BUY OUT AGREEMENT

     THIS  AGREEMENT  is made and entered into effective as of March 28, 2002 by
and between Emeritus Corporation ("Emeritus") and Fairfield Assisted Living, LLC
("FAL").

                                    RECITALS

     A.     Emeritus  is  currently  the  sole  member  of  Fairfield Retirement
Center,  LLC  (the  "LLC").

     B.     The  LLC  is  the  owner  of  the  assisted living facility known as
NorthBay  Retirement  Center  in  Fairfield,  California  (the  "Facility").

     C.     The  Company  previously  granted  FAL  a  75% interest in Emeritus'
economic  interest  in the LLC and a 75% interest in Emeritus' economic interest
in a $2,500,000 Promissory Note payable by the LLC to Emeritus (the "Note") (the
"Economic  Interests");

     D.     Emeritus  currently  has the right to acquire the Economic Interests
from  FAL  for  a  purchase  price equal to FAL's investment (which is currently
$2,100,000)  plus  a  9%  return  on  that  investment (the "Repurchase Price").

     E.     FAL has the right to sell the Economic Interests with the consent of
the  Company.

     F.     Emeritus  has advanced $487,734 on behalf of FAL to meet the working
capital  needs  of  the  LLC  (the  "Emeritus  Working  Capital  Advances").

     G.     The Company and FAL are interested in restructuring the LLC in order
to  clean  up the capital structure of the LLC and thus eliminate the complexity
of  the  foregoing  economic  interest  arrangement.

H.     Emeritus  has  executed  a  Commitment  Letter,  dated March 5, 2002 with
Health  Care  REIT,  Inc. ("HCR") pursuant to which Emeritus has agreed to cause
the  LLC  to  sell  the Facility to HCR and HCR has agreed to lease the Facility
back  to  Emeritus  which,  in turn, would sublease the Facility to the LLC (the
"Sale/Leaseback  Transaction").

I.     Emeritus  and FAL are interested in documenting their rights with respect
to  the  terms  and  conditions  of,  and  proceeds  from,  the  Sale/Leaseback
Transaction.

NOW,  THEREFORE,  in  consideration  of  the  foregoing  premises and the mutual
covenants  of  the  parties  set  forth  herein, IT IS HEREBY AGREED AS FOLLOWS:

1.  Authorization.  Emeritus  shall  be and hereby is authorized to proceed with
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the consummation of the Sale/Leaseback Transaction.  Provided the Sale/Leaseback
Transaction (i) results in net proceeds to FAL of Two Million Nine Hundred Fifty
Thousand  and  no/100  Dollars ($2,950,000.00) (the "Required Net Proceeds") and
(ii) does not require the execution of any guarantees by FAL or any principal of
FAL  (the  "Conditions"),  then  Emeritus  shall  be and hereby is authorized to
consummate  the  Sale/Leaseback  Transaction  on  such  additional  terms  and
conditions  as  it deems to be appropriate and FAL shall accept the Required Net
Proceeds  as  payment  in  full  for  any  interest  which it may now have or be
entitled  to  acquire  in  the LLC.  In furtherance and not in limitation of the
foregoing, FAL acknowledges and agrees that in the event the Conditions are met,
FAL  shall  and  does  hereby  waive  and release any right which it may have to
participate  in the future ownership or operation of the Facility, including any
future  ownership of the LLC, and agrees that the Facility may be leased back to
Emeritus  and  subleased  by  Emeritus  to the LLC as part of the Sale/Leaseback
Transaction.  FAL agrees to execute any and all documents, which may be required
to  evidence  its  consent  to,  or  to  facilitate  the  consummation  of,  the
Sale/Leaseback  Transaction.

2. Rights Pending Completion of Sale Transaction.  Emeritus and FAL  acknowledge
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and agree that no interest has been accruing on the Note or on the cash invested
or advanced as of January 1, 2002 by Emeritus and FAL to the Company and that no
interest shall accrued pending consummation of the Sale/Leaseback Transaction or
execution  of  the New Operating Agreement (as defined in Section 3 hereof).  In
addition,  Emeritus  has agreed and continues to agree not to seek collection of
the  development  fees  or consulting fees, which are due and owing to it as the
successor in interest by assignment to BW and NorthBay and agrees that such fees
shall  be  waived  in  full  in  the  event of the closing of the Sale/Leaseback
Transaction  or  the  execution  of  the  New  Operating  Agreement.

3. Rights in the Event of the Failure of the Sale Transaction.  In the event the
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Sale  Transaction  has  not  been closed by May 1, 2002, then within thirty (30)
days  thereafter  Emeritus  and  FAL  shall  enter  into an Amended and Restated
Operating Agreement with respect to the LLC which shall reflect their respective
ownership interests therein, to wit, 54.7% for FAL and 45.3% for Emeritus, shall
be  on  terms  and conditions acceptable to Emeritus and FAL and shall otherwise
govern  the  day to day management of the affairs of the LLC (the "New Operating
Agreement").

      4.  Entirety.  This Agreement represents the entire and final agreement of
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the  parties hereto with respect to the subject matter hereof and supersedes all
prior negotiation, discussions or writings with respect thereto.  This Agreement
may  not  be  amended  or  modified  except  by written instrument signed by the
parties  hereto.

     5.  Counterparts.  This  Agreement may be executed in counterparts, each of
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which  shall  be deemed to be an original, but all of which taken together shall
constitute  but  one  and  the  same  instrument.

     6.  Attorneys  Fees.  In  the  event  of a dispute among the parties hereto
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with  respect  to  the  interpretation  or  enforcement of the terms hereof, the
prevailing party shall be entitled to collect from the other its costs and fees,
including  its  costs  and  fees  on  appeal.

     7.  Construction.  Each  of the parties acknowledges and agrees that it has
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participated in the drafting and negotiation of this Agreement.  Accordingly, in
the  event  of  a  dispute  among  the  parties  hereto  with  respect  to  the
interpretation  or  enforcement  of  the  terms  hereof,  no  provision shall be
construed  so  as  to  favor  or  disfavor  either  party  hereto.

     8.  Governing  Law.  This  Agreement  shall be governed by and construed in
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accordance  with  the  laws  of  the  State  of  Washington.

     IN WITNESS WHEREOF, the parties hereby execute this Agreement as of the day
and  year  first  set  forth  above.

                         EMERITUS  CORPORATION


                         By:     /s/    Raymond  R.  Brandstrom
                              Raymond  R.  Brandstrom
                         Its:     Chief  Financial  Officer__



                         FAIRFIELD  ASSISTED  LIVING,  LLC


                         By:     /s/    Daniel  R.  Baty________
                              Daniel  R.  Baty
                         Its:     General  Partner___________