LEASE AGREEMENT


                                     BETWEEN


                          HCRI FAIRMONT PROPERTIES, LLC


                                       AND


                          EMERITUS PROPERTIES XII, LLC


                               SEPTEMBER 29, 2003


<PAGE>
SECTION     PAGE
-------     ----

                                TABLE OF CONTENTS
                                -----------------


SECTION     PAGE
-------     ----
ARTICLE  1:     LEASED  PROPERTY,  TERM  AND  DEFINITIONS     1
1.1     Leased  Property     1
1.2     Term     1
1.3     Definitions     1
ARTICLE  2:     RENT     9
2.1     Base  Rent     9
2.1.1     Base  Rent  Adjustment     9
2.2     Additional  Rent     9
2.3     Place  of  Payment  of  Rent     9
2.4     Net  Lease     9
2.5     No  Termination,  Abatement,  Etc.     10
2.6     Transaction  Fee     10
ARTICLE  3:     IMPOSITIONS  AND  UTILITIES     10
3.1     Payment  of  Impositions     10
3.2     Definition  of  Impositions     11
3.3     Escrow  of  Impositions     12
3.4     Utilities     12
3.5     Discontinuance  of  Utilities     13
3.6     Business  Expenses     13
3.7     Permitted  Contests     13
ARTICLE  4:     INSURANCE     13
4.1     Property  Insurance     13
4.2     Liability  Insurance     14
4.3     Builder's  Risk  Insurance     15
4.4     Insurance  Requirements     15
4.5     Replacement  Value     16
4.6     Blanket  Policy     16
4.7     No  Separate  Insurance     16
4.8     Waiver  of  Subrogation     16
4.9     Mortgages     17
4.10     Escrows     17
ARTICLE  5:     INDEMNITY     17
5.1     Tenant's  Indemnification     17
5.1.1     Notice  of  Claim     18
5.1.2     Survival  of  Covenants     18
5.1.3     Reimbursement  of  Expenses     18
5.2     Environmental  Indemnity;  Audits     18
5.3     Limitation  of  Landlord's  Liability     18
ARTICLE  6:     USE  AND  ACCEPTANCE  OF  PREMISES     19
6.1     Use  of  Leased  Property     19
6.2     Acceptance  of  Leased  Property     19
6.3     Conditions  of  Use  and  Occupancy     19
ARTICLE  7:     MAINTENANCE  AND  MECHANICS'  LIENS     20
7.1     Maintenance     20
7.2     Required  Alterations     20
7.3     Mechanic's  Liens     20
7.4     Replacements  of  Fixtures  and  Landlord's  Personal  Property     21
7.5     Lender  Maintenance  Reserve  Escrow     21
ARTICLE  8:     DEFAULTS  AND  REMEDIES     21
8.1     Events  of  Default     21
8.2     Remedies     23
8.3     Right  of  Setoff     26
8.4     Performance  of  Tenant's  Covenants     26
8.5     Late  Payment  Charge     26
8.6     Default  Rent     27
8.7     Attorneys'  Fees     27
8.8     Escrows  and  Application  of  Payments     27
8.9     Remedies  Cumulative     27
8.10     Waivers     27
8.11     Obligations  Under  the  Bankruptcy  Code     28
ARTICLE  9:     DAMAGE  AND  DESTRUCTION     28
9.1     Notice  of  Casualty     28
9.2     Substantial  Destruction     28
9.3     Partial  Destruction     29
9.4     Restoration     29
9.5     Insufficient  Proceeds     30
9.6     Not  Trust  Funds     30
9.7     Landlord's  Inspection     30
9.8     Landlord's  Costs     30
9.9     No  Rent  Abatement     31
ARTICLE  10:     CONDEMNATION     31
10.1     Total  Taking     31
10.2     Partial  Taking     31
10.3     Condemnation  Proceeds  Not  Trust  Funds     31
ARTICLE  11:     TENANT'S  PROPERTY     32
11.1     Tenant's  Property     32
11.2     Requirements  for  Tenant's  Property     32
ARTICLE  12:     RENEWAL  OPTIONS     33
12.1     Renewal  Options     33
12.2     Effect  of  Renewal     33
ARTICLE  13:     RIGHT  OF  FIRST  OPPORTUNITY     34
13.1     Right  of  First  Opportunity     34
13.2     Closing     35
ARTICLE  14:     NEGATIVE  COVENANTS     36
14.1     No  Debt     36
14.2     No  Liens     36
14.3     No  Guaranties     36
14.4     No  Transfer     36
14.5     No  Dissolution     36
14.6     Subordination  of  Payments  to  Affiliates     36
14.7     Change  of  Location  or  Name     36
ARTICLE  15:     AFFIRMATIVE  COVENANTS     37
15.1     Perform  Obligations     37
15.2     Proceedings  to  Enjoin  or  Prevent  Construction     37
15.3     Documents  and  Information     37
15.3.1     Furnish  Documents     37
15.3.2     Furnish  Information     37
15.3.3     Further  Assurances  and  Information     37
15.3.4     Material  Communications     38
15.3.5     Requirements  for  Financial  Statements     38
15.4     Compliance  With  Laws     38
15.5     Broker's  Commission     38
15.6     Existence  and  Change  in  Ownership     38
15.7     Financial  Covenants     39
15.7.1     Definitions     39
15.7.2     Coverage  Ratio     39
15.8     Facility  Licensure  and  Certification     39
15.9     Transfer  of  License  and  Facility  Operations     39
15.9.1     Licensure     39
15.9.2     Facility  Operations     39
15.10     Bed  Operating  Rights     40
15.11     Power  of  Attorney     40
15.12     Compliance  with  Loan  Documents     41
ARTICLE  16:     ALTERATIONS,  CAPITAL  IMPROVEMENTS,  AND  SIGNS     42
16.1     Prohibition  on  Alterations  and  Improvements     42
16.2     Approval  of  Alterations     42
16.3     Permitted  Alterations     43
16.4     Requirements  for  Permitted  Alterations     43
16.5     Ownership  and  Removal  of  Permitted  Alterations     44
16.6     Minimum  Qualified  Capital  Expenditures     44
16.7     Signs     44
ARTICLE  17:     RESERVED     44
ARTICLE  18:     ASSIGNMENT  AND  SALE  OF  LEASED  PROPERTY     44
18.1     Prohibition  on  Assignment  and  Subletting     44
18.2     Requests  for  Landlord's Consent to Assignment, Sublease or Management
Agreement     45
18.3     Agreements  with  Residents     46
18.4     Sale  of  Leased  Property     46
18.5     Assignment  by  Landlord     46
ARTICLE  19:     HOLDOVER  AND  SURRENDER     46
19.1     Holding  Over     46
19.2     Surrender     47
19.3     Indemnity     47
ARTICLE  20:     RESERVED     47
ARTICLE  21:     QUIET  ENJOYMENT,  SUBORDINATION,  ATTORNMENT  AND  ESTOPPEL
CERTIFICATES     47
21.1     Quiet  Enjoyment     47
21.2     Subordination     47
21.3     Attornment     48
21.4     Estoppel  Certificates     48
ARTICLE  22:     REPRESENTATIONS  AND  WARRANTIES     49
22.1     Organization  and  Good  Standing     49
22.2     Power  and  Authority     49
22.3     Enforceability     49
22.4     Government  Authorizations     49
22.5     Financial  Statements     49
22.6     Condition  of  Facility     50
22.7     Compliance  with  Laws     50
22.8     No  Litigation     50
22.9     Consents     50
22.10     No  Violation     51
22.11     Reports  and  Statements     51
22.12     ERISA     51
22.13     Chief  Executive  Office     51
22.14     Other  Name  or  Entities     51
22.15     Parties  in  Possession     51
22.16     Access     52
22.17     Utilities     52
22.18     Condemnation  and  Assessments     52
22.19     Zoning     52
22.20     Pro  Forma  Statement     52
22.21     Environmental  Matters     52
22.22     Leases  and  Contracts     53
22.23     No  Default     53
22.24     Tax  Status     53
ARTICLE  23:     RESERVED     53
ARTICLE  24:     SECURITY  INTEREST     53
24.1     Collateral     53
24.2     Additional  Documents     54
24.3     Notice  of  Sale     54
24.4     Recharacterization     55
24.5     Subordination     55
ARTICLE  25:     MISCELLANEOUS     55
25.1     Notices     55
25.2     Advertisement  of  Leased  Property     55
25.3     Entire  Agreement     55
25.4     Severability     55
25.5     Captions  and  Headings     56
25.6     Governing  Law     56
25.7     Memorandum  of  Lease     56
25.8     Waiver     56
25.9     Binding  Effect     56
25.10     No  Offer     56
25.11     Modification     56
25.12     Landlord's  Modification     57
25.13     No  Merger     57
25.14     Laches     57
25.15     Limitation  on  Tenant's  Recourse     57
25.16     Construction  of  Lease     57
25.17     Counterparts     57
25.18     Custody  of  Escrow  Funds     57
25.19     Landlord's  Status  as  a  REIT     57
25.20     Exhibits     58
25.21     WAIVER  OF  JURY  TRIAL     58
25.22     CONSENT  TO  JURISDICTION     58
25.23     Attorney's  Fees  and  Expenses     58
25.24     Survival     59
25.25     Time     59

SCHEDULE  1:     INITIAL  RENT  SCHEDULE
EXHIBIT  A:     LEGAL  DESCRIPTIONS
EXHIBIT  B:     PERMITTED  EXCEPTIONS
EXHIBIT  C:     FACILITY  INFORMATION
EXHIBIT  D:     LANDLORD'S  PERSONAL  PROPERTY
EXHIBIT  E:     DOCUMENTS  TO  BE  DELIVERED
EXHIBIT  F:     TENANT'S  CERTIFICATE  AND  FACILITY  FINANCIAL  REPORTS
EXHIBIT  G:     GOVERNMENT  AUTHORIZATIONS  TO  BE  OBTAINED;  ZONING  PERMITS
EXHIBIT  H:     PENDING  LITIGATION
EXHIBIT  I:     LIST  OF  LEASES  AND  CONTRACTS
EXHIBIT  J:     WIRE  TRANSFER  INSTRUCTIONS
EXHIBIT  K:     BASE  PRICE


<PAGE>


                                 LEASE AGREEMENT


          This  Lease  Agreement ("Lease") is made effective as of September 29,
2003  (the  "Effective  Date")  between HCRI FAIRMONT PROPERTIES, LLC, a limited
liability  company organized under the laws of the State of Delaware ("Landlord"
as  further  defined  in  1.3 below), having its principal office located at One
SeaGate,  Suite  1500,  P.O.  Box  1475,  Toledo,  Ohio 43603-1475, and EMERITUS
PROPERTIES XII, LLC, a limited liability company organized under the laws of the
State  of  Washington  ("Tenant"),  having its chief executive office located at
3131  Elliott  Avenue,  Suite  500,  Seattle,  Washington  98121.
                                 R E C I T A L S
A.     As  of  the  date  hereof, Landlord acquired the Leased Property (defined
below)  from Tenant and paid the Acquisition Payment (defined below) towards the
purchase price for the Leased Property.  The amount paid by Tenant for the costs
     incurred  by Landlord in connection with its acquisition from Tenant of the
Leased  Property,  if  any,  shall  be  considered  Tenant's  contribution.
B.     Landlord  desires  to  lease  the  Leased  Property  to Tenant and Tenant
desires  to  lease the Leased Property from Landlord upon the terms set forth in
this  Lease.
          NOW,  THEREFORE,  Landlord  and  Tenant  agree  as  follows:
              ARTICLE 1:     LEASED PROPERTY, TERM AND DEFINITIONS
1.1     Leased  Property.  Landlord  hereby  leases  to Tenant and Tenant hereby
        ----------------
leases  from  Landlord  the  Leased Property, subject, however, to the Permitted
Exceptions  and  subject  to  the  terms  and  conditions  of  this  Lease.
1.2     Term.  The  initial term ("Initial Term") of this Lease commences on the
        ----
Effective  Date and expires at 12:00 Midnight Eastern Time on the day before the
15th  anniversary  of  the  Commencement Date (the "Expiration Date"); provided,
however,  that  Tenant  has  one  or more options to renew the Lease pursuant to
Article  12.
1.3     Definitions.  Except  as  otherwise  expressly  provided,  [i] the terms
        -----------
defined  in  this section have the meanings assigned to them in this section and
include  the  plural  as  well  as  the  singular; [ii] all accounting terms not
otherwise  defined  herein have the meanings assigned to them in accordance with
generally  accepted  accounting  principles as of the time applicable; and [iii]
the  words  "herein",  "hereof"  and "hereunder" and similar words refer to this
Lease  as  a  whole  and  not  to  any  particular  section.
     "$4,400,000  Note"  means  the note granted by Guarantor to HCN dated as of
August  28,  2003,  as  amended  or  restated.
"Acquisition  Payment" means any payment by Landlord to acquire Leased Property.
"ADA"  means  the  federal  statute entitled Americans with Disabilities Act, 42
U.S.C.  12101,  et  seq.
"Additional  Rent"  has  the  meaning  set  forth  in  2.2.
"Affiliate"  means  Guarantor  and any person, corporation, partnership, limited
liability  company,  trust,  or other legal entity that, directly or indirectly,
controls,  or  is  controlled  by,  or  is  under  common control with Tenant or
Guarantor.  "Control" (and the correlative meanings of the terms "controlled by"
and  "under  common control with") means the possession, directly or indirectly,
of  the power to direct or cause the direction of the management and policies of
such  entity.  "Affiliate"  includes,  without  limitation,  each Guarantor.  An
Affiliate of Tenant shall specifically exclude Columbia Pacific Management, Inc.
or  any  Affiliate  thereof  and Holiday Retirement Corporation or any Affiliate
thereof  and,  prior  to the date of its acquisition thereof, Alterra Healthcare
Corporation  or  any  Affiliate  thereof.
"Annual Company Budget" means Tenant's projection of its financial statement for
the  next  fiscal  year (or the 12-month rolling forward period, if applicable),
which  shall  include  the balance sheet, statement of income, statement of cash
flows,  statement  of shareholders' equity and statement of capital expenditures
for  the  applicable  period.
"Annual  Financial Statements" means [i] an audited Facility Financial Statement
for  the  most  recent  fiscal  year; and [ii] for Guarantor, if Guarantor is or
includes  a  corporation,  partnership  or limited liability company, an audited
balance  sheet  and  statement  of  income  for  the  most  recent  fiscal year.
"Bankruptcy Code" means the United States Bankruptcy Code set forth in 11 U.S.C.
101,  et  seq.,  as  amended  from  time  to  time.
"Base  Price"  has  the  meaning  set  forth  on  Exhibit  K.
"Base  Rent"  has  the meaning set forth in  2.1, as increased from time to time
pursuant  to  2.2.
"Business Day" means any day other than a Saturday, Sunday, or national holiday.
"Casualty"  has  the  meaning  set  forth  in  9.1.
"CERCLA"  means  the  Comprehensive  Environmental  Response,  Compensation  and
Liability  Act  of  1980,  as  amended  from  time  to  time.
"Closing"  means  the  closing  of  the  lease of the Leased Property to Tenant.
"Collateral"  has  the  meaning  set  forth  in  24.1.
"Commencement  Date" means the Effective Date if such date is the first day of a
month,  and  if  it  is  not,  the  first  day  of the first month following the
Effective  Date.
"Commitment"  means  the  Commitment Letter for the Lease dated March 5, 2002 as
modified  by  the  letter  dated  March  31,  2003.
"CPI"  means  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.
"Default  Rent"  has  the  meaning  set  forth  in  8.6.
"Effective  Date"  means  the  date  of  this  Lease.
"Environmental  Laws"  means  all federal, state, and local laws, ordinances and
policies the purpose of which is to protect human health and the environment, as
amended  from  time to time, including, but not limited to, [i] CERCLA; [ii] the
Resource  Conservation  and  Recovery  Act;  [iii]  the  Hazardous  Materials
Transportation  Act; [iv] the Clean Air Act; [v] Clean Water Act; [vi] the Toxic
Substances Control Act; [vii] the Occupational Safety and Health Act; [viii] the
Safe  Drinking  Water  Act;  and  [ix]  analogous  state  laws  and regulations.
"Event  of  Default"  has  the  meaning  set  forth  in  8.1.
"Expiration  Date"  has  the  meaning  set  forth  in  1.2.
"Facility"  means  the  Facility  located  on  the  Land, including the Facility
Property.
"Facility  Cash  Flow"  has  the  meaning  set  forth  in  15.7.1.
"Facility  Coverage  Ratio"  has  the  meaning  set  forth  in  15.7.1.
"Facility  Financial  Statement"  means  a  financial statement for the Facility
which  shall  include  the balance sheet, statement of income, statement of cash
flows, statement of shareholders' equity, occupancy census data (including payor
mix), statement of capital expenditures and a comparison of the actual financial
data  versus  the  Annual  Company  Budget  for  the  applicable  period.
"Facility Name" means the name under which the Facility has done business during
the Term.  The Facility Name in use by the Facility on the Effective Date is set
forth  on  the  attached  Exhibit  C.
"Facility  Property"  means the Land on which the Facility is located, the legal
description  of  which  is set forth on Exhibit A, the Improvements on the Land,
the  Related  Rights,  and  Landlord's  Personal  Property.
"Facility  State"  means  the  State  in  which  the  Facility  is  located.
"Facility  Uses"  means  the uses relating to the operation of the Facility as a
facility  of  the  type  and operating the number of beds and units set forth on
Exhibit  C.
"Financial  Statements"  means  [i]  the  annual,  quarterly  and  year  to date
financial  statements  of  Tenant;  and  [ii]  all  operating statements for the
Facility,  that  were  submitted  to  Landlord  prior  to  the  Effective  Date.
"Fixtures"  means  all  permanently  affixed  equipment, machinery, fixtures and
other  items  of  real  and/or  personal property (excluding Landlord'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
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,  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.
"Government  Authorizations"  means  all permits, licenses, approvals, consents,
and  authorizations  required  to comply with all Legal Requirements, including,
but  not  limited  to,  [i]  zoning  permits, variances, exceptions, special use
permits,  conditional  use  permits,  and  consents; [ii] the permits, licenses,
provider  agreements  and  approvals required for licensure and operation of the
Facility in accordance with the Facility Uses and, if applicable, certified as a
provider  under  the  federal  Medicare  and  state  Medicaid  programs;  [iii]
environmental,  ecological, coastal, wetlands, air, and water permits, licenses,
and  consents;  [iv]  curb  cut,  subdivision,  land  use, and planning permits,
licenses,  approvals  and consents; [v] building, sign, fire, health, and safety
permits,  licenses,  approvals,  and  consents;  and [vi] architectural reviews,
approvals,  and  consents  required  under  restrictive  covenants.
"Guarantor"  means  Emeritus  Corporation,  a  Washington  corporation.
"Guaranty" means the Unconditional and Continuing Lease Guaranty entered into by
Guarantor  to guarantee payment and performance of the Obligor Group Obligations
and  any  amendments  thereto  or  substitutions  or  replacements  therefore.
"Hazardous  Materials"  means  any  substance  [i] the presence of which poses a
hazard  to  the health or safety of persons on or about the Land, including, but
not  limited  to,  asbestos containing materials; [ii] which requires removal or
remediation  under  any  Environmental  Law,  including, without limitation, any
substance  which  is  toxic,  explosive,  flammable,  radioactive,  or otherwise
hazardous;  or  [iii]  which  is  regulated  under  or  classified  under  any
Environmental  Law  as  hazardous  or  toxic, including, but not limited to, any
substance  within  the  meaning  of "hazardous substance", "hazardous material",
"hazardous  waste",  "toxic  substance", "regulated substance", "solid waste" or
"pollutant"  as  defined  in  any  Environmental  Law.
"HCN"  means  Health  Care  REIT,  Inc.,  a  Delaware  corporation.
"HIPDB"  means  the  Healthcare Integrity and Protection Data Bank maintained by
the  Department  of  Health  and  Human  Services.
"Impositions"  has  the  meaning  set  forth  in  3.2.
"Improvements"  means all buildings, structures, Fixtures and other improvements
of every kind on any portion of the Land, including, but not limited to, alleys,
sidewalks,  utility  pipes,  conduits  and lines (on-site and off-site), parking
areas  and  roadways  appurtenant  to  such  buildings  and  structures,  now or
hereafter  situated  upon  any  portion  of  the  Land.
"Initial  Term"  has  the  meaning  set  forth  in  1.2.
"Investment  Amount"  is  an aggregate concept and means the sum of all Landlord
Payments  outstanding  at  the  applicable  time.
"Land"  means  the  real  property  described  in  Exhibit  A  attached  hereto.
"Landlord"  means  HCRI  Fairmont  Properties,  LLC.
"Landlord  Affiliate"  means  any  person,  corporation,  partnership,  limited
liability  company,  trust,  or other legal entity that, directly or indirectly,
controls,  or  is  controlled  by,  or  is  under  common control with Landlord.
"Control"  (and the correlative meanings of the terms "controlled by" and "under
common control with") means the possession, directly or indirectly, of the power
to  direct or cause the direction of the management and policies of such entity.
"Landlord  Payment"  means  the  Acquisition  Payment or any advance by Landlord
under  the  terms  hereof.
"Landlord's  Personal Property" means all Personal Property owned by Landlord on
the  Effective  Date and located at the Facility, including, without limitation,
all  personal  property  listed on the attached Exhibit D, together with any and
all  replacements  thereof, and all Personal Property that pursuant to the terms
of  this  Lease  becomes  the  property  of  Landlord  during  the  Term.
"Lease"  means  this  Lease  Agreement,  as  amended  from  time  to  time.
"Lease  Documents"  means  this Lease and all documents executed by Landlord and
Tenant  relating  to  this  Lease  or  the  Facility.
"Lease Payments" means the sum of the Base Rent payments (as increased from time
to  time)  for  the  applicable  period.
"Lease  Year"  means  each  consecutive period of 365 or 366 days throughout the
Term.  The  first  Lease  Year commences on the Commencement Date and expires on
the  day  before  the  first  anniversary  of  the  Commencement  Date.
"Leased  Property"  means  all  of  the  Land,  Improvements, Related Rights and
Landlord's  Personal  Property.
"Legal  Requirements"  means  all  laws,  regulations,  rules,  orders,  writs,
injunctions,  decrees,  certificates,  requirements,  agreements,  conditions of
participation  and  standards  of any federal, state, county, municipal or other
governmental  entity,  administrative  agency,  insurance  underwriting  board,
architectural  control  board,  private  third-party  payor,  accreditation
organization,  or  any  restrictive  covenants  applicable  to  the development,
construction, condition and operation of the Facility by Tenant for the Facility
Uses, including, but not limited to, [i] zoning, building, fire, health, safety,
sign,  and  subdivision regulations and codes; [ii] certificate of need laws (if
applicable);  [iii]  licensure to operate as the Facility in accordance with its
Facility  Uses;  [iv]  Medicare  and  Medicaid  certification  requirements  (if
applicable);  [v]  the ADA; [vi] any Environmental Laws; and [vii] requirements,
conditions  and  standards  for  participation  in  third-party  payor insurance
programs.
"Lender" means JPMorgan Chase Bank (formerly known as the Chase Manhattan Bank),
trustee  for  the  registered  certificateholders  of Credit Suisse First Boston
Mortgage  Securities Corp. Commercial Mortgage Pass-Through Certificates, Series
2000-PS4.
"Letter  of  Credit"  shall  mean  on  the  Effective  Date the letter of credit
required  by  Lender  in  the amount of 5% of the outstanding amount of the loan
assumed by Landlord and any time after the Effective Date shall mean such letter
of  credit  as  required  by  Lender which may be reduced from time to time as a
result  of  draws  thereunder.
"Loan  Documents"  as  used  herein  means the Loan Documents, as defined in the
Note,  and  includes the [i] Assumption Agreement, by and among Landlord, Tenant
and  Lender;  [ii]  the Assumption of Obligations of Guarantor by and among HCN,
Guarantor  and  Lender;  [iii] the Subordination and Standstill Agreement by and
among  Tenant, Landlord, HCN, Guarantor and Lender; and [iv] any other documents
executed  in  connection  with  the  Note  Assumption executed by either Tenant,
Guarantor,  Landlord  and/or  HCN.
"Material  Obligation"  means  [i] any indebtedness with respect to any critical
care  equipment  and  for  all  other  equipment  any  indebtedness in excess of
$250,000.00 at the Facility secured by a security interest in or a lien, deed of
trust  or mortgage on any of the Leased Property (or any part thereof, including
any  Personal  Property) and any agreement relating thereto; [ii] any obligation
or  agreement  that is material to the construction or operation of the Facility
or  that  is  material  to  Tenant's business or financial condition and where a
breach  thereunder, if not cured within any applicable cure period, would have a
material  adverse  affect on the financial condition of Tenant or the results of
operations  at the Facility; [iii] any unsecured indebtedness or lease of Tenant
that  has an outstanding principal balance or obligation of at least $250,000.00
and  any  agreement  relating  thereto;  and  [iv]  any indebtedness or lease of
Guarantor,  other  than this Lease, that has an outstanding principal balance or
obligation  of  at  least  $1,000,000.00.
"Mortgage"  means  the  Deed of Trust and Security Agreement dated September 29,
1999  from  Tenant  in  favor  of  Lender to secure the Note, as assigned to and
assumed  by  Landlord  and  as  the  same  may  be  amended  from  time to time.
"Negotiation  Period"  has  the  meaning  set  forth  in  Exhibit  K.
"Net  Operating  Income"  means  the  pre-tax  net income of Tenant plus [i] the
amount  of the provision for depreciation and amortization; plus [ii] the amount
of  the provision for interest and lease payments, if any; plus [iii] the amount
of  the  provision  for Rent payments; plus [iv] the amount of the provision for
management  fees.
"Note"  means  the  Fixed  Rate  Note  dated  September 29, 1999 in the original
principal  amount  of  $4,330,000.00  from  Tenant  to Lender as assigned to and
assumed  by  Landlord  and  as  the  same  may  be  amended  from  time to time.
"Obligor  Group  Obligations"  means  all payment and performance obligations of
Tenant  or  Guarantor  to Landlord or any Landlord Affiliate, including, but not
limited  to,  all  obligations under this Lease, any loans extended to Tenant or
Guarantor  by  Landlord  or any Landlord Affiliate and all documents executed by
Tenant or Guarantor in favor of Landlord or any Landlord Affiliate in connection
with  this  Lease,  any  loan  or  any  other  obligation.
"Offer"  has  the  meaning  set  forth  in  13.1.
"Opportunity  Notice"  has  the  meaning  set  forth  in  13.1(a).
"Organization  State"  means  the  State  in  which  an  entity  is  organized.
"Organizational  Documents"  means  [i]  for  a  corporation,  its  Articles  of
Incorporation  certified by the Secretary of State of the Organization State, as
amended  to  date,  and its Bylaws certified by such entity, as amended to date;
[ii]  for  a partnership, its Partnership Agreement certified by such entity, as
amended  to  date, and the Partnership Certificate, certified by the appropriate
authority (if applicable), as amended to date; and [iii] for a limited liability
company, its Articles of Organization certified by the Secretary of State of the
Organization State, as amended to date, and its Operating Agreement certified by
such  entity,  as  amended  to  date.
"Periodic  Financial Statements" means an unaudited Facility Financial Statement
for  the  most  recent  month.
"Permitted  Exceptions"  means all easements, liens, encumbrances, restrictions,
agreements and other title matters existing as of the Effective Date, including,
without  limitation,  the  exceptions  to  title set forth on Exhibit B attached
hereto,  and any sublease of any portion of the Leased Property made in complete
accordance  with  Article  18.
"Permitted  Liens"  means  [i] liens granted to Landlord; [ii] liens customarily
incurred  by Tenant in the ordinary course of business for items not delinquent,
including  mechanic's liens and deposits and charges under worker's compensation
laws;  [iii]  liens  for taxes and assessments not yet due and payable; [iv] any
lien,  charge, or encumbrance which is being contested in good faith pursuant to
this  Lease; [v] the Permitted Exceptions; and [vi] purchase money financing and
capitalized  equipment leases for the acquisition of personal property provided,
however,  that  Landlord  obtains  a  nondisturbance agreement from the purchase
money lender or equipment lessor in form and substance as may be satisfactory to
Landlord  if  the  original  cost  of  the  equipment  exceeds  $250,000.00.
"Personal  Property"  means  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 Tenant) 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 Improvements.
"Pro  Forma  Statement" means a financial forecast for the Facility for the next
five-year  period  prepared  in  accordance  with  the  standards  for forecasts
established  by  the  American  Institute  of  Certified  Public  Accountants.
"Protected  Period"  has  the  meaning  set  forth  in  13.1(a).
"Qualified Capital Expenditures" means the expenditures capitalized on the books
of  Tenant  for  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  replacement  of  siding;  roof  replacements,  including
replacements  of  gutters,  downspouts,  eaves  and  soffits;  major repairs and
replacements  of  plumbing  and  sanitary systems; overhaul of elevator systems;
repaving,  resurfacing and sealcoating of sidewalks, parking lots and driveways;
repainting of entire building exterior and normal maintenance and repairs needed
to  maintain the quality and condition of the Facility in the market in which it
operates,  but  excluding  Alterations.
"Receivables"  means [i] all of Tenant's rights to receive payment for providing
resident  care  and  services as set forth in any accounts, contract rights, and
instruments,  and  [ii]  those  documents,  chattel  paper,  inventory proceeds,
provider  agreements,  participation  agreements, ledger sheets, files, records,
computer  programs, tapes, and agreements relating to Tenant's rights to receive
payment  for  providing  resident  care  services.
"Related  Rights"  means  all easements, rights (including bed operating rights)
and  appurtenances  relating  to  the  Land  and  the  Improvements.
"Renewal  Date"  means  the  first  day  of  each  Renewal  Term.
"Renewal  Option"  has  the  meaning  set  forth  in  12.1.
"Renewal  Term"  has  the  meaning  set  forth  in  12.1.
"Rent"  means  Base  Rent,  Additional  Rent  and  Default  Rent.
"Rent Schedule" means the schedule issued by Landlord to Tenant showing the Base
Rent  to be paid by Tenant pursuant to the terms of this Lease, as such schedule
is amended from time to time by Landlord.  The initial Rent Schedule is attached
to  this  Lease  as  Schedule 1 or, after review and approval by Tenant, will be
attached  following  Closing if the Rent Schedule cannot be determined until the
day  of  Closing.
"Replacement  Operator"  has  the  meaning  set  forth  in  15.9.1.
"Right  of  First  Opportunity  Event"  has  the  meaning  set  forth  in  13.1.
"Secured  Party"  has  the  meaning  set  forth  in  24.1.
"Tenant"  has the meaning set forth in the introductory paragraph of this Lease.
"Tenant's  Property"  has  the  meaning  set  forth  in  11.1.
"Term"  means  the  Initial  Term  and  each  Renewal  Term.
                               ARTICLE 2:     RENT
2.1     Base Rent.  Tenant shall pay Landlord base rent ("Base Rent") in advance
        ---------
     in  consecutive monthly installments payable on the first day of each month
during  the  Term commencing on the Commencement Date.  If the Effective Date is
not  the  first  day  of  a  month,  Tenant  shall pay Landlord Base Rent on the
Effective  Date  for  the  partial month, i.e., for the period commencing on the
Effective  Date  and  ending  on the day before the Commencement Date.  The Base
Rent  payable  for  the  Initial  Term  is  as shown on the Rent Schedule, to be
adjusted  pursuant  to  2.1.1.  The  Base  Rent  for  each  Renewal Term will be
determined  in  accordance  with  12.2.
2.1.1     Base  Rent  Adjustment.  In  accordance  with  the  terms  of the Loan
          ----------------------
Documents,  monthly  payments  of principal and interest due to Lender under the
Note  ("Loan  Payment")  shall  be paid by Tenant.  On October 1, 2003, the Base
Rent  due  on  October  1,  2003 shall be reduced by an amount equal to the Loan
Payment  (as  of  the  Effective Date in the amount of $31,801.42) divided by 30
times  the  number  of  days  starting  with  the  Effective  Date and ending on
September  30,  2003.  On  November  1, 2003, and on the first day of each month
thereafter  that  Tenant  makes a Loan Payment, the Base Rent due on November 1,
2003  and  on  the  first  day  of each month thereafter, shall be reduced by an
amount  equal  to  the  Loan  Payment  made by Tenant.  If Landlord makes a Loan
Payment, the Base Rent for each month thereafter shall not be reduced until such
     time as Landlord has been repaid the Loan Payment made by Landlord.  Tenant
shall deliver to Landlord written evidence, satisfactory to Landlord, of payment
of  the  Loan  Payment  within five Business Days of payment of same, but in any
event  prior  to  the  10th  day  of  each  month.
2.2     Additional  Rent.  In  addition to Base Rent, Tenant shall pay all other
        ----------------
amounts, liabilities, obligations and Impositions which Tenant assumes or agrees
     to  pay  under this Lease including any fine, penalty, interest, charge and
cost  which  may  be  added  for  nonpayment  or  late  payment  of  such  items
(collectively  the  "Additional  Rent").
2.3     Place  of  Payment  of  Rent.  Tenant shall make all payments of Rent to
        ----------------------------
Landlord  by electronic wire transfer in accordance with the wiring instructions
set  forth  in  Exhibit  J attached hereto, subject to change in accordance with
other  written  instructions  provided  by  Landlord  from  time  to  time.
2.4          Net  Lease.  This  Lease  shall  be  deemed  and construed to be an
             ----------
"absolute  net  lease",  and  Tenant  shall  pay  all Rent and other charges and
expenses  in  connection  with  the Leased Property throughout the Term, without
abatement,  deduction,  recoupment  or  setoff.  Landlord  shall have all legal,
equitable  and  contractual  rights, powers and remedies provided either in this
Lease  or  by  statute  or  otherwise  in  the  case  of nonpayment of the Rent.
2.5     No  Termination,  Abatement,  Etc.  Except  as  otherwise  specifically
        ---------------------------------
provided  in  this  Lease, Tenant shall remain bound by this Lease in accordance
with  its  terms.  Tenant  shall  not,  without the consent of Landlord, modify,
surrender  or  terminate  the  Lease, nor seek nor be entitled to any abatement,
deduction,  deferment  or reduction of Rent, or setoff or recoupment against the
Rent.  Except  as  expressly provided in this Lease, the obligations of Landlord
and  Tenant shall not be affected by reason of [i] any damage to, or destruction
of,  the  Leased  Property or any part thereof from whatever cause or any Taking
(as  hereinafter  defined)  of the Leased Property or any part thereof; [ii] the
lawful  or  unlawful  prohibition  of,  or restriction upon, Tenant's use of the
Leased  Property,  or  any  part  thereof, the interference with such use by any
person,  corporation,  partnership  or other entity, or by reason of eviction by
paramount title; [iii] any claim which Tenant has or might have against Landlord
or  by  reason  of  any default or breach of any warranty by Landlord under this
Lease  or  any other agreement between Landlord and Tenant, or to which Landlord
and  Tenant  are  parties;  [iv]  any  bankruptcy,  insolvency,  reorganization,
composition,  readjustment,  liquidation,  dissolution,  winding  up  or  other
proceeding  affecting Landlord or any assignee or transferee of Landlord; or [v]
any  other  cause,  whether similar or dissimilar to any of the foregoing, other
than a discharge of Tenant from any such obligations as a matter of law.  Except
as  otherwise  specifically  provided  in this Lease, Tenant hereby specifically
waives  all  rights,  arising  from  any occurrence whatsoever, which may now or
hereafter be conferred upon it by law [a] to modify, surrender or terminate this
Lease  or  quit  or surrender the Leased Property or any portion thereof; or [b]
entitling  Tenant  to  any  abatement, reduction, suspension or deferment of the
Rent or other sums payable by Tenant hereunder.  The obligations of Landlord and
Tenant  hereunder shall be separate and independent covenants and agreements and
the  Rent  and  all  other sums payable by Tenant hereunder shall continue to be
payable in all events unless the obligations to pay the same shall be terminated
pursuant to the express provisions of this Lease or by termination of this Lease
other  than  by  reason  of  an Event of Default.  Nothing in this  2.5 shall be
construed  to  limit  any right which Tenant may have to bring a separate action
against  Landlord  for any claim which Tenant may have or allege to have against
Landlord.
2.6     Transaction  Fee.  On the Effective Date, Tenant shall pay a transaction
        ----------------
fee  to  Landlord  in  an  amount  equal  to  1%  of  the  Investment  Amount.
                    ARTICLE 3:     IMPOSITIONS AND UTILITIES
3.1     Payment  of  Impositions.  Tenant  shall  pay,  as  Additional Rent, all
        ------------------------
Impositions  that  may  be levied or become a lien on the Leased Property or any
part  thereof  at any time (whether prior to or during the Term), without regard
to  prior ownership of said Leased Property, before any fine, penalty, interest,
or  cost  is  incurred;  provided, however, Tenant may contest any Imposition in
accordance  with  3.7.  Tenant  shall deliver to Landlord [i] not more than five
days  after  the  due  date  of  each Imposition, copies of the invoice for such
Imposition  and  the check delivered for payment thereof; and [ii] not more than
30  days  after  the due date of each Imposition, a copy of the official receipt
evidencing  such  payment  or  other  proof of payment satisfactory to Landlord.
Tenant's  obligation  to  pay  such Impositions shall be deemed absolutely fixed
upon  the  date  such  Impositions become a lien upon the Leased Property or any
part  thereof.  Tenant,  at  its expense, shall prepare and file all tax returns
and  reports  in  respect  of  any Imposition as may be required by governmental
authorities.  Tenant  shall  be  entitled  to  any  refund  due  from any taxing
authority if no Event of Default shall have occurred hereunder and be continuing
     and  if  Tenant  shall  have paid all Impositions due and payable as of the
date  of  the  refund.  Landlord shall be entitled to any refund from any taxing
authority  if  an  Event of Default has occurred and is continuing.  Any refunds
retained  by Landlord due to an Event of Default shall be applied as provided in
8.8.  Landlord and Tenant shall, upon request of the other, provide such data as
is  maintained  by  the  party  to  whom the request is made with respect to the
Leased Property as may be necessary to prepare any required returns and reports.
In  the  event  governmental  authorities  classify any property covered by this
Lease  as personal property, Tenant shall file all personal property tax returns
in  such jurisdictions where it may legally so file.  Landlord, to the extent it
possesses  the  same,  and  Tenant,  to  the  extent it possesses the same, will
provide  the  other  party,  upon  request,  with  cost and depreciation records
necessary  for  filing  returns  for  any  property  so  classified  as personal
property.  Where  Landlord  is  legally  required  to file personal property tax
returns,  Tenant will be provided with copies of assessment notices indicating a
value  in  excess  of the reported value in sufficient time for Tenant to file a
protest.  Tenant  may, at Tenant's option and at Tenant's sole cost and expense,
protest,  appeal,  or  institute  such  other  proceedings  as  Tenant  may deem
appropriate  to  effect  a  reduction  of  real  estate  or  personal  property
assessments  and  Landlord,  at  Tenant's  expense  as  aforesaid,  shall  fully
cooperate  with  Tenant  in such protest, appeal, or other action.  Tenant shall
reimburse  Landlord  for  all personal property taxes paid by Landlord within 30
days  after  receipt  of  billings accompanied by copies of a bill therefore and
payments thereof which identify the personal property with respect to which such
payments  are  made.  Impositions  imposed  in  respect to the tax-fiscal period
during which the Term terminates shall be adjusted and prorated between Landlord
and Tenant as of the termination date, whether or not such Imposition is imposed
before  or  after  such termination, and Tenant's obligation to pay its prorated
share  thereof  shall  survive  such  termination.
3.2     Definition of Impositions.  "Impositions" means, collectively, [i] taxes
        -------------------------
(including,  without  limitation,  all  capital  stock  and  franchise  taxes of
Landlord  imposed  by  the  Facility  State  or  any  governmental entity in the
Facility  State  due  to  this  lease transaction or Landlord's ownership of the
Leased  Property  and  the  income  arising  therefrom, or due to Landlord being
considered  as  doing  business  in  the  Facility  State  because of Landlord's
ownership  of  the  Leased Property or lease thereof to Tenant), all real estate
and  personal property ad valorem, sales and use, business or occupation, single
business,  gross  receipts,  transaction  privilege, rent or similar taxes; [ii]
assessments  (including,  without  limitation,  all  assessments  for  public
improvements  or  benefits,  whether  or not commenced or completed prior to the
date  hereof  and  whether or not to be completed within the Term); [iii] ground
rents,  water,  sewer  or other rents and charges, excises, tax levies, and fees
(including,  without  limitation, license, permit, inspection, authorization and
similar  fees);  [iv]  all  taxes  imposed  on Tenant's operations of the Leased
Property,  including,  without  limitation,  employee  withholding taxes, income
taxes  and  intangible taxes; [v] all taxes imposed by the Facility State or any
governmental  entity in the Facility State with respect to the conveyance of the
Leased  Property  by Landlord to Tenant or Tenant's designee, including, without
limitation,  conveyance  taxes; and [vi] 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 or any part
thereof and/or the Rent (including all interest and penalties thereon due to any
failure  in payment by Tenant), which at any time prior to, during or in respect
of  the  Term hereof may be assessed or imposed on or in respect of or be a lien
upon  [a]  Landlord  or  Landlord's  interest in the Leased Property or any part
thereof;  [b]  the  Leased Property or any part thereof or any rent therefrom or
any  estate,  right, title or interest therein; or [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 by Tenant of the Leased Property
or  any part thereof.  Tenant shall not, however, be required to pay any capital
gains tax or any tax based on net income imposed on Landlord by any governmental
entity  other than the capital stock and franchise taxes described in clause [i]
above.
3.3     Escrow  of Impositions.  Tenant shall deposit with Landlord on the first
        ----------------------
day  of each month a sum equal to 1/12th of the Impositions assessed against the
Leased  Property  for  the  preceding tax year for real estate taxes, which sums
shall  be  used by Landlord toward payment of such Impositions.  In addition, if
an  Event  of  Default  occurs  and  while  it remains uncured, Tenant shall, at
Landlord's  election, deposit with Landlord on the first day of each month a sum
equal  to 1/12th of the Impositions assessed against the Leased Property for the
preceding tax year other than for real estate taxes, which sums shall be used by
Landlord  toward  payment  of such Impositions.  Tenant, on demand, shall pay to
Landlord  any additional funds necessary to pay and discharge the obligations of
Tenant  pursuant  to the provisions of this section.  The receipt by Landlord of
the  payment  of  such  Impositions  by  and  from  Tenant  shall  only be as an
accommodation  to  Tenant, the mortgagees, and the taxing authorities, and shall
not  be  construed  as  rent or income to Landlord, Landlord serving, if at all,
only  as  a conduit for delivery purposes.  The foregoing provision shall become
applicable  only  at  such  time as the escrow of Impositions is not required by
Lender,  it being understood and agreed that for so long as Lender requires that
the  real  estate  tax portion of the Imposition be escrowed with Lender, Tenant
shall  be  deemed to have fulfilled its obligations under this  3.3 with respect
to the real estate tax portion of the Imposition provided Tenant receives notice
either  from  Lender  or from Landlord as required pursuant to  15.12.4 and then
Tenant  makes  the required escrow payment of the real estate tax portion of the
Imposition  to  Lender  as  and  when  due.
3.4     Utilities.  Tenant  shall  pay,  as  Additional  Rent,  all  taxes,
        ---------
assessments,  charges,  deposits,  and  bills  for utilities, including, without
        ---
limitation,  charges for water, gas, oil, sanitary and storm sewer, electricity,
telephone  service,  and  trash  collection,  which  may  be charged against the
occupant of the Improvements during the Term.  If an Event of Default occurs and
while  it  remains  uncured,  Tenant shall, at Landlord's election, deposit with
Landlord  on  the first day of each month a sum equal to 1/12th of the amount of
the  annual  utility  expenses for the preceding Lease Year, which sums shall be
used  by  Landlord  to  pay  such  utilities.  Tenant  shall,  on demand, pay to
Landlord any additional amount needed to pay such utilities.  Landlord's receipt
of  such  payments  shall  only  be  an  accommodation to Tenant and the utility
companies  and  shall  not  constitute  rent  or  income  to  Landlord.  Absent
circumstances  beyond  Tenant's  reasonable  control,  Tenant shall at all times
maintain  that  amount of heat necessary to ensure against the freezing of water
lines.  Tenant  hereby  agrees  to indemnify and hold Landlord harmless from and
against  any liability or damages to the utility systems and the Leased Property
that  may  result  from  Tenant's  failure  to  maintain  sufficient heat in the
Improvements  absent  circumstances  beyond  Tenant's  reasonable  control.
3.5     Discontinuance of Utilities.  Landlord will not be liable for damages to
        ---------------------------
person  or  property  or  for  injury  to,  or interruption of, business for any
discontinuance of utilities nor will such discontinuance in any way be construed
as  an  eviction  of  Tenant or cause an abatement of rent or operate to release
Tenant  from  any  of  Tenant's  obligations  under  this  Lease.
3.6     Business  Expenses.  Tenant  shall  promptly  pay all expenses and costs
        ------------------
incurred  in  connection  with  the  operation  of  the  Facility  on the Leased
Property,  including,  without  limitation, employee benefits, employee vacation
and  sick  pay,  consulting  fees,  and  expenses  for  inventory  and supplies.
3.7     Permitted  Contests.  Tenant,  on its own or on Landlord's behalf (or in
        -------------------
Landlord's  name),  but  at  Tenant's expense, may contest, by appropriate legal
proceedings  conducted  in  good  faith  and  with  due diligence, the amount or
validity  or  application,  in  whole or in part, of any Imposition or any Legal
Requirement or insurance requirement or any lien, attachment, levy, encumbrance,
charge  or  claim  provided  that [i] in the case of an unpaid Imposition, lien,
attachment,  levy,  encumbrance,  charge  or  claim,  the  commencement  and
continuation  of  such  proceedings  shall  suspend  the collection thereof from
Landlord  and from the Leased Property; [ii] neither the Leased Property nor any
Rent  therefrom  nor  any  part  thereof  or  interest  therein  would be in any
immediate  danger  of being sold, forfeited, attached or lost; [iii] in the case
of  a  Legal Requirement, Landlord would not be in any immediate danger of civil
or  criminal  liability  for  failure to comply therewith pending the outcome of
such proceedings; [iv] in the event that any such contest shall involve a sum of
money  or  potential  loss  in  excess  of  $50,000.00,  Tenant shall deliver to
Landlord  and its counsel an opinion of Tenant's counsel to the effect set forth
in  clauses  [i], [ii] and [iii], to the extent applicable; [v] in the case of a
Legal  Requirement  and/or  an  Imposition,  lien, encumbrance or charge, Tenant
shall  give  such  reasonable  security as may be demanded by Landlord to insure
ultimate  payment  of  the  same  and  to  prevent any sale or forfeiture of the
affected  Leased  Property  or  the  Rent  by  reason  of  such  nonpayment  or
noncompliance;  provided,  however,  the provisions of this section shall not be
construed to permit Tenant to contest the payment of Rent (except as to contests
concerning  the  method of computation or the basis of levy of any Imposition or
the  basis  for  the  assertion of any other claim) or any other sums payable by
Tenant  to Landlord hereunder; [vi] in the case of an insurance requirement, the
coverage required by Article 4 shall be maintained; and [vii] if such contest be
finally  resolved  against  Landlord or Tenant, Tenant shall, as Additional Rent
due  hereunder,  promptly  pay the amount required to be paid, together with all
interest  and  penalties  accrued  thereon,  or comply with the applicable Legal
Requirement  or  insurance  requirement.  Landlord,  at  Tenant's expense, shall
execute  and deliver to Tenant such authorizations and other documents as may be
reasonably  required in any such contest, and, if reasonably requested by Tenant
or  if  Landlord  so  desires,  Landlord  shall join as a party therein.  Tenant
hereby  agrees  to  indemnify  and  save  Landlord harmless from and against any
liability,  cost  or  expense  of  any kind that may be imposed upon Landlord in
connection  with  any  such  contest  and  any  loss  resulting  therefrom.
                            ARTICLE 4:     INSURANCE
4.1     Property  Insurance.  At Tenant's expense, Tenant shall maintain in full
        -------------------
force  and  effect  a  property insurance policy or policies insuring the Leased
Property  against  the  following:
(a)     Loss  or  damage  commonly covered by a "All Risk" or "Special Form", as
the  case  may  be,  policy  insuring  against  physical  loss  or damage to the
Improvements  and Personal Property, including, but not limited to, risk of loss
from  fire  and  other hazards, collapse, transit coverage, vandalism, malicious
mischief,  theft,  earthquake (if the Leased Property is in earthquake zone 1 or
2)  and  sinkholes  (if usually recommended in the area of the Leased Property).
The  policy  shall be in the amount of the full replacement value (as defined in
4.5)  of  the  Improvements and Personal Property and shall contain a deductible
amount  acceptable  to  Landlord.  Landlord  shall  be  named  as  an additional
insured.  The  policy  shall  include  a  stipulated value endorsement or agreed
amount  endorsement  and endorsements for contingent liability for operations of
building  laws,  demolition  costs,  and  increased  cost  of  construction.
(b)     If  applicable,  loss  or damage by explosion of steam boilers, pressure
vessels,  or  similar  apparatus,  now  or  hereafter  installed  on  the Leased
Property,  in  commercially  reasonable  amounts  acceptable  to  Landlord.
(c)     Consequential  loss  of  rents  and income coverage insuring against all
"All  Risk"  or  "Special  Form",  as  the case may be, risk of physical loss or
damage  with  limits and deductible amounts acceptable to Landlord covering risk
of  loss  during the course of reconstruction, and containing an endorsement for
extended  period  of  indemnity of at least 90 days, and shall be written with a
stipulated  amount  of  coverage  if  available  at  a  reasonable  premium.
(d)     If  the  Leased Property is located, in whole or in part, in a federally
designated 100-year flood plain area, flood insurance for the Improvements in an
amount  equal  to  the  lesser  of  [i]  the  full  replacement  value  of  the
Improvements;  or  [ii]  the  maximum  amount  of  insurance  available  for the
Improvements  under  all  federal  and  private  flood  insurance  programs.
(e)     Loss  or  damage  caused  by the breakage of plate glass in commercially
reasonable  amounts  acceptable  to  Landlord.
(f)     Loss  or  damage  commonly covered by blanket crime insurance, including
employee  dishonesty,  loss  of  money  orders  or  paper  currency, depositor's
forgery, and loss of property of patients accepted by Tenant for safekeeping, in
commercially  reasonable  amounts  acceptable  to  Landlord.
4.2     Liability  Insurance.  At  Tenant's  expense,  Tenant  shall  maintain
        --------------------
liability  insurance  against  the  following:
(a)     Claims  for  personal  injury  or  property  damage  commonly covered by
comprehensive  general  liability  insurance  with  endorsements  for incidental
malpractice,  contractual,  personal  injury,  owner's  protective  liability,
voluntary  medical  payments,  products  and  completed  operations,  broad form
property  damage,  and  extended  bodily  injury,  with  commercially reasonable
amounts  for  bodily  injury,  property  damage,  and voluntary medical payments
acceptable  to  Landlord,  but  with  a  combined  single limit of not less than
$5,000,000.00  per  occurrence.
(b)     Claims  for  personal  injury  and  property  damage commonly covered by
comprehensive  automobile  liability insurance, covering all owned and non-owned
automobiles,  with  commercially  reasonable amounts for bodily injury, property
damage,  and  for automobile medical payments acceptable to Landlord, but with a
combined  single  limit  of  not  less  than  $5,000,000.00  per  occurrence.
(c)     Claims  for  personal injury commonly covered by medical malpractice and
professional  liability  insurance in commercially reasonable amounts acceptable
to  Landlord.
(d)     Claims  commonly  covered  by  workers'  compensation  insurance for all
persons  employed  by Tenant on the Leased Property.  Such workers' compensation
insurance  shall be in accordance with the requirements of all applicable local,
state,  and  federal  law.
4.3     Builder's  Risk  Insurance.  In connection with any construction, Tenant
        ---------------------------
shall  maintain  in  full  force  and  effect  a  builder's completed value risk
coverage  ("Builder's  Risk  Coverage")  of  insurance  in  a  nonreporting form
insuring  against  all  "All  Risk"  risk  of  physical  loss  or  damage to the
Improvements,  including,  but  not limited to, risk of loss from fire and other
hazards,  collapse,  transit  coverage,  vandalism,  malicious  mischief, theft,
earthquake  (if  Leased Property is in earthquake zone 1 or 2) and sinkholes (if
usually  recommended  in  the  area of the Leased Property).  The Builder's Risk
Coverage  shall  include  endorsements providing coverage for building materials
and  supplies  and  temporary premises.  The Builder's Risk Coverage shall be in
the amount of the full replacement value of the Improvements and shall contain a
     deductible  amount  acceptable  to Landlord.  Landlord shall be named as an
additional  insured.  The  Builder's  Risk Coverage shall include an endorsement
permitting  initial  occupancy.
4.4     Insurance  Requirements.  The  following  provisions  shall apply to all
        -----------------------
insurance  coverages  required  hereunder:
(a)     The  form and substance of all policies shall be subject to the approval
of  Landlord,  which  approval  will  not  be  unreasonably  withheld.
(b)     The carriers of all policies shall have a Best's Rating of "A" or better
and  a  Best's Financial Category of XII or higher and shall be authorized to do
insurance  business  in  the  Facility  State.
(c)     Tenant shall be the "named insured" and Landlord shall be an "additional
insured"  on  each  policy.
(d)     Tenant  shall  deliver  to Landlord certificates or policies showing the
required  coverages  and  endorsements.  The policies of insurance shall provide
that  the  policy  may not be canceled or not renewed, and no material change or
reduction  in  coverage  may  be  made,  without at least 30 days' prior written
notice  to  Landlord.
(e)     The  policies  shall  contain  a  severability  of  interest  and/or
cross-liability  endorsement,  provide  that  the acts or omissions of Tenant or
Landlord  will  not invalidate the coverage of the other party, and provide that
Landlord  shall  not  be  responsible  for  payment  of  premiums.
(f)     All  loss  adjustment  shall require the written consent of Landlord and
Tenant,  as  their  interests  may  appear.
(g)     At  least  30  days  prior  to  the expiration of each insurance policy,
Tenant  shall  deliver  to Landlord a certificate showing renewal of such policy
and  payment  of  the  annual  premium  therefor  and  a  current Certificate of
Compliance  (in  the form delivered at the time of Closing) completed and signed
by  Tenant's  insurance  agent.
4.5     Replacement  Value.  The  term "full replacement value" means the actual
        ------------------
replacement  cost  thereof  from  time  to  time,  including  increased  cost of
construction  endorsement,  with  no reductions or deductions.  Tenant shall, in
connection  with  each  annual  policy  renewal,  deliver  to  Landlord  a
redetermination  of  the full replacement value by the insurer or an endorsement
indicating  that  the Leased Property is insured for its full replacement value.
If Tenant makes any Permitted Alterations (as hereinafter defined) to the Leased
     Property, Landlord may have such full replacement value redetermined at any
time  after  such  Permitted  Alterations  are made, regardless of when the full
replacement  value  was  last  determined.
4.6     Blanket  Policy.  Notwithstanding  anything to the contrary contained in
        ---------------
this  Article 4, Tenant may carry the insurance required by this Article under a
blanket policy of insurance, provided that the coverage afforded Tenant will not
be  reduced  or diminished or otherwise be different from that which would exist
under  a  separate  policy  meeting  all  of  the  requirements  of  this Lease.
4.7     No  Separate  Insurance.  Tenant  shall  not take out separate insurance
        -----------------------
concurrent  in  form  or contributing in the event of loss with that required in
this  Article,  or  increase  the  amounts  of  any  then existing insurance, by
securing  an additional policy or additional policies, unless all parties having
an insurable interest in the subject matter of the insurance, including Landlord
and  any mortgagees, are included therein as additional insureds or loss payees,
the  loss  is  payable  under  said  insurance  in the same manner as losses are
payable under this Lease, and such additional insurance is not prohibited by the
existing policies of insurance.  Tenant shall immediately notify Landlord of the
taking out of such separate insurance or the increasing of any of the amounts of
the  existing insurance by securing an additional policy or additional policies.
4.8     Waiver  of  Subrogation.  Each  party hereto hereby waives any and every
        -----------------------
claim  which arises or may arise in its favor and against the other party hereto
during  the  Term  for  any  and  all loss of, or damage to, any of its property
located  within  or  upon, or constituting a part of, the Leased Property, which
loss  or  damage  is covered by valid and collectible insurance policies, to the
extent that such loss or damage is recoverable under such policies.  Said mutual
waiver  shall  be  in  addition  to, and not in limitation or derogation of, any
other  waiver  or  release  contained  in this Lease with respect to any loss or
damage  to  property  of  the parties hereto.  Inasmuch as the said waivers will
preclude  the  assignment  of  any  aforesaid  claim  by  way of subrogation (or
otherwise)  to  an  insurance  company  (or any other person), each party hereto
agrees  immediately  to  give  each  insurance  company  which  has issued to it
policies  of  insurance, written notice of the terms of said mutual waivers, and
to  have such insurance policies properly endorsed, if necessary, to prevent the
invalidation  of  said  insurance coverage by reason of said waivers, so long as
such  endorsement  is  available  at  a  reasonable  cost.
4.9     Mortgages.  The  following  provisions  shall  apply  if Landlord now or
        ---------
hereafter  places  a  mortgage  on the Leased Property or any part thereof:  [i]
Tenant shall obtain a standard form of lender's loss payable clause insuring the
interest  of  the  mortgagee; [ii] Tenant shall deliver evidence of insurance to
such  mortgagee;  [iii]  loss  adjustment  shall  require  the  consent  of  the
mortgagee; and [iv] Tenant shall provide such other information and documents as
may  be  required  by  the  mortgagee.
4.10     Escrows.  After an Event of Default occurs hereunder, Tenant shall make
         -------
such  periodic  payments  of  insurance  premiums  in accordance with Landlord's
requirements  after  receipt  of  notice  thereof  from  Landlord.
                            ARTICLE 5:     INDEMNITY
5.1     Tenant's  Indemnification.  Tenant hereby indemnifies and agrees to hold
        -------------------------
harmless  Landlord  and  HCN  (jointly  and severally, "Indemnified Party"), any
successors  or  assigns  of  Indemnified Party, and Indemnified Party's and such
successor's  and  assign's  directors,  officers,  employees and agents from and
against any and all demands, claims, causes of action, fines, penalties, damages
     (including  consequential  damages),  losses, liabilities (including strict
liability),  judgments,  and expenses (including, without limitation, reasonable
attorneys'  fees,  court  costs,  and  the  costs set forth in  8.7) incurred in
connection  with  or  arising  from:  [i]  the  use  or  occupancy of the Leased
Property  by  Tenant  or  any  persons claiming under Tenant; [ii] any activity,
work,  or  thing done, or permitted or suffered by Tenant in or about the Leased
Property;  [iii]  any  acts,  omissions,  or  negligence of Tenant or any person
claiming  under  Tenant,  or  the  contractors,  agents, employees, invitees, or
visitors  of  Tenant  or  any  such  person;  [iv]  any  breach,  violation,  or
nonperformance  by  Tenant or any person claiming under Tenant or the employees,
agents,  contractors,  invitees, or visitors of Tenant or of any such person, of
any  term,  covenant,  or  provision  of  this  Lease  or any law, ordinance, or
governmental requirement of any kind, including, without limitation, any failure
to  comply  with  any  applicable  requirements under the ADA; [v] any injury or
damage  to  the  person,  property or business of Tenant, its employees, agents,
contractors,  invitees,  visitors,  or any other person entering upon the Leased
Property;  [vi]  any  construction,  alterations,  changes  or demolition of the
Facility  performed  by  or contracted for by Tenant or its employees, agents or
contractors;  [vii]  any  obligations,  costs  or  expenses  arising  under  any
Permitted  Exceptions;  and  [viii] any claim under a Loan Document arising from
the acts or omissions of Tenant or Guarantor, including, but not limited to, (a)
any claim against HCN under an Indemnity Agreement granted by HCN to Lender; and
(b)  any  applicable  make-whole  premium  payable  to  Lender as a result of an
acceleration  of  the  Loan.  If  any  action  or  proceeding is brought against
Landlord,  its  employees,  or  agents by reason of any such claim, Tenant, upon
notice  from  Landlord,  will  defend the claim at Tenant's expense with counsel
reasonably satisfactory to Landlord.  All amounts payable to Landlord under this
section  shall  be  payable on written demand and any such amounts which are not
paid  within  10  days after demand therefore by Landlord shall bear interest at
Landlord's  rate  of  return as provided in the Commitment.  In case any action,
suit  or  proceeding is brought against Tenant by reason of any such occurrence,
Tenant shall use its commercially reasonable efforts to defend such action, suit
or  proceeding.  Nothing  in this  5.1 shall be construed as requiring Tenant to
indemnify  Landlord  with  respect to Landlord's own gross negligence or willful
misconduct  or  with  respect to any claim under the Loan Documents arising from
the  acts  or  omissions  of  Landlord  or  HCN.
5.1.1     Notice of Claim.  Landlord shall notify Tenant in writing of any claim
          ---------------
     or action brought against Landlord in which indemnity may be sought against
Tenant  pursuant to this section.  Such notice shall be given in sufficient time
to  allow  Tenant  to  defend  or  participate  in such claim or action, but the
failure  to  give  such notice in sufficient time shall not constitute a defense
hereunder  nor  in  any  way impair the obligations of Tenant under this section
unless  the  failure  to give such notice precludes Tenant's defense of any such
action.
5.1.2     Survival  of  Covenants.  The  covenants  of  Tenant contained in this
          -----------------------
section  shall  remain  in  full  force and effect after the termination of this
Lease  until  the  expiration  of the period stated in the applicable statute of
limitations  during  which a claim or cause of action may be brought and payment
in full or the satisfaction of such claim or cause of action and of all expenses
and  charges  incurred by Landlord relating to the enforcement of the provisions
herein  specified.
5.1.3     Reimbursement  of  Expenses.  Unless  prohibited by law, Tenant hereby
          ---------------------------
agrees  to  pay  to  Landlord all of the reasonable fees, charges and reasonable
out-of-pocket  expenses related to the Facility and required hereby, or incurred
by  Landlord  in  enforcing  the  provisions  of  this  Lease.
5.2     Environmental  Indemnity;  Audits.  Tenant hereby indemnifies and agrees
        ---------------------------------
to  hold harmless Landlord, any successors to Landlord's interest in this Lease,
and  Landlord's  and  such successors' directors, officers, employees and agents
from  and against any losses, claims, damages (including consequential damages),
penalties,  fines,  liabilities  (including  strict liability), costs (including
cleanup  and recovery costs), and expenses (including expenses of litigation and
reasonable  consultants'  and attorneys' fees) incurred by Landlord or any other
indemnitee  or  assessed against any portion of the Leased Property by virtue of
any  claim  or  lien  by  any  governmental or quasi-governmental unit, body, or
agency,  or  any  third  party, for cleanup costs or other costs pursuant to any
Environmental  Law.  Tenant's  indemnity  shall  survive the termination of this
Lease.  Provided,  however,  Tenant  shall  have  no  indemnity  obligation with
respect  to  [i]  Hazardous  Materials  first  introduced to the Leased Property
subsequent to the date that Tenant's occupancy of the Leased Property shall have
     fully  terminated;  or  [ii]  Hazardous  Materials introduced to the Leased
Property  by  Landlord,  its agent, employees, successors or assigns.  If at any
time  during the Term of this Lease any governmental authority notifies Landlord
or  Tenant  of  a  violation  of  any  Environmental  Law or Landlord reasonably
believes that a Facility may violate any Environmental Law, Landlord may require
one or more environmental audits of such portion of the Leased Property, in such
form, scope and substance as specified by Landlord, at Tenant's expense.  Tenant
shall,  within  30  days  after  receipt  of an invoice from Landlord, reimburse
Landlord  for  all  costs  and  expenses incurred in reviewing any environmental
audit,  including,  without  limitation,  reasonable  attorneys' fees and costs.
5.3     Limitation  of  Landlord's  Liability.  Landlord,  its  agents,  and
        -------------------------------------
employees,  will not be liable for any loss, injury, death, or damage (including
        -
consequential  damages) to persons, property, or Tenant's business occasioned by
theft,  act  of  God, public enemy, injunction, riot, strike, insurrection, war,
court  order,  requisition,  order  of  governmental  body  or  authority, fire,
explosion,  falling  objects,  steam, water, rain or snow, leak or flow of water
(including  water  from  the  elevator  system),  rain  or  snow from the Leased
Property  or  into  the  Leased Property or from the roof, street, subsurface or
from any other place, or by dampness or from the breakage, leakage, obstruction,
or  other  defects  of  the  pipes, sprinklers, wires, appliances, plumbing, air
conditioning, or lighting fixtures of the Leased Property, or from construction,
repair,  or  alteration  of the Leased Property or from any acts or omissions of
any  other  occupant  or visitor of the Leased Property, or from any other cause
beyond  Landlord's  control.
                  ARTICLE 6:     USE AND ACCEPTANCE OF PREMISES
6.1     Use of Leased Property.  Tenant shall use and occupy the Leased Property
        ----------------------
     exclusively  for  the  Facility Uses specified for the Facility and for all
lawful  and  licensed  ancillary uses, including the operation of an Alzheimer's
Memory  Loss  Unit,  provided  Tenant  complies  with  all  applicable  Legal
Requirements  and  for  no  other  purpose  without the prior written consent of
Landlord.  Tenant  shall  obtain  and  maintain  all  approvals,  licenses,  and
consents  needed  to  use  and  operate the Leased Property as herein permitted.
Tenant  shall  deliver  to  Landlord  complete  copies of surveys, examinations,
certification  and  licensure  inspections,  compliance  certificates, and other
similar reports issued to Tenant by any governmental agency within 10 days after
Tenant's  receipt  of  each  item.
6.2     Acceptance  of Leased Property.  Tenant acknowledges that [i] Tenant and
        ------------------------------
its  agents  have had an opportunity to inspect the Leased Property; [ii] Tenant
has  found the Leased Property fit for Tenant's use; [iii] Landlord will deliver
the  Leased  Property  to  Tenant  in  "as-is"  condition;  [iv] Landlord is not
obligated  to  make  any improvements or repairs to the Leased Property; and [v]
the  roof, walls, foundation, heating, ventilating, air conditioning, telephone,
sewer,  electrical,  mechanical, elevator, utility, plumbing, and other portions
of  the  Leased  Property are in good working order.  Tenant waives any claim or
action  against  Landlord  with respect to the condition of the Leased Property.
LANDLORD  MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF
THE  LEASED  PROPERTY  OR  ANY  PART  THEREOF, EITHER AS TO ITS FITNESS FOR USE,
DESIGN  OR  CONDITION  FOR  ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, OR AS TO
QUALITY  OF  THE  MATERIAL  OR  WORKMANSHIP  THEREIN, LATENT OR PATENT, IT BEING
AGREED  THAT  ALL  SUCH  RISKS  ARE  TO  BE  BORNE  BY  TENANT.
6.3     Conditions  of Use and Occupancy.  Tenant agrees that during the Term it
        --------------------------------
shall use and keep the Leased Property in a careful, safe and proper manner; not
commit  or  suffer  waste thereon; not use or occupy the Leased Property for any
unlawful  purposes;  not use or occupy the Leased Property or permit the same to
be  used  or  occupied,  for  any  purpose or business deemed extra-hazardous on
account  of  fire  or  otherwise;  keep  the  Leased Property in such repair and
condition  as  may  be  required by the Board of Health, or other city, state or
federal  authorities,  free  of  all cost to Landlord; not permit any acts to be
done  which  will  cause  the  cancellation,  invalidation, or suspension of any
insurance  policy;  and  permit Landlord and its agents to enter upon the Leased
Property  at  all  reasonable  times to examine the condition thereof.  Landlord
shall  have  the  right  to  have  an  annual  inspection of the Leased Property
performed  and  Tenant shall pay an inspection fee of the lesser of $1,500.00 or
Landlord's  reasonable  out-of-pocket  expenses  within 30 days after receipt of
Landlord's  invoice.
                 ARTICLE 7:     MAINTENANCE AND MECHANICS' LIENS
7.1     Maintenance.  Tenant  shall  maintain,  repair,  and  replace the Leased
        -----------
Property,  including,  without  limitation,  all  structural  and  nonstructural
repairs and replacements to the roof, foundations, exterior walls, HVAC systems,
     equipment,  parking  areas,  sidewalks,  water,  sewer and gas connections,
pipes  and  mains.  Tenant  shall  pay,  as  Additional  Rent,  the full cost of
maintenance,  repairs,  and  replacements.  Tenant  shall  maintain  all drives,
sidewalks,  parking  areas, and lawns on or about the Leased Property in a clean
and  orderly  condition,  free  of accumulations of dirt, rubbish, snow and ice.
Tenant  shall  at  all  times  maintain, operate and otherwise manage the Leased
Property  on  a  basis  and  in a manner consistent with the standards currently
maintained  by  Tenant at the Leased Property.  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.  Tenant will not take or omit to
take  any  action  the  taking  or omission of which might materially impair the
value  or  the  usefulness  of  the Leased Property or any parts thereof for the
Facility  Uses.  Tenant  shall permit Landlord to inspect the Leased Property at
all  reasonable  times  and  on reasonable advance notice, and if Landlord has a
reasonable  basis  to believe that there are maintenance problem areas and gives
Tenant  written  notice thereof setting forth its concerns in reasonable detail,
Tenant  shall  deliver  to Landlord a plan of correction within 10 Business Days
after  receipt  of the notice.  Tenant shall diligently pursue correction of all
problem  areas  within 60 days after receipt of the notice or such longer period
as  may  be necessary for reasons beyond its reasonable control such as shortage
of  materials or delays in securing necessary permits, but not caused by lack of
diligence  by  Tenant  and,  upon expiration of the 60-day period, shall deliver
evidence  of  completion  to  Landlord  or an interim report evidencing Tenant's
diligent  progress towards completion and, at the end of the next 60-day period,
evidence  of  satisfactory completion.  Upon completion, Landlord shall have the
right  to  re-inspect  the  Facility and Tenant shall pay a re-inspection fee of
$750.00  plus  Landlord's reasonable out-of-pocket expenses within 30 days after
receipt  of  Landlord's  invoice.  At  each inspection of the Leased Property by
Landlord,  the  Facility employee in charge of maintenance shall be available to
tour  the  Facility  with  Landlord  and  answer  questions.
7.2     Required  Alterations.  Tenant shall, at Tenant's sole cost and expense,
        ---------------------
make any additions, changes, improvements or alterations to the Leased Property,
including  structural  alterations,  which  may  be required by any governmental
authorities,  including  those  required  to maintain licensure or certification
under the Medicare and Medicaid programs (if so certified), whether such changes
are  required  by  Tenant's use, changes in the law, ordinances, or governmental
regulations,  defects  existing as of the date of this Lease, or any other cause
whatsoever.  All  such  additions, changes, improvements or alterations shall be
deemed to be Permitted Alterations and shall comply with all laws requiring such
alterations  and  with  the  provisions  of  16.4.
7.3     Mechanic's  Liens.  Tenant shall have no authority to permit or create a
        -----------------
lien  against  Landlord's interest in the Leased Property, and Tenant shall post
notices or file such documents as may be required to protect Landlord's interest
in  the  Leased  Property  against  liens.  Tenant  hereby  agrees  to  defend,
indemnify,  and  hold  Landlord  harmless  from and against any mechanic's liens
against  the  Leased  Property  by  reason of work, labor, services or materials
supplied or claimed to have been supplied on or to the Leased Property.  Subject
to  Tenant's  right  to  contest  the  same in accordance with the terms of this
Lease,  Tenant  shall  remove,  bond-off, or otherwise obtain the release of any
mechanic's lien filed against the Leased Property within 10 days after notice of
the  filing  thereof.  Tenant  shall  pay  all expenses in connection therewith,
including,  without  limitation,  damages,  interest, court costs and reasonable
attorneys'  fees.
7.4     Replacements of Fixtures and Landlord's Personal Property.  Tenant shall
        ---------------------------------------------------------
not  remove  Fixtures  and Landlord's Personal Property from the Leased Property
except  to  replace  the  Fixtures  and  Landlord's Personal Property with other
similar items of equal quality and value.  Items being replaced by Tenant may be
removed  and  shall  become  the property of Tenant and items replacing the same
shall  be  and  remain  the  property  of  Landlord.  Tenant shall execute, upon
written  request  from  Landlord,  any  and  all documents necessary to evidence
Landlord's  ownership of Landlord's Personal Property and replacements therefor.
Tenant  may  finance  replacements  for  the  Fixtures  and  Landlord's Personal
Property  by  equipment lease or by a security agreement and financing statement
if, with respect to any financing of critical care equipment and with respect to
any other Personal Property having a value in excess of $250,000.00 [i] Landlord
has  consented  to  the  terms and conditions of the equipment lease or security
agreement;  and  [ii]  the  equipment  lessor  or  lender  has  entered  into  a
nondisturbance  agreement  with  Landlord  upon  terms and conditions reasonably
acceptable  to  Landlord,  including,  without  limitation,  the following:  [a]
Landlord  shall  have the right (but not the obligation) to assume such security
agreement  or  equipment  lease upon the occurrence of an Event of Default under
this  Lease;  [b]  the  equipment  lessor or lender shall notify Landlord of any
default  by  Tenant  under  the  equipment  lease or security agreement and give
Landlord  a  reasonable opportunity to cure such default; and [c] Landlord shall
have  the  right  to  assign  its  rights  under  the  equipment lease, security
agreement,  or  nondisturbance  agreement.  Tenant  shall,  within 30 days after
receipt  of  an  invoice  from  Landlord,  reimburse  Landlord for all costs and
expenses  incurred  in  reviewing  and  approving  the equipment lease, security
agreement,  and  nondisturbance  agreement,  including,  without  limitation,
reasonable  attorneys'  fees  and  costs.
7.5     Lender  Maintenance  Reserve Escrow.  Upon request from Tenant, Landlord
        -----------------------------------
shall cooperate with Tenant to secure the release of funds held by Lender in the
Lender  Maintenance Reserve Escrow to the extent such funds are available as set
forth  in  the Loan Documents.  Tenant's obligations set forth in this Article 7
shall  not  be  conditioned  upon the release of funds by Lender from the Lender
Maintenance  Reserve  Fund.
                      ARTICLE 8:     DEFAULTS AND REMEDIES
8.1     Events  of  Default.  The occurrence of any one or more of the following
        -------------------
shall  be an event of default ("Event of Default") hereunder without any advance
notice  to  Tenant  unless  specified  herein:
(a)     Tenant fails to pay in full any installment of Base Rent, any Additional
     Rent  or  any  other monetary obligation payable by Tenant under this Lease
within  10  days  after  such  payment  is  due.
(b)     Tenant or Guarantor (where applicable) fails to comply with any covenant
set  forth  in  Article  14,   15.6,  15.7,  15.8  or  15.12  of  this  Lease.
(c)     Tenant  fails  to  observe  and perform any other covenant, condition or
agreement  under  this  Lease  to  be  performed  by Tenant and [i] such failure
continues  for  a  period  of  30  days after written notice thereof is given to
Tenant  by  Landlord;  or  [ii]  if,  by reason of the nature of such default it
cannot  be  remedied  within  30  days,  Tenant  fails to proceed with diligence
reasonably  satisfactory  to  Landlord  after  receipt of the notice to cure the
default  or,  in  any  event,  fails  to  cure such default within 60 days after
receipt of the notice.  The foregoing notice and cure provisions do not apply to
any Event of Default otherwise specifically described in any other subsection of
8.1.
(d)     Tenant  abandons  or  vacates(except  during  a  period  of  repair  or
reconstruction  after  damage, destruction or a Taking) the Facility Property or
any material part thereof, ceases to operate any Facility, ceases to do business
or  ceases  to  exist  for  any  reason  for  any  one  or  more  days.
(e)     [i]  The  filing  by  Tenant  or  Guarantor  of  a  petition  under  the
Bankruptcy  Code  or  the  commencement of a bankruptcy or similar proceeding by
Tenant  or  Guarantor; [ii] the failure by Tenant or Guarantor within 60 days to
dismiss  an  involuntary  bankruptcy  petition  or  other  commencement  of  a
bankruptcy,  reorganization or similar proceeding against such party, or to lift
or  stay  any  execution,  garnishment or attachment of such consequence as will
impair  its  ability to carry on its operation at the Leased Property; [iii] the
entry  of  an order for relief under the Bankruptcy Code in respect of Tenant or
Guarantor;  [iv]  any  assignment  by Tenant or Guarantor for the benefit of its
creditors; [v] the entry by Tenant or Guarantor into an agreement of composition
with  its creditors; [vi] the approval by a court of competent jurisdiction of a
petition  applicable  to  Tenant  or  Guarantor  in  any  proceeding  for  its
reorganization  instituted  under  the  provisions  of  any  state  or  federal
bankruptcy,  insolvency,  or  similar  laws;  [vii]  appointment by final order,
judgment,  or  decree  of  a  court of competent jurisdiction of a receiver of a
whole or any substantial part of the properties of Tenant or Guarantor (provided
such  receiver  shall  not have been removed or discharged within 60 days of the
date  of  his  qualification).
(f)     [i]  Any  receiver,  administrator,  custodian  or  other  person  takes
possession  or control of any of the Leased Property and continues in possession
for  60  days;  [ii] any writ against any of the Leased Property is not released
within  60  days;  [iii]  any judgment is rendered or proceedings are instituted
against  the  Leased Property, Tenant which adversely affect the Leased Property
or  any  part  thereof,  which is not dismissed for 60 days (except as otherwise
provided  in  this  section);  [iv]  all  or a substantial part of the assets of
Tenant  are  attached,  seized,  subjected to a writ or distress warrant, or are
levied upon, or come into the possession of any receiver, trustee, custodian, or
assignee for the benefit of creditors; [v] Tenant is enjoined, restrained, or in
any  way  prevented  by  court  order,  or  any proceeding is filed or commenced
seeking  to  enjoin,  restrain  or  in  any way prevent Tenant or Guarantor from
conducting  all or a substantial part of its business or affairs; or [vi] except
as  otherwise permitted hereunder, a final notice of lien, levy or assessment is
filed  of  record  with respect to all or any part of the Leased Property or any
property  of  Tenant  or  Guarantor  located  at  the Leased Property and is not
dismissed,  discharged,  or  bonded-off  within  30  days.
(g)     Any representation or warranty made by Tenant or Guarantor in this Lease
or any other document executed in connection with this Lease, any guaranty of or
other  security  for  this  Lease,  or  any  report,  certificate,  application,
financial  statement  or  other  instrument  furnished  by  Tenant  or Guarantor
pursuant  hereto  or thereto shall prove to be false, misleading or incorrect in
any  material  respect  as  of  the  date  made.
(h)     Tenant  or  any  Affiliate  of  Tenant  defaults  on any indebtedness or
obligation  to  Landlord or any Landlord Affiliate, any Obligor Group Obligation
or  any  agreement  with  Landlord or any Landlord Affiliate, including, without
limitation, any lease with Landlord or any Landlord Affiliate, or the occurrence
of  a  default  under  any Material Obligation, and any applicable grace or cure
period  with  respect  to  default under such indebtedness or obligation expires
without  such  default  having  been  cured.  This provision applies to all such
indebtedness,  obligations  and  agreements  as  they  may be amended, modified,
extended,  or  renewed  from  time  to  time.
(i)     Any  guarantor  of  this  Lease  dissolves,  terminates,  is adjudicated
incompetent,  files  a petition in bankruptcy, or is adjudicated insolvent under
the  Bankruptcy  Code  or  any other insolvency law, or fails to comply with any
covenant  or  requirement  of  such  guarantor set forth in this Lease or in the
guaranty  of  such  guarantor,  which  is  not  cured within any applicable cure
period.
(j)     The  license  for  the Facility or any other Government Authorization is
canceled,  suspended,  reduced  to  provisional  or  temporary,  or  otherwise
invalidated,  or license revocation or decertification proceedings are commenced
against  Tenant, and in each instance, such action is not stayed pending appeal,
or,  as  a result of the acts or omissions of Tenant, any reduction of more than
5%  occurs  in  the  number  of  licensed  beds  or units at the Facility, or an
admissions  ban is issued for the Facility and remains in effect for a period of
more  than  45  days.
8.2     Remedies.  Upon  the  occurrence of an Event of Default under this Lease
        --------
or  any  Lease  Document,  and  at any time thereafter until Landlord waives the
default in writing or acknowledges cure of the default in writing, at Landlord's
     option,  without  declaration, notice of nonperformance, protest, notice of
protest,  notice of default, notice to quit or any other notice or demand of any
kind,  Landlord  may  exercise  any and all rights and remedies provided in this
Lease  or  any  Lease  Document  or  otherwise  provided under law or in equity,
including,  without  limitation,  any  one  or  more  of the following remedies:
(a)     Landlord may re-enter and take possession of the Leased Property without
     terminating  this  Lease,  and lease the Leased Property for the account of
Tenant,  holding Tenant liable for all costs of Landlord in reletting the Leased
Property and for the difference in the amount received by such reletting and the
amounts  payable  by  Tenant  under  the  Lease.
(b)     Landlord  may  terminate this Lease by written notice to Tenant, exclude
Tenant  from  possession  of the Leased Property and use commercially reasonable
efforts  to  lease  the Leased Property to others, holding Tenant liable for the
difference  in  the amounts received from such reletting and the amounts payable
by  Tenant  under  this  Lease.
(c)     Landlord  may re-enter the Leased Property and have, repossess and enjoy
the  Leased  Property  as  if  this  Lease had not been made, and in such event,
Tenant  and its successors and assigns shall remain liable for any contingent or
unliquidated  obligations  or  sums  owing  at  the  time  of such repossession.
(d)     Landlord  may have access to and inspect, examine and make copies of the
books  and  records  and  any  and  all  accounts, data and income tax and other
returns  of  Tenant  insofar  as  they pertain to the Leased Property subject to
landlord's obligation to maintain the confidentiality of any patient or employee
information  in  accordance with the requirements of applicable State or federal
law.
(e)     Landlord  may  accelerate  all of the unpaid Rent hereunder based on the
then  current Rent Schedule so that the aggregate Rent for the unexpired term of
this  Lease  becomes  immediately  due  and  payable.
(f)     Landlord  may  take  whatever  action  at law or in equity as may appear
necessary  or desirable to collect the Rent and other amounts payable under this
Lease  then  due  and  thereafter  to  become due, or to enforce performance and
observance  of  any  obligations,  agreements  or covenants of Tenant under this
Lease.
(g)     With  respect  to  the  Collateral  or  any  portion thereof and Secured
Party's  security interest therein, Secured Party may exercise all of its rights
as  secured party under Article 9 of the Uniform Commercial Code.  Secured Party
may  sell  the  Collateral  by  public  or private sale upon five days notice to
Tenant.  Tenant  agrees  that a commercially reasonable manner of disposition of
the  Collateral  shall  include, without limitation and at the option of Secured
Party, a sale of the Collateral, in whole or in part, concurrently with the sale
of  the  Leased  Property.
(h)     Secured  Party  may  obtain control over and collect the Receivables and
apply  the  proceeds  of  the  collections  to satisfaction of the Obligor Group
Obligations  unless prohibited by law.  Tenant appoints Landlord or its designee
as attorney for Tenant with powers [i] to receive, to endorse, to sign and/or to
deliver,  in  Tenant's name or Secured Party's name, any and all checks, drafts,
and  other instruments for the payment of money relating to the Receivables, and
to  waive demand, presentment, notice of dishonor, protest, and any other notice
with  respect  to any such instrument; [ii] to sign Tenant's name on any invoice
or  bill  of  lading relating to any Receivable, drafts against account debtors,
assignments  and  verifications  of Receivables, and notices to account debtors;
[iii] to send verifications of Receivables to any account debtor; and [iv] to do
all  other  acts  and  things  necessary  to carry out this Lease.  Absent gross
negligence  or  willful  misconduct of Secured Party, Secured Party shall not be
liable  for  any omissions, commissions, errors of judgment, or mistakes in fact
or  law  made  in  the  exercise of any such powers.  At Secured Party's option,
Tenant shall [i] provide Secured Party a full accounting of all amounts received
on  account of Receivables with such frequency and in such form as Secured Party
may  require,  either with or without applying all collections on Receivables in
payment of the Obligor Group Obligations or [ii] deliver to Secured Party on the
day  of  receipt  all such collections in the form received and duly endorsed by
Tenant.  At  Secured Party's request, Tenant shall institute any action or enter
into  any  settlement  determined  by  Secured  Party  to be necessary to obtain
recovery  or redress from any account debtor in default of Receivables.  Secured
Party  may give notice of its security interest in the Receivables to any or all
account  debtors  with instructions to make all payments on Receivables directly
to Secured Party, thereby terminating Tenant's authority to collect Receivables.
After  terminating Tenant's authority to enforce or collect Receivables, Secured
Party  shall  have  the  right  to take possession of any or all Receivables and
records  thereof and is hereby authorized to do so, and only Secured Party shall
have  the right to collect and enforce the Receivables.  Prior to the occurrence
and during the continuance of an Event of Default, at Tenant's cost and expense,
but  on  behalf  of  Secured Party and for Secured Party's account, Tenant shall
collect or otherwise enforce all amounts unpaid on Receivables and hold all such
collections  in  trust  for  Secured  Party,  but  Tenant  may  commingle  such
collections  with Tenant's own funds, until Tenant's authority to do so has been
terminated,  which  may be done only after an Event of Default.  Notwithstanding
any  other  provision  hereof,  Secured  Party  does  not assume any of Tenant's
obligations  under any Receivable, and Secured Party shall not be responsible in
any  way  for  the  performance  of  any  of the terms and conditions thereof by
Tenant.
(i)     Without  waiving  any prior or subsequent Event of Default, Landlord may
waive  any  Event  of  Default or, with or without waiving any Event of Default,
remedy  any  default.
(j)     Landlord  may terminate its obligation, if any, to disburse any Landlord
Payments.
(k)     Landlord  may  enter  and  take  possession of the Land and the Facility
without  terminating  this Lease and complete construction and renovation of the
Improvements  (or  any part thereof) and perform the obligations of Tenant under
the  Lease  Documents.  Without limiting the generality of the foregoing and for
the  purposes  aforesaid,  Tenant  hereby  appoints  Landlord  its  lawful
attorney-in-fact  with  full  power  to  do  any of the following:  [i] complete
construction,  renovation  and  equipping  of  the  Improvements  in the name of
Tenant;  [ii]  use  unadvanced  funds  remaining under the Investment Amount, or
funds that may be reserved, escrowed, or set aside for any purposes hereunder at
any  time,  or  to advance funds in excess of the Investment Amount, to complete
the  Improvements; [iii] make changes in the plans and specifications that shall
be  necessary  or  desirable  to  complete the Improvements in substantially the
manner  contemplated  by the plans and specifications; [iv] retain or employ new
general  contractors,  subcontractors,  architects, engineers, and inspectors as
shall be required for said purposes; [v] pay, settle, or compromise all existing
bills  and  claims,  which  may be liens or security interests, or to avoid such
bills  and  claims  becoming  liens  against  the  Facility or security interest
against  fixtures  or  equipment,  or  as  may be necessary or desirable for the
completion  of  the  construction  and  equipping of the Improvements or for the
clearance  of title; [vi] execute all applications and certificates, in the name
of  Tenant,  that  may be required in connection with any construction; [vii] do
any  and  every  act  that  Tenant  might do in its own behalf, to prosecute and
defend  all  actions  or  proceedings  in  connection with the Improvements; and
[viii]  to  execute,  deliver  and file all applications and other documents and
take any and all actions necessary to transfer the operations of the Facility to
Secured  Party  or  Secured Party's designee.  This power of attorney is a power
coupled  with  an  interest  and  cannot  be  revoked.
(l)     Landlord  may  apply,  with  or  without  notice  to  Tenant,  for  the
appointment  of  a  receiver ("Receiver") for Tenant or Tenant's business or for
the  Leased  Property.  Unless  prohibited  by law, such appointment may be made
either  before  or  after  termination  of  Tenant's  possession  of  the Leased
Property, without notice, without regard to the solvency or insolvency of Tenant
at  the  time  of  application  for such Receiver and without regard to the then
value  of  the  Leased Property, and Secured Party may be appointed as Receiver.
After the occurrence and during the continuance of an Event of Default, Landlord
shall  be entitled to appointment of a receiver as a matter of right and without
the  need  to  make any showing other than the existence of an Event of Default.
The  Receiver  shall  have  the  power to collect the rents, income, profits and
Receivables  of  the Leased Property during the pendency of the receivership and
all  other  powers  which  may  be  necessary or are usual in such cases for the
protection, possession, control, management and operation of the Leased Property
during the whole of said proceeding.  All sums of money received by the Receiver
from such rents and income, after deducting therefrom the reasonable charges and
expenses  paid  or  incurred  in connection with the collection and disbursement
thereof,  shall  be  applied  to  the  payment of the Rent or any other monetary
obligation of Tenant under this Lease, including, without limitation, any losses
or  damages  incurred  by Landlord under this Lease.  Tenant, if requested to do
so,  will  consent  to  the  appointment  of  any  such  Receiver  as aforesaid.
(m)     Landlord  may  terminate any management agreement with respect to any of
the  Leased Property and shall have the right to retain one or more managers for
the  Leased Property at the expense of Tenant, such manager(s) to serve for such
term  and  at  such  compensation as Landlord reasonably determines is necessary
under  the  circumstances.
8.3     Right  of  Setoff.  Landlord may, and is hereby authorized by Tenant to,
        -----------------
at  any  time  and  from time to time without advance notice to Tenant (any such
notice being expressly waived by Tenant), setoff or recoup and apply any and all
     sums  held  by  Landlord,  any  indebtedness of Landlord to Tenant, and any
claims  by  Tenant against Landlord, against any obligations of Tenant hereunder
and  against  any  claims  by  Landlord  against  Tenant,  whether  or  not such
obligations  or  claims  of  Tenant  are matured and whether or not Landlord has
exercised  any  other  remedies  hereunder.  The  rights  of Landlord under this
section  are  in  addition  to  any  other rights and remedies Landlord may have
against  Tenant.
8.4     Performance  of Tenant's Covenants.  Landlord may perform any obligation
        ----------------------------------
of Tenant which Tenant has failed to perform within five days after Landlord has
sent  a  written  notice to Tenant informing it of its specific failure.  Tenant
shall  reimburse  Landlord  on  demand, as Additional Rent, for any expenditures
thus  incurred  by Landlord and shall pay interest thereon at Landlord's rate of
return  as  provided  in  the  Commitment.
8.5     Late  Payment  Charge.  Tenant  acknowledges  that  any  default  in the
        ---------------------
payment  of  any  installment  of Rent payable hereunder will result in loss and
additional expense to Landlord in servicing any indebtedness of Landlord secured
by the Leased Property, handling such delinquent payments, and meeting its other
financial obligations, and because such loss and additional expense is extremely
difficult and impractical to ascertain, Tenant agrees that in the event any Rent
payable  to  Landlord  hereunder  is not paid within 10 days after the due date,
Tenant  shall  pay a late charge of 5% of the amount of the overdue payment as a
reasonable  estimate of such loss and expenses, unless applicable law requires a
lesser  charge,  in  which  event  the maximum rate permitted by such law may be
charged  by  Landlord.  The  10-day grace period set forth in this section shall
not  extend the time for payment of Rent or the period for curing any default or
constitute  a  waiver  of  such  default.
8.6     Default  Rent.  At Landlord's option at any time after the occurrence of
        -------------
an  Event  of  Default and while such Event of Default remains uncured, the Base
Rent  payable  under this Lease shall be increased to reflect Landlord's rate of
return  of  18.5% per annum on the Investment Amount ("Default Rent"); provided,
however,  that  if  a  court of competent jurisdiction determines that any other
amounts  payable  under  this  Lease are deemed to be interest, the Default Rent
shall be adjusted to ensure that the aggregate interest payable under this Lease
does  not  accrue  at  a  rate  in  excess  of  the  maximum  legal  rate.
8.7     Attorneys'  Fees.  Tenant  shall  pay  all reasonable costs and expenses
        ----------------
incurred  by  Landlord  in  enforcing or preserving Landlord's rights under this
Lease,  whether  or  not  an  Event of Default has actually occurred or has been
declared  and  thereafter  cured,  including,  without limitation, [i] the fees,
expenses,  and costs of any litigation, appellate, receivership, administrative,
bankruptcy,  insolvency  or  other similar proceeding; [ii] reasonable attorney,
paralegal,  consulting  and  witness  fees  and  disbursements;  and  [iii]  the
expenses,  including, without limitation, lodging, meals, and transportation, of
Landlord  and  its  employees, agents, attorneys, and witnesses in preparing for
litigation,  administrative, bankruptcy, insolvency or other similar proceedings
and  attendance  at  hearings,  depositions, and trials in connection therewith.
All such reasonable costs, expenses, charges and fees payable by Tenant shall be
deemed  to  be  Additional  Rent  under  this  Lease.
8.8     Escrows and Application of Payments.  As security for the performance of
        -----------------------------------
the  Obligor Group Obligations, Tenant hereby assigns to Landlord all its right,
title, and interest in and to all monies escrowed with Landlord under this Lease
and  all  deposits  with  utility  companies,  taxing  authorities and insurance
companies;  provided,  however,  that  Landlord  shall  not  exercise its rights
hereunder  until  an  Event  of  Default has occurred.  Any payments received by
Landlord  under any provisions of this Lease during the existence or continuance
of  an Event of Default shall be applied to the Obligor Group Obligations in the
order  which  Landlord  may  determine.
8.9     Remedies  Cumulative.  The remedies of Landlord herein are cumulative to
        --------------------
and not in lieu of any other remedies available to Landlord at law or in equity.
The  use  of  any one remedy shall not be taken to exclude or waive the right to
use  any  other  remedy.
8.10     Waivers.  Tenant waives [i] any notice required by statute or other law
         -------
as a condition to bringing an action for possession of, or eviction from, any of
the Leased Property, [ii] any right of re-entry or repossession, [iii] any right
to  a  trial  by  jury in any action or proceeding arising out of or relating to
this Lease, [iv]  any right of redemption whether pursuant to statute, at law or
in  equity,  [v]  all  presentments,  demands  for  performance,  notices  of
nonperformance,  protest,  notices  of  protest, notices of dishonor, notices to
quit  and  any  other notice or demand of any kind other than those specifically
provided  for  in this Lease, and [vi] all notices of the existence, creation or
incurring  of  any  obligation  or advance under this Lease before or after this
date.
8.11     Obligations Under the Bankruptcy Code.  Upon filing of a petition by or
         -------------------------------------
against  Tenant  under  the  Bankruptcy  Code,  Tenant,  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 Tenant, agree to pay monthly in advance on
the  first  day  of  each  month,  as  reasonable  compensation  for the use and
occupancy  of  the  Leased Property, an amount equal to all Rent due pursuant to
this  Lease.  Included  within  and  in  addition  to  any  other  conditions or
obligations  imposed upon Tenant or its successor in the event of the assumption
and/or assignment of this Lease are the following:  [i] the cure of any monetary
defaults  and reimbursement of pecuniary loss within not more than five Business
Days  of  assumption and/or assignment; [ii] the deposit of an additional amount
equal  to  not less than three months' Base Rent, which amount is agreed to be a
necessary  and  appropriate  deposit to adequately assure the future performance
under  this  Lease of the Tenant or its assignee; and [iii] the continued use of
the Leased Property for the Facility Uses.  Nothing herein shall be construed as
an  agreement  by  Landlord  to  any  assignment  of  this  Lease or a waiver of
Landlord's right to seek adequate assurance of future performance in addition to
that  set  forth  hereinabove  in connection with any proposed assumption and/or
assignment  of  this  Lease.
                      ARTICLE 9:     DAMAGE AND DESTRUCTION
9.1     Notice of Casualty.  If the Leased Property shall be destroyed, in whole
        ------------------
     or  in  part,  or  damaged  by  fire, flood, windstorm or other casualty in
excess  of  $150,000.00 (a "Casualty"), Tenant shall give written notice thereof
to  Landlord  within  two  Business  Days  after the occurrence of the Casualty.
Within  15  days  after  the occurrence of the Casualty or as soon thereafter as
such  information  is  reasonably  available to Tenant, Tenant shall provide the
following  information  to  Landlord:  [i]  the  date  of the Casualty; [ii] the
nature  of the Casualty; [iii] a description of the damage or destruction caused
by  the  Casualty, including the type of Leased Property damaged and the area of
the  Improvements  damaged;  [iv]  a preliminary estimate of the cost to repair,
rebuild,  restore  or replace the Leased Property; [v] a preliminary estimate of
the  schedule  to complete the repair, rebuilding, restoration or replacement of
the  Leased  Property;  [vi] a description of the anticipated property insurance
claim,  including  the  name  of the insurer, the insurance coverage limits, the
deductible  amount,  the expected settlement amount, and the expected settlement
date;  and [vii] a description of the business interruption claim, including the
name  of  the insurer, the insurance coverage limits, the deductible amount, the
expected  settlement amount, and the expected settlement date.  Within five days
after  request  from  Landlord,  Tenant will provide Landlord with copies of all
correspondence  to the insurer and any other information reasonably requested by
Landlord.
9.2     Substantial  Destruction.
        ------------------------
9.2.1     If  the  Facility Improvements are substantially destroyed at any time
other  than  during the final 18 months of the Initial Term or any Renewal Term,
Tenant  shall  promptly rebuild and restore such Improvements in accordance with
9.4  and Landlord shall make the insurance proceeds available to Tenant for such
restoration.  The term "substantially destroyed" means any casualty resulting in
     the  loss  of  use of 50% or more of the licensed beds at any one Facility.
9.2.2     If  the  Facility  Improvements are substantially destroyed during the
final  18  months of the Initial Term or any Renewal Term, Landlord may elect to
terminate  this  Lease and retain the insurance proceeds unless Tenant exercises
its  option  to  renew as set forth in  9.2.3.  If Landlord elects to terminate,
Landlord  shall  give notice ("Termination Notice") of its election to terminate
this  Lease  within  30 days after receipt of Tenant's notice of the damage.  If
Tenant  does  not exercise its option to renew under  9.2.3 within 15 days after
delivery  of  the Termination Notice, this Lease shall terminate on the 15th day
after  delivery  of  the  Termination  Notice.  If  this Lease is so terminated,
Tenant  shall  be  liable  to  Landlord  for  all Rent and all other obligations
accrued  under  this  Lease  through  the  effective  date  of  termination.
9.2.3     If  the  Facility  Improvements are substantially destroyed during the
final  18  months of the Initial Term or the Renewal Term and Landlord gives the
Termination  Notice,  Tenant  shall have the option to renew this Lease.  Tenant
shall  give  Landlord irrevocable notice of Tenant's election to renew within 15
days  after  delivery of the Termination Notice.  If Tenant elects to renew, the
Renewal  Term  will be in effect for the balance of the then current Term plus a
15-year  period.  The  Renewal  Term  will  commence  on the third day following
Landlord's receipt of Tenant's notice of renewal.  All other terms of this Lease
for  the  Renewal Term shall be in accordance with Article 12.  The Improvements
will  be  restored by Tenant in accordance with the provisions of this Article 9
regarding  partial  destruction.
9.3     Partial Destruction.  If the Facility Improvements are not substantially
        -------------------
     destroyed,  then  Tenant  shall  comply  with  the  provisions  of  9.4 and
Landlord  shall  make  the  insurance  proceeds  available  to  Tenant  for such
restoration.
9.4     Restoration.  Subject  to any limitations imposed by law with respect to
        -----------
the rebuilding of the Leased Premises, Tenant shall promptly repair, rebuild, or
restore  the  damaged  Leased  Property,  at Tenant's expense, so as to make the
Leased  Property  at  least  equal  in  value  to  the  Leased Property existing
immediately prior to such occurrence and as nearly similar to it in character as
is practicable and reasonable.  Before beginning such repairs or rebuilding with
respect  to  any  Casualty,  or  letting  any  contracts in connection with such
repairs  or  rebuilding,  Tenant  will  submit  for  Landlord's  approval, which
approval  Landlord  will  not  unreasonably  withhold  or  delay,  plans  and
specifications meeting the requirements of  16.2 for such repairs or rebuilding.
Promptly  after  receiving  Landlord's approval of the plans and specifications,
Tenant  will begin such repairs or rebuilding and will prosecute the repairs and
rebuilding to completion with diligence, subject, however, to strikes, lockouts,
acts  of  God,  embargoes,  governmental  restrictions,  and other causes beyond
Tenant's  reasonable  control.  Landlord  will  make available to Tenant the net
proceeds  of  any  fire  or  other  casualty insurance paid to Landlord for such
repair  or  rebuilding  as  the same progresses, after deduction of any costs of
collection, including reasonable attorneys' fees.  Payments will be made against
properly  certified  vouchers of a competent architect in charge of the work and
approved  by Landlord.  Payments for deposits for the repairing or rebuilding or
delivery  of  materials  to the Facility will be made upon Landlord's receipt of
evidence  satisfactory  to  Landlord that such payments are required in advance.
With  respect  to any Casualty, prior to commencing the repairing or rebuilding,
Tenant  shall  deliver  to  Landlord  for Landlord's approval a schedule setting
forth  the  estimated  monthly draws for such work.  Landlord will contribute to
such  payments  out  of the insurance proceeds an amount equal to the proportion
that  the total net amount received by Landlord from insurers bears to the total
estimated  cost  of  the  rebuilding  or repairing, multiplied by the payment by
Tenant  on  account of such work.  Landlord may, however, withhold 10% from each
payment  until  the  work  is completed and proof has been furnished to Landlord
that  no lien or liability has attached or will attach to the Leased Property or
to  Landlord  in  connection  with  such  repairing  or  rebuilding.  Upon  the
completion  of  rebuilding  and the furnishing of such proof, the balance of the
net proceeds of such insurance payable to Tenant on account of such repairing or
rebuilding will be paid to Tenant.  If required by law as a result of the nature
or  extent of the damage, Tenant will obtain and deliver to Landlord a temporary
or  final  certificate  of  occupancy  before  the  damaged  Leased  Property is
reoccupied  for  any  purpose.  Tenant shall complete such repairs or rebuilding
free and clear of mechanic's or other liens, and in accordance with the building
codes  and all applicable laws, ordinances, regulations, or orders of any state,
municipal,  or  other  public authority affecting the repairs or rebuilding, and
also  in  accordance with all requirements of the insurance rating organization,
or  similar  body.  Any  remaining  proceeds of insurance after such restoration
will  be  Tenant's  property.
9.5     Insufficient  Proceeds.  If the proceeds of any insurance settlement are
        ----------------------
not  sufficient  to  pay the costs of Tenant's repair, rebuilding or restoration
under  9.4 in full, Tenant shall deposit with Landlord at Landlord's option, and
within  10  days  of  Landlord's  request,  an  amount  sufficient in Landlord's
reasonable  judgment to complete such repair, rebuilding or restoration or shall
provide  Landlord  with evidence reasonably satisfactory to Landlord that Tenant
has  available  the  funds  needed  to  complete  such  repair,  rebuilding  or
restoration.  Tenant shall not, by reason of the deposit or payment, be entitled
to  any  reimbursement  from  Landlord  or  diminution in or postponement of the
payment  of  the  Rent.
9.6     Not Trust Funds.  Notwithstanding anything herein or at law or equity to
        ---------------
the contrary, none of the insurance proceeds paid to Landlord as herein provided
shall  be  deemed trust funds, and Landlord shall be entitled to dispose of such
proceeds  as  provided  in this Article 9.  Tenant expressly assumes all risk of
loss,  including  a  decrease  in  the  use,  enjoyment  or value, of the Leased
Property  from  any  casualty  whatsoever,  whether  or not insurable or insured
against.
9.7     Landlord's  Inspection.  During  the  progress  of  such  repairs  or
        ----------------------
rebuilding,  Landlord  and  its architects and engineers may, from time to time,
        -
inspect  the  Leased  Property  and will be furnished, if required by them, with
copies  of all plans, shop drawings, and specifications relating to such repairs
or rebuilding.  Tenant will keep all plans, shop drawings, and specifications at
the  building, and Landlord and its architects and engineers may examine them at
all  reasonable  times  and  on  reasonable  notice.  If, during such repairs or
rebuilding, Landlord and its architects and engineers determine that the repairs
or  rebuilding  are  not  being  done  in accordance with the approved plans and
specifications,  Landlord  will  give  prompt  notice  in  writing  to  Tenant,
specifying  in  detail  the particular deficiency, omission, or other respect in
which Landlord claims such repairs or rebuilding do not accord with the approved
plans  and  specifications.  Upon  the  receipt  of any such notice, Tenant will
cause  corrections  to  be  made  to  any deficiencies, omissions, or such other
respect.  Tenant's obligations to supply insurance, according to Article 4, will
be  applicable  to  any  repairs  or  rebuilding  under  this  section.
9.8     Landlord's  Costs.  Tenant  shall,  within  30  days after receipt of an
        -----------------
invoice  from  Landlord,  pay  the costs, expenses, and fees of any architect or
engineer  employed  by  Landlord  to  review any plans and specifications and to
supervise  and  approve  any  construction, or for any services rendered by such
architect  or  engineer  to Landlord as contemplated by any of the provisions of
this  Lease, or for any services performed by Landlord's attorneys in connection
therewith.
9.9     No  Rent  Abatement.  Rent  will  not  abate  pending  the  repairs  or
        -------------------
rebuilding  of  the  Leased  Property.
        -
                          ARTICLE 10:     CONDEMNATION
10.1     Total  Taking.  If,  by  exercise  of the right of eminent domain or by
         -------------
conveyance  made  in  response  to  the  threat  of  the  exercise of such right
("Taking"),  the  entire  Facility Property is taken, or so much of the Facility
Property  is  taken  that  the  number  of  licensed  beds/units at the Facility
Property is reduced by more than 25% as a result of such Taking, then this Lease
     will  end  with respect to the Facility Property only on the earlier of the
vesting  of  title  to  the Facility Property in the condemning authority or the
taking  of possession of the Facility Property by the condemning authority.  All
damages  awarded  for such Taking under the power of eminent domain shall be the
property  of Landlord, whether such damages shall be awarded as compensation for
diminution  in  value  of  the  leasehold  or  the fee of the Facility Property,
provided, however, nothing herein shall preclude Tenant from pursuing a separate
award  for  the  Taking  of  its  Tenant's  Property  (as  defined below) or for
relocation  costs  or  expenses.
10.2     Partial  Taking.  If,  after a Taking, so much of the Facility Property
         ---------------
remains  that  the  Facility  Property  can  be  used for substantially the same
purposes  for  which  it  was  used immediately before the Taking, then [i] this
Lease  will  end  as to the part taken on the earlier of the vesting of title to
such  Leased Property in the condemning authority or the taking of possession of
the  Leased  Property  by the condemning authority and the Rent will be adjusted
accordingly;  [ii]  at  its  cost,  Tenant shall restore so much of the Facility
Property as remains to a sound architectural unit substantially suitable for the
purposes  for  which  it  was  used  immediately  before  the Taking, using good
workmanship  and  new,  first-class  materials;  [iii]  upon  completion  of the
restoration,  Landlord  will  pay  Tenant  the  lesser  of the net award made to
Landlord  on  the  account  of the Taking (after deducting from the total award,
reasonable  attorneys',  appraisers',  and  other  fees  and  costs  incurred in
connection  with  the  obtaining of the award and amounts paid to the holders of
mortgages  secured  by  the Facility Property), or Tenant's actual out-of-pocket
costs of restoring the Facility Property; and [iv] Landlord shall be entitled to
the  balance of the net award except to the extent specifically allocated to the
value  of  Tenant's  Property  or  any  relocation costs or expenses incurred by
Tenant  as  a result of such partial Taking.  The restoration shall be completed
in  accordance  with   9.4, 9.5, 9.7, 9.8 and 9.9 with such provisions deemed to
apply  to  condemnation  instead  of  casualty.
10.3     Condemnation  Proceeds  Not  Trust  Funds.  Notwithstanding anything in
         -----------------------------------------
this  Lease  or at law or equity to the contrary, none of the condemnation award
paid  to Landlord shall be deemed trust funds, and Landlord shall be entitled to
dispose  of  such  proceeds  as  provided  in this Article 10.  Tenant expressly
assumes  all risk of loss, including a decrease in the use, enjoyment, or value,
of  the  Leased  Property  from  any  Taking.
                        ARTICLE 11:     TENANT'S PROPERTY
11.1     Tenant's  Property.  Tenant shall have the right to install, place, and
         ------------------
use  on  the  Leased Property such fixtures, furniture, equipment, inventory and
other  personal  property  in addition to Landlord's Personal Property as may be
required  or  as  Tenant  may,  from  time  to time, deem necessary or useful to
operate  the  Leased  Property  for  its  permitted  purposes.  All  fixtures,
furniture,  equipment, inventory, and other personal property installed, placed,
or used on the Leased Property which is owned by Tenant or leased by Tenant from
     third  parties  is  hereinafter  referred  to  as  "Tenant's  Property".
11.2     Requirements  for  Tenant's  Property.  Tenant shall comply with all of
         -------------------------------------
the  following  requirements  in  connection  with  Tenant's  Property:
(a)     Tenant  shall,  at Tenant's sole cost and expense, maintain, repair, and
replace  Tenant's  Property.
(b)     Tenant  shall, at Tenant's sole cost and expense, keep Tenant's Property
insured  against  loss  or  damage  by  fire,  vandalism and malicious mischief,
sprinkler  leakage,  earthquake, and other physical loss perils commonly covered
by  fire  and  extended  coverage,  boiler  and  machinery,  and  difference  in
conditions insurance in an amount not less than 90% of the then full replacement
cost thereof.  Tenant shall use the proceeds from any such policy for the repair
and replacement of Tenant's Property.  The insurance shall meet the requirements
of  4.3.
(c)     Tenant  shall  pay  all  taxes  applicable  to  Tenant's  Property.
(d)     If Tenant's Property is damaged or destroyed by fire or any other cause,
Tenant  shall  have  the  right,  but  not  the obligation, to repair or replace
Tenant's  Property  (unless the same is required for the operation of the Leased
Property  in compliance with applicable Legal Requirements, in which case Tenant
shall be required to promptly repair or replace the same) unless Landlord elects
to  terminate  this  Lease  pursuant  to  9.2.2.
(e)     Unless an Event of Default or any event which, with the giving of notice
or  lapse  of  time, or both, would constitute an Event of Default has occurred,
Tenant  may  remove Tenant's Property from the Leased Property from time to time
provided  that  [i]  the  items  removed  are not required to operate the Leased
Property for the Facility Uses (unless such items are being replaced by Tenant);
and  [ii]  Tenant  repairs  any damage to the Leased Property resulting from the
removal  of  Tenant's  Property.
(f)     Tenant  shall  not,  without the prior written consent of Landlord or as
otherwise  provided  in  this  Lease,  remove  any  Tenant's  Property or Leased
Property.  Tenant shall, at Landlord's option, remove Tenant's Property upon the
termination  or  expiration  of  this  Lease  and shall repair any damage to the
Leased  Property  resulting  from  the  removal of Tenant's Property.  If Tenant
fails to remove Tenant's Property within 30 days after request by Landlord, then
Tenant  shall  be  deemed to have abandoned Tenant's Property, Tenant's Property
shall  become  the  property  of  Landlord,  and  Landlord may remove, store and
dispose  of  Tenant's  Property.  In  such  event, Tenant shall have no claim or
right  against Landlord for such property or the value thereof regardless of the
disposition  thereof  by  Landlord.  Tenant shall pay Landlord, upon demand, all
expenses  incurred  by  Landlord in removing, storing, and disposing of Tenant's
Property  and repairing any damage caused by such removal.  Tenant's obligations
hereunder  shall  survive  the  termination  or  expiration  of  this  Lease.
(g)     Tenant  shall  perform  its  obligations  under  any  equipment lease or
security  agreement  for  Tenant's  Property.  For equipment loans or leases for
critical  care  equipment and for all other equipment having an original cost in
excess  of  $250,000.00,  Tenant  shall cause such equipment lessor or lender to
enter  into  a  nondisturbance agreement with Landlord upon terms and conditions
acceptable  to  Landlord,  including,  without  limitation,  the following:  [i]
Landlord  shall have the right (but not the obligation) to assume such equipment
lease or security agreement upon the occurrence of an Event of Default by Tenant
hereunder;  [ii]  such  equipment  lessor or lender shall notify Landlord of any
default  by  Tenant  under  the  equipment  lease or security agreement and give
Landlord a reasonable opportunity to cure such default; and [iii] Landlord shall
have  the  right  to  assign  its  interest  in  the equipment lease or security
agreement  and  nondisturbance  agreement.  Tenant  shall,  within 30 days after
receipt  of  an  invoice  from  Landlord,  reimburse  Landlord for all costs and
expenses  incurred  in  reviewing  and  approving  the equipment lease, security
agreement  and  nondisturbance  agreement,  including,  without  limitation,
reasonable  attorneys'  fees  and  costs.
                         ARTICLE 12:     RENEWAL OPTIONS
12.1     Renewal  Options.  Tenant  has  the  option to renew ("Renewal Option")
         ----------------
this  Lease  for one 15-year renewal term ("Renewal Term").  Tenant can exercise
the  Renewal  Option  only  upon  satisfaction  of  the  following  conditions:
(a)     There  shall be no uncured Event of Default, or any event which with the
passage of time or giving of notice would constitute an Event of Default, at the
     time  Tenant  exercises its Renewal Option nor on the date the Renewal Term
is  to  commence.
(b)     Tenant  shall  give  Landlord  irrevocable  written notice of renewal no
later  than  the  date  which is [i] 90 days prior to the expiration date of the
Initial  Term;  or  [ii]  15  days  after Landlord's delivery of the Termination
Notice  as  set  forth  in  9.2.3.
12.2     Effect  of  Renewal.  The  following  terms  and  conditions  will  be
         -------------------
applicable  if  Tenant  renews  the  Lease:
(a)     Effective  Date.  Except  as otherwise provided in  9.2.3, the effective
        ---------------
date  of any Renewal Term will be the first day after the expiration date of the
Term.  The  first  day  of  the  Renewal Term is also referred to as the Renewal
Date.
(b)     Investment  Amount.  Effective  as  of  the  Renewal  Date,  a  single
        ------------------
Investment  Amount  will  be  computed  by summing all Landlord Payments made to
        -
date.
(c)     Rent  Adjustment.  Effective  as  of  the  Renewal  Date, Landlord shall
        ----------------
calculate  Base  Rent  for the Renewal Term in accordance with  2.1(c)(2) of the
Commitment  and  shall  issue  a  new  Rent  Schedule  reflecting  the Base Rent
adjustment.  Until Tenant receives a revised Rent Schedule from Landlord, Tenant
shall for each month [i] continue to make installments of Base Rent according to
the  Rent Schedule in effect on the day before the Renewal Date; and [ii] within
10  days following Landlord's issuance of an invoice, pay the difference between
the installment of Base Rent paid to Landlord for such month and the installment
of  Base  Rent  actually  due  for  such month as a result of the renewal of the
Lease.
(d)     Other  Terms  and Conditions.  Except for the modifications set forth in
        ----------------------------
this  12.2, all other terms and conditions of the Lease will remain the same for
the  Renewal  Term.
                   ARTICLE 13:     RIGHT OF FIRST OPPORTUNITY
13.1     Right  of  First Opportunity.  In the event at any time during the Term
         ----------------------------
either  [i]  Landlord  elects  to  seek  a purchaser of the Leased Property (the
"Right  of First Opportunity Event") or [ii] Landlord receives a bona fide offer
from  a  third  party  (the "Offer") setting forth the terms and conditions upon
which  it  proposes  to  purchase  the Leased Property which it is interested in
accepting,  but in no event shall Landlord be obligated to accept (the "Right of
First  Refusal  Event"),  the  following  provisions  shall  apply:
(a)     In  the event of the occurrence of the Right of First Opportunity Event,
Landlord  shall  provide  Tenant  with  written notice of its intent to sell the
Leased  Property  and  its proposed terms with respect thereto (the "Opportunity
Notice").  Landlord  and  Tenant  shall  have a period of 30 days after Tenant's
receipt  of the Opportunity Notice (the "Protected Period") to negotiate in good
faith  with  respect  to  the  terms and conditions under which such transaction
shall  occur provided that in no event shall the purchase price be less than the
Base  Price  and  shall  occur  on  the  terms  and  conditions set forth in the
Transaction  Documents  (as  defined below) (the "Opportunity Transaction").  In
the event Landlord and Tenant are unable to reach agreement within the Protected
     Period  with  respect  to  the  terms  of the Opportunity Transaction, then
Landlord  shall  be  free  to  enter  into  negotiations  with  respect  to  the
Opportunity Transaction with any other person or entity; provided, however, that
Landlord  shall  not  be  permitted  to  consummate a transaction with any other
person  or  entity  on  terms  which  are  less favorable to Landlord than those
offered  to Tenant during the Protected Period without first offering Tenant the
opportunity  on  written  notice  setting  forth  such  terms  to consummate the
Opportunity  Transaction on such alternative terms and conditions (the "Modified
Opportunity  Notice");  provided,  however,  that Tenant shall be deemed to have
waived  its  right  to  proceed with such revised Opportunity Transaction in the
event  it  does  not  advise  Landlord of its election to proceed within 10 days
after  its  receipt  of  the  Modified  Opportunity  Notice.
(b)     In  the  event  of  the  occurrence  of  a Right of First Refusal Event,
Landlord  shall  provide  Tenant  with a true and correct copy of the Offer (the
"Right of First Refusal Notice").  Tenant shall have 20 days from its receipt of
the  Right  of  First Refusal Notice to advise Landlord in writing whether it is
prepared to purchase the Leased Property on the same terms and conditions as set
forth  in  the Offer.  Tenant's failure to so advise Landlord within such 20 day
period shall be deemed to be a determination by Tenant not to exercise the right
of  first  refusal  provided for herein, at which time Landlord shall be free to
consummate  the  transaction  which  was  the  subject  of  the Offer; provided,
however,  that  Landlord shall not be permitted to modify the terms specified in
the Offer in an manner more favorable to the third party than those reflected in
the  original  Offer  (the "Modified Offer") without first again offering Tenant
the  opportunity  to  consummate  a  transaction  on  the terms set forth in the
Modified  Offer;  provided,  however, that Tenant shall be deemed to have waived
its  right  to  proceed  with such a transaction in the event it does not advise
Landlord  of  its  election  to  proceed within 10 days after its receipt of the
Modified  Offer.
(c)     In  the  event  Landlord  does not consummate a transaction on the terms
provided  for  in the Offer or the Modified Offer, as applicable, within 90 days
after  the  date  thereof,  Landlord  shall  not be permitted to sell the Leased
Property to the Offeror or to any other party, whether on the terms set forth in
the  Offer  or  the  Modified  Offer,  as applicable, or pursuant to a new Offer
without again first offering Tenant an option to consummate a transaction on the
terms  specified  in  the  Offer,  the  Modified  Offer  or  any  new  Offer, as
applicable;  provided,  however,  that Tenant shall be deemed to have waived its
rights  hereunder  in  the  event it does not advise Landlord of its election to
proceed  within 10 days after its receipt of another copy of the Offer or of the
Modified  Offer  or  the  new  Offer,  as  applicable.
(d)     In  the  event  Tenant  exercises its right of first refusal or right of
first  opportunity  provided for herein, Tenant and Landlord shall have a period
of  30  days in which to enter into one or more written agreements outlining the
terms  and  conditions,  in  addition  to  those  set  forth in the Offer or the
Modified  Offer,  if  applicable, on which the sale will occur (the "Transaction
Documents").  In  the  event Landlord and Tenant fail to execute the Transaction
Documents  within  said  30  day  period,  then  Tenant  shall be deemed to have
forfeited  its  rights  hereunder  with  respect  to such transaction; provided,
however, that Landlord shall not be permitted to sell the Leased Property to any
other  person or entity on terms which are less favorable to Landlord than those
offered to Tenant during the Protected Period or beyond the expiration of the 90
day period provided for in clause (c), without first complying with the terms of
this  13.1  unless  Landlord  and  Tenant  failed  to  execute  the  Transaction
Documents  as  a result of Tenant's bad faith in the negotiation of the terms of
such  Transaction  Documents,  in which case Landlord shall be permitted to sell
the  Leased  Property  to  any other person or entity regardless of the terms of
such  transaction.
(e)     Any  sale  of the Lease Property by Landlord pursuant to this  13, other
than  to  Tenant,  shall  be  subject  to the rights of Tenant under this Lease,
including,  but  not  limited  to,  its  rights  under  this  13.
(f)     At  the  time  of  the acquisition of the Leased Property by Tenant, the
then  outstanding  amount  of principal and accrued and unpaid interest, if any,
due  under  the  $4,400,000  Note  shall  be  due and payable in full or if said
$4,400,000  Note  is  consolidated, then the lesser of $4,400,000.00 or the then
outstanding principal and accrued and unpaid interest of said consolidated note.
13.2     Closing.  Any  closing  pursuant  to, and the consequences to Tenant of
         -------
failing  to close after exercising its rights under  13.1 shall be in accordance
with  the  terms set forth in the Offer or Modified Offer and in the Transaction
Documents  executed  pursuant  to  the  terms  of  this  Article  13.
                       ARTICLE 14:     NEGATIVE COVENANTS
     Until  the  Obligor  Group  Obligations  shall have been performed in full,
Tenant  and  Guarantor  covenant  and  agree  that  Tenant  (and Guarantor where
applicable)  shall not do any of the following without the prior written consent
of  Landlord:
14.1     No  Debt.  Tenant  shall  not create, incur, assume, or permit to exist
         --------
any  indebtedness  with respect to the Leased Property other than [i] trade debt
incurred  in  the  ordinary  course  of business; [ii] indebtedness for Facility
working  capital  purposes;  and  [iii]  indebtedness  that  is  secured  by any
Permitted  Lien.
14.2     No Liens.  Tenant shall not create, incur, or permit to exist any lien,
         --------
charge,  encumbrance,  easement  or  restriction upon the Leased Property or any
lien  upon  or  pledge  of  any  interest in Tenant, except for Permitted Liens.
14.3     No  Guaranties.  Tenant  shall  not create, incur, assume, or permit to
         --------------
exist any guarantee of any loan or other indebtedness with respect to the Leased
Property  except for the endorsement of negotiable instruments for collection in
the  ordinary  course  of  business.
14.4     No Transfer.  Tenant shall not sell, lease, sublease, mortgage, convey,
         -----------
assign  or  otherwise  transfer  any  legal  or equitable interest in the Leased
Property  or  any part thereof, except for transfers made in connection with any
Permitted  Lien  or leases to the residents of the Leased Property or commercial
leases  with  respect  to  a  portion  of  the leased Property comprising in the
aggregate  less  than 2,500 square feet provided such commercial leases shall be
for  services  that  are  an  integral  part  of  the  Facility.
14.5     No  Dissolution.  Tenant  shall  not  dissolve,  liquidate,  merge,
         ---------------
consolidate  or  terminate its existence or sell, other than in a sale/leaseback
or  sale/manage  back transaction, assign, lease, or otherwise transfer (whether
in  one  transaction or in a series of transactions) all or substantially all of
its  assets  (whether  now owned or hereafter acquired) unless, in the case of a
merger or consolidation by Tenant, the surviving entity in such merger has a net
worth  immediately  after  the merger or consolidation at least equal to that of
the  Tenant immediately prior thereto.  Tenant shall maintain its organizational
structure  as  a special purpose, bankruptcy remote entity as required under the
Loan  Documents.
14.6     Subordination  of  Payments  to Affiliates.  After the occurrence of an
         ------------------------------------------
Event  of  Default  and  until  such  Event  of  Default  is cured (or waived in
writing),  Tenant  and  Guarantor  shall  not make any payments or distributions
(including,  without  limitation,  salary,  bonuses,  fees, principal, interest,
dividends,  liquidating  distributions, management fees, cash flow distributions
or  lease  payments  but  specifically excluding salary paid to employees of the
Facility or employees of Tenant or Guarantor in the ordinary course of business)
to  Guarantor  or  any  shareholder,  member  or partner of Tenant or Guarantor.
14.7     Change  of  Location  or  Name.  Tenant  shall  not,  without providing
         ------------------------------
Landlord  with  30  days prior notice thereof, change any of the following:  [i]
the  location  of  the  principal place of business or chief executive office of
Tenant,  or  any  office where any of Tenant's books and records are maintained;
[ii]  the name under which Tenant conducts any of its business or operations; or
[iii]  reorganize  or  otherwise  change  its  Organization  State.
                      ARTICLE 15:     AFFIRMATIVE COVENANTS
15.1     Perform Obligations.  Tenant shall perform all of its obligations under
         -------------------
     this  Lease,  the  Government Authorizations, the Permitted Exceptions, and
all  Legal  Requirements.
15.2     Proceedings  to Enjoin or Prevent Construction.  If any proceedings are
         ----------------------------------------------
filed  seeking  to  enjoin  or  otherwise prevent or declare invalid or unlawful
Tenant's  construction,  occupancy, maintenance, or operation of the Facility or
any  portion  thereof,  Tenant  will  cause  such  proceedings  to be vigorously
contested  in  good  faith,  and  in the event of an adverse ruling or decision,
prosecute  all  allowable  appeals  therefrom,  and  will,  without limiting the
generality  of the foregoing, resist the entry or seek the stay of any temporary
or  permanent  injunction  that  may  be  entered, and use its best commercially
reasonable efforts to bring about a favorable and speedy disposition of all such
proceedings  and  any  other  proceedings.
15.3     Documents  and  Information.
         ---------------------------
15.3.1     Furnish  Documents.  Tenant shall periodically during the term of the
           ------------------
Lease  deliver  to  Landlord the Annual Financial Statements, Periodic Financial
Statements,  Annual  Company  Budget and all other documents, reports, schedules
and  copies described on Exhibit E within the specified time periods.  With each
delivery of Annual Financial Statements and Periodic Financial Statements (other
     than  the  monthly  Facility Financial Statement) to Landlord, Tenant shall
also  deliver to Landlord a certificate signed by the Chief Financial Officer or
managing  member  (as applicable) of Tenant, an Annual Facility Financial Report
or  Quarterly Facility Financial Report, as applicable, and a Quarterly Facility
Accounts  Receivable  Aging  Report  all in the form of Exhibit F.  In addition,
Tenant shall deliver to Landlord the applicable Annual Facility Financial Report
and  the  applicable  Quarterly Facility Accounts Receivable Aging Report (based
upon  internal financial statements) within 60 days after the end of each fiscal
year.  After  the  occurrence  of  an Event of Default and receipt of Landlord's
written  request,  Tenant  shall  deliver  to Landlord an updated Annual Company
Budget  (based  on  a  12-month  rolling forward period) within 10 Business Days
after  receipt  of  Landlord's  request.
15.3.2     Furnish  Information.  Tenant and Guarantor shall [i] promptly supply
           --------------------
Landlord  with  such information concerning its financial condition, affairs and
property,  as  Landlord may reasonably request from time to time hereafter; [ii]
promptly notify Landlord in writing of any condition or event that constitutes a
breach  or event of default of any term, condition, warranty, representation, or
provisions  of  this  Lease  or any other agreement, and of any material adverse
change  in  its financial condition; [iii] maintain a standard and modern system
of  accounting;  [iv]  permit Landlord or any of its agent or representatives to
have  access  to  and  to  examine  all  of  its books and records regarding the
financial  condition  of  the  Facility  at  any  time or times hereafter during
business  hours  and  after  reasonable  oral  or written notice; and [v] permit
Landlord  to  copy and make abstracts from any and all of said books and records
subject  to  any limitations imposed by State or federal law with respect to the
confidentiality  of  patient  and  employee  records.
15.3.3     Further  Assurances  and  Information.  Tenant  shall,  on request of
           -------------------------------------
Landlord  from  time  to time, execute, deliver, and furnish documents as may be
necessary  to  fully  consummate the transactions contemplated under this Lease.
Within  15  days after a request from Landlord, Tenant shall provide to Landlord
such  additional  information regarding Tenant, Tenant's financial condition, or
the  Facility  as Landlord, or any existing or proposed creditor of Landlord, or
any  auditor  or  underwriter  of  Landlord, may reasonably require from time to
time, including, without limitation, a current Tenant's Certificate and Facility
Financial  Report  in  the  form  of  Exhibit  F.  From and after and during the
continuance  of  an  Event  of Default, Landlord shall have the right to require
Tenant  to provide to Landlord, at Tenant's expense, an appraisal prepared by an
MAI  appraiser  setting  forth  the  current  fair  market  value  of the Leased
Property.
15.3.4     Material  Communications.  Tenant  shall transmit to Landlord, within
           ------------------------
five  days  after  receipt  thereof,  any  material  communication  affecting  a
Facility,  this  Lease, the Legal Requirements or the Government Authorizations,
and  Tenant  will  promptly  respond  to Landlord's inquiry with respect to such
information.  Tenant  shall  notify  Landlord  in writing within five days after
Tenant  has  knowledge  of  any  potential, threatened or existing litigation or
proceeding  against, or investigation of, Tenant, Guarantor or the Facility that
would  reasonably  be  expected  to  adversely  affect  the right to operate the
Facility  or  Landlord's  title  to  the  Facility or Tenant's interest therein.
15.3.5     Requirements  for  Financial  Statements.  Tenant  shall  meet  the
           ----------------------------------------
following  requirements  in  connection  with  the  preparation of the financial
statements:  [i]  all  audited  financial  statements  shall  be  prepared  in
accordance  with  general  accepted  accounting principles consistently applied;
[ii]  all  unaudited  financial  statements  shall  be  prepared  in  a  manner
substantially  consistent  with prior audited and unaudited financial statements
submitted  to  Landlord; [iii] all financial statements shall fairly present the
financial  condition  and  performance  for  the relevant period in all material
respects;  [iv]  the audited financial statements shall include all notes to the
financial  statements  and  a  complete  schedule  of contingent liabilities and
transactions  with  Affiliates;  and  [v] the audited financial statements shall
contain  an  unqualified  opinion.
15.4     Compliance  With Laws.  Tenant shall comply with all Legal Requirements
         ---------------------
and  keep  all  Government  Authorizations in full force and effect.  Subject to
Tenant's  right  to contest the same in accordance with the terms of this Lease,
Tenant  shall  pay when due all taxes and governmental charges of every kind and
nature  that  are assessed or imposed upon Tenant at any time during the term of
the  Lease, including, without limitation, all income, franchise, capital stock,
property,  sales  and  use,  business, intangible, employee withholding, and all
taxes  and  charges  relating  to Tenant's business and operations at the Leased
Property.  Tenant  shall  be  solely  responsible  for compliance with all Legal
Requirements,  including  the ADA, and Landlord shall have no responsibility for
such  compliance.
15.5     Broker's  Commission.  Tenant  shall  indemnify Landlord from claims of
         --------------------
brokers  arising by the execution hereof or the consummation of the transactions
contemplated  hereby  and  from expenses incurred by Landlord in connection with
any  such  claims  (including  reasonable  attorneys'  fees).
15.6     Existence  and  Change  in Ownership.  Except as otherwise specifically
         ------------------------------------
provided  herein,  Tenant  and Guarantor shall maintain its existence throughout
the  term  of  this Lease and any change in the ownership of Tenant, directly or
indirectly,  shall  require  Landlord's  prior  written  consent.
15.7     Financial  Covenants.  The  defined  terms  used  in  this  section are
         --------------------
defined  in  15.7.1.  The  method of valuing assets shall be consistent with the
Financial Statements.  The following financial covenants shall be met throughout
the  term  of  this  Lease:
15.7.1     Definitions.
           -----------
(a)     "Facility  Cash  Flow"  means  the net income of Tenant arising from the
Facility as reflected on the Facility Financial Statement plus [i] the amount of
     the  provision  for  depreciation and amortization; plus [ii] the amount of
the  provision  for  management fees; plus [iii] the amount of the provision for
income  taxes;  plus [iv] the amount of the provision for Base Rent payments and
interest  and  equipment lease payments, if any; minus [v] an imputed management
fee  equal  to  5%  of gross revenues (net of contractual allowances); and minus
[vi]  an  imputed replacement reserve of $250 per licensed unit at the Facility,
per  year.
(b)     "Facility  Coverage  Ratio"  is  the ratio of [i] Facility Cash Flow for
each  applicable period; to [ii] the Base Rent payments and all debt service and
equipment  lease  payments  relating  for  the  applicable  period.
15.7.2     Coverage  Ratio.  Tenant  shall  maintain  for  each fiscal quarter a
           ---------------
Facility  Coverage  Ratio for the Facility of not less than 1.00 to 1.00 for the
third  and  fourth  quarter of 2003 and the first quarter of 2004 and a Facility
Coverage  Ratio  of  not  less  than  1.25  to 1.00 for each quarter thereafter.
15.8     Facility  Licensure  and  Certification.  Tenant shall [i] give written
         ---------------------------------------
notice  to  Landlord  within  five days after an inspection of the Facility with
respect to health care licensure or certification has occurred; and [ii] deliver
     to  Landlord copies of each of the reports, notices, correspondence and all
other items and documents listed under item no. 18 of Exhibit E within five days
after  receipt  thereof.  Tenant acknowledges that it has reviewed Exhibit E and
agrees  to  the  foregoing  obligation.  If Tenant receives a Facility survey or
inspection report with material deficiencies, notice of failure to comply with a
plan  of  correction  or  an  HIPDB adverse action report, Tenant shall cure all
deficiencies  and  implement  all corrective actions by the date required by the
regulatory  authority  and  shall  deliver  evidence  of  same  to  Landlord.
15.9     Transfer  of  License  and  Facility  Operations.  If  this  Lease  is
         ------------------------------------------------
terminated due to expiration of the Term, pursuant to an Event of Default or for
any  reason  other  than  Tenant's purchase of the Leased Property, or if Tenant
vacates  the  Leased  Property (or any part thereof) without termination of this
Lease  (other  than  during  periods  of  repair or reconstruction after damage,
destruction  or  a  Taking),  the  following  provisions  shall  be  immediately
effective:
15.9.1     Licensure.  Tenant  shall execute, deliver and file all documents and
           ---------
statements  requested by Landlord to effect the transfer of the Facility license
and  Government  Authorizations to a replacement operator designated by Landlord
("Replacement  Operator"),  subject  to  any  required  approval of governmental
regulatory authorities, and Tenant shall provide to Landlord all information and
     records required by Landlord in connection with the transfer of the license
and  Government  Authorizations.
15.9.2     Facility  Operations.  In  order  to  facilitate  a  responsible  and
           --------------------
efficient  transfer  of  the operations of the Facility, Tenant shall, if and to
the  extent  requested  by  Landlord,  [i]  deliver  to Landlord the most recent
updated reports, notices, schedules and documents listed under item nos. 17, 18,
19,  20  and  21  of Exhibit E; [ii] assuming Tenant has not already vacated the
Leased  Property,  continue  and  maintain  the operation of the Facility in the
ordinary course of business, including using its commercially reasonable efforts
to  retain  the  residents at the Facility to the fullest extent practicable and
consistent  with applicable laws and regulations, until transfer of the Facility
operations  to  the  Replacement  Operator  is  completed; [iii] enter into such
management  agreements,  operations  transfer  agreements  and  other  types  of
agreements  that  may  be  reasonably  requested  by Landlord or the Replacement
Operator,  provided, however, in no event shall Tenant be required to permit the
Replacement  Operator to operate the Leased Property under their licenses unless
they  receive  confirmation  that  doing  so  will  not violate applicable Legal
Requirements  and they get appropriate indemnities from the Replacement Operator
in  form  and  substance  reasonably  acceptable  to  Tenant;  and  [iv] provide
reasonable  access during normal business hours and on reasonable advance notice
for  Landlord  and  its  agents  to  show  the Facility to potential replacement
operators.  Tenant  consents  to  the  distribution  by  Landlord  to  potential
replacement  operators  of  Facility  financial  statements,  licensure reports,
financial  and  property  due diligence materials and other documents, materials
and information relating to the Facility.  The provisions of this section do not
create  or  establish  any  rights  in  Tenant  or  any third party and Landlord
reserves  all  rights  and  remedies  relating  to  termination  of  this Lease.
15.10     Bed  Operating Rights.  Tenant acknowledges and agrees that the rights
          ---------------------
to  operate the beds located at the Facility as set forth on Exhibit C under the
law  of  the  Facility  State,  to relocate such bed operating rights to another
location  or  locations,  and  to  transfer  such  bed operating rights to third
parties,  are  property of the Landlord and are an integral part of the real and
personal  property  that  constitutes  the Leased Property.  Tenant has only the
right  to  use  of  such rights during the term of this Lease and subject to its
terms  and conditions.  Subject to applicable law and to the extent permitted by
law,  all  operating rights shall automatically revert to Landlord or Landlord's
designee  upon  the  expiration  or  termination  of  this  Lease for any reason
whatsoever  (other  than  Tenant's  purchase of the Leased Property) without any
requirement  of  a  transfer  or  the  payment  of  additional  consideration.
15.11     Power  of  Attorney.  Effective upon [i] the occurrence and during the
          -------------------
continuance  of  an  Event of Default, or [ii] termination of this Lease for any
reason  other  than  Tenant's  purchase  of  the  Leased Property, Tenant hereby
irrevocably  and  unconditionally  appoints  Landlord,  or Landlord's authorized
officer,  agent,  employee  or  designee,  as  Tenant's  true  and  lawful
attorney-in-fact,  to  act  for  Tenant  in  Tenant's name, place, and stead, to
execute,  deliver  and  file  all  applications  and any and all other necessary
documents  and  statements  to  effect  the  issuance,  transfer, reinstatement,
renewal  and/or  extension  of  the  Facility  license  and  all  Governmental
Authorizations  issued  to  Tenant  or  applied for by Tenant in connection with
Tenant's  operation  of  the Facility, to permit any designee of Landlord or any
other  transferee to operate the Facility under the Governmental Authorizations,
and to do any and all other acts incidental to any of the foregoing, but only in
the  event  Tenant  fails to take such actions or execute such documents after a
request  from  Landlord.  Tenant  irrevocably  and  unconditionally  grants  to
Landlord  as  its  attorney-in-fact  full  power and authority to do and perform
every  act  necessary  and  proper  to  be  done  in  the exercise of any of the
foregoing  powers  as fully as Tenant might or could do if personally present or
acting,  with  full  power  of substitution, hereby ratifying and confirming all
that said attorney shall lawfully do or cause to be done by virtue hereof.  This
power  of  attorney  is  coupled  with  an  interest and is irrevocable prior to
Tenant's  purchase  of  the Leased Property.  Landlord shall provide Tenant with
copies of any documents filed and/or with a summary of any action taken pursuant
to  this  power  of  attorney.
15.12     Compliance with Loan Documents.  Tenant and Guarantor acknowledge that
          ------------------------------
[i]  Landlord  is  acquiring  the  Leased Property subject to the Mortgage; [ii]
Landlord  and HCN will assume the obligations set forth in the Mortgage and Loan
Documents; and [iii] Landlord and HCN would not have assumed the obligations set
forth  in  the  Mortgage  or  the  Loan Documents without Tenant and Guarantor's
agreement  to  comply  with  the  terms  and  conditions  set  forth in the Loan
Documents as hereinafter set forth.  Tenant and Guarantor have each reviewed the
Loan  Documents  and are familiar with the terms and conditions thereof.  Tenant
and  Guarantor  agree  to  comply with the terms and conditions set forth in the
Loan  Documents  to  the  extent  such  terms  and conditions apply to Tenant or
Guarantor,  or  the  operation  of  the  Facility including, but not limited to,
satisfying  all insurance requirements, maintaining required reserves and escrow
accounts, making payments due thereunder other than regularly scheduled payments
of principal and interest, and granting access to the Property to the Lenders as
set  forth  in  the  Loan  Documents.  Neither  Tenant  nor  Guarantor shall, in
connection  with  either  Tenant's  or Guarantor's compliance with the terms and
conditions  of  the  Loan Documents and the operation of the Facility, create or
permit  any  third  party  (other  than  Landlord  for  which neither Tenant nor
Guarantor  assumes  any  responsibility  hereunder) to create any condition that
would  cause  an  Event  of  Default,  as  defined  in  any such Loan Documents.
Tenant's  or Guarantor's failure to comply with the Loan Documents to the extent
such  terms and conditions apply to Tenant or Guarantor, or the operation of the
Facility  and to cure same within any applicable cure period provided for in the
Loan  Documents  shall  be  an  Event  of  Default  under  this  Lease.
15.12.1       Tenant  acknowledges that under the terms of Landlord's assumption
of the Loan Documents, Lender has required the Letter of Credit.  Tenant agrees,
     at  Tenant's  sole  cost  and  expense,  to deliver the Letter of Credit to
Lender  and,  except  as  otherwise  provided  herein, to maintain the Letter of
Credit in effect for so long as required by Lender.  In the event of a draw upon
the  Letter  of  Credit  or  upon the expiration of the Letter of Credit, Tenant
shall  be  responsible,  at  Tenant's  sole  cost  and  expense,  to  provide  a
replacement  Letter  of  Credit  satisfactory  to  Lender unless the draw on the
Letter  of  Credit  is  caused  by  a  Landlord  Default as defined in  15.12.2.
15.12.2       In  the  event  of  a  Landlord  Default,  as hereinafter defined,
Landlord shall (i) upon demand by Tenant, reimburse Tenant for any amounts drawn
by  Lender  under  the  Letter  of  Credit  and for any other costs and expenses
incurred by Tenant as a result thereof, including but not limited to, reasonable
attorney  fees;  (ii)  thereafter  be  obligated,  at  Landlord's  sole cost and
expense,  to  provide  and  continuously maintain a replacement Letter of Credit
satisfactory to Lender unless a subsequent draw is caused by a Tenant Default as
defined  in  15.12.3,  in  which case  15.12.1 shall apply; and (iii) indemnify,
defend  and  hold  harmless  Tenant  and  Guarantor from and against any and all
demands,  claims,  causes  of  action,  fines,  penalties,  damages  (including
consequential  damages),  losses,  liabilities  (including  strict  liability),
judgments  and  expenses  (including,  without limitation, reasonable attorneys'
fees,  court  costs  and  the costs described in  8.7) to the extent incurred by
Tenant  as  a result of the Landlord Default including, but not limited to, as a
result  of  the  foreclosure  by  Lender  with  respect to any of the collateral
provided  by  Tenant  or Guarantor under the Loan Documents or the taking of any
other  action  by  the Lender against Tenant or Guarantor under the terms of the
Loan  Documents.  Landlord Default shall mean an Event of Default under the Loan
Document caused solely by the acts or omissions of Landlord or HCN and is not an
Event  of  Default  under a Loan Document arising due to Tenant's or Guarantor's
failure  to comply with the terms and conditions of a Loan Document as agreed to
by  Tenant  and  Guarantor  pursuant  to  15.12  ("Landlord  Defaults").
15.12.3       Upon  the  occurrence  of  an  Event  of  Default  under  the Loan
Documents  caused  by  Tenant  ("Tenant Default"), Tenant or Guarantor shall (i)
upon  demand by Landlord or HCN, reimburse Landlord or HCN for any amounts drawn
by  Lender  under  the  Letter  of  Credit  and for any other costs and expenses
incurred  by  Landlord or HCN as a result thereof, including but not limited to,
reasonable attorney fees; provided, however, this clause (i) shall only apply if
the  Tenant  Default  occurs after the occurrence of a Landlord Default and at a
time when the Letter of Credit has been posted by Landlord pursuant to  15.12.2;
(ii)  thereafter be obligated, at Tenant's sole cost and expense, to provide and
continuously  maintain  a  replacement  Letter  of Credit satisfactory to Lender
unless a subsequent draw is caused by a Landlord Default, in which case  15.12.2
shall apply; and (iii) indemnify, defend and hold harmless Landlord and HCN from
and  against  any  and  all demands, claims, causes of action, fines, penalties,
damages (including consequential damages), losses, liabilities (including strict
liability),  judgments  and  expenses (including, without limitation, reasonable
attorneys'  fees,  court  costs  and  the costs described in  8.7) to the extent
incurred by Landlord or HCN as a result of the Tenant Default including, but not
limited  to, as a result of the foreclosure by Lender with respect to any of the
collateral provided by Landlord or HCN under the Loan Documents or the taking of
any  other  action  by the Lender against Landlord or HCN under the terms of the
Loan  Documents.
15.12.4       Landlord  shall,  within  five Business Days after receipt thereof
from  Lender,  deliver  to  Tenant all notices received by Landlord from Lender.
Tenant  shall,  within  five  Business  Days  after receipt thereof from Lender,
deliver  to  Landlord  all  notices  received  by  Tenant from Lender.  Landlord
further  acknowledges  and  agrees  that  Tenant  shall not be in default of its
obligations  under  this  15.12  in  the  event  Tenant  fails  to  fulfill  the
obligations  imposed under a Loan Document as and when due solely as a result of
the  failure  of Landlord to remit any such Lender notice within the time period
specified  herein  and  that  in  the event of a draw by Lender on the Letter of
Credit  as  a result thereof, the same shall be deemed to be a Landlord Default.
          ARTICLE 16:     ALTERATIONS, CAPITAL IMPROVEMENTS, AND SIGNS
16.1     Prohibition  on  Alterations  and  Improvements.  Except  for Permitted
         -----------------------------------------------
Alterations  (as  hereinafter  defined), Tenant shall not make any structural or
nonstructural  changes,  alterations, additions and/or improvements (hereinafter
collectively  referred  to  as  "Alterations")  to  the  Leased  Property.
16.2     Approval  of  Alterations.  If  Tenant desires to perform any Permitted
         -------------------------
Alterations,  Tenant  shall deliver to Landlord plans, specifications, drawings,
and  such  other  information  as  may  be  reasonably  requested  by  Landlord
(collectively  the  "Plans and Specifications") showing in reasonable detail the
scope  and  nature of the Alterations that Tenant desires to perform.  It is the
intent  of  the  parties  hereto that the level of detail shall be comparable to
that which is referred to in the architectural profession as "design development
drawings"  as  opposed  to working or biddable drawings.  Landlord agrees not to
unreasonably  delay  its review of the Plans and Specifications.  Within 30 days
after  receipt  of an invoice, Tenant shall reimburse Landlord for all costs and
expenses  incurred  by  Landlord  in  reviewing  and,  if required, approving or
disapproving  the  Plans and Specifications, inspecting the Leased Property, and
otherwise monitoring compliance with the terms of this Article 16.  Tenant shall
comply  with  the  requirements  of  16.4  in  making any Permitted Alterations.
16.3     Permitted  Alterations.  Permitted  Alterations  means  any  one of the
         ----------------------
following:  [i]  Alterations  approved  by  Landlord;  [ii] Alterations required
under  7.2; [iii] Alterations affecting the structure of the Leased Property and
having  a  total cost of less than $250,000.00 individually or in the aggregate;
[iv] repairs, rebuilding and restoration required or undertaken pursuant to  9.4
or  [v]  non-structural Alterations such as painting, landscaping, wallpapering,
installing  new  floor  coverings,  etc.  without  regard  to  the cost thereof.
16.4     Requirements  for  Permitted Alterations.  Tenant shall comply with all
         ----------------------------------------
of  the  following  requirements  in  connection with any Permitted Alterations:
(a)     The  Permitted Alterations shall be made in accordance with the approved
Plans  and  Specifications.
(b)     The Permitted Alterations and the installation thereof shall comply with
all  applicable  legal  requirements  and  insurance  requirements.
(c)     The  Permitted  Alterations  shall  be  done  in  a good and workmanlike
manner,  shall  not  impair  the value or the structural integrity of the Leased
Property,  and  shall  be  free  and  clear  of  all  mechanic's  liens.
(d)     For  any  Permitted  Alterations  having  a total cost of $100,000.00 or
more,  Tenant  shall  deliver to Landlord a payment and performance bond, with a
surety  acceptable  to Landlord, in an amount equal to the estimated cost of the
Permitted Alterations, guaranteeing the completion of the work free and clear of
liens  and  in accordance with the approved Plans and Specifications, and naming
Landlord  and  any  mortgagee  of  Landlord  as  joint  obligees  on  such bond.
(e)     Tenant  shall,  at  Tenant's expense, obtain a builder's completed value
risk  policy of insurance insuring against all risks of physical loss, including
collapse  and transit coverage, in a nonreporting form, covering the total value
of  the  work  performed,  and  equipment, supplies, and materials, and insuring
initial  occupancy.  Landlord  and any mortgagee of Landlord shall be additional
insureds  of such policy.  Landlord shall have the right to approve the form and
substance  of  such  policy.
(f)     Tenant  shall  pay  the  premiums required to increase the amount of the
insurance  coverages required by Article 4 to reflect the increased value of the
Improvements resulting from installation of the Permitted Alterations, and shall
deliver  to  Landlord  a  certificate  evidencing  the  increase  in  coverage.
(g)     Tenant  shall,  not later than 60 days after completion of the Permitted
Alterations,  deliver to Landlord a revised "as-built" survey of the Facility if
the  Permitted  Alterations  altered the Land or "footprint" of the Improvements
and  an "as-built" set of Plans and Specifications for the Permitted Alterations
in  form  and  substance  satisfactory  to  Landlord.
(h)     Tenant  shall,  not  later than 30 days after Landlord sends an invoice,
reimburse  Landlord  for any reasonable costs and expenses, including attorneys'
fees  and architects' and engineers' fees, incurred in connection with reviewing
and  approving  the  Permitted Alterations and ensuring Tenant's compliance with
the  requirements  of  this  section.  The  daily  fee for Landlord's consulting
engineer  is  $750.00.
16.5     Ownership  and  Removal  of  Permitted  Alterations.  The  Permitted
         ---------------------------------------------------
Alterations  shall  become a part of the Leased Property, owned by Landlord, and
leased  to  Tenant  subject  to  the terms and conditions of this Lease.  Tenant
shall  not  be  required  or  permitted  to  remove  any  Permitted Alterations.
16.6     Minimum  Qualified  Capital Expenditures.  During each calendar year of
         ----------------------------------------
the  Term,  Tenant  shall expend at least $300.00 per unit for Qualified Capital
Expenditures  to  improve  the Facility.  Thereafter throughout the Term, Tenant
shall expend such amount each calendar year, increased annually in proportion to
     increases  in  the  CPI.  At  least  annually,  at the request of Landlord,
Landlord  and  Tenant  shall  review  capital  expenditures budgets and agree on
modifications,  if  any,  required  by  changed  circumstances  and  the changed
conditions  of  the  Leased  Property.  Upon request from Tenant, Landlord shall
cooperate  with  Tenant  to  secure  the  release of funds held by Lender in the
Lender  Maintenance Reserve Escrow to the extent such funds are available as set
forth in the Loan Documents.  Tenant's obligations set forth in this  16.6 shall
not  be  conditioned  upon  the  release  of  funds  by  Lender  from the Lender
Maintenance  Reserve  Fund.
16.7     Signs.  Tenant  may,  at  its  own  expense,  erect  and  maintain
         -----
identification signs at the Leased Property, provided such signs comply with all
         ---
     laws,  ordinances,  and regulations.  Upon the termination or expiration of
this  Lease  (other  than  as a result of the exercise by Tenant of its purchase
rights),  Tenant  shall,  within  30 days after notice from Landlord, remove the
signs  and  restore  the  Leased  Property  to  its  original  condition.
                            ARTICLE 17:     RESERVED
             ARTICLE 18:     ASSIGNMENT AND SALE OF LEASED PROPERTY
18.1     Prohibition  on  Assignment  and  Subletting.  Tenant acknowledges that
         --------------------------------------------
Landlord  has  entered  into this Lease in reliance on the personal services and
business  expertise  of  Tenant.  Tenant  may  not  assign,  sublet,  mortgage,
hypothecate,  pledge, grant a right of first refusal or transfer any interest in
this  Lease,  or  in the Leased Property, in whole or in part, without the prior
written  consent  of  Landlord,  which  Landlord  may  withhold  in its sole and
absolute discretion.  The following transactions will be deemed an assignment or
     sublease  requiring Landlord's prior written consent:  [i] an assignment by
operation  of  law;  [ii]  an  imposition (whether or not consensual) of a lien,
mortgage,  or  encumbrance  upon Tenant's interest in the Lease; [iii] except as
otherwise  permitted  by   14.4  and  18.3,  an  arrangement (including, but not
limited  to,  management agreements, concessions, licenses, and easements) which
allows  the  use  or  occupancy  of all or part of the Leased Property by anyone
other  than Tenant; and [iv] a material change of ownership of Tenant other than
changes  resulting  from  the  trading  of  Tenant's  or  Guarantor's stock on a
national  stock  exchange.  Landlord's consent to any assignment, right of first
refusal  or sublease will not release Tenant (or any guarantor) from its payment
and  performance obligations under this Lease, but rather Tenant, any guarantor,
and Tenant's assignee or sublessee will be jointly and severally liable for such
payment  and  performance.  An  assignment,  right  of first refusal or sublease
without the prior written consent of Landlord will be void at Landlord's option.
Landlord's  consent  to  one assignment, right of first refusal or sublease will
not  waive  the  requirement  of  its  consent  to  any subsequent assignment or
sublease.  Notwithstanding  the  foregoing,  Tenant  may enter into a Management
Agreement  with  Guarantor.
18.2     Requests  for  Landlord's Consent to Assignment, Sublease or Management
         -----------------------------------------------------------------------
Agreement.  If  Tenant  is  required  to obtain Landlord's consent to a specific
 --------
assignment,  sublease,  or  management agreement, Tenant shall give Landlord [i]
 --
the name and address of the proposed assignee, subtenant or manager; [ii] a copy
 -
of  the  proposed assignment, sublease or management agreement; [iii] reasonably
satisfactory  information about the nature, business and business history of the
proposed  assignee,  subtenant,  or  manager  and its proposed use of the Leased
Property;  and  [iv]  banking,  financial,  and  other  credit  information, and
references  about  the  proposed  assignee,  subtenant  or manager sufficient to
enable  Landlord  to determine the financial responsibility and character of the
proposed assignee, subtenant or manager.  Any assignment, sublease or management
agreement  shall  contain  provisions  to  the  effect that [a] such assignment,
sublease  or management agreement is subject and subordinate to all of the terms
and  provisions  of  this  Lease  and  to  the  rights  of Landlord and that the
assignee,  subtenant  or  manager shall comply with all applicable provisions of
this  Lease;  [b]  such  assignment, sublease or management agreement may not be
modified  without  the  prior written consent of Landlord not to be unreasonably
withheld  or delayed; [c] if this Lease shall terminate before the expiration of
such  assignment,  sublease  or management agreement, the assignee, subtenant or
manager  thereunder  will, solely at Landlord's option and only upon the express
written  notice  of  attornment  from Landlord, attorn to Landlord and waive any
right  the  assignee, subtenant or manager may have to terminate the assignment,
sublease  or management agreement or surrender possession thereunder as a result
of  the termination of this Lease; and [d] if the assignee, subtenant or manager
receives  a written notice from Landlord stating that Tenant is in default under
this  Lease, the assignee, subtenant or manager shall thereafter pay all rentals
or  payments  under the assignment, sublease or management agreement directly to
Landlord  until  such  default  has  been  cured.  Any  attempt  or  offer by an
assignee,  subtenant  or  manager  to attorn to Landlord shall not be binding or
effective  without  the  express  written  consent  of  Landlord.  Tenant hereby
collaterally  assigns  to  Landlord,  as  security  for  the  performance of its
obligations  hereunder, all of Tenant's right, title, and interest in and to any
assignment,  sublease  or management agreement now or hereafter existing for all
or  part  of  the  Leased  Property.  Tenant  shall, at the request of Landlord,
execute  such other instruments or documents as Landlord may request to evidence
this  collateral  assignment.  If Landlord, in its sole and absolute discretion,
consents  to  such  assignment,  sublease, or management agreement, such consent
shall  not  be  effective  until  [i] a fully executed copy of the instrument of
assignment,  sublease  or  management  agreement has been delivered to Landlord;
[ii] in the case of an assignment, Landlord has received a written instrument in
which the assignee has assumed and agreed to perform all of Tenant's obligations
under the Lease; and [iii] Tenant has paid to Landlord a fee in the amount equal
to  the  lesser  of  Landlord's  actual  out-of-pocket  costs  and  expenses and
$2,500.00  (applies  only  to  consent  requests  after  the  Closing); and [iv]
Landlord  has  received  reimbursement  from  Tenant  or  the  assignee  for all
attorneys'  fees  and  expenses  and all other reasonable out-of-pocket expenses
incurred  in connection with determining whether to give its consent, giving its
consent  and  all  matters  relating  to the assignment (applies only to consent
requests  after  the  Closing).
18.3     Agreements  with  Residents.  Notwithstanding  18.1,  Tenant  may enter
         ---------------------------
into  an  occupancy  agreement with residents of the Leased Property without the
prior  written  consent  of  Landlord  provided  that [i] the agreement does not
provide  for  lifecare services; [ii] the agreement does not contain any type of
rate  lock provision or rate guaranty for more than one calendar year; [iii] the
agreement  does  not  provide for any rent reduction or waiver other than for an
introductory  period  not to exceed six months; [iv] Tenant may not collect rent
for more than one month in advance, other than one month of rent collected to be
held as security for the performance of the resident's obligation to Tenant; and
[v]  all  residents  of  the  Leased Property are accurately shown in accounting
records  for  the  Facility.  Without  the prior written consent of Landlord and
Tenant  shall  not  change  the  form  of  resident occupancy agreement that was
submitted  to  Landlord  prior  to  the  Effective  Date.
18.4     Sale  of  Leased  Property.  If Landlord or any subsequent owner of the
         --------------------------
Leased  Property sells the Leased Property, its liability for the performance of
its  agreements  in  this  Lease  will end on the date of the sale of the Leased
Property,  and  Tenant  will look solely to the purchaser for the performance of
those  agreements.  For  purposes  of  this section, any holder of a mortgage or
security  agreement  which  affects  the  Leased  Property  at any time, and any
landlord under any lease to which this Lease is subordinate at any time, will be
a  subsequent  owner  of the Leased Property when it succeeds to the interest of
Landlord  or  any  subsequent  owner  of  the  Leased  Property.
18.5     Assignment  by  Landlord.  Landlord  may  transfer,  assign,  mortgage,
         ------------------------
collaterally  assign,  or otherwise dispose of Landlord's interest in this Lease
or  the  Leased  Property.
                     ARTICLE 19:     HOLDOVER AND SURRENDER
19.1     Holding  Over.  If  Tenant,  with  or  without  the  express or implied
         -------------
consent  of  Landlord,  continues to hold and occupy the Leased Property (or any
part  thereof)  after  the expiration of the Term or earlier termination of this
Lease  (other  than  pursuant to Tenant's purchase of the Leased Property), such
holding  over  beyond  the  Term and the acceptance or collection of Rent in the
amount  specified below by Landlord shall operate and be construed as creating a
tenancy  from  month  to  month  and  not  for  any other term whatsoever.  Said
month-to-month  tenancy may be terminated by Landlord by giving Tenant five days
written  notice,  and  at  any  time  thereafter  Landlord may re-enter and take
possession  of  the  Leased  Property.  If  without  Landlord's  consent  or  at
Landlord's request, Tenant continues after the expiration of the Term or earlier
     termination of this Lease to hold and occupy the Leased Property whether as
a month-to-month tenant or a tenant at sufferance or otherwise, Tenant shall pay
Rent  for  each month in an amount equal to the sum of [i] one and one-half (1 )
times  the  Base  Rent  payable  during  the  month  in which such expiration or
termination  occurs,  plus  [ii]  all Additional Rent accruing during the month,
plus  [iii]  any  and  all  other sums payable by Tenant pursuant to this Lease.
During  any  continued  tenancy  after  the  expiration  of  the Term or earlier
termination  of this Lease, Tenant 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
continue  its  occupancy  and  use  of  the Leased Property until the tenancy is
terminated.  Nothing  contained  herein shall constitute the consent, express or
implied,  of  Landlord  to  the  holding  over of Tenant after the expiration or
earlier  termination  of  this  Lease.
19.2     Surrender.  Except  for  [i]  Permitted  Alterations;  [ii]  normal and
         ---------
reasonable  wear  and  tear (subject to the obligation of Tenant to maintain the
Leased  Property in good order and repair during the Term); and [iii] damage and
destruction  not  required  to be repaired by Tenant, Tenant shall surrender and
deliver  up  the Leased Property at the expiration or termination of the Term in
as good order and condition as of the Commencement Date.  The provisions of this
19.2  shall  not  apply  in  the event of the termination of this Lease upon the
purchase  of  the  Leased  Property  by  Tenant.
19.3     Indemnity.  If  Tenant fails to surrender the entire Leased Property or
         ---------
any  part  thereof  upon the expiration or termination of this Lease in a timely
manner  and  in accordance with the provisions of this Lease, in addition to any
other liabilities to Landlord accruing therefrom, Tenant shall defend, indemnify
     and  hold  Landlord,  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
collected  by  Landlord  pursuant to this Lease during Tenant's holdover and any
claims  by  any proposed new tenant founded on Tenant's failure to surrender the
Leased Property.  The provisions of this Article 19 shall survive the expiration
or  termination  of this Lease.  The provisions of this  19.3 shall not apply in
the  event  of  the  termination  of  this Lease upon the purchase of the Leased
Property  by  Tenant.
                           ARTICLE 20:     [RESERVED]
      ARTICLE 21:     QUIET ENJOYMENT, SUBORDINATION, ATTORNMENT AND ESTOPPEL
                                  CERTIFICATES
21.1     Quiet  Enjoyment.  So  long  as  Tenant performs all of its obligations
         ----------------
under  this  Lease,  Tenant's  possession  of  the  Leased  Property will not be
disturbed  by  Landlord  or  any  party  claiming by, through or under Landlord.
21.2     Subordination.  Subject  to  the  terms and conditions of this section,
         -------------
this  Lease  and  Tenant's rights under this Lease are subordinate to any ground
lease  or  underlying lease, first mortgage, first deed of trust, or other first
lien  against  the  Leased  Property,  together with any renewal, consolidation,
extension,  modification  or replacement thereof, which now or at any subsequent
time  affects  the  Leased  Property  or  any interest of Landlord in the Leased
Property,  except to the extent that any such instrument expressly provides that
this  Lease  is  superior.  The  foregoing  subordination provision is expressly
conditioned  upon any lessor or mortgagee being obligated and bound to recognize
Tenant  as  the tenant under this Lease, and such lessor or mortgagee shall have
no  right  to  disturb  Tenant's  possession,  use  and  occupancy of the Leased
Property  or  Tenant's enjoyment of its rights under this Lease unless and until
an  Event  of Default occurs hereunder.  Any foreclosure action or proceeding by
any  mortgagee  with  respect  to  the Leased Property shall not affect Tenant's
rights  under  this Lease and shall not terminate this Lease unless and until an
Event  of  Default  occurs  hereunder.  The  foregoing  provisions  will  be
self-operative,  and  no  further instrument will be required in order to effect
them.  However,  Tenant  shall  execute, acknowledge and deliver to Landlord, at
any time and from time to time upon demand by Landlord, such documents as may be
requested  by  Landlord  or any mortgagee or any holder of any mortgage or other
instrument  described  in  this  section,  to  confirm  or  effect  any  such
subordination,  provided  that  any such document shall include a nondisturbance
provision as set forth in this section satisfactory to Tenant.  Any mortgagee of
the  Leased Property shall be deemed to be bound by the nondisturbance provision
set  forth in this section.  If Tenant fails or refuses to execute, acknowledge,
and  deliver any such document within 20 days after written demand, Landlord may
execute  acknowledge  and  deliver  any  such  document  on  behalf of Tenant as
Tenant's  attorney-in-fact.  Tenant  hereby constitutes and irrevocably appoints
Landlord,  its  successors and assigns, as Tenant's attorney-in-fact to execute,
acknowledge,  and  deliver  on  behalf of Tenant any documents described in this
section.  This power of attorney is coupled with an interest and is irrevocable.
21.3     Attornment.  If  any  holder of any mortgage, indenture, deed of trust,
         ----------
or  other  similar instrument described in  21.2 succeeds to Landlord's interest
in  the  Leased  Property,  Tenant will pay to such holder all Rent subsequently
payable  under  this  Lease.  Tenant shall, upon request of anyone succeeding to
the  interest  of  Landlord,  automatically become the tenant of, and attorn to,
such  successor  in  interest  without  changing  this  Lease.  The successor in
interest will not be bound by [i] any payment of Rent for more than one month in
advance  unless  actually  received  by  the  successor;  [ii]  any amendment or
modification  of  this  Lease thereafter made without its consent as provided in
this  Lease; [iii] any claim against Landlord arising prior to the date on which
the  successor  succeeded to Landlord's interest; or [iv] any claim or offset of
Rent  against  Landlord.  Upon request by Landlord or such successor in interest
and without cost to Landlord or such successor in interest, Tenant will execute,
acknowledge  and deliver an instrument or instruments confirming the attornment.
If  Tenant  fails  or  refuses  to  execute,  acknowledge,  and deliver any such
instrument  within 20 days after written demand, then Landlord or such successor
in  interest  will be entitled to execute, acknowledge, and deliver any document
on behalf of Tenant as Tenant's attorney-in-fact.  Tenant hereby constitutes and
irrevocably  appoints  Landlord,  its  successors  and  assigns,  as  Tenant's
attorney-in-fact  to  execute,  acknowledge, and deliver on behalf of Tenant any
such  document.  This  power  of  attorney  is  coupled  with an interest and is
irrevocable.
21.4     Estoppel  Certificates.  At the request of Landlord or any mortgagee or
         ----------------------
purchaser of the Leased Property, Tenant shall execute, acknowledge, and deliver
an  estoppel  certificate,  in  recordable  form,  in  favor  of Landlord or any
mortgagee  or  purchaser  of  the Leased Property certifying the following:  [i]
that the Lease is unmodified and in full force and effect, or if there have been
modifications  that the same is in full force and effect as modified and stating
the modifications; [ii] the date to which Rent and other charges have been paid;
[iii]  whether  Tenant or Landlord is in default or whether there is any fact or
condition  known  to  Landlord or Tenant which, with notice or lapse of time, or
both,  would  constitute a default, and specifying any existing default, if any;
[iv]  that Tenant has accepted and occupies the Leased Property; [v] that Tenant
has  no  defenses,  setoffs,  deductions,  credits,  or  counterclaims  against
Landlord,  if  that  be  the  case, or specifying such that exist; and [vi] such
other information as may reasonably be requested by Landlord or any mortgagee or
purchaser.  Any  purchaser  or  mortgagee may rely on this estoppel certificate.
If  Tenant fails to deliver the estoppel certificates to Landlord within 10 days
after  the  request  of  Landlord, then Tenant shall be deemed to have certified
that  [a]  the  Lease  is in full force and effect and has not been modified, or
that  the  Lease  has been modified as set forth in the certificate delivered to
Tenant;  [b]  Tenant  has  not  prepaid any Rent or other charges except for the
current  month;  [c]  Tenant  has accepted and occupies the Leased Property; [d]
neither  Tenant  nor  Landlord  is in default nor is there any fact or condition
which,  with  notice  or lapse of time, or both, would constitute a default; and
[e]  Tenant  has  no  defenses,  setoffs,  deductions, credits, or counterclaims
against  Landlord.  Tenant  hereby  irrevocably  appoints  Landlord  as Tenant's
attorney-in-fact  to  execute,  acknowledge,  and deliver on Tenant's behalf any
estoppel  certificate  to  which  Tenant  does  not  object within 10 days after
Landlord  sends  the  certificate  to Tenant.  This power of attorney is coupled
with  an  interest  and  is  irrevocable.
                 ARTICLE 22:     REPRESENTATIONS AND WARRANTIES
     Tenant hereby makes the following representations and warranties, as of the
Effective  Date, to Landlord and acknowledge that Landlord is granting the Lease
in  reliance upon such representations and warranties.  Tenant's representations
and  warranties shall survive the Closing and, except to the extent made as of a
specific  date,  shall continue in full force and effect until the Obligor Group
Obligations  have  been  performed  in  full.
22.1     Organization and Good Standing.  Tenant is a limited liability company,
         ------------------------------
     duly organized, validly existing and in good standing under the laws of its
Organization  State.  Tenant  is  qualified  to  do  business  in and is in good
standing  under  the  laws  of  the  Facility  State.
22.2     Power  and  Authority.  Tenant  has the power and authority to execute,
         ---------------------
deliver and perform this Lease.  Tenant has taken all requisite action necessary
to  authorize  the  execution, delivery and performance of its obligations under
this  Lease.
22.3     Enforceability.  This  Lease  constitutes  a  legal, valid, and binding
         --------------
obligation  of  Tenant, enforceable in accordance with its terms, except as such
enforceability may be limited by creditors rights laws and general principles of
equity.
22.4     Government  Authorizations.  The  Facility  is  in  compliance with all
         --------------------------
Legal Requirements.  All Government Authorizations are in full force and effect.
Except  as  otherwise  noted  in  Exhibit  G,  Tenant  holds  all  Government
Authorizations  necessary  for  the operation of the Facility in accordance with
the  Facility Uses.  No prior notice to or approval from any licensure authority
is  required in connection with the Lease or the transfer of the fee interest in
the  Leased  Property to Landlord other than those notices which have been given
or  approval  which  have  been  obtained  prior  to  the  Commencement  Date.
22.5     Financial Statements.  Tenant has furnished Landlord with true, correct
         --------------------
and  complete  copies  of  the Financial Statements described on Exhibit C.  The
Financial  Statements fairly present the financial position of Tenant, Guarantor
and  the  Facility, as applicable, as of the respective dates and the results of
operations  for  the  periods  then ended in conformance with generally accepted
accounting  principles  applied  on  a basis consistent with prior periods.  The
Financial  Statements  and  other  information  furnished  to Landlord are true,
complete  and  correct and, as of the Effective Date, no material adverse change
has occurred since the furnishing of such statements and information.  As of the
Effective  Date,  the  Financial Statements and other information do not contain
any  untrue  statement  or omission of a material fact and are not misleading in
any  material  respect.  Tenant  and  Guarantor  are solvent, and no bankruptcy,
insolvency,  or  similar  proceeding  is  pending  or contemplated by or, to the
knowledge  of  Tenant,  against  Tenant  or  Guarantor.
22.6     Condition of Facility.  To the best of Tenant's knowledge and except as
         ---------------------
otherwise  disclosed  in  writing  by  Tenant to Landlord prior to the Effective
Date, all of the mechanical and electrical systems, heating and air-conditioning
systems,  plumbing,  water  and sewer systems, and all other items of mechanical
equipment  or appliances are in good working order, condition and repair, are of
sufficient  size  and capacity to service the Facility for the Facility Uses and
conform  with  all applicable ordinances and regulations, and with all building,
zoning,  fire,  safety,  and  other  codes,  laws and orders.  The Improvements,
including  the  roof  and foundation, are structurally sound and free from leaks
and  other  defects.
22.7     Compliance  with  Laws.  To the best of Tenant's knowledge, there is no
         ----------------------
violation of, or noncompliance with, [i] any laws, orders, rules or regulations,
ordinances or codes of any kind or nature whatsoever relating to the Facility or
the  ownership  or  operation  thereof (including, without limitation, building,
fire,  health, occupational safety and health, zoning and land use, planning and
environmental  laws,  orders,  rules  and  regulations);  [ii]  any  covenants,
conditions,  restrictions  or agreements affecting or relating to the ownership,
use or occupancy of the Facility; or [iii] any order, writ, regulation or decree
relating  to  any  matter  referred  to  in  [i]  or  [ii]  above.
22.8     No  Litigation.  As  of  the  Effective Date and except as disclosed on
         --------------
Exhibit  H,  [i]  there  are  no  actions  or  suits,  or  any  proceedings  or
investigations  by  any  governmental  agency or regulatory body pending against
Tenant  with  respect  to its operation at the Facility or against the Facility;
[ii]  no  HIPDB  adverse action reports have been issued to Tenant, Guarantor or
the  Facility;  [iii]  Tenant has not received notice of any threatened actions,
suits,  proceedings  or  investigations  against  Tenant  or with respect to its
operation at the Facility or against the Facility at law or in equity, or before
any  governmental  board,  agency or authority which, if determined adversely to
Tenant or Guarantor, would materially and adversely affect the Facility or title
to  the  Facility  (or  any  part thereof), the right to operate the Facility as
presently  operated,  or  the  financial  condition of Tenant or Guarantor; [iv]
there are no unsatisfied or outstanding judgments against Tenant with respect to
its  operations  at  the Facility or against the Facility; [v] there is no labor
dispute  materially  and adversely affecting the operation or business conducted
by  Tenant at the Facility; and [vi] Tenant does not have knowledge of any facts
or  circumstances  which  might  reasonably  form the basis for any such action,
suit,  or  proceeding.
22.9     Consents.  The  execution,  delivery and performance of this Lease will
         --------
not  require  any consent, approval, authorization, order, or declaration of, or
any  filing  or  registration  with,  any  court,  any  federal, state, or local
governmental or regulatory authority, or any other person or entity, the absence
of  which  would materially impair the ability of Tenant to operate the Facility
for  the  Facility  Uses except for the post-acquisition filing for licensure of
the  Facility.
22.10     No  Violation.  The  execution, delivery and performance of this Lease
          -------------
[i]  do  not  and  will  not  conflict with, and do not and will not result in a
breach  of  Tenant's Organizational Documents; [ii] do not and will not conflict
with,  and  do  not  and will not result in a breach of, and do not and will not
constitute  a  default under (or an event which, with or without notice or lapse
of  time,  or  both,  would  constitute  a  default  under),  any  of the terms,
conditions  or  provisions of any agreement or other instrument or obligation to
which  Tenant  is a party or by which its assets are bound; and [iii] do not and
will  not  violate  any  order,  writ,  injunction,  decree,  statute,  rule  or
regulation  applicable  to  Tenant  or  the  Facility.
22.11     Reports  and  Statements.  All  reports,  statements, certificates and
          ------------------------
other  data  furnished  by  or  on  behalf of Tenant or Guarantor to Landlord in
connection  with  this Lease, and all representations and warranties made herein
or  in  any certificate or other instrument delivered in connection herewith and
therewith,  are  true  and  correct  in all material respects and do not omit to
state  any  material  fact  or  circumstance  necessary  to  make the statements
contained  herein or therein, in light of the circumstances under which they are
made,  not  misleading  as of the date of such report, statement, certificate or
other data.  The copies of all agreements and instruments submitted to Landlord,
including,  without  limitation,  all  agreements  relating to management of the
Facility  and  Tenant's working capital are true, correct and complete copies in
all  material  respects and include all material amendments and modifications of
such  agreements.
22.12     ERISA.  All  plans  (as defined in  4021(a) of the Employee Retirement
          -----
Income  Security  Act  of  1974,  as  amended  or supplemented from time to time
("ERISA"))  for  which  Tenant  is an "employer" or a "substantial employer" (as
defined  in   3(5) and 4001(a)(2) of ERISA, respectively) are in compliance with
ERISA  and  the  regulations  and  published interpretations thereunder.  To the
extent  Tenant  maintains  a  qualified defined benefit pension plan:  [i] there
exists  no  accumulated  funding  deficiency;  [ii]  no  reportable event and no
prohibited  transaction has occurred; [iii] no lien has been filed or threatened
to  be filed by the Pension Benefit Guaranty Corporation established pursuant to
Subtitle  A  of  Title  IV of ERISA; and [iv] Tenant has not been deemed to be a
substantial  employer.
22.13     Chief  Executive  Office.  Tenant maintains its chief executive office
          ------------------------
and  its  books  and  records  at Tenant's address set forth in the introductory
paragraph  of  this  Lease.  Tenant  does not conduct any business or operations
other  than  at  Tenant's  chief  executive  office  and  at  the  Facility.
22.14     Other  Name or Entities.  Except as disclosed herein, none of Tenant's
          -----------------------
business  is  conducted  through  any  subsidiary, unincorporated association or
other entity and Tenant has not, within the six years preceding the date of this
Lease [i] changed its name, [ii] used any name other than the name stated at the
beginning  of  this Lease, or [iii] merged or consolidated with, or acquired any
of  the  assets  of,  any  corporation  or  other  business.
22.15     Parties in Possession.  Except as disclosed on Exhibit B, there are no
          ---------------------
parties in possession of any Leased Property or any portion thereof as managers,
lessees,  tenants  at  sufferance,  or  trespassers.
22.16     Access.  Except  as  otherwise  disclosed  in  writing  by  Tenant  to
          ------
Landlord  prior  to  the  Effective  Date, access to the Land is directly from a
dedicated public right-of-way without any easement.  To the knowledge of Tenant,
there is no fact or condition which would result in the termination or reduction
of  the  current  access  to  and  from  the  Land  to  such  right-of-way.
22.17     Utilities.  There  are available at the Land gas, municipal water, and
          ---------
sanitary  sewer  lines,  storm  sewers,  electrical  and  telephone  services in
operating  condition  which  are adequate for the operation of the Facility at a
reasonable cost.  Except as otherwise disclosed in writing by Tenant to Landlord
prior to the Effective Date, the Land has direct access to utility lines located
in  a  dedicated  public right-of-way without any easement.  As of the Effective
Date,  there  is  no  pending  or,  to  the  knowledge  of  Tenant,  threatened
governmental  or  third  party  proceeding  which  would impair or result in the
termination  of  such  utility  availability.
22.18     Condemnation  and  Assessments.  As  of the Effective Date, Tenant has
          ------------------------------
not  received  notice  of,  and there are no pending or, to the best of Tenant's
knowledge,  threatened,  condemnation, assessment (except as otherwise disclosed
in  writing  by  Tenant  to  Landlord  prior  to the Effective Date), or similar
proceedings  affecting  or  relating to the Facility, or any portion thereof, or
any  utilities,  sewers,  roadways  or  other  public  improvements  serving the
Facility.
22.19     Zoning.  As  of  the  Effective Date, [i] the use and operation of the
          ------
Facility  for  the  Facility Uses is a permitted use under the applicable zoning
code;  [ii]  except  as  disclosed  on Exhibit G hereto, no special use permits,
conditional  use  permits,  variances,  or  exceptions  have been granted or are
needed  for  such  use  of  the  Facility;  [iii] the Land is not located in any
special  districts  such  as historical districts or overlay districts; and [iv]
the  Facility  has  been  constructed  in  accordance with and complies with all
zoning  laws  in  effect  at  the  time  of its construction, including, but not
limited to, dimensional, parking, setback, screening, landscaping, sign and curb
cut  requirements  or  the  Facility obtained required waivers or variances from
such  requirements.
22.20     Pro Forma Statement.  Tenant has delivered to Landlord a true, correct
          -------------------
and  complete  copy  of  the Pro Forma Statement.  The Pro Forma Statement shows
Tenant's  reasonable  expectation  based on the facts and circumstances known to
Tenant, of the most likely results of Facility operations for the next five-year
period.  By  its  execution of this Lease, Landlord acknowledges and agrees that
the  Pro Forma Statement has been reviewed by Landlord and that Tenant shall not
be  in  default  of  its  obligations  under  this Lease in the event the actual
results  of  Facility operations for the next five-year period differ from those
set  forth  in  the  Pro  Forma  Statement.
22.21     Environmental  Matters.  During  the  period  of Tenant's ownership or
          ----------------------
possession  of  the Leased Property and, to the best of Tenant's knowledge after
diligent  inquiry,  for  the period prior to Tenant's ownership or possession of
the  Leased  Property,  [i]  the  Leased  Property  is  in  compliance  with all
Environmental  Laws;  [ii]  there  were  no  releases  or threatened releases of
Hazardous Materials on, from, or under the Leased Property, except in compliance
with all Environmental Laws; [iii] no Hazardous Materials have been, are or will
be  used,  generated,  stored,  or disposed of at the Leased Property, except in
compliance  with all Environmental Laws; [iv] asbestos has not been and will not
be  used  in  the construction of any Improvements; [v] no permit is or has been
required  from  the  Environmental  Protection  Agency  or any similar agency or
department  of  any  state or local government for the use or maintenance of any
Improvements;  [vi] underground storage tanks on or under the Land, if any, have
been  and  currently  are  being  operated  in  compliance  with  all applicable
Environmental  Laws;  [vii]  any  closure, abandonment in place or removal of an
underground  storage  tank  on or from the Land was performed in compliance with
applicable Environmental Laws and any such tank had no release contaminating the
Leased  Property  or, if there had been a release, the release was remediated in
compliance  with applicable Environmental Laws to the satisfaction of regulatory
authorities;  [viii]  no  summons, citation or inquiry has been made by any such
environmental  unit,  body  or  agency  or  a third party demanding any right of
recovery  for  payment  or  reimbursement for costs incurred under CERCLA or any
other  Environmental  Laws  and  the Land is not subject to the lien of any such
agency; and [ix] to the best of Tenant's knowledge, the environmental assessment
of the Facility (and all follow-up reports, supplements and amendments) that was
delivered  to Landlord by Tenant in connection with the closing of this Lease is
true,  complete  and accurate.  "Disposal" and "release" shall have the meanings
set  forth  in  CERCLA.
22.22     Leases  and  Contracts.  As  of  the  Effective  Date  and  except  as
          ----------------------
disclosed  on  Exhibit  I,  there are no leases or contracts (including, but not
limited  to, insurance contracts, maintenance contracts, construction contracts,
employee  benefit  plans,  employment  contracts,  equipment  leases,  security
agreements,  architect  agreements, and management contracts) to which Tenant or
Guarantor  is  a  party  relating  to  any  part  of  the  ownership, operation,
possession,  construction,  management  or  administration  of  the  Land or the
Facility.
22.23     No  Default.  As of the Effective Date, [i] there is no existing Event
          -----------
of  Default  under  this  Lease;  and [ii] no event has occurred which, with the
giving  of notice or the passage of time, or both, would constitute or result in
such  an  Event  of  Default.
22.24     Tax  Status.  If  Tenant is a limited liability company, it is taxable
          -----------
as  a  partnership  under  the Internal Revenue Code and all applicable facility
state  tax  laws.
                           ARTICLE 23:     [RESERVED]
                        ARTICLE 24:     SECURITY INTEREST
24.1     Collateral.  Tenant hereby grants to Landlord and HCN (individually and
         ----------
     collectively  called  "Secured Party") a security interest in the following
described  property,  whether  now  owned  or  hereafter acquired by Tenant (the
"Collateral"),  to  secure  the  payment  and  performance  of the Obligor Group
Obligations:
(a)     All  machinery,  furniture,  equipment,  trade  fixtures,  appliances,
inventory  and  all  other  goods  (as  "equipment", "inventory" and "goods" are
defined  for  purposes of Article 9 ("Article 9") of the Uniform Commercial Code
as  adopted  in  Virginia)  and  any  leasehold interest of Tenant in any of the
foregoing,  including,  without  limitation,  those  items  which  are to become
fixtures  or  which  are building supplies and materials to be incorporated into
any  improvement  or  fixture.
(b)     All  accounts,  contract  rights,  general  intangibles,  instruments,
documents,  and  chattel  paper  [as  "accounts",  "contract  rights",  "general
intangibles",  "instruments",  "documents"  and  "chattel paper" are defined for
purposes  of  Article  9]  now  or  hereafter  arising.
(c)     All  franchises,  permits,  licenses,  operating rights, certifications,
approvals,  consents,  authorizations  and other general intangibles, including,
without  limitation,  certificates of need, state health care facility licenses,
and  Medicare  and Medicaid provider agreements, to the extent permitted by law.
(d)     Unless  expressly  prohibited  by  the  terms  thereof,  all  contracts,
agreements,  contract rights and materials relating to the design, construction,
operation  or  management  of  any  improvements, including, but not limited to,
plans,  specifications,  drawings,  blueprints,  models,  mock-ups,  brochures,
flyers,  advertising  and  promotional  materials  and  mailing  lists.
(e)     All  subleases,  occupancy agreements, license agreements and concession
agreements,  written or unwritten, of any nature, now or hereafter entered into,
and  all  right, title and interest of Tenant thereunder, and including, without
limitation,  Tenant's  right, if any, to cash or securities deposited thereunder
whether  or  not the same was deposited to secure performance by the subtenants,
occupants,  licensees  and  concessionaires  of  their  obligations  thereunder,
including  the  right  to  receive  and  collect  the rents, revenues, and other
charges  thereunder.
(f)     All  ledger  sheets,  files,  records,  computer  programs, tapes, other
electronic  data  processing  materials,  and  other  documentation.
(g)     The  products  and proceeds of the preceding listed property, including,
without  limitation,  cash  and  non-cash  proceeds,  proceeds  of proceeds, and
insurance  proceeds.
24.2     Additional Documents.  At the request of Landlord, Tenant shall execute
         --------------------
     additional  security  agreements,  financing  statements,  and  such  other
documents  as may be requested by Landlord to maintain and perfect such security
interest.  Tenant  hereby  irrevocably  appoints  Landlord,  its  successors and
assigns,  as Tenant's attorney-in-fact to execute, acknowledge, deliver and file
such  documents  on behalf of Tenant.  This power of attorney is coupled with an
interest  and  is  irrevocable.  Tenant  authorizes  Landlord  to file financing
statements  describing  the  Collateral  to  perfect  and  maintain the security
interest granted hereunder without the signature or any further authorization of
Tenant.
24.3     Notice  of  Sale.  With respect to any sale or other disposition of any
         ----------------
of  the Collateral after the occurrence of an Event of Default, Landlord, Tenant
agrees  that  the  giving  of  five  days' notice by Landlord, sent by overnight
delivery,  postage  prepaid, to Tenant's notice address designating the time and
place  of  any  public  sale  or  the time after which any private sale or other
intended  disposition  of  such  Collateral is to be made, shall be deemed to be
reasonable  notice  thereof  and  Tenant  waives  any  other notice with respect
thereto.
24.4     Recharacterization.  Landlord and Tenant intend this Lease to be a true
         ------------------
lease.  However, if despite the parties' intent, it is determined or adjudged by
a  court  for any reason that this Lease is not a true lease or if this Lease is
recharacterized  as a financing arrangement, then this Lease shall be considered
a  secured financing agreement and Landlord's title to the Leased Property shall
constitute  a  perfected  first  priority lien in Landlord's favor on the Leased
Property  to  secure  the  payment  and  performance  of  all  the Obligor Group
Obligations.
24.5     Subordination  Landlord  acknowledges  and  agrees  that  the liens and
         -------------
rights granted to Landlord under this Article 24 are and shall be subordinate to
any  liens  and  rights granted by Tenant in favor of Lender with respect to the
Collateral.
                          ARTICLE 25:     MISCELLANEOUS
25.1     Notices.  Landlord  and  Tenant hereby agree that all notices, demands,
         -------
requests,  and consents (hereinafter "notices") required to be given pursuant to
the terms of this Lease shall be in writing, shall be addressed to the addresses
     set  forth in the introductory paragraph of this Lease, and shall be served
by [i] personal delivery; [ii] certified mail, return receipt requested, postage
prepaid;  or [iii] nationally recognized overnight courier.  Notwithstanding the
foregoing,  any notice received by Landlord from Lender may be sent to Tenant by
facsimile  at  206/301-4500  and  deemed  sent  upon  receipt  of  successful
transmission.  Notwithstanding the foregoing, any notice received by Tenant from
Lender  may  be  sent  to  Landlord,  Attn:  Erin  C.  Ibele,  by  facsimile  at
419/247-2826  and  deemed  sent  upon  receipt  of successful transmission.  All
notices  shall be deemed to be given upon the earlier of actual receipt or three
Business  Days  after  mailing,  or  one  Business  Day  after  deposit with the
overnight  courier.  Any  notices meeting the requirements of this section shall
be  effective,  regardless  of  whether  or  not actually received.  Landlord or
Tenant  may  change  its  notice  address  at any time by giving the other party
notice  of  such  change.
25.2     Advertisement  of  Leased  Property.  In  the  event  Tenant  fails  to
         -----------------------------------
exercise its option to renew within the time period set forth in  12.1 or in the
event,  the  parties  hereto  have  not executed a renewal Lease within 120 days
prior  to the expiration of this Lease, or Tenant has not exercised its Right of
First  Opportunity, then Landlord or its agent shall have the right to enter the
Leased Property at all reasonable times for the purpose of exhibiting the Leased
Property  to  others  and  to  place upon the Leased Property for and during the
period  commencing 120 days prior to the expiration of this Lease, "for sale" or
"for  rent"  notices  or  signs.
25.3     Entire  Agreement.  This  Lease  contains  the entire agreement between
         -----------------
Landlord  and  Tenant  with  respect  to  the  subject  matter  hereof.  No
representations, warranties, and agreements have been made by Landlord except as
set  forth in this Lease.  No oral agreements or understandings between Landlord
and  Tenant  shall  survive  execution  of  this  Lease.
25.4     Severability.  If any term or provision of this Lease is held or deemed
         ------------
by  Landlord  to  be invalid or unenforceable, such holding shall not affect the
remainder  of  this  Lease  and  the same shall remain in full force and effect,
unless  such  holding  substantially  deprives  Tenant  of the use of the Leased
Property  or  Landlord  of  the rents herein reserved, in which event this Lease
shall  forthwith  terminate  as  if  by  expiration  of  the  Term.
25.5     Captions  and Headings.  The captions and headings are inserted only as
         ----------------------
a  matter  of  convenience  and  for  reference  and  in no way define, limit or
describe  the  scope  of  this  Lease  or  the  intent  of any provision hereof.
25.6     Governing  Law.  This  Lease  shall  be  governed  by  and construed in
         --------------
accordance  with  the  laws of the State of Virginia, except as to matters under
applicable  procedural  conflicts of laws rules which require the application of
laws of another state, in which case the laws or conflicts of laws rules, as the
case  may  be,  of  such  state  shall  govern  to  the  extent  required.
25.7     Memorandum  of  Lease.  Tenant  shall  not  record  this Lease.  Tenant
         ---------------------
shall,  however,  record  a  memorandum  of  lease  approved  by  Landlord  upon
Landlord's  request.
25.8     Waiver.  No  waiver  by  Landlord  of  any condition or covenant herein
         ------
contained,  or of any breach of any such condition or covenant, shall be held or
taken  to be a waiver of any subsequent breach of such covenant or condition, or
to  permit  or  excuse  its  continuance  or any future breach thereof or of any
condition  or covenant, nor shall the acceptance of Rent by Landlord at any time
when  Tenant  is in default in the performance or observance of any condition or
covenant herein be construed as a waiver of such default, or of Landlord's right
to  terminate  this Lease or exercise any other remedy granted herein on account
of  such  existing  default.
25.9     Binding  Effect.  This  Lease  will  be  binding  upon and inure to the
         ---------------
benefit  of  the  heirs,  successors,  personal  representatives,  and permitted
assigns  of  Landlord  and  Tenant.
25.10     No  Offer.  Landlord's  submission  of  this Lease to Tenant is not an
          ---------
offer  to  lease the Leased Property, or an agreement by Landlord to reserve the
Leased  Property  for Tenant.  Landlord will not be bound to Tenant until Tenant
has  duly  executed  and  delivered  duplicate  original leases to Landlord, and
Landlord  has duly executed and delivered one of these duplicate original leases
to  Tenant.
25.11     Modification.  This  Lease may only be modified by a writing signed by
          ------------
both  Landlord  and Tenant.  All references to this Lease, whether in this Lease
or  in  any  other  document  or  instrument, shall be deemed to incorporate all
amendments,  modifications  and  renewals  of  this  Lease,  made after the date
hereof.  If  Tenant  requests  Landlord's  consent  to  any change in ownership,
merger  or consolidation of Tenant or Guarantor, any assumption of the Lease, or
any  modification  of  the  Lease,  Tenant  shall  provide Landlord all relevant
information and documents sufficient to enable Landlord to evaluate the request.
In  connection  with any such request, Tenant shall pay to Landlord a fee in the
amount  equal  to  the  lesser  of  $2,500.00  and  Landlord's actual reasonable
attorney's  fees  and  expenses  and  other  reasonable  out-of-pocket  expenses
incurred  in  connection  with  Landlord's  evaluation  of Tenant's request, the
preparation  of  any  documents  and amendments, the subsequent amendment of any
documents  between Landlord and its collateral pool lenders (if applicable), and
all  related  matters.
25.12     Landlord's  Modification.  Tenant  acknowledges  that, provided Lender
          ------------------------
consents  or  the Lender has been paid in full, Landlord may mortgage the Leased
Property  or  use  the Leased Property as collateral for collateralized mortgage
obligations  or  Real  Estate  Mortgage  Investment  Companies (REMICS).  If any
mortgage  lender  of  Landlord  desires  any  modification of this Lease, Tenant
agrees  to  consider such modification in good faith and to execute an amendment
of  this Lease if Tenant finds such modification acceptable.  Landlord shall not
do  anything in connection with its financing of the Leased Property which would
limit  the  rights  granted  Tenant  hereunder.
25.13     No  Merger.  The surrender of this Lease by Tenant or the cancellation
          ----------
of  this  Lease  by  agreement of Tenant and Landlord or the termination of this
Lease  on  account  of  Tenant's  default  will  not work a merger, and will, at
Landlord's  option,  terminate  any  subleases  or  operate  as an assignment to
Landlord  of  any  subleases.  Landlord's  option  under  this paragraph will be
exercised  by  notice to Tenant and all known subtenants of the Leased Property.
25.14     Laches.  No  delay  or omission by either party hereto to exercise any
          ------
right  or  power  accruing  upon any noncompliance or default by the other party
with  respect to any of the terms hereof shall impair any such right or power or
be  construed  to  be  a  waiver  thereof.
25.15     Limitation  on  Tenant's  Recourse.  Tenant's  sole  recourse  against
          ----------------------------------
Landlord,  and any successor to the interest of Landlord in the Leased Property,
is  to the interest of Landlord, and any such successor, in the Leased Property.
Tenant will not have any right to satisfy any judgment which it may have against
Landlord,  or any such successor, from any other assets of Landlord, or any such
successor.  In  this  section,  the terms "Landlord" and "successor" include the
shareholders,  venturers,  and  partners  of  "Landlord" and "successor" and the
officers,  directors, and employees of the same.  The provisions of this section
are  not  intended to limit Tenant's right to seek injunctive relief or specific
performance.
25.16     Construction  of  Lease.  This Lease has been prepared by Landlord and
          -----------------------
its  professional advisors and reviewed by Tenant and its professional advisors.
Landlord,  Tenant,  and their advisors believe that this Lease is the product of
all  their  efforts,  that it expresses their agreement, and agree that it shall
not  be  interpreted  in  favor  of  either Landlord or Tenant or against either
Landlord  or  Tenant  merely  because  of  their  efforts  in  preparing  it.
25.17     Counterparts.  This  Lease  may  be executed in multiple counterparts,
          ------------
each  of  which  shall  be  deemed  an  original  hereof.
25.18     Custody  of  Escrow  Funds.  Any  funds  paid  to  Landlord  in escrow
          --------------------------
hereunder  may  be  held  by Landlord or, at Landlord's election, by a financial
institution,  the  deposits  or accounts of which are insured or guaranteed by a
federal or state agency.  The funds shall not be deemed to be held in trust, may
be  commingled with the general funds of Landlord or such other institution, and
shall  not  bear  interest.
25.19     Landlord's  Status as a REIT.  Tenant acknowledges that Landlord (or a
          ----------------------------
Landlord  Affiliate)  has  elected and may hereafter elect to be taxed as a real
estate  investment  trust  ("REIT")  under  the  Internal  Revenue  Code.
25.20     Exhibits.  All  of  the exhibits referenced in this Lease are attached
          --------
hereto  and  incorporated  herein.
25.21     WAIVER  OF JURY TRIAL.  LANDLORD AND TENANT WAIVE TRIAL BY JURY IN ANY
          ---------------------
ACTION,  PROCEEDING  OR COUNTERCLAIM BROUGHT BY ANY OF THEM AGAINST THE OTHER ON
ALL  MATTERS  ARISING  OUT  OF THIS LEASE OR THE USE AND OCCUPANCY OF THE LEASED
PROPERTY  (EXCEPT  CLAIMS  FOR PERSONAL INJURY OR PROPERTY DAMAGE).  IF LANDLORD
COMMENCES  ANY  SUMMARY  PROCEEDING  FOR  NONPAYMENT  OF  RENT,  TENANT WILL NOT
INTERPOSE,  AND  WAIVES  THE  RIGHT  TO  INTERPOSE, ANY COUNTERCLAIM IN ANY SUCH
PROCEEDING.
25.22     CONSENT  TO  JURISDICTION.  TENANT  HEREBY  IRREVOCABLY  SUBMITS  AND
          -------------------------
CONSENTS  TO  THE  NONEXCLUSIVE  JURISDICTION  AND VENUE OF ANY STATE OR FEDERAL
COURT  HAVING  JURISDICTION  OVER  LUCAS  COUNTY,  OHIO OR ANY COUNTY IN WHICH A
FACILITY IS LOCATED FOR ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY MATTER
ARISING  FROM  OR  RELATED  TO [I] THE COMMITMENT; [II] THIS LEASE; OR [III] ANY
DOCUMENT  EXECUTED  BY  TENANT  IN  CONNECTION  WITH  THIS LEASE.  TENANT HEREBY
IRREVOCABLY  WAIVES,  TO  THE  FULLEST  EXTENT TENANT MAY EFFECTIVELY DO SO, THE
DEFENSE  OF  AN  INCONVENIENT  FORUM  TO  THE  MAINTENANCE OF ANY SUCH ACTION OR
PROCEEDING.  TENANT  AGREES  THAT  A  FINAL  JUDGMENT  IN  ANY  SUCH  ACTION  OR
PROCEEDING  SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY
SUIT  ON  THE  JUDGMENT  OR  IN  ANY  OTHER  MANNER  PROVIDED  BY  LAW.
     TENANT  AGREES  NOT  TO  INSTITUTE  ANY  LEGAL ACTION OR PROCEEDING AGAINST
LANDLORD  OR  ANY  DIRECTOR,  OFFICER,  EMPLOYEE, AGENT OR PROPERTY OF LANDLORD,
CONCERNING  ANY  MATTER ARISING OUT OF OR RELATING TO THE COMMITMENT, THIS LEASE
OR  ANY RELATED DOCUMENT IN ANY COURT OTHER THAN A STATE OR FEDERAL COURT HAVING
JURISDICTION  OVER  LUCAS  COUNTY,  OHIO  UNLESS SUCH COURT LACKS IN PERSONAM OR
SUBJECT  MATTER  JURISDICTION  IN  WHICH  CASE  TENANT  SHALL  HAVE THE RIGHT TO
INSTITUTE  SUCH  ACTION OR PROCEEDING BEFORE ANY COURT HAVING SUCH JURISDICTION.
TENANT  HEREBY  CONSENTS  TO SERVICE OF PROCESS BY LANDLORD IN ANY MANNER AND IN
ANY  JURISDICTION  PERMITTED  BY  LAW.  NOTHING  HEREIN  SHALL  AFFECT OR IMPAIR
LANDLORD'S  RIGHT  TO  SERVE  LEGAL  PROCESS  IN ANY MANNER PERMITTED BY LAW, OR
LANDLORD'S  RIGHT  TO  BRING  ANY  ACTION  OR  PROCEEDING  AGAINST TENANT OR THE
PROPERTY  OF  TENANT  IN  THE  COURTS  OF  ANY  OTHER  JURISDICTION.
25.23     Attorney's  Fees  and  Expenses.  Tenant  shall  pay  to  Landlord all
          -------------------------------
reasonable  costs  and expenses incurred by Landlord in administering this Lease
and the security for this Lease, enforcing or preserving Landlord's rights under
     this  Lease  and  the  security  for  this  Lease,  and  in  all matters of
collection, whether or not an Event of Default has actually occurred or has been
declared  and  thereafter  cured,  including, but not limited to, [a] reasonable
attorney's  and paralegal's fees and disbursements; [b] the fees and expenses of
any  litigation,  administrative,  bankruptcy,  insolvency, receivership and any
other  similar  proceeding;  [c]  court costs; [d] the expenses of Landlord, its
employees,  agents,  attorneys  and  witnesses  in  preparing  for  litigation,
administrative,  bankruptcy,  insolvency  and other proceedings and for lodging,
travel,  and  attendance at meetings, hearings, depositions, and trials; and [e]
consulting and witness fees and expenses incurred by Landlord in connection with
any  litigation  or  other  proceeding;  provided,  however, Landlord's internal
bookkeeping  and  routine  lease  servicing  costs  are  not  payable by Tenant.
25.24     Survival.  The  following  provisions shall survive termination of the
          --------
Lease:  Article  8  (Defaults and Remedies); Article 9 (Damage and Destruction);
Article  10 (Condemnation);  15.9 (Transfer of License and Facility Operations);
15.10  (Bed  Operating  Rights);  18.2  (Assignment  or  Sublease);  Article  19
(Holdover  and Surrender); Article 24 (Security Interest) and  25.24 (Survival).
25.25     Time.  Time  is  of  the  essence  in  the  performance of this Lease.
          ----
            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

<PAGE>

          IN  WITNESS  WHEREOF,  the  parties hereto have executed this Lease or
caused  the  same to be executed by their respective duly authorized officers as
of  the  date  first  set  forth  above.
Signed  and  acknowledged  in  the  presence  of:

     HCRI  FAIRMONT  PROPERTIES,  LLC

     By:  Health  Care  REIT,  Inc.
Signature  Rita  J.  Rogge     Its:  Sole  Member
Print  Name  Rita  J.  Rogge
     By:  Erin  C.  Ibele
Signature  Kathleen  A.  Sullivan
Print  Name  Kathleen  A.  Sullivan       Title:  V.P.  &  Corporate  Secretary

     EMERITUS  PROPERTIES  XII,  LLC

     By:  Emeritus  Corporation
     Its:  Sole  Member

       By:  William  M.  Shorten
Signature
Print  Name       Title:  Director  of  Real  Estate  Finance

Signature
Print  Name       Tax  I.D.  No.:  91-1994665



STATE  OF  OHIO    )
       )  SS:
COUNTY  OF  LUCAS  )

   The  foregoing  instrument  was  acknowledged  before  me  this  ___  day  of
September,  2003  by _________________________, the _________________________ of
Health Care REIT, Inc., a Delaware corporation, the sole member of HCRI Fairmont
Properties, LLC, a Delaware limited liability company, on behalf of the company.


  Notary  Public

My  Commission  Expires:  [SEAL]

STATE  OF  WASHINGTON  )
  )  SS:
COUNTY  OF  KING  )

    The  foregoing  instrument  was  acknowledged  before  me  this  ___  day of
September,  2003  by _________________________, the _________________________ of
Emeritus  Corporation,  a  Washington  corporation,  the sole member of Emeritus
Properties  XII,  LLC,  a Washington limited liability company, on behalf of the
limited  liability  company.


  Notary  Public

My  Commission  Expires:  [SEAL]


THIS  INSTRUMENT  PREPARED  BY:

OKSANA  M.  LUDD,  ESQ.
SHUMAKER,  LOOP  &  KENDRICK,  LLP
1000  JACKSON  STREET
TOLEDO,  OHIO  43624-1573

<PAGE>


                       SCHEDULE 1:  INITIAL RENT SCHEDULE
EMERITUS  CORPORATION  -  MANASSAS,  VA
---------------------------------------
HEALTH  CARE  REIT,  INC.

                                                     EFFECTIVE DATE     09/29/03
                                                  INITIAL TERM DATE     10/01/03
INITIAL  TERM     15     Yrs
                                       INITIAL TERM EXPIRATION DATE     09/30/18
                                         INITIAL INVESTMENT AMOUNT     8,200,000

                                                          RATE OF RETURN     N/A
(365/360  BASIS)
                                               INITIAL RATE OF RETURN     10.00%
                                                                          ------

INCREASER     (*)  ANNUAL  RENT  INCREASER IS EQUAL TO THE LESSER OF THREE TIMES
CPI OR 25 BASIS POINTS.  THIS SCHEDULE WAS PREPARED USING THE CPI FOR THE PERIOD
JULY,  2002  TO JULY, 2003 AND ASSUMED AS SUCH GOING FORWARD.  ACTUAL INCREASERS
WILL  BE  REVIEWED  ANNUALLY.

                                              INITIAL MONTHLY RENT     68,333.33

                                                ANNUAL INCREASER AMOUNT     0.00
   LEASE YEAR     DATES     ACTUAL CPI     INCREASER (BP) (LESSER OF 3 TIMES THE
     CPI INCREASE OVER PRIOR YEAR OR 25 BP)     BEGINNING RENT RATE OF RETURN
                   MONTHLY RENT AMOUNT     ANNUAL RENT AMOUNT
                                     FROM     TO

                         09/29/03     09/30/03               10.00%     4,493.15
          1     10/01/03     09/30/04     N/A     N/A     10.00%     68,333.33
                                                                      819,999.96
          2     10/01/04     09/30/05     2.10%     0.25%     10.25%   70,041.67
                                                                      840,500.00
          3     10/01/05     09/30/06     2.10%     0.25%     10.50%   71,750.00
                                                                      861,000.00
          4     10/01/06     09/30/07     2.10%     0.25%     10.75%   73,458.33
                                                                      881,500.00
          5     10/01/07     09/30/08     2.10%     0.25%     11.00%   75,166.67
                                                                      902,000.00
          6     10/01/08     09/30/09     2.10%     0.25%     11.25%   76,875.00
                                                                      922,500.00
          7     10/01/09     09/30/10     2.10%     0.25%     11.50%   78,583.33
                                                                      943,000.00
          8     10/01/10     09/30/11     2.10%     0.25%     11.75%   80,291.67
                                                                      963,500.00
          9     10/01/11     09/30/12     2.10%     0.25%     12.00%   82,000.00
                                                                      984,000.00
         10     10/01/12     09/30/13     2.10%     0.25%     12.25%   83,708.33
                                                                    1,004,500.00
         11     10/01/13     09/30/14     2.10%     0.25%     12.50%   85,416.67
                                                                    1,025,000.00
         12     10/01/14     09/30/15     2.10%     0.25%     12.75%   87,125.00
                                                                    1,045,500.00
         13     10/01/15     09/30/16     2.10%     0.25%     13.00%   88,833.33
                                                                    1,066,000.00
         14     10/01/16     09/30/17     2.10%     0.25%     13.25%   90,541.67
                                                                    1,086,500.00
         15     10/01/17     09/30/18     2.10%     0.25%     13.50%   92,250.00
                                                                    1,107,000.00



<PAGE>



                          EXHIBIT A:  LEGAL DESCRIPTION
Parcel  3K-4,  comprising 3.000 acres, more or less, more particularly described
by  metes  and  bounds  on  Plat  Showing Subdivision of the Property of Potomac
Conference  Corporation,  dated  June 2, 1988, and recorded in Deed Book 1702 at
page  1423, among the land records of Prince William County, Virginia, and being
more  particularly  described  by  metes  and  bounds  as  follows:
All  of  that  certain  tract  or  Parcel  of  land  situate  in the Gainesville
Magisterial  District of Prince William County, Virginia, at 8341 Barrett Drive,
Manassas,  Virginia  and  being  more  particularly  described  as  follows:
Beginning  at  an  iron  pipe  set  on the Easterly right of way line of Barrett
Drive,  Route  732, a public roadway of variable width, said pipe being a corner
to  the  Potomac  Conference Corporation of Seventh Day Adventists and said pipe
being  the  Southwest  corner  of the herein described parcel.  Thence with said
right  of  way line, North 16 degrees 31 minutes 51 seconds East for 358.73 feet
to  an  iron  pipe found, corner to president, Potomac Church of Jesus Christ of
Latter  Day Saints.  Thence departing said right of way line and with president,
Potomac Church of Jesus Christ of Latter Day Saints, South 73 degrees 28 minutes
09  seconds  East  for  364.28 feet to an iron pipe found.  A corner to Manassas
Retirement  Residence  Limited  Partnership,  thence  with  Manassas  Retirement
Residence  Limited  Partnership, South 16 degrees 31 minutes 51 seconds West for
358.73  feet  to  an  iron  pipe  found,  a corner to the aforementioned Potomac
Conference  Corporation  of  Seventh  Day  Adventists.  Thence  with  Potomac
Conference Corporation of Seventh Day Adventists, North 73 degrees 28 minutes 09
seconds  West  for  364.29 feet to the point of beginning and containing 130.680
S.F.,  more  or  less.


<PAGE>
                        EXHIBIT B:  PERMITTED EXCEPTIONS
1.     Real  property  taxes  subsequent  to  June  30,  2003.
2.     Storm  Water  Management  fees  subsequent  to  June  30,  2003.
3.     Solid  Waste  User  fees  subsequent  to  June  30,  2003.
4.     Terms,  conditions  and  all matters as set forth in and as shown on plat
attached  to  instrument recorded in Deed Book 1702 at page 1423, among the land
records  of  Prince  William  County,  Virginia.
5.     Easement(s)  granted  to  the American Telephone and Telegraph Company of
Virginia,  recorded  in  Deed  Book  71  at  page  161, among the aforesaid land
records.
6.     Easement(s)  granted  to Prince William Electric Cooperative, recorded in
Deed  Book  546  at  page  564  among  the  aforesaid  land  records.
7.     Easement(s) granted to the Board of Supervisors of Prince William County,
Virginia, and the Prince William County Service Authority, recorded in Deed Book
1887  at  page  928  among  the  aforesaid  land  records.
8.     Easement(s)  granted to the Board of County Supervisors of Prince William
County,  Virginia, recorded in Deed Book 2282 at page 437, and in Deed Book 2356
at  page  491,  among  the  aforesaid  land  records.
9.     Easements  and  all matters as set forth in and as shown on plat attached
to Grant of Easement recorded in Deed Book 2356 at page 502, among the aforesaid
land  records.
10.     Terms, provisions, obligations and all matters as set forth in Agreement
to  Grant  Easement  recorded in Deed Book 2515 at page 997, among the aforesaid
land  records.
11.     Easement(s)  granted  to Northern Virginia Electric Cooperative recorded
in  Deed  Book  2349  at  page  1969,  among  the  aforesaid  land  records.
12.     Easement(s)  granted  to  GTE  South Incorporated, recorded in Deed Book
2374  at  page  707,  among  the  aforesaid  land  records.
13.     Waterline  Easements  granted  to  the  Prince  William  County  Service
Authority, recorded in Deed Book 2282 at page 454; and in Deed Book 2803 at page
1853,  among  the  aforesaid  land  records.
14.     Term,  provisions and all matters set forth in Stormwater Management/BMP
Facilities Maintenance Agreements recorded in Deed Book 2282 at page 450; and in
Deed  Book  2803  at  page  1858,  among  the  aforesaid  land  records.
15.     Assignment of Service Contracts and Leases recorded in Deed Book 2803 at
page  1983,  among  the  aforesaid  land  records.
16.     Deed  of  Trust  from Emeritus Properties XII, LLC, a Washington limited
liability  company,  to Alexandria Title Agency, Inc., Trustees, dated September
29,  1999,  recorded  September  30, 1999 in Deed Book 2803 at page 1989, in the
Clerk's  Office  of  the  Circuit  Court  of  Prince  William  County, Virginia.
SECURING  AMRESCO  Capital, L.P., a Delaware limited partnership in the original
principal  sum  of  $4,330,000.00.
Note:     By Instrument dated September 29, 1999 and recorded September 30, 1999
in  Deed  Book  2803  at page 2059, all rights of the assignor in, under, and to
said  Instrument  were  assigned  to Credit Suisse First Boston Mortgage Capital
LLC,  a  Delaware  limited  liability  company.
Note:     By  Instrument  executed  as  of April 6, 2001 and recorded on June 5,
2001  as Instrument No. 200106050052220, all right, title and interest in and to
the  aforementioned  Instrument  was  assigned  to  The Chase Manhattan Bank, as
Trustee,  for  the  benefit  of  the  holders  of the Credit Suisse First Boston
Mortgage  Securities Corp. Commercial Mortgage Pass-Through Certificates, Series
2000-PS4.
17.     Assignment  of Leases and Rents recorded in Deed Book 2803 at page 2048,
among  the  aforesaid  land  records.
Note:     By Instrument dated September 29, 1999 and recorded September 30, 1999
in  Deed  Book  2803  at page 2059, all rights of the assignor in, under, and to
said  Instrument  were  assigned  to Credit Suisse First Boston Mortgage Capital
LLC,  a  Delaware  limited  liability  company.
Note:     By  Instrument  executed  as  of April 6, 2001 and recorded on June 5,
2001  as Instrument No. 200106050052221, all right, title and interest in and to
the  aforementioned  Instrument  was  assigned  to  The Chase Manhattan Bank, as
Trustee,  for  the  benefit  of  the  holders  of the Credit Suisse First Boston
Mortgage  Securities Corp. Commercial Mortgage Pass-Through Certificates, Series
2000-PS4.
18.     Reservation  of a 15' buffer as set forth in instrument recorded in Deed
Book  2282  at  page  437,  among  the  aforesaid  land  records.
19.     Waterline  Easement  as  the  same  is  set  forth  on  plat attached to
instrument  recorded  in  Deed  Book  2356 at page 491, among the aforesaid land
records.
20.     Twenty  foot  (20');  thirty-five foot (35'); and twenty-five foot (25')
building restriction lines as shown on survey by R.S. Thomas, CLS, dated May 14,
2003.


<PAGE>



                        EXHIBIT C:  FACILITY INFORMATION
                    STREET ADDRESS     FACILITY TYPE (PER LICENSE)
          FACILITY NAME     COUNTY     BEDS/UNITS     INVESTMENT AMOUNT
                                      Assisted Living
                       8341 Barrett Drive     ___ licensed beds
                      Manassas, VA  20109     ___ operating beds
Cobblestones at Fairmont     County:  Prince William     75 units     $8,200,000
------------------------     -----------------------     --------     ----------


<PAGE>

                    EXHIBIT D:  LANDLORD'S PERSONAL PROPERTY
                               [Tenant to provide]


<PAGE>

                      EXHIBIT E:  DOCUMENTS TO BE DELIVERED


          Tenant  shall  deliver  each of the following documents to Landlord no
later  than  the  date  specified  for  each  document:
1.     Annual Financial Statement of Tenant (audited) - within 90 days after the
     end  of  each  fiscal  year.
2.     Annual  Company  Budget  not later than 60 days prior to the beginning of
the  next  fiscal  year.
3.     Quarterly  Variance Report for the Facility, including occupancy, census,
capital  expenditures  and  operating  revenues and expenses by line item with a
detailed  explanation  of  the  cause  of all material variances from the Annual
Company  Budget  (i.e.,  more  than 10% for that line item) and a description of
Tenant's plans for eliminating all material variances - within 45 days after the
     end  of  each  quarter.
4.     Quarterly  Update to Annual Company Budget (on a 12-month rolling forward
period)  -  within  45  days  after  the  end  of  each  quarter.
5.     Quarterly  Healthcare  Integrity  and Protection Data Bank (HIPDB) Report
(dated  not  earlier than the end of the quarter) - within 45 days after the end
of  each  quarter.
6.     Quarterly  Updates  to  Operator Profile of Tenant, including a review of
the  Profile  prepared  by  Landlord  and  identification  of all changes to the
Profile  to reflect the current situation - within 45 days after the end of each
quarter.
7.     Monthly  Facility  Financial  Statement - within 30 days after the end of
each  month.
8.     Tenant's  Certificate  and  Annual or Quarterly Facility Financial Report
(Exhibit  F)  -  with  each  delivery  of  Tenant's  financial  statements.
9.     Annual  Facility Financial Report (based upon internal financial records)
-  within  60  days  after  the  end  of  each  fiscal  year.
10.     Annual Financial Statement (audited) of Guarantor - within 90 days after
     the  end  of  each  fiscal  year.
11.     Periodic Financial Statement of Guarantor - within 45 days after the end
     of  each  quarter.
12.     Guarantor's  certificate  -  with each delivery of Guarantor's financial
statements.
13.     Federal  tax returns of Guarantor, which shall include on a consolidated
basis,  Tenant  -  within 15 days after the filing of the return.  If the filing
date  is  extended,  also  provide a copy of the extension application within 15
days  after  filing.
14.     If applicable, Medicaid cost reports for the Facility - within five days
     after  filing  of  the  report  with  the  State  agency.
15.     State  and  federal health care survey and inspection reports, inspector
exit  interview  notes and report (if delivered to Tenant), plans of correction,
re-survey  reports,  evidence  of  annual  license  renewal within 30 days after
receipt  by  Tenant,  HIPDB  adverse action report, notice of any investigation,
inspection  or survey by licensing authorities, notice of licensure deficiencies
or commencement of licensure revocation or decertification proceeding, notice of
     admissions  ban,  issuance  of  a  provisional or temporary license and all
correspondence  regarding  any  of  the foregoing for the Facility - within five
days  after  receipt  by  Tenant.
16.     Real  estate  taxes
(a)     Copy  of  invoice  and  check - within five days after the due date; and
(b)     Copy  of  official  receipt  or other satisfactory evidence of payment -
within  30  days  after  the  due  date.
17.     Certificate of insurance renewal, current Certificate of Compliance from
     insurance agent and evidence of payment of premium - at least 30 days prior
to  the  expiration  of  each  policy.
18.     Facility information:  [i] a security deposit report, including resident
     name, date of move-in, security deposit, and corresponding security deposit
bank  account  balance,  with  a  monthly  update  of any changes; [ii] a report
accounting  for  all  resident  trust  funds, including corresponding trust fund
deposit  bank  accounts; [iii] a schedule and copies of any equipment leases and
financings,  including vendor, equipment descriptions, monthly payment, rate and
maturity,  with  a monthly update of any changes and the required nondisturbance
agreement  if  the  original  cost  of  the equipment exceeds $50,000.00; [iv] a
schedule  of  all utility providers and utility deposits; [v] a list of all rent
concessions, including, but not limited to, free rent, rent reduction, community
fee  waivers, rate locks, rate guaranties and waivers of security deposits; [vi]
a  copy  of  each  private pay resident's occupancy agreement and the Facility's
form  of agreement; [vii] a schedule of all employee vacation and sick days; and
[viii]  employee policies and procedures handbook, including employee benefits -
current  and annually updated reports, schedules and copies to be delivered upon
request.

<PAGE>


                        EXHIBIT F:  TENANT'S CERTIFICATE
                         AND FACILITY FINANCIAL REPORTS


Report  Period:     Commencing  _______________  and  ending  _______________

Lease:     Lease  made by HCRI Fairmont Properties, LLC ("Landlord") to Emeritus
Properties  XII,  LLC  ("Tenant")


          Tenant  hereby  certifies  to Landlord to the best of its knowledge as
follows:

1.     The  attached  [specify audited or unaudited and annual or quarterly, and
                               -------    ---------     ------    ---------
if consolidated, so state] financial statements of Tenant [i] have been prepared
   ------------
     in  accordance  with  generally accepted accounting principles consistently
applied; [ii] have been prepared in a manner substantially consistent with prior
financial  statements  submitted  to  Landlord;  and  [iii]  fairly  present the
financial  condition  and  performance  of  Tenant  in  all  material  respects.
2.     The attached [Annual or Quarterly] Facility Financial Report and Facility
     Accounts  Receivable  Aging  Report for the Report Period is complete, true
and  accurate  and  has  been prepared in a manner substantially consistent with
prior  schedules  submitted  to  Landlord.  As  set  forth  in  the  [Annual  or
Quarterly]  Facility  Financial  Report,  Tenant  has  maintained  the  Facility
Coverage Ratio [*IF APPLICABLE:  and the Current Ratio/Debt to Equity Ratio] for
the  Report  Period  as  required  under  the Lease between Tenant and Landlord.
3.     To  the  best  of its knowledge, Tenant was in compliance with all of the
provisions of the Lease and all other documents executed by Tenant in connection
     with  the  Lease  at all times during the Report Period, and no default, or
any  event  which with the passage of time or the giving of notice or both would
constitute  a  default,  has  occurred  under  the  Lease.
          Executed  this  ___  day  of  _______________,  _____.




Name:

Title:

<PAGE>
                        ANNUAL FACILITY FINANCIAL REPORT

FACILITY  NAME:
FACILITY  ADDRESS:


REPORT  PERIOD:     Twelve  (12)  months  beginning  _______________  and ending
_______________.  All  information  reported  should  be  for  this period only.

                                           % RESIDENT
           OCCUPANCY DATA          CENSUS DATA     DAYS     % REVENUES
           --------------          -----------     ----     ----------
           Total Beds/Units:     _______     Medicaid:     _______%     _______%
           -----------------     -------     ---------     --------     --------
       Total Available Days:     _______     Medicare:     _______%     _______%
       Total Occupied Days:     _______     Private and Other:     _______%
                                                                        _______%
         Occupancy Percentage:     _______%     Total:     _______%     _______%


                                 OPERATING DATA

1.     Gross  Revenues     $

2.     Contractual  Allowances     $

3.     Net  Revenues     $

4.     Operating  Expenses(before  interest,  lease/rent,  depreciation,
amortization  and  management  fees)     $
                                          ---

5.     Net  Operating  Income     $

6.     Interest  Expense     $

7.     Lease/Rent  Expense     $

8.     Depreciation  Expense     $

9.     Amortization  Expense     $

10.     Management  Fees     $

11.     Management  Fees  (as  a  percent  of  Gross  Revenues)          %

12.     Overhead  Allocation  (if  applicable)     $

13.     Other  (identify)     $

14.     Income  Taxes     $

15.     Net  Income  (amount  should  agree  with  the  facility's  financial
statements)     $

<PAGE>
                                 FINANCING DATA
               (Note:  This data breaks out Items 6 and 7 above.)


              Related to HCN     All Other Leases and/or Debt     Total
Lease  Payments      _________      _________      ________
                    -----------     -----------     ----------
Interest  Payments      _________      _________      ________
Principal  Payments  (if  any)      _________      _________      ________
      $      $      $
       =       =       =
                                 COVERAGE RATIO

1.     Net  Operating  Income     $______________
2.     Less  Imputed  Management  Fee
       (  _____%  of  gross  revenues)     (______________)
3.     Less  Imputed  Replacement  Reserve  for  period
       ($_________  per  bed  [or  unit]  per  year)     (______________)
4.     Adjusted  Net  Operating  Income     $______________
5.     Loan/Lease  Payments  to  HCN     $______________
6.     Actual  Coverage  Ratio  (Line  4  Line  5)     ______________
7.     Minimum  Coverage  Ratio  (per  Lease  Agreement)     ______________

                                  CURRENT RATIO
                           [*DELETE IF NOT APPLICABLE]

1.     Current  Assets     $______________
2.     Current  Liabilities     $______________
3.     Actual  Current  Ratio  (Line  1  Line  2)     ______________
4.     Minimum  Current  Ratio  (per  Lease  Agreement)     ______________


I  certify  that  the  foregoing  is  true  and  accurate.

          Date:

Name:          Phone  Number:

     Title:


<PAGE>
                       QUARTERLY FACILITY FINANCIAL REPORT

FACILITY  NAME:
FACILITY  ADDRESS:


REPORT  PERIOD:     Three  (3)  months  beginning  _______________  and  ending
_______________.  All  information  reported  should  be  for  this period only.

                                           % RESIDENT
           OCCUPANCY DATA          CENSUS DATA     DAYS     % REVENUES
                                                            ----------
           Total Beds/Units:     _______     Medicaid:     _______%     _______%
           -----------------     -------     ---------     --------     --------
       Total Available Days:     _______     Medicare:     _______%     _______%
 Total Occupied Days:     _______     Private & Other:     _______%     _______%
         Occupancy Percentage:     _______%     Total:     _______%     _______%


                                 OPERATING DATA

1.     Gross  Revenues     $

2.     Contractual  Allowances     $

3.     Net  Revenues     $

4.     Operating  Expenses  (before  interest,  lease/rent,  depreciation,
 amortization  and  management  fees)     $
                                           ---

5.     Net  Operating  Income     $

6.     Interest  Expense     $

7.     Lease/Rent  Expense     $

8.     Depreciation  Expense     $

9.     Amortization  Expense     $

10.     Management  Fees     $

11.     Management  Fees  (as  a  percent  of  Gross  Revenues)          %

12.     Overhead  Allocation  (if  applicable)     $

13.     Other  (identify)     $

14.     Income  Taxes     $

       15.     Net Income (amount should agree with the facility's financial
                               statements)     $

<PAGE>
                                     ------
                                 FINANCING DATA
               (Note:  This data breaks out Items 6 and 7 above.)


              Related to HCN     All Other Leases and/or Debt     Total
Lease  Payments      _________      _________      ________
                    -----------     -----------     ----------
Interest  Payments      _________      _________      ________
Principal  Payments  (if  any)      _________      _________      ________
      $      $      $
       =       =       =
                                 COVERAGE RATIO

1.     Net  Operating  Income     $______________
2.     Less  Imputed  Management  Fee
       (  _____%  of  gross  revenues)     (______________)
3.     Less  Imputed  Replacement  Reserve  for  period
       ($_________  per  bed  [or  unit]  per  year)     (______________)
4.     Adjusted  Net  Operating  Income     $______________
5.     Loan/Lease  Payments  to  HCN     $______________
6.     Actual  Coverage  Ratio  (Line  4  Line  5)     ______________
7.     Minimum  Coverage  Ratio  (per  Lease  Agreement)     ______________

                                  CURRENT RATIO
                           [*DELETE IF NOT APPLICABLE]

1.     Current  Assets     $______________
2.     Current  Liabilities     $______________
3.     Actual  Current  Ratio  (Line  1  Line  2)     ______________
4.     Minimum  Current  Ratio  (per  Lease  Agreement)     ______________


I  certify  that  the  foregoing  is  true  and  accurate.

          Date:

Name:          Phone  Number:

     Title:


<PAGE>
------


               QUARTERLY FACILITY ACCOUNTS RECEIVABLE AGING REPORT
     FACILITY  NAME:
     FACILITY  ADDRESS:



ACCOUNTS  RECEIVABLE  AGING  AS  OF  ____________  (MOST  RECENT  QUARTER ENDED)

PAYOR     0-30  DAYS  %     31-60  DAYS  %     61-90 DAYS  %     OVER 90 DAYS  %
TOTALS  %
Medicaid     $__________  ____%     $__________  ____%     $__________  ____%
$__________  ____%     $__________  ____%
Medicare     $__________  ____%     $__________  ____%     $__________  ____%
$__________  ____%     $__________  ____%
Commercial  Insurance     $__________  ____%     $__________  ____%
$__________  ____%     $__________  ____%     $__________  ____%
Other  -_____________     $__________  ____%     $__________  ____%
$__________  ____%     $__________  ____%     $__________  ____%
TOTALS     $__________  100%     $__________  100%     $__________  100%
$__________  100%     $__________  100%

         % OF TOTALS $     ___________%     ___________%     ___________%
                              ___________%     100%

ACCOUNTS  RECEIVABLE  AGING  AS  OF  ____________  (2ND  RECENT  QUARTER  ENDED)

PAYOR     0-30  DAYS  %     31-60  DAYS  %     61-90 DAYS  %     OVER 90 DAYS  %
TOTALS  %
Medicaid     $__________  ____%     $__________  ____%     $__________  ____%
$__________  ____%     $__________  ____%
Medicare     $__________  ____%     $__________  ____%     $__________  ____%
$__________  ____%     $__________  ____%
Commercial  Insurance     $__________  ____%     $__________  ____%
$__________  ____%     $__________  ____%     $__________  ____%
Other  -_____________     $__________  ____%     $__________  ____%
$__________  ____%     $__________  ____%     $__________  ____%
TOTALS     $__________  100%     $__________  100%     $__________  100%
$__________  100%     $__________  100%

         % OF TOTALS $     ___________%     ___________%     ___________%
                              ___________%     100%


<PAGE>


                      EXHIBIT G:  GOVERNMENT AUTHORIZATIONS
                         TO BE OBTAINED; ZONING PERMITS
The  letter  dated  May  6,  2003  from  Sherman  Patrick,  Jr.,  AICP,  Zoning
Administrator, County of Prince William, 1 County Complex Court, Prince William,
Virginia  22192-9201  addressed  to  Health  Care REIT, Inc.; HCRI Massachusetts
Properties  Trust  II; and HCRI Mississippi Properties, Inc., One SeaGate, Suite
1500,  P.O. Box 1475, Toledo, Ohio  43603-1475 regarding Verification of Zoning,
assisted  living  facility,  8341  Barrett  Drive,  Manassas,  Virginia  GPIN
7696-98-3820,  describes  any  and  all  special  use  permits,  conditional use
permits,  variances  and  exceptions  which  have  been granted or are needed in
connection  with  the  use  of  Cobblestones  at  Fairmont.

<PAGE>
                         EXHIBIT H:  PENDING LITIGATION


                                      NONE


<PAGE>
                    EXHIBIT I:  LIST OF LEASES AND CONTRACTS
1.     Therapy  Services  Agreement  with  The  Weston  Group,  Inc.;
2.     Counseling  and  Rehabilitation  Services,  Inc.  Service  Agreement;
3.     Fidelity  Engineering  Generator  Inspection  &  Maintenance  Agreement;
4.     Otis  Elevator  Maintenance  Agreement;
5.     National  Elevator  Inspection  Services  Agreement;
6.     Beauty/Barber  Shop  Operation  Agreement;
7.     A.  L.  &  L.  Industries,  Inc.  Lawn  and  Landscape  Services
8.     Protect  Emergency Response Systems, Emergency Call System Agreement; and
9.     Stericycle  Biomedical  Waste  Removal  Agreement.


<PAGE>
                     EXHIBIT J:  WIRE TRANSFER INSTRUCTIONS
                             HEALTH CARE REIT, INC.
                           WIRE TRANSFER INSTRUCTIONS
                                       KeyBank
BANK:     Cleveland,  Ohio

ABA  NUMBER:     041001039

ACCOUNT  NAME:     Health  Care  REIT,  Inc.

ACCOUNT  NUMBER:     353321001011

NOTIFY:     Michael  A.  Crabtree

PHONE:     (419)  247-2800


<PAGE>
                             EXHIBIT K:  BASE PRICE
(A)     The  base price ("Base Price") for the Leased Property will be an amount
equal  to  the  greater of [i] the Investment Amount; or [ii] the sum of [a] the
Investment  Amount  plus [b] 50% of the difference between the Fair Market Value
at the time of the acquisition and the sum of [I] the Investment Amount and [II]
$1,100,000.00.
(B)     Fair  Market  Value.  The fair market value (the "Fair Market Value") of
        -------------------
the  Leased  Property  shall  be  determined  as  follows:
     The  parties  shall  attempt  to  determine the Fair Market Value by mutual
agreement  within  15 days after giving the Termination Notice (the "Negotiation
Period").  However,  if the parties do not agree on the Fair Market Value during
the  Negotiation  Period,  the  following  provisions  shall  apply:
     Landlord  and  Tenant shall each give the other party notice of the name of
an  acceptable  appraiser  five  Business  Days after the end of the Negotiation
Period.  The  two  appraisers  will  then  select  a  third  appraiser within an
additional  five  days.  Each  appraiser  must  demonstrate  to  the  reasonable
satisfaction  of  both Landlord and Tenant that it has significant experience in
appraising  properties  similar  to the Leased Property.  Within five days after
designation, each appraiser shall submit a resume to Landlord and Tenant setting
forth  such  appraiser's qualifications, including education and experience with
similar  properties.  A  notice  of  objections  to  the  qualifications  of any
appraiser  shall  be  given  within  10 days after receipt of such resume.  If a
party  fails  to  timely  object to the qualifications of an appraiser, then the
appraiser  shall be conclusively deemed satisfactory.  If a party gives a timely
notice of objection to the qualifications of an appraiser, then the disqualified
appraiser shall be replaced by an appraiser selected by the qualified appraisers
or,  if  all  appraisers  are  disqualified,  then by an appraiser selected by a
commercial  arbitrator  acceptable  to  Landlord  and  Tenant.
     The  Fair Market Value shall be determined by the appraisers within 60 days
thereafter as follows.  Each of the appraisers shall be instructed to prepare an
appraisal  of the Leased Property in accordance with the following instructions:
     The  Leased Property is to be valued upon the three conventional approaches
to  estimate  value  known  as the Income, Sales Comparison and Cost Approaches.
Once  the  approaches  are  completed,  the  appraiser correlates the individual
approaches  into  a  final  value  conclusion.
     The  three  approaches  to  estimate  value  are  summarized  as  follows:
INCOME  APPROACH:  This  valuation  approach  recognizes  that  the value of the
operating  tangible  and  intangible  assets  can be represented by the expected
economic  viability  of  the  business  giving  returns  on  and  of the assets.
SALES  COMPARISON APPROACH:  This valuation approach is based upon the principle
of  substitution.  When  a  facility  is  replaceable  in the market, the market
approach assumes that value tends to be set at the price of acquiring an equally
desirable  substitute  facility.  Since  healthcare market conditions change and
frequently  are  subject  to  regulatory and financing environments, adjustments
need  to  be  considered.  These  adjustments  also  consider  the  operating
differences  such  as  services  and  demographics.
COST  APPROACH:  This  valuation  approach  estimates  the value of the tangible
assets  only.  Value  is  represented  by  the market value of the land plus the
depreciated  reproduction  cost  of  all  improvements  and  equipment.
In  general,  the Income and Sales Comparison Approaches are considered the best
representation  of value because they cover both tangible and intangible assets,
consider  the  operating  characteristics  of  the  business  and  have the most
significant  influence  on  attracting  potential  investors.
The  appraised  values  submitted  by  the three appraisers shall be ranked from
highest  value  to middle value to lowest value, the appraised value (highest or
lowest)  which  is  furthest from the middle appraised value shall be discarded,
and  the  remaining two appraised values shall be averaged to arrive at the Fair
Market  Value.