LEASE AGREEMENT


                          HR ACQUISITION I CORPORATION
                             a Maryland corporation,
                     CAPSTONE CAPITAL OF PENNSYLVANIA, INC.
                           a Pennsylvania corporation,
                                       and
                               HRT HOLDINGS, INC.
                             a Delaware corporation
                                   ("LESSOR")

                                       AND

                              EMERITUS CORPORATION
                            a Washington corporation
                                   ("LESSEE")
                                   May 1, 2003

                                       for

                            ASSISTED LIVING FACILITY
                                   located at
             Outlook Pointe at Harrisburg - Harrisburg, Pennsylvania
               Outlook Pointe at Creekview - Hampden, Pennsylvania
             Outlook Pointe at Bloomsburg - Bloomsburg, Pennsylvania
             Outlook Pointe at Harrisonburg - Harrisonburg, Virginia
                  Outlook Pointe at Roanoke - Roanoke, Virginia
                 Outlook Pointe at Danville - Danville, Virginia
                    Outlook Pointe at Ravenna - Ravenna, Ohio
            Outlook Pointe at Greensboro - Greensboro, North Carolina

<PAGE>


                                Table of Contents
                                -----------------
                                   (continued)
                                                                            Page
                                                                            ----

                                       iii

                                        i

ARTICLE  1     LEASED  PROPERTY;  TERM     1
ARTICLE  2     RENT     2
2.1     Minimum  Rent  and  Adjustments  to  Minimum  Rent     2
2.2     Calculation  of  Increases  to  Minimum  Rent.     3
2.3     Additional  Charges.     3
2.5     Abatement  of  Rent  Limited     3
ARTICLE  3     IMPOSITIONS     4
3.1     Payment  of  Impositions     4
3.2     Proration  of  Impositions.     4
3.3     Utility  Charges     4
3.4     Insurance  Premiums     5
ARTICLE  4     NO  TERMINATION     5
ARTICLE  5     OWNERSHIP  OF  LEASED  PROPERTY     5
5.1     Ownership  of  the  Property.     5
5.2     Personal  Property.     5
ARTICLE  6     CONDITION  AND  USE  OF  LEASED  PROPERTY     5
6.1     Condition  of  the  Leased  Property.     5
6.2     Use  of  the  Leased  Property.     6
6.3     Management  of  Facility     6
6.4     Lessor  to  Grant  Easements     6
ARTICLE  7     LEGAL,  INSURANCE  AND  FINANCIAL  REQUIREMENTS     7
7.1     Compliance  with  Legal  and  Insurance  Requirements.     7
7.2     Legal  Requirement  Covenants.     7
7.3     Rent  and  Debt  Service  Coverage  -  Facility     7
ARTICLE  8     REPAIRS;  RESTRICTIONS  AND  ANNUAL  INSPECTIONS     8
8.1     Maintenance  and  Repair.     8
8.2     Encroachments;  Restrictions.     9
8.3     Inspections     9
ARTICLE  9     CAPITAL  ADDITIONS     10
9.1     Construction  of  Capital  Additions  to  the  Leased  Property.     10
9.2     Capital  Additions  Financed  by  Lessee.     10
9.4     Remodeling  and  Non-Capital  Additions.     12
9.5     Salvage.     12
ARTICLE  10     LIENS     12
ARTICLE  11     PERMITTED  CONTESTS     13
ARTICLE  12     INSURANCE     13
12.1     General  Insurance  Requirements.     13
12.2     Replacement  Cost.     14
12.3     Additional  Insurance     14
12.4     Waiver  of  Subrogation.     14
12.5     Form  of  Insurance.     14
12.6     Change  in  Limits.     15
12.7     Blanket  Policy.     15
12.8     No  Separate  Insurance     15
12.9     Insurance  for  Contractors.     15
ARTICLE  13     FIRE  AND  CASUALTY     15
13.1     Insurance  Proceeds.     15
13.2     Reconstruction  in  the  Event  of  Damage  or  Destruction  Covered by
Insurance.     15
13.3     Reconstruction  in  the  Event  of Damage or Destruction Not Covered by
Insurance.     16
13.4     Personal  Property     17
13.5     Restoration  of  Capital  Additions     17
13.6     No  Abatement  of  the  Rent     17
13.7     Damage  Near  End  of  Term     17
13.8     Purchase  or  Substitution     17
13.9     Waiver          17
ARTICLE  14     CONDEMNATION     18
14.1     Parties'  Rights  and  Obligations     18
14.2     Total  Taking     18
14.3     Partial  Taking     18
14.4     Restoration     18
14.5     Award  Distribution     18
14.6     Temporary  Taking     19
14.7     Purchase  or  Substitution     19
ARTICLE  15     DEFAULT     19
15.1     Events  of  Default     19
15.2     Remedies     20
15.3     Additional  Expenses     21
15.4     Waiver          21
15.5     Application  of  Funds     21
15.6     Notices  by  Lessor     21
15.7     Lessor's  Security  Interest     21
ARTICLE  16     LESSOR'S  RIGHT  TO  CURE     22
ARTICLE  17     PURCHASE  OF  THE  LEASED  PROPERTY     22
ARTICLE  18     HOLDING  OVER     23
ARTICLE  19     ABANDONMENT     23
19.1     Discontinuance  of  Operations  on  the  Leased  Property;  Offer  of
Substitution     23
19.2     Obsolescence  of  the  Leased  Property;     23
19.3     Conveyance  of  Leased  Property     23
ARTICLE  20     SUBSTITUTION  OF  PROPERTY     24
20.1     Substitution  of  Property  for  the  Leased  Property.     24
20.2     Conditions  to  Substitution.     25
20.3     Conveyance  to  Lessee.     26
20.4     Expenses.     26
ARTICLE  21     RISK  OF  LOSS     26
ARTICLE  22     INDEMNIFICATION     26
ARTICLE  23     SUBLETTING  AND  ASSIGNMENT     27
23.1     Subletting  and  Assignment.     27
23.2     Non-Disturbance,  Subordination  and  Attornment.     27
23.3     Sublease  Limitation.     28
23.4     Sublease  to  Current  Licensee     28
ARTICLE  24     OFFICER'S  CERTIFICATES  AND  FINANCIAL  STATEMENTS     28
24.1     Estoppel  Certificate     28
24.2     Financial  Statements  and  Certificates.     28
ARTICLE  25     INSPECTION     29
ARTICLE  26     QUIET  ENJOYMENT     30
ARTICLE  27     NOTICES     30
ARTICLE  28     APPRAISAL     31
ARTICLE  29     PURCHASE  RIGHTS     32
29.1     Right  of  First  Refusal.      32
29.2     Option  to  Purchase.     32
29.3     Third  Party  Designee     32
ARTICLE  30     DEFAULT  BY  LESSOR     33
30.1     Default  by  Lessor.     33
30.2     Lessee's  Right  to  Cure     33
ARTICLE  31     ARBITRATION     33
31.1     Controversies.  .     33
31.2     Appointment  of  Arbitrators.     33
31.3     Third  Arbitrator.     33
31.4     Arbitration  Procedure.     33
31.5     Expenses.     34
ARTICLE  32     FINANCING  OF  THE  LEASED  PROPERTY     34
ARTICLE  33     SUBORDINATION,  ATTORNMENT  AND  NON-DISTURBANCE     34
ARTICLE  34     EXTENDED  TERMS     35
ARTICLE  35     MISCELLANEOUS     35
35.1     No  Waiver.     35
35.2     Remedies  Cumulative     35
35.3     Surrender     35
35.4     No  Merger  of  Title     36
35.5     Transfers  by  Lessor     36
35.6     General.     36
35.7     Memorandum  of  Lease     36
35.8     Transfer  of  Licenses     36
35.9     Prior  Existing  Property  Conditions     36
35.10     Capital  Improvements  Term  Loan     36
35.11     Facility  Repairs  and  Capital  Improvements     37
ARTICLE  36     GLOSSARY  OF  TERMS     37


<PAGE>
                                      LEASE
     THIS  LEASE  ("Lease")  dated  the  first  day  of  May,  2003  between  HR
Acquisition  I  Corporation,  a  Maryland  corporation,  Capstone  Capital  of
Pennsylvania,  Inc.  and HRT Holdings, Inc., each having its principal office at
3310  West  End  Avenue,  Suite 700, Nashville, Tennessee 37203 each of which is
("Lessor") hereunder, and EMERITUS CORPORATION, a Washington corporation, having
its  principal  office  at  3131  Elliott Avenue, Suite 500, Seattle, Washington
98121  ("Lessee").

                              LEASED PROPERTY; TERM
                              ---------------------
Upon  and  subject  to  the  terms  and conditions hereinafter set forth, Lessor
leases  to  Lessee  and  Lessee  rents  from  Lessor  all of Lessor's rights and
interest in and to the following property (collectively, the "Leased Property"):
(a)     the  real  property  more  particularly  described on Exhibit A attached
                                                              ---------
hereto  together  with  all covenants, licenses, privileges and benefits thereto
belonging,  and  any  easements,  rights-of-way, rights of ingress and egress or
other  interests  of  Lessor  in,  on  or  to any land, highway, street, road or
avenue,  open  or  proposed,  in, on, across, in front of, abutting or adjoining
such  real property, including all strips and gores adjacent to or lying between
such  real  property  and  any  adjacent  real  property  (the  "Land");
(b)     the  assisted  living  facilities  (individually  a  "Facility"  and
collectively  the "Facilities") located on the Land together with all buildings,
structures,  Fixtures  (as  hereinafter defined) and other improvements of every
kind  (including  all  alleyways  and connecting tunnels, crosswalks, sidewalks,
landscaping,  parking  lots  and  structures  and  roadways  appurtenant to such
buildings and structures presently or hereafter situated upon the Land, drainage
and all above-ground and underground utility structures) (collectively, together
with  the  Facility,  and  any Capital Additions financed by Lessor, the "Leased
Improvements"  now  or  hereafter  located  therein  or  thereon);
(c)     all  permanently  affixed equipment, machinery, fixtures and other items
of  real  and/or  personal  property,  including all components thereof, now and
hereafter  located in, on or used in connection with, and permanently affixed to
or  incorporated  into the Leased Improvements, including all furnaces, boilers,
heaters,  electrical  equipment,  heating,  plumbing,  lighting,  ventilating,
refrigerating,  incineration,  air  and water pollution control, waste disposal,
air-cooling  and  air  conditioning systems and apparatus, sprinkler systems and
fire  and  theft  protection  equipment,  carpet, moveable or immovable walls or
partitions  and  built-in  oxygen  and  vacuum  systems, all of which are hereby
deemed  by  the  parties  hereto  to  constitute  real estate, together with all
replacements, modifications, alterations and additions thereto, but specifically
excluding  all  items  included  within  the  category  of  Personal  Property
(collectively  the  "Fixtures");
(d)     the  Personal  Property;
(e)     to  the  extent  permitted  by  law,  all  permits,  approvals and other
intangible  property  or  any interest therein now or hereafter owned or held by
Lessor  in connection with the Leased Property or any business or businesses now
or  hereafter  conducted  by  Lessee  or  any  Tenant  or  with the use thereof,
including all leases, contract rights, agreements, trade names, water rights and
reservations,  zoning  rights, business licenses and warranties (including those
relating  to  construction or fabrication) related to the Leased Property or any
part  thereof,  but  specifically  excluding  the  general corporate trademarks,
service  marks,  logos,  insignia  or  books  and  records  of  Lessee;  and
(f)     all  site  plans,  surveys,  soil  and  substrata studies, architectural
drawings,  plans and specifications, engineering plans and studies, floor plans,
landscape  plans,  and  other  plans  and studies that relate to the Land or the
Leased  Improvements  and  are  in  Lessor's  possession  or  control.
SUBJECT,  HOWEVER,  to  the  matters set forth on Exhibit B attached hereto (the
                                                  ---------
"Permitted  Exceptions"), to have and to hold for a fixed term of ten (10) years
(the  "Initial  Term")  commencing  as to each of the Facilities on the date set
forth  in  Exhibit  C  opposite the name of the Facility, which date the parties
acknowledge  and  agree  will  be  the  date  upon  which Lessee has secured the
approval  of  its  Board of Directors to the transaction which is the subject of
the  Lease  and  is issued a license to operate such Facility (the "Commencement
Date"),  and  ending  as  to all of the Facilities at midnight on April 30, 2013
(the "Expiration Date"), as may be extended pursuant to the terms of Article 34.
The  date  on  which  the Initial Term has commenced as to all of the Facilities
shall  hereinafter  be  referred  to  as  the  "Final  Commencement  Date."

                                      RENT
                                      ----
1.1     Minimum  Rent  and  Adjustments  to  Minimum  Rent.  Lessee shall pay to
        --------------------------------------------------
Lessor,  without  notice,  demand,  set off (except as set forth in Section 30.2
hereof)  or  counterclaim,  in  advance  in lawful money of the United States of
America,  at Lessor's address set forth herein or at such other place or to such
other person, firms or corporations as Lessor from time to time may designate in
     writing,  Minimum  Rent,  as  adjusted  annually pursuant to Section 2.1(b)
during  the  Term,  as  follows:
(g)     Minimum  Rent.  Lessee will pay to Lessor as rent (as adjusted from time
        -------------
to  time  in accordance with Section 2.1 (b), the "Minimum Rent") for the Leased
Property  the  annual  sum  of $3,450,000.  The Minimum Rent shall be payable in
advance  in  12 equal, consecutive monthly installments on the first day of each
calendar month during the Term commencing on the Commencement Date.  The Minimum
     Rent (or pro rata portion thereof, as applicable) shall be prorated for any
partial  month  and  is subject to adjustment as provided in Sections 2.1(b) and
9.3(b)(iv)  below.  The  Minimum  Rent  shall be allocated to a Facility for the
purposes  of  this  Article  2  as  shown  on  Exhibit  C  attached  hereto.
                                               ----------
(h)     Increases  to  Minimum  Rent. On the first and second anniversary of the
        ----------------------------
Final  Commencement  Date  the  then-current  Minimum  Rent  shall be increased,
effective  as  of  each  such anniversary of the Final Commencement Date, by the
percentage  increase  in  the  Gross Revenues over the prior twelve-month period
times  50%  (up to a maximum of $275,000) (the "Rent Cap").  [For example if the
Gross  Revenues  as of the Final Commencement Date were $1,000,000 and the Gross
Revenues  as  of  the  first  anniversary  of  the  Final Commencement Date were
$1,500,000, then the increase to Minimum Rent as of the first anniversary of the
Final  Commencement  Date  would  be $500,000  50% = $250,000]. In the event the
Rent  Cap  is  achieved  as a result of the increase in Gross Revenues at one or
more  of  the  Facilities  during  the  applicable period, the total increase to
Minimum  Rent  in  the second and third Lease Years shall be allocated among the
affected  Facilities  on  a pro rata basis based on the ratio of the increase in
Gross Revenues at each affected Facility to the total increase in Gross Revenues
at all of the affected Facilities.  Beginning with the third anniversary date of
the  Final  Commencement  Date (the "Adjustment Date"), the then-current Minimum
Rent  shall  be  increased  annually effective as of such Adjustment Date by the
increase  in  the  Consumer  Price Index from the second anniversary date of the
Final  Commencement  Date to the first Adjustment Date and, thereafter, from the
prior  Adjustment  Date to the then-current Adjustment Date, provided that in no
event  will  the  annual  change  in  the  Minimum Rent be more than 3.5% of the
Minimum  Rent  for the prior year.  In addition to the increases to Minimum Rent
provided  in  this  Section  2.1(b), the Minimum Rent shall also be increased as
provided  in  Section  35.11  of  this  Lease.
(i)     Capital  Expenditures.  Lessee  will  fund  expenditures for repairs and
        ---------------------
replacements  for  the  Facilities  as  approved  by  Lessor, the costs of which
according  to  generally accepted accounting principles must be depreciated over
periods greater than one year, as follows: (i) during the first twelve months of
the Term, no funding required; (ii) during the second twelve months of the Term,
funding  at the rate of $150.00 per bed per year less the difference between the
required  deposit  and  the  actual  expenditure made by Lessee pursuant to this
Section  2.1(c)  and  (iii)  commencing  the third twelve months of the Term and
thereafter during the Term, funding at the rate of $300.00 per bed per year less
the  difference  between the required deposit and the actual expenditure made by
Lessee pursuant to this Section 2.1(c). Within 45 days after each anniversary of
the  Final  Commencement  Date,  Lessee  provide  evidence  of such expenditures
satisfactory to Lessor. In the event such expenditures are not made, then within
such  45-day  period  following each anniversary of the Final Commencement Date,
Lessee  will  pay to Lessor for deposit in a money market account in a federally
insured  bank  acceptable  to  Lessor  and  Lessee  the  difference  between the
expenditures  required  and  the  amount actually spent for such purposes, which
funds  (the  "Capital Replacement Account") shall be made available to Lessee to
make  such repairs and replacements. The Capital Replacement Account shall be in
the name of Lessor, and interest earned on such account shall be retained in the
Capital  Replacement Account. Lessee shall make detailed requests for such funds
in  writing to Lessor in the same form as a Request pursuant Section 9.3 hereof.
Within  30  days  of  such  Request,  Lessor  shall  approve,  in its reasonable
discretion,  the  amount  of  requested  funds  and  make  mutually  agreeable
arrangements  for  the disbursement of the funds, or provide Lessee with written
notice  in  reasonable detail specifying Lessor's objections to such Request. So
long  as  this  Lease  is  still  in  effect  (i)  at the Expiration Date, up to
$100,000.00  of  the  Capital Replacement Account will be paid to Lessee and the
balance  of  such  account  shall  be the sole property of Lessor or (ii) in the
event  of  the  purchase  of  any or all of the Facilities by Leseee pursuant to
Article  29,  then all of the funds in the Capital Replacement Account allocated
to  the  purchased  Facility  shall  be  paid to Lessee and Lessor shall have no
rights  with  respect  thereto.  Until released or until the Expiration Date, as
applicable,  such escrow funds will constitute security for Lessee's obligations
under  this  Lease,  and  Lessee  hereby  grants  to  Lessor an assignment of, a
security  interest  in  and  a  right  of  setoff against all such escrow funds.
(j)     Payment  of  Minimum Rent. All payments of Minimum Rent shall be made in
        -------------------------
lawful  money  of  the  United States by wire transfer of same day funds to such
account  or  location  specified  by Lessor from time to time in writing. In the
event  that  Lessor  fails  to timely provide such notice, Lessee shall make the
payment  to  Lessor  at  the  address  provided  for notices below or such other
address  as  Lessor  may  from  time  to  time  designate  in writing to Lessee.
2.1     Calculation  of  Increases  to Minimum Rent. On or about each Adjustment
        -------------------------------------------
Date,  Lessor  will  calculate  the increase in the Minimum Rent pursuant to the
provisions  of  Section  2.1(b)  and  will provide Lessee with written notice of
same.  Lessee  shall  continue to pay the Current Minimum Rent until it receives
notice  of  the  increase  in  the  Minimum  Rent.
3.1     Additional  Charges.  Subject  to  Article  11  relating  to  permitted
        -------------------
contests,  Lessee  will  also  pay  and  discharge as and when due (a) all other
amounts,  liabilities  and  obligations,  which  Lessee assumes or agrees to pay
under  this  Lease  including,  to  the  extent  applicable,  any  condominium
association  dues,  assessments  or  other  charges, and (b) in the event of any
failure  on  the  part of Lessee to pay any of those items referred to in clause
(a)  above,  Lessee  will  also  promptly pay and discharge every fine, penalty,
interest  and  cost  which  may be added for non-payment or late payment of such
items  (the  items  referred  to  in clauses (a) and (b) above being referred to
herein  collectively  as  the  "Additional  Charges"), and Lessor shall have all
legal,  equitable  and  contractual rights, powers and remedies provided in this
Lease,  by  statute  or  otherwise, in the case of non-payment of the Additional
Charges,  as  well  as  the  Minimum Rent. If any installment of Minimum Rent or
Additional  Charges  (but  only as to those Additional Charges which are payable
directly  to  Lessor) shall not be paid within ten days after the date when due,
Lessee will pay Lessor on demand, as Additional Charges, interest (to the extent
permitted  by  law)  computed  at  the  Overdue  Rate  on  the  amount  of  such
installment,  from  the date when due to the date of payment in full thereof. In
the  event  Lessor  provides Lessee with written notice of failure to timely pay
any  installment  of  Minimum Rent or any Additional Charges pursuant to Section
15.1(b)  more  than three times within any twelve month period, Lessee shall pay
an  administrative  fee  to  Lessor in the amount of $500.00 for each additional
written  notice  Lessor gives pursuant to Section 15.1(b) during the next twelve
months.  To  the extent that Lessee pays any Additional Charges to Lessor or the
Facility  Mortgagee  pursuant  to any requirement of this Lease, Lessee shall be
relieved of its obligation to pay such Additional Charges to the entity to which
such  Additional  Charges  would  otherwise  be due. Additional Charges shall be
deemed  Rent  hereunder.
4.1     Net Lease. The Rent shall be paid absolutely net to Lessor, so that this
        ---------
Lease  shall yield to Lessor the full amount of the installments of Minimum Rent
and  the  payments  of  Additional  Charges  (but  only  those which are payable
directly  to  Lessor)  throughout the Term but subject to any provisions of this
Lease  which  expressly provide for payments by a party other than Lessor or the
adjustment  of  the  Rent  or  other  charges.
5.1     Abatement  of  Rent  Limited.  There  shall  be  no abatement of Rent on
        ----------------------------
account  of any Casualty, Taking or other event, except that (a) in the event of
a  partial  Taking or a temporary Taking as described in Sections 14.3 and 14.6,
the  Minimum Rent shall be abated as follows:  (i) in the case of such a partial
Taking,  the  Project  Amount  shall  be reduced for the purposes of calculating
Minimum  Rent  pursuant  to Section 2.1 by subtracting therefrom, as applicable,
the  net  amount of the Award received by Lessor, and (ii) in the case of such a
temporary  Taking,  by  reducing  the  Minimum  Rent  for  the  period of such a
temporary  Taking,  by the net amount of the Award received by Lessor and (b) in
the  event  of  a  Casualty,  the  Minimum Rent shall be abated as follows:  The
Project  Amount  shall  be  reduced for the purposes of calculating Minimum Rent
pursuant  to Section 2.1 by subtracting therefrom, as applicable, the net amount
of  the  insurance  proceeds.
     For the purposes of this Section 2.5, the "net amount of the Award received
by  Lessor"  shall  mean  the  Award  paid to Lessor or a Facility Mortgagee (as
defined  below) on account of such Taking, minus all costs and expenses incurred
by  Lessor  in  connection  therewith,  and minus any amounts paid to or for the
account  of Lessee to reimburse for the costs and expenses of reconstructing the
Facility  following  such  Taking  in  order  to  create a viable and functional
Facility under all of the circumstances ("Net Award Amount") and the "net amount
of the insurance proceeds" shall mean the insurance proceeds paid to Lessor or a
Facility  Mortgagee  on  account  of such Casualty, minus all costs and expenses
incurred  by Lessor in connection therewith and minus any amounts paid to or for
the  account of Lessee to reimburse for the costs and expenses of reconstructing
the  Facility following such Casualty in order to create a viable and functional
Facility  under  all  of  the  circumstances  ("Net  Proceeds  Amount").

                                   IMPOSITIONS
                                   -----------
6.1     Payment  of  Impositions.  Subject  to  Article 11 relating to permitted
        ------------------------
contests,  Lessee  will  pay, or cause to be paid, all Impositions which are due
and  owing  during  the  Term and which relate to the period covered by the Term
before  any  fine,  penalty, interest or cost may be added for non-payment, such
payments  to  be  made  directly  to  the taxing authorities where feasible, and
Lessee  will  promptly,  upon  request,  furnish  to  Lessor  copies of official
receipts  or  other  satisfactory  proof  evidencing  such  payments.  Lessee's
obligation  to  pay  such  Impositions  and  the  amount thereof shall be deemed
absolutely  fixed  upon  the date such Impositions become a lien upon the Leased
Property  or  any  part  thereof. If any such Imposition may lawfully be paid in
installments (whether or not interest shall accrue on the unpaid balance of such
     Imposition),  Lessee  may  exercise  the  option  to  pay the same (and any
accrued  interest on the unpaid balance of such Imposition) in installments and,
in  such  event,  shall pay such installments during the Term hereof as the same
become  due  and before any fine, penalty, premium, further interest or cost may
be  added  thereto.  Lessor,  at  its expense, shall, to the extent permitted by
applicable  law, prepare and file all tax returns and reports as may be required
by  governmental  authorities in respect of Lessor's net income, gross receipts,
franchise  taxes  and taxes on its capital stock. Lessee, at its expense, shall,
to the extent permitted by applicable laws and regulations, prepare and file all
other tax returns and reports in respect of any Imposition as may be required by
governmental  authorities.  If any refund shall be due from any taxing authority
in  respect  of any Imposition paid by Lessee, the same shall be paid over to or
retained  by  Lessee if no Event of Default shall have occurred hereunder and be
continuing.  Any  such funds retained by Lessor due to an Event of Default shall
be  applied  as provided in Article 15. Lessor and Lessee shall, upon request of
the  other,  provide such data as is maintained by the party to whom the request
is  made  with respect to the Leased Property as may be necessary to prepare any
required returns and reports. In the event governmental authorities classify any
property  covered  by  this  Lease  as  personal property, Lessee shall file all
personal  property  tax  returns in such jurisdictions where filing is required.
Lessor  and  Lessee  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 Lessor is legally required to file personal property
tax  returns,  and  Lessee  is  obligated for the same hereunder, Lessee will be
provided with copies of assessment notices in sufficient time for Lessee to file
a  protest.  Lessee may, upon giving 30 days' prior written notice to Lessor, at
Lessee's  option  and  at  Lessee's  sole  cost and expense, protest, appeal, or
institute  such  other  proceedings  as  Lessee may deem appropriate to effect a
reduction  of  real  estate  or  personal  property  assessments  and Lessor, if
requested  by Lessee and at Lessee's expense as aforesaid, shall fully cooperate
with Lessee in such protest, appeal, or other action. Billings for reimbursement
by Lessee to Lessor of personal property taxes shall be accompanied by copies of
an  invoice  therefor  and payments thereof which identify the personal property
with  respect to which such payments are made. Lessor will cooperate with Lessee
in  order  that  Lessee  may  fulfill  its  obligations hereunder, including the
execution  of  any  instruments  or  documents  reasonably  requested by Lessee.
7.1     Proration  of  Impositions.  Impositions  imposed  in  respect  of  the
        --------------------------
tax-fiscal  period  during  which  the  Term  commences  and terminates shall be
prorated  between  Lessor  and Lessee, whether or not such Imposition is imposed
before  or  after  such termination, and Lessee's and Lessor's obligation to pay
their  respective  prorated  shares thereof with respect to any tax period which
relates  to  the  period  after  termination  of  the  Lease  shall survive such
termination.
8.1     Utility  Charges.  Lessee  will,  or will cause its Tenants, if any, to,
        ----------------
contract for, in its own name, and will pay or cause to be paid all charges for,
electricity,  power,  gas,  oil,  water  and  other utilities used in the Leased
Property  during  the  Term.
9.1     Insurance Premiums.  Lessee will contract for, in its own name, and will
        ------------------
pay  or cause to be paid all premiums for, the insurance coverage required to be
maintained  by  Lessee  pursuant  to  Article  12  during  the  Term.

                                 NO TERMINATION
                                 --------------
Except  as  provided  in  this Lease, Lessee shall remain bound by this Lease in
accordance  with its terms and shall neither take any action without the consent
of  Lessor  to modify, surrender or terminate the same, nor seek nor be entitled
to  any abatement, deduction, deferment or reduction of Rent, or set-off against
the Rent, nor shall the respective obligations of Lessor and Lessee be otherwise
affected  by reason of (a) any damage to, or destruction of, the Leased Property
or  any portion thereof from whatever cause or any Taking of the Leased Property
or  any  portion thereof, except as otherwise provided in Articles 13 or 14, (b)
the  lawful  prohibition  of,  or  restriction  upon, Lessee's use of the Leased
Property,  or  any  portion  thereof,  or  the interference with such use by any
person,  corporation,  partnership  or other entity, or by reason of eviction by
paramount  title, (c) any claim which Lessee has or might have against Lessor or
by reason of any default or breach of any warranty by Lessor under this Lease or
any  other agreement between Lessor and Lessee or to which Lessor and Lessee are
parties,  (d)  any  bankruptcy,  insolvency,  reorganization,  composition,
readjustment,  liquidation,  dissolution,  winding  up  or  other  proceedings
affecting  Lessor  or any assignee or transferee of Lessor, or (e) for any other
cause  whatsoever  whether similar or dissimilar to any of the foregoing. Lessee
hereby  specifically  waives  all  rights arising from any occurrence whatsoever
which  may now or hereafter be conferred upon it by law to (i) modify, surrender
or  terminate this Lease or quit or surrender the Leased Property or any portion
thereof,  or  (ii)  entitle  Lessee  to  any abatement, reduction, suspension or
deferment  of  the  Rent  or  other  sums payable by Lessee hereunder, except as
otherwise  specifically  provided  in  this Lease. The obligations of Lessor and
Lessee  hereunder shall be separate and independent covenants and agreements and
the  Rent  and  all  other sums payable by Lessee hereunder shall continue to be
payable  in  all  events,  unless  the  obligations  to  pay  the  same shall be
terminated pursuant to the express provisions of this Lease. Notwithstanding the
foregoing,  Lessee  shall  have  the right by separate and independent action to
pursue any claim or seek any damages it may have against Lessor as a result of a
breach  by  Lessor  of  the  terms  of  this  Lease.

                          OWNERSHIP OF LEASED PROPERTY
                          ----------------------------
10.1     Ownership of the Property. Lessee acknowledges that the Leased Property
         -------------------------
     is  the  property  of  Lessor  and  that  Lessee  has only the right to the
possession  and use of the Leased Property upon the terms and conditions of this
Lease.
11.1     Personal  Property.  Lessee may (and shall as provided hereinbelow), at
         ------------------
its  expense,  install, affix or assemble or place on any parcels of the Land or
in  any  of  the Leased Improvements any items of the Personal Property, and may
remove,  replace  or  substitute  for the same from time to time in the Ordinary
Course  of  Business  or  upon expiration of the Term.  Lessee shall provide and
maintain during the entire Term all such Personal Property as shall be necessary
in  order  to  operate  the  Facility  in  compliance with all licensure and, if
applicable,  certification requirements, in compliance with all applicable Legal
Requirements  and  Insurance  Requirements  and  otherwise  in  accordance  with
customary  practice  in  the  industry  for  the  Primary  Intended  Use.

                      CONDITION AND USE OF LEASED PROPERTY
                      ------------------------------------
12.1     Condition  of  the  Leased Property. Lessor hereby assigns for Lessee's
         -----------------------------------
benefit any covenants, representations and warranties made in favor of Lessor or
     any  predecessor  to  Lessor with respect to the design and construction of
the  Improvements.  Lessee  will  examine and otherwise acquire knowledge of the
condition of the Leased Property prior to the occupancy of the Leased. Property.
Lessee  is  leasing  the Leased Property "as is" in its condition at the time of
occupancy.  Lessee  waives  any claim or action against Lessor in respect of the
condition  of  the Leased Property.  LESSOR MAKES NO WARRANTY OR REPRESENTATION,
EXPRESS  OR  IMPLIED,  IN  RESPECT  OF  THE LEASED PROPERTY OR ANY PART THEREOF,
EITHER  AS  TO  ITS  FITNESS  FOR  USE, SUITABILITY, 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  LESSEE. LESSEE ACKNOWLEDGES THAT THE LEASED PROPERTY HAS BEEN
INSPECTED  BY LESSEE AND IS SATISFACTORY TO IT IN ALL RESPECTS.  Notwithstanding
the  foregoing, Lessee shall have no liability to Lessor for any liens which may
be  imposed  against the Leased Property as a result of the acts or omissions of
any party other than Lessee during the period prior to the Commencement Date but
the  same  shall  be  and  remain  the  responsibility  of  Lessor.
13.1     Use  of  the  Leased  Property.
(k)     After the Commencement Date and during the entire Term, Lessee shall use
     or  cause  to  be used each Facility and the Leased Property as an assisted
living  facility  and for such other uses as may be necessary in connection with
or  incidental  to  such use (the "Primary Intended Use").  Lessee shall not use
the  Leased  Property or any portion thereof for any other use without the prior
written  consent  of Lessor, which consent shall not be unreasonably withheld or
delayed.
(l)     Lessee covenants that it will obtain and maintain all material approvals
needed  to use and operate the Leased Property and each Facility for the Primary
Intended  Use  in  compliance  with  all  applicable  Legal  Requirements.
(m)     Lessee  covenants  and  agrees  that  during  the  Term  it will use its
reasonable  best  efforts  to  operate  continuously  the  Leased  Property  in
accordance  with its Primary Intended Use and to maintain its certifications for
reimbursement,  if  any, and licensure and its accreditation, if compliance with
accreditation standards is required to maintain the operations of a Facility and
if  a  failure  to  comply  would  adversely  affect operations of the Facility.
(n)     Lessee  shall  not  commit  or  suffer  to be committed any waste on the
Leased  Property,  or  in  the Facility or cause or permit any nuisance thereon.
(o)     Lessee  shall  neither  suffer  nor  permit  the  Leased Property or any
portion  thereof,  including  any  Capital  Addition  whether or not financed by
Lessor,  to  be  used  in  such  a  manner as (i) is reasonably likely to impair
Lessor's  estate therein or any portion thereof, or (ii) is reasonably likely to
result  in  a  claim  or  claims  of  adverse usage or adverse possession by the
public,  as such, or of implied dedication of the Leased Property or any portion
thereof.
(p)     Lessee  will  not utilize any Hazardous Materials on the Leased Property
except  in accordance with applicable Legal Requirements and will not permit any
contamination  which  may  require  remediation  under  any applicable Hazardous
Materials  Law.  Lessee  agrees  not  to  dispose  of any Hazardous Materials or
substances  within  the sewerage system of the Leased Property, and that it will
handle  all  "red  bag" wastes in accordance with applicable Hazardous Materials
Laws.
14.1     Management of Facility. Unless otherwise agreed to in writing by Lessor
         ----------------------
     (i)  Lessee shall cause each Facility to be managed and leased to Residents
and  Tenants at all times by Lessee or an Affiliate of Lessee, (ii) Lessee shall
not  enter  into any agreement (oral or written) with respect to such management
and  leasing  activities  unless  the  terms thereof and the proposed manager or
leasing agent have been approved in writing by Lessor, (iii) all such management
or  leasing  agreements  must  be in writing, and (iv) all management or leasing
agreements  with  an  Affiliate  of Lessee must contain provisions to the effect
that  (A)  the obligation of Lessee to pay management fees is subordinate to its
obligation  to  pay  the  Rent,  and (B) the manager shall not have the right to
collect  any  management  fees  during  the  continuance of an Event of Default.
15.1     Lessor  to  Grant  Easements.  Lessor  will,  from time to time, at the
         ----------------------------
request  of Lessee and at Lessee's cost and expense, but subject to the approval
of  Lessor  of  the  terms and conditions thereof, (a) grant easements and other
rights  in  the  nature  of  easements,  (b) release existing easements or other
rights  in  the  nature  of  easements  which  are for the benefit of the Leased
Property,  (c)  dedicate  or transfer unimproved portions of the Leased Property
for  road,  highway  or other public purposes, (d) execute petitions to have the
Leased  Property  annexed  to any municipal corporation or utility district, (e)
execute  amendments  to  any  covenants  and  restrictions  affecting the Leased
Property,  and  (f) execute and deliver to any person such instruments as may be
necessary or appropriate to confirm or effect such grants, releases, dedications
and  transfers  (to the extent of its interest in the Leased Property), but only
upon  delivery  to  Lessor  of  an Officer's Certificate stating (and such other
information  as  Lessor  may  reasonably  require  confirming)  that such grant,
release,  dedication,  transfer, petition or amendment is required or beneficial
for  and  not detrimental to the proper conduct of the business of Lessee on the
Leased  Property  and  does  not  reduce  the  value  thereof.

                   LEGAL, INSURANCE AND FINANCIAL REQUIREMENTS
                   -------------------------------------------
16.1     Compliance with Legal and Insurance Requirements. Subject to Article 11
         ------------------------------------------------
     relating  to  permitted contests, Lessee, at its expense, will promptly (a)
comply  with  all  material  Legal  Requirements  and  Insurance Requirements in
respect of the use, operation, maintenance, repair and restoration of the Leased
Property, whether or not compliance therewith shall require structural change in
any  of  the  Leased Improvements or interfere with the use and enjoyment of the
Leased  Property, and (b) directly or indirectly with the cooperation of Lessor,
but  at  Lessee's  sole  cost and expense, procure, maintain and comply with all
material  licenses,  certificates  of  need,  if  any,  and other authorizations
required  for  (i)  any use of the Leased Property then being made, and for (ii)
the  proper  erection,  installation,  operation  and  maintenance of the Leased
Improvements  or  any  part  thereof,  including  any  Capital  Additions.
17.1     Legal  Requirement  Covenants.  Lessee  covenants  and  agrees that the
         -----------------------------
Leased  Property  shall  not  be  used  for  any unlawful purpose. Lessee shall,
directly or indirectly with the cooperation of Lessor, but at Lessee's sole cost
and  expense,  acquire and maintain all material licenses, certificates, permits
and  other authorizations and approvals needed to operate the Leased Property in
its customary manner for the Primary Intended Use and any other use conducted on
the  Leased  Property  as  may  be permitted from time to time hereunder. Lessee
further  covenants  and  agrees  that  Lessee's  use  of the Leased Property and
Lessee's  maintenance,  alteration,  and  operation  of  the same, and all parts
thereof,  shall  at  all  times  conform  to  all applicable Legal Requirements.
18.1     Rent  and  Debt  Service  Coverage  -  Facility.  As  used  herein, the
         -----------------------------------------------
following  terms  shall  have  the  meanings  indicated:
     "Consolidated  Coverage  Ratio"  means,  for  any  period, the ratio of (i)
EBITDARM  on  a  consolidated  basis for the Facilities in the aggregate for the
applicable period, to (ii) the principal (excluding any prepayments or principal
at  maturity), interest and lease (capital and operating) payment obligations of
the  Facilities  in  the  aggregate  for  the  same  period.
     "EBITDARM"  means, for any period, the Net Income (or deficit) plus (i) the
interest  charges paid or accrued during such period (including imputed interest
on  lease  (capital  or  operating)  obligations  (including  this  Lease),  but
excluding amortization of debt discount and expense), (ii) income taxes for such
period,  (iii)  any amounts in respect of depreciation and amortization for such
period, (iv) the rent due under all leases (capital or operating, including this
Lease)  for  such  period,  and  (v) any actual management fees paid or incurred
during  such  period.
     "Facility  Coverage  Ratio"  means,  for  any  period, the ratio of (i) the
difference  between  EBITDARM  for the Facility for the applicable period, minus
assumed  management  fees  of  five  percent (5%) of the Gross Revenues from the
Facility  to  (ii)  the  principal  (excluding  any  prepayments or principal at
maturity),  interest  and lease (capital and operating) payment obligations with
respect  to  the  Facility  (including  the  Minimum  Rent) for the same period.
(q)     Lessee  agrees  and covenants with Lessor that, so long as this Lease is
in  effect,  Lessee  will  achieve  and  maintain,  on a consolidated basis, the
Consolidated  Coverage  Ratios  set  forth below for the twelve months preceding
each  quarterly  reporting  date.

                                        Required  Consolidated
Period                                        Coverage  Ratio
------                                        ---------------

(i)     Prior  to  date  in  (ii)                         No  requirement

(ii)     For  the  last  two  calendar  quarters  during
     the  calendar  year  ending  12/31/05                    1.05  to  1.0

(iii)     For  each  calendar  quarter  during  the
     calendar  year  ending  12/31/06                    1.10  to  1.0

(iv)     For  each  calendar  quarter  during  the
     calendar  year  ending  12/31/07                    1.15  to  1.0

(v)     For  each  calendar  quarter  during  the
     calendar  year  ending  12/31/08  and  during
     each  calendar  year  thereafter                    1.20  to  1.0

     (b)     Lessee agrees and covenants with Lessor that, so long as this Lease
is  in effect, Lessee will achieve and maintain the Facility Coverage Ratios set
forth  below  for  the  twelve  months preceding each quarterly reporting date.

                                        Required  Facility
Period                                        Coverage  Ratio
------                                        ---------------

(i)     Prior  to  date  in  (ii)                         No  requirement

(ii)     For  the  last  two  calendar  quarters  during
     the  calendar  year  ending  12/31/05  and  for
     each  calendar  quarter  during  the  calendar
     year  ending  12/31/06                         1.0  to  1.0

(iii)     For  each  calendar  quarter  during  the
     calendar  years  ending  12/31/07  and  12/31/08          1.05  to  1.0

(iv)     For  each  calendar  quarter  during  the  calendar
     year  ending  12/31/09  and  during  each
     calendar  year  thereafter                         1.10  to  1.0



                  REPAIRS; RESTRICTIONS AND ANNUAL INSPECTIONS
                  --------------------------------------------
19.1     Maintenance  and  Repair.
(r)     Lessee,  at  its  expense, will keep the Leased Property and all private
roadways,  sidewalks  and curbs appurtenant thereto in reasonably good order and
repair  (whether or not the need for such repairs occurs as a result of Lessee's
use,  the  elements, the age of the Leased Property or any portion thereof), and
except  as  otherwise provided in Articles 13 and 14, with reasonable promptness
will make all necessary and appropriate repairs thereto of every kind and nature
     (including  remodeling  to  the  extent  necessary  to  maintain the Leased
Property  in  a  condition substantially the same as exists on the date hereof),
whether  interior  or  exterior,  structural  or  non-structural,  ordinary  or
extraordinary,  foreseen  or  unforeseen  or  arising  by  reason of a condition
existing prior to or after the commencement of the Term of this Lease (concealed
or  otherwise).  All  repairs  and  remodeling  shall,  to the extent reasonably
achievable,  be at least equivalent in quality to the original work and shall be
accomplished  by  Lessee  or a party selected by Lessee. Lessee will not take or
omit  to take any action the taking or omission of which would materially impair
the  value  or  usefulness  of  the  Leased Property or any part thereof for the
Primary  Intended  Use.  If  Lessee  fails  to  perform  any  of its obligations
hereunder,  Lessor  may, on giving 30 days' written notice to Lessee (other than
in  a case reasonably deemed by Lessor to be an emergency, in which case no such
notice  shall  be  required),  without  demand  on  Lessee,  perform  any  such
obligations  in  such  manner  and  to such extent and take such other action as
Lessor may deem appropriate in the event that Lessee has not timely commenced to
perform such obligation or take such action, and all costs, expenses and charges
of  Lessor  relating  to any such action shall constitute Additional Charges and
shall  be  payable  by  Lessee  to  Lessor  in  accordance  with  Section  2.3.
(s)     Except  for the use of any insurance proceeds (to the extent required by
Sections  13.1  and 13.2) and any Award (to the extent required by Section 14.3)
and  except  for  repairs,  replacements, alterations, restorations and renewals
required  as  a  result  of the acts of omissions of any party other than Lessee
during  the period prior to the Commencement Date, which shall be and remain the
responsibility  of  Lessor, Lessor shall not under any circumstances be required
to  build  or  rebuild  any  improvements on the Leased Property, or to make any
repairs,  replacements,  alterations, restorations, or renewals of any nature or
description  to  the  Leased  Property,  whether  ordinary  or  extraordinary,
structural  or nonstructural, foreseen or unforeseen, or to make any expenditure
whatsoever  with  respect  thereto in connection with this Lease, or to maintain
the  Leased  Property  in  any  way.
(t)     Nothing  contained  in  this  Lease  and no action or inaction by Lessor
shall  be construed as  constituting the consent or request of Lessor, expressed
or  implied, to any contractor, subcontractor, laborer, materialman or vendor to
or  for the performance of any particular labor or services or the furnishing of
any  particular  materials  or  other property for the construction, alteration,
addition, repair or demolition of or to the Leased Property or any part thereof.
(u)     Unless Lessor shall convey any of the Leased Property to Lessee pursuant
to  the  provisions  of  this  Lease,  Lessee will, upon the expiration or prior
termination of this Lease, vacate and surrender the Leased Property to Lessor in
the  condition in which the Leased Property was originally received from Lessor,
except  for  ordinary  wear  and  tear  (subject  to the obligation of Lessee to
maintain  the  Property in good order and repair during the entire Term), damage
caused  by  the  gross  negligence  or  willful  acts  of  Lessor, and damage or
destruction  described  in  Article  13  or resulting from a Taking described in
Article  14 which Lessee is not required by the terms of this Lease to repair or
restore,  and  except  as  repaired,  rebuilt,  restored, altered or added to as
permitted  or  required  by  the  provisions  of  this  Lease.
20.1     Encroachments;  Restrictions.  If any of the Improvements shall, at any
         ----------------------------
time,  encroach upon any property, street or right-of-way adjacent to the Leased
Property,  or  shall  violate  the  agreements  or  conditions  contained in any
applicable  Legal  Requirement,  lawful  restrictive covenant or other agreement
affecting  the  Leased Property, or any part thereof, or shall impair the rights
of  others  under  any  easement or right-of-way to which the Leased Property is
subject,  then promptly upon the request of Lessor, Lessee shall at its expense,
subject  to  its  right  to  contest  the  existence  of  any such encroachment,
violation  or  impairment, (a) obtain valid and effective waivers or settlements
of  all  claims,  liabilities and damages resulting from each such encroachment,
violation  or impairment, whether the same shall affect Lessor or Lessee, or (b)
make such changes in the Improvements, and take such other actions, as Lessor in
     the  good  faith  exercise of its judgment deems reasonably practicable, to
remove  such encroachment, or to end such violation or impairment, including, if
necessary,  the  alteration  of any of the Leased Improvements, and in any event
take  all  such  actions as may be necessary in order to be able to continue the
operation  of  the  Facility  for  the Primary Intended Use substantially in the
manner  and  to  the  extent the Facility was operated prior to the assertion of
such  violation or encroachment. Any such alteration shall be made in conformity
with  the  applicable requirements of Article 9. Lessee's obligations under this
Section  8.2  shall  be in addition to and shall in no way discharge or diminish
any  obligation  of any insurer under any policy of title or other insurance and
Lessee  shall be entitled to a credit for any sums recovered by Lessor under any
such  policy of title or other insurance.  Notwithstanding the foregoing, Lessee
shall  have  no  liability  to  Lessor for any encroachments or violations which
existed  prior  to  the  Commencement Date or arise, whether before or after the
Commencement  Date, from as a result of the acts or omissions of any party other
than  Lessee,  its  agents,  employees  or contractors but the same shall be and
remain  the  responsibility  of  Lessor.
21.1     Inspections.  From  time to time during the Term but no more often than
         -----------
one  time  per  year,  Lessor and its agents shall have the right to inspect the
Leased  Property  and  all  systems  contained therein at any reasonable time to
determine  Lessee's  compliance with its obligations under this Lease, including
those  obligations  set  forth in Article 7 and this Article 8. Lessee shall pay
Lessor  the  sum  of $2,000.00 per year to cover the time and expense associated
with  such  inspections  as  and  when  performed.

                                CAPITAL ADDITIONS
                                -----------------
22.1     Construction  of  Capital  Additions  to  the  Leased  Property.
(v)     If  no  Event  of  Default shall have occurred and be continuing, Lessee
shall  have  the  right,  upon and subject to the terms and conditions set forth
below, to construct or install Capital Additions on the Leased Property with the
     prior  written  consent  of  Lessor which consent shall not be unreasonably
withheld;  provided that Lessee shall not be permitted to create any Encumbrance
on  the  Leased  Property in connection with such Capital Addition without first
complying  with  Section  9.1(b) hereof. Prior to commencing construction of any
Capital  Addition,  Lessee  shall submit to Lessor in writing a proposal setting
forth  in  reasonable  detail any proposed Capital Addition and shall provide to
Lessor  such  plans  and  specifications, permits, licenses, contracts and other
information  concerning  the  proposed Capital Addition as Lessor may reasonably
request.  Without  limiting the generality of the foregoing, such proposal shall
indicate  the  approximate  projected cost of constructing such Capital Addition
and  the  use  or  uses  to  which  it  will  be  put.
(w)     Prior  to  commencing construction of any Capital Addition, Lessee shall
first  request  Lessor  to  provide  funds  to  pay for such Capital Addition in
accordance  with  the provisions of Section 9.3. If Lessor declines or is unable
to  provide  such  financing  on  terms  acceptable to Lessee and Lessee rejects
Lessor's  offer  of  financing,  Lessee  may arrange or provide other financing,
subject  to the provisions of Section 9.2. Lessor will reasonably cooperate with
Lessee regarding the grant of any consents or easements or the like necessary or
appropriate  in  connection  with any Capital Addition; provided that no Capital
Addition  shall be made which would tie in or connect any Leased Improvements on
the  Leased  Property  with  any  other improvements on property adjacent to the
Leased  Property  (and  not  part  of  the Land covered by this Lease) including
tie-ins  of buildings or other structures or utilities, unless Lessee shall have
obtained  the  prior  written  approval  of  Lessor, which approval shall not be
unreasonably  withheld.  All proposed Capital Additions shall be architecturally
integrated  into  and  consistent  with  the  Leased  Property.
23.1     Capital Additions Financed by Lessee. If Lessee finances or arranges to
         ------------------------------------
     finance  any  Capital  Addition with a party other than Lessor or if Lessee
pays cash for any Capital Addition, this Lease shall be and hereby is amended to
provide  as  follows:
(x)     There  shall  be no adjustment in the Minimum Rent by reason of any such
Capital  Addition.
(y)     Upon  the  expiration or earlier termination of this Lease, Lessor shall
compensate  Lessee  for  all Capital Additions paid for or financed by Lessee in
any  of  the  following  ways:
(1)     By  purchasing  all Capital Additions paid for by Lessee from Lessee for
cash  in  the  amount  of the Fair Market Added Value at the time of purchase by
Lessor  of  all  such  Capital  Additions  paid  for  or  financed by Lessee; or
(2)     Such  other arrangement regarding such compensation as shall be mutually
acceptable  to  Lessor  and  Lessee.
Any  amount  owed  by  Lessee  to Lessor under this Lease at such termination or
expiration  may  be deducted from any compensation for Capital Additions payable
by  Lessor  to  Lessee  under  this  Section  9.2.
24.1     Capital  Additions  Financed  by  Lessor.
(z)     Lessee  shall  request  that  Lessor  provide or arrange financing for a
Capital  Addition  by  providing  to  Lessor  such information about the Capital
Addition  as  Lessor  may  reasonably  request  (a  "Request"),  including  all
information  referred to in Section 9.1 above. Lessor may, but shall be under no
obligation  to provide or obtain the funds necessary to meet the Request. Within
30  days  of  receipt  of a Request, Lessor shall notify Lessee as to whether it
will  finance the proposed Capital Addition and, if so, the terms and conditions
upon  which  it would do so, including the terms of any amendment to this Lease.
In  no  event  (i)  shall  the  portion  of  the projected Capital Addition Cost
comprised of land (if any), materials, labor charges, fixtures and out-of-pocket
     expenses  (including a reasonable construction management fee) be less than
100%  of  the  total  amount  of  such  cost, or (ii) shall Lessee or any of its
Affiliates  be  entitled  to  any  commission  or  development  fee, directly or
indirectly,  as  a  portion of the Capital Addition Cost other than for services
actually  provided in connection with the design or construction of such Capital
Addition.  Any  Capital Addition not financed by Lessor, which Lessee intends to
finance or arrange financing for pursuant to Section 9.2, must still be approved
in  writing by Lessor pursuant to the terms of Section 9.1 hereof, which consent
will  not be unreasonably withheld. Lessee may withdraw its Request by notice to
Lessor  at  any  time  before or after receipt of Lessor's terms and conditions.
(aa)     If  Lessor  agrees  to  finance the proposed Capital Addition, Lessor's
obligation  to  advance  any  funds  shall  be  subject to receipt of all of the
following,  in  form  and  substance  reasonably  satisfactory  to  Lessor:
(3)     such  loan  documentation  as  may  be  required  by  Lessor;
(4)     any  information, certificates, licenses, permits or documents requested
by  Lessor, or by any lender with whom Lessor has agreed or may agree to provide
financing,  which  are  necessary  or appropriate to confirm that Lessee will be
able  to use the Capital Addition upon completion thereof in accordance with the
Primary  Intended Use, including all required federal, state or local government
licenses  and  approvals;
(5)     an  Officer's Certificate and, if requested, a certificate from Lessee's
architect,  setting  forth  in  detail  reasonably  satisfactory  to  Lessor the
projected  (or  actual,  if  available)  cost  of the proposed Capital Addition;
(6)     an  amendment to this Lease, duly executed and acknowledged, in form and
substance  satisfactory to Lessor and Lessee (the "Lease Amendment"), containing
such  provisions as may be necessary or appropriate due to the Capital Addition,
including  any  appropriate changes in the legal description of the Land and the
Rent,  all  such  changes  to  be  mutually  agreed  upon  by Lessor and Lessee;
(7)     if  appropriate,  a  deed  conveying  title  to  Lessor  to any land and
improvements  or  other  rights  acquired  for  the  purpose of constructing the
Capital  Addition,  free  and  clear  of  any liens or encumbrances except those
approved in writing by Lessor and, both prior to and following completion of the
Capital  Addition, an as-built survey thereof reasonably satisfactory to Lessor;
(8)     if  appropriate,  endorsements  to  any  outstanding  policy  of  title
insurance  covering  the  Leased  Property  or  a  supplemental  policy of title
insurance  covering  the  Leased  Property  reasonably  satisfactory in form and
substance  to  Lessor  (A)  updating the same without any additional exceptions,
except as may be permitted by Lessor; and (B) increasing the coverage thereof by
an  amount equal to the Fair Market Value of the Capital Addition (except to the
extent  covered  by  the  owner's  policy  of  title  insurance  referred  to in
subparagraph  (vii)  below);
(9)     if required by Lessor, (A) an owner's policy of title insurance insuring
fee  simple  title  to any land conveyed to Lessor pursuant to subparagraph (v),
free and clear of all liens and encumbrances except those approved by Lessor and
(B)  a  lender's policy of title insurance satisfactory in form and substance to
Lessor and the Lending Institution advancing any portion of the Capital Addition
Cost;
(10)     if  required  by  Lessor  upon  completion  of the Capital Addition, an
M.A.I.  appraisal  of  the  Leased  Property;  and
(11)     such  other  certificates  (including  endorsements  increasing  the
insurance  coverage,  if  any, at the time required by Section 12.1), documents,
customary opinions of Lessee's counsel, appraisals, surveys, certified copies of
duly  adopted  resolutions  of  the Board of Directors of Lessee authorizing the
execution  and  delivery  of  the  Lease  Amendment and any other instruments or
documents  as  may  be  reasonably  required  by  Lessor.
(bb)     Upon  making  a  Request  to finance a Capital Addition, whether or not
such  financing  is  actually consummated, Lessee shall pay the reasonable costs
and  expenses  of  Lessor  and  any  Lending  Institution which has committed to
finance  such Capital Addition paid or incurred in connection with the financing
of the Capital Addition, including (i) the fees and expenses of their respective
     counsel, (ii) the amount of any recording or transfer taxes and fees, (iii)
documentary  stamp  taxes,  if  any, (iv) title insurance charges, (v) appraisal
fees,  if  any, and (vi) commitment fees, if any. Notwithstanding the foregoing,
Lessee shall have no obligation to reimburse Lessor for any of the fees, charges
and  expenses  described  in  this  Section  9.3(c),  if  such  Capital Addition
financing  fails  to  close  subsequent  to  Lessor  issuing  Lessee  a  written
commitment to finance said Capital Additions; provided that this provision shall
not  apply  if  such  financing  fails  to close due to the acts or omissions of
Lessee.
25.1     Remodeling  and  Non-Capital Additions. Lessee shall have the right and
         --------------------------------------
the  obligation  to  make additions, modifications or improvements to the Leased
Property  which are not Capital Additions, including tenant improvements made in
connection  with  the  Tenant  Leases,  from  time  to time as may reasonably be
necessary  for  its  uses and purposes and to permit Lessee to comply fully with
its  obligations  set  forth  in  this  Lease; provided that such action will be
undertaken  expeditiously,  in  a  workmanlike manner and will not significantly
alter the character or purpose or detract from the value or operating efficiency
     of  the  Leased  Property  and  will  not  significantly impair the revenue
producing  capability  of the Leased Property or adversely affect the ability of
Lessee  to  comply  with  the provisions of this Lease. Title to all non-Capital
Additions,  modifications  and  improvements shall, without payment by Lessor at
any  time,  be  included  under  the terms of this Lease and, upon expiration or
earlier  termination  of  this  Lease,  shall pass to and become the property of
Lessor.
26.1     Salvage. All materials which are scrapped or removed in connection with
         -------
the  making of either Capital Additions permitted by Section 9.1, remodeling and
non-capital  additions permitted by Section 9.4 or repairs required by Article 8
shall  be  or  become  the  property of Lessor; provided that Lessor may require
Lessee to dispose of such materials and remit the net proceeds thereof to Lessor
within  15  days  of  such  disposal.

                                      LIENS
                                      -----
Subject  to  the provisions of Article 11 relating to permitted contests, Lessee
will  not  directly  or  indirectly  create or suffer to exist and will promptly
discharge  at  its  expense  any  lien, encumbrance, attachment, title retention
agreement  or  claim  upon the Leased Property or any attachment, levy, claim or
encumbrance  in respect of the Rent, not including, however, (a) this Lease, (b)
the  matters,  if any, set forth in Exhibit B attached hereto, (c) restrictions,
                                    ---------
liens and other encumbrances which are consented to in writing by Lessor, or any
easements  granted  pursuant to the provisions of Section 6.4 of this Lease, (d)
liens  for  those taxes of Lessor which Lessee is not required to pay hereunder,
(e)  subleases  permitted  by  Article 23, (f) liens for Impositions or for sums
resulting from noncompliance with Legal Requirements so long as (1) the same are
not  yet  payable  or are payable without the addition of any fine or penalty or
(2)  such  liens  are  in  the process of being contested in accordance with the
provisions  of  Article  11,  (g)  liens  of  mechanics,  laborers, materialmen,
suppliers  or vendors for sums either disputed or not yet due, provided that (1)
the  payment of such sums shall not be postponed for more than 60 days after the
completion  of  the  action  (including  any  appeal  from any judgment rendered
therein)  giving  rise  to  such  lien  and  such  reserve  or other appropriate
provisions  as  shall  be  required  by  law  or  generally  accepted accounting
principles  shall  have  been  made  therefor  or  (2) any such liens are in the
process  of being contested in accordance with the provisions of Article 11, (h)
any  Encumbrance  placed  on  the  Leased  Property by Lessor, and (i) the liens
granted by Lessee to Lessor under the terms of the leasehold mortgages described
in  Section  25.10  (the "Leasehold Mortgages").  Notwithstanding the foregoing,
Lessee  shall  have  no  liability  to Lessor for any liens which may be imposed
against  the  Leased  Property as a result of the acts or omissions of any party
other than Lessee, its agents, employees or contractors, during the period prior
to  the Commencement Date but the same shall be and remain the responsibility of
Lessor.

                               PERMITTED CONTESTS
                               ------------------
Lessee,  after  ten  days'  prior  written  notice  to  Lessor, on its own or on
Lessor's  behalf (or in Lessor's name), but at Lessee's expense, may contest, by
appropriate  legal  proceedings  conducted in good faith and with due diligence,
the  amount,  validity  or  application, in whole or in part, of any Imposition,
Legal  Requirement,  Insurance Requirement, lien, attachment, levy, encumbrance,
charge  or claim (collectively "Charge") not otherwise permitted by the terms of
this  Lease,  which is required to be paid or discharged by Lessee, any Resident
or  any  Tenant;  provided  that  (a)  in  the  case  of  an  unpaid Charge, the
commencement  and  continuation of such proceedings, or the posting of a bond or
certificate  of deposit as may be permitted by applicable law, shall suspend the
collection  thereof  from  Lessor  and from the Leased Property; (b) 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; (c)
Lessor  would  not be in any immediate danger of civil or criminal liability for
failure  to comply therewith pending the outcome of such proceedings; (d) in the
event  that  any  such contest shall involve a sum of money or potential loss in
excess  of  $50,000.00,  then  Lessee shall deliver to Lessor and its counsel an
Officer's  Certificate  and  such  opinions  of  legal  counsel  as  Lessor  may
reasonably  request as to the matters set forth in clauses (a), (b) and (c); (e)
in  the  case  of  an Insurance Requirement, the coverage required by Article 12
shall  be maintained; and (f) if such contest be finally resolved against Lessor
or  Lessee,  Lessee shall, as Additional Charges due hereunder, promptly pay the
amount  required  to  be  paid, together with all interest and penalties accrued
thereon,  or  otherwise comply with the applicable Charge; provided further that
nothing  contained  herein  shall  be  construed to permit Lessee to contest the
payment  of  the  Rent, or any other sums payable by Lessee to Lessor hereunder.
Lessor,  at  Lessee's  expense,  shall  execute  and  deliver  to  Lessee  such
authorizations  and  other  documents  as may reasonably be required in any such
contest  and, if reasonably requested by Lessee or if Lessor so desires and then
at  its  own  expense, Lessor shall join as a party therein. Lessor shall do all
things  reasonably  requested  by  Lessee in connection with such action. Lessee
shall  indemnify and save Lessor harmless against any liability, cost or expense
of  any kind that may be imposed upon Lessor in connection with any such contest
and  any  loss  resulting  therefrom.

                                    INSURANCE
                                    ---------
27.1     General  Insurance  Requirements. During the Term of this Lease, Lessee
         --------------------------------
shall at all times keep the Leased Property, and all property owned or leased by
     Lessee  and located in or on the Leased Property insured with the kinds and
amounts  of  insurance  described  below  and  written  by  companies reasonably
acceptable  to  Lessor authorized to do insurance business in the state in which
the  Leased  Property is located. The policies must name Lessor as an additional
insured  and  losses  shall  be  payable  to Lessor and/or Lessee as provided in
Article  13.  In  addition, the policies shall name as an additional insured the
holder  of  any mortgage, deed of trust or other security agreement securing any
Encumbrance  placed  on  the  Leased Property ("Facility Mortgagee") or any part
thereof  in  accordance with the provisions of Article 32 ("Facility Mortgage"),
if  any,  by way of a standard form of mortgagee's loss payable endorsement. Any
loss  adjustment  in  excess of $100,000.00 shall require the written consent of
Lessor  and  each  affected  Facility  Mortgagee. Evidence of insurance shall be
deposited  with  Lessor  and, if requested, with any Facility Mortgagee(s).  The
policies on the Leased Property, including the Leased Improvements, the Fixtures
and  the  Personal  Property,  shall  insure  against  the  following  risks:
(cc)     Loss  or  damage  by  fire,  vandalism and malicious mischief, extended
coverage  perils  commonly  known  as  "All  Risk" and all physical loss perils,
including  sprinkler  leakage  and  business interruption, in an amount not less
than 100% of the then Full Replacement Cost thereof (as defined below in Section
     12.2)  after  deductible  with a replacement cost endorsement sufficient to
prevent  Lessee  from  becoming  a  co-insurer  together  with  an  agreed value
endorsement;
(dd)     Loss  or  damage  by  explosion  of  steam boilers, pressure vessels or
similar  apparatus  now  or  hereafter installed in the Facility, in such limits
with  respect  to any one accident as may be reasonably requested by Lessor from
time  to  time;
(ee)     Loss  or  damage  by hurricane, tornado and earthquake in the amount of
the  Full  Replacement  Cost,  after  deductible;
(ff)     Loss  of income under a business interruption insurance policy covering
risk  of  loss  during the first 12 months of reconstruction necessitated by the
occurrence  of  any  of  the  hazards  described in Sections 12.1(a), 12.1(b) or
12.1(c),  in  an amount sufficient to prevent Lessee from becoming a co-insurer;
provided  that  in the event that there shall be an Event of Default outstanding
hereunder  and  Lessor  shall  receive  any  proceeds from such income insurance
which, when added to income amounts received with respect to the applicable time
period,  exceed  the  amount  of  income  owed by Lessee hereunder, Lessor shall
immediately  pay  such  excess  to  Lessee;
(gg)     Claims  for  personal  injury  or  property  damage  under  a policy of
commercial  general  liability  insurance including insurance against assumed or
contractual  liability  including indemnities under this Lease, with amounts not
less than $5,000,000.00 per occurrence in respect of bodily injury and death and
$10,000,000.00  for  property  damage;  and
(hh)     Flood (when the Leased Property is located in whole or in part within a
designated  flood  plain  area)  and  upon  written request of Lessor such other
hazards and in such amounts as may be customary for comparable properties in the
area  and if available at commercially reasonable rates from insurance companies
authorized  to do business in the state in which the Leased Property is located.
28.1     Replacement Cost. The term "Full Replacement Cost" as used herein shall
         ----------------
     mean  the  actual  replacement  cost  of  the  Facility  from time to time,
including  increased  cost of construction endorsement, less exclusions provided
in the normal fire insurance policy. In the event Lessor or Lessee believes that
the  Full  Replacement  Cost  has  increased or decreased at any time during the
Term,  it  shall have the right at its own expense to have such Full Replacement
Cost  redetermined  by the insurance company which is then providing the largest
amount  of  casualty  insurance  carried  on  the  Leased  Property, hereinafter
referred  to  as  the "impartial appraiser". The party desiring to have the Full
Replacement  Cost  so  redetermined  shall  forthwith,  on  receipt  of  such
determination  by  the  impartial  appraiser, give written notice thereof to the
other party hereto. The determination of such impartial appraiser shall be final
and  binding  on the parties hereto, and Lessee shall forthwith increase, or may
decrease,  the  amount  of the insurance carried pursuant to this Article to the
amount  so  determined  by  the  impartial  appraiser.
29.1     Additional  Insurance.  In  addition  to the insurance described above,
         ---------------------
Lessee  shall  upon written request of Lessor maintain such additional insurance
as  may be reasonably required from time to time by any Facility Mortgagee which
is consistent with insurance coverage for similar properties in the city, county
and  state where the Leased Property is located and is available at commercially
reasonable  rates, or required pursuant to any applicable Legal Requirement, and
shall  at  all  times  maintain  or  cause  to  be  maintained adequate worker's
compensation insurance coverage for all persons employed by Lessee on the Leased
Property,  in  accordance  with  all  applicable  Legal  Requirements or is self
insured  in  accordance  with  an  approved  self  insurance  program.
30.1     Waiver  of  Subrogation. All insurance policies carried by either party
         -----------------------
covering  the  Leased  Property,  the Fixtures, the Facility and/or the Personal
Property, including contents, fire and casualty insurance, shall expressly waive
any  right  of  subrogation  on  the part of the insurer against the other party
except  with  respect  to  claims  arising  out  of  the  negligence and willful
misconduct  of  such  other  party. The parties hereto agree that their policies
will  include  such  a  waiver  clause  or  endorsement  so  long as the same is
obtainable  without  extra  cost,  and  in the event of such an extra charge the
other  party,  at  its  election, may request and pay the same, but shall not be
obligated  to  do  so.
31.1     Form of Insurance. All of the policies of insurance referred to in this
         -----------------
Section  shall be written in form reasonably satisfactory to Lessor by insurance
companies  reasonably  satisfactory  to  Lessor.  Lessee  shall pay all premiums
therefor,  and  deliver such policies or certificates thereof to Lessor prior to
their  effective  date  (and,  with  respect to any renewal policy, prior to the
expiration  of  the  existing  policy). In the event of the failure of Lessee to
effect  such  insurance  in  the  names herein called for or to pay the premiums
therefor,  or  to deliver such policies or certificates thereof to Lessor at the
times required, Lessor shall be entitled, but shall have no obligation, to enact
such  insurance and pay the premiums therefor, which premiums shall be repayable
by  Lessee to Lessor upon written demand therefor, and failure to repay the same
shall constitute an Event of Default within the meaning of Section 15.1(c). Each
insurer  mentioned  in this Section shall agree, by endorsement on the policy or
policies issued by it, or by independent instrument furnished to Lessor, that it
will  give  to  Lessor  prior  written  notice  before the policy or policies in
question  shall  be  altered,  allowed  to  expire  or  canceled.
32.1     Change in Limits. In the event that Lessor shall at any time reasonably
         ----------------
and  in good faith believe the limits of the personal injury, property damage or
general  public liability insurance then carried to be insufficient, the parties
shall  endeavor  to agree on the proper and reasonable limits for such insurance
to  be  carried  and  such insurance shall thereafter be carried with the limits
thus  agreed on until further change pursuant to the provisions of this Section.
If  the  parties  shall  be  unable  to agree thereon, the proper and reasonable
limits  for  such  insurance  shall  be  determined  by an impartial third party
selected  by the parties the costs of which shall be divided equally between the
parties.  Such  redeterminations, whether made by the parties or by arbitration,
shall  be  made  no more frequently than every year. Nothing herein shall permit
the  amount  of  insurance  to be reduced below the amount or amounts reasonably
required  by  any  Facility  Mortgagee.
33.1     Blanket  Policy.  Notwithstanding anything to the contrary contained in
         ---------------
this  Section,  Lessee's  obligations to carry the insurance provided for herein
may  be brought within the coverage of a so-called blanket policy or policies of
insurance  carried and maintained by Lessee.  Currently, Lessee's blanket policy
insurance  coverage  is  as  set  forth  on Exhibit H attached hereto and Lessee
agrees  to  give  Lessor  thirty  (30) days prior written notice of any material
change  to  be  made  in  such  coverage.
34.1     No  Separate  Insurance.  Without  the prior written consent of Lessor,
         -----------------------
Lessee  shall  not,  on  Lessee's  own  initiative or pursuant to the request or
requirement  of  any third party, take out separate insurance concurrent in form
or contributing in the event of loss with that required in this Article 12 to be
furnished  by, or which may reasonably be required by a Facility Mortgagee to be
furnished  by,  Lessee,  or  increase the amounts of any then-existing insurance
required  under  this  Article 12 by securing an additional policy or additional
policies,  unless all parties having an insurable interest in the subject matter
of the insurance, including in all cases Lessor and all Facility Mortgagees, are
included  therein  as  additional  insureds  and  the loss is payable under said
insurance  in  the  same  manner as losses are required to be payable under this
Lease.  Lessee  shall  immediately  notify  Lessor of the taking out of any such
separate  insurance  or  of  the  increasing  of  any  of  the  amounts  of  the
then-existing insurance required under this Article 12 by securing an additional
policy  or  additional  policies.
35.1     Insurance  for  Contractors.  If  Lessee  shall  engage  or cause to be
         ---------------------------
engaged  any  contractor  to  perform  work on the Leased Property, Lessee shall
require  such  contractor to carry and maintain insurance coverage comparable to
the  foregoing  requirements,  at  no  expense  to  Lessor.

                                FIRE AND CASUALTY
                                -----------------
36.1     Insurance  Proceeds.  All  proceeds  payable  by  reason of any loss or
         -------------------
damage  to  the  Leased  Property  or any portion thereof, and insured under any
policy of insurance required by Article 12 of this Lease shall be paid to Lessor
     and held by Lessor in trust (subject to the provisions of Section 13.7) and
shall be made available for reconstruction or repair, as the case may be, of any
damage  to  or  destruction  of the Leased Property, or any portion thereof, and
shall  be  paid  out by Lessor from time to time for the reasonable cost of such
reconstruction  or  repair  in  accordance with this Article 13 after Lessee has
expended  an  amount  equal  to or exceeding the deductible under any applicable
insurance  policy.  Any  excess  proceeds  of  insurance  remaining  after  the
completion  of the restoration or reconstruction of the Leased Property shall be
retained  by  Lessee  free  and  clear  upon  completion  of any such repair and
restoration  except as otherwise specifically provided below in this Article 13;
provided  that  in  the event neither Lessor nor Lessee is required or elects to
repair or restore the Leased Property, then all such insurance proceeds shall be
retained  by  Lessor.  All  salvage resulting from any risk covered by insurance
shall belong to Lessee, including any salvage relating to Capital Additions paid
for  by  Lessee.
37.1     Reconstruction  in  the  Event  of  Damage  or  Destruction  Covered by
Insurance.
(ii)     Facility  Rendered  Unsuitable  for Its Primary Intended Use. Except as
         ------------------------------------------------------------
provided  in  Section  2.6  and  Section 13.7, if during the Term, a Facility is
totally or partially destroyed from a risk covered by the insurance described in
     Article  12 and the Facility thereby is rendered Unsuitable for its Primary
Intended  Use,  such  damage or destruction shall not terminate this Lease as to
such  Facility  and  all of Lessee's obligations with respect to payment of Rent
shall  continue  in  full force and effect and shall not be affected thereby and
Lessee  shall  either:
(12)     apply all proceeds payable with respect thereto to restore the Facility
     to  substantially  the  same condition as existed immediately prior to such
damage  or  destruction,  or
(13)     offer  either  (A)  to  acquire the affected Facility from Lessor for a
purchase  price  equal  to  the  Minimum Purchase Price of the affected Facility
immediately  prior  to  such  damage  or  destruction or (B) to substitute a new
property  or  properties for the affected Facility pursuant to and in accordance
with  the  provisions of Article 20 (which offer to substitute Lessor may in its
reasonable  discretion  refuse).
Lessee shall give written notice to Lessor within 60 days after the date of such
damage  or  destruction whether Lessee chooses option (i) or option (ii), and if
option (ii) is chosen, such notice shall be accompanied by the offer referred to
therein. In the event Lessee fails to give such notice or does not make an offer
under  option  (ii),  Lessee  shall  promptly proceed to restore the Facility to
substantially  the  same condition as existed immediately prior to the damage or
destruction.  If  Lessee's  offer  to  substitute  for  the affected Facility is
reasonably  refused  by  Lessor,  Lessee  shall  promptly proceed to restore the
affected  Facility  to  substantially  the same condition as existed immediately
prior to such damage or destruction or acquire the affected Facility from Lessor
for  a  purchase  price  equal  to  the  Minimum  Purchase Price of the affected
Facility  immediately  prior  to  such  damage  or  destruction.
(jj)     Facility  Not  Rendered Unsuitable for Its Primary Intended Use. Except
         ---------------------------------------------------------------
as  provided  in Section 2.6 and Section 13.7, if during the Term, a Facility is
partially  destroyed  from  a risk covered by the insurance described in Article
12, but the Facility is not thereby rendered Unsuitable for its Primary Intended
     Use,  Lessee shall restore the Facility to substantially the same condition
as  existed  immediately  prior  to the damage or destruction and such damage or
destruction  shall  not  terminate  this  Lease  and all of Lessee's obligations
hereunder,  including  Lessee's  obligations  with respect to the payment of the
Rent, shall continue in full force and effect and shall not be affected thereby;
provided  that  if  Lessee  cannot within a reasonable time obtain all necessary
governmental  approvals,  including  building permits, licenses, conditional use
permits  and any certificates of need, after diligent efforts to do so, in order
to  be  able  to perform all required repair and restoration work and to operate
the  Facility  for  its Primary Intended Use in substantially the same manner as
immediately  prior  to  such  damage  or  destruction,  then  Lessee  shall:
offer,  either  (i)  to acquire the affected Facility from Lessor for a purchase
price  equal  to  the Minimum Purchase Price immediately prior to such damage or
destruction, or (ii) to substitute a new property or properties for the affected
Facility  pursuant to and in accordance with the provisions of Article 20 (which
offer  to  substitute  Lessor  in  its  reasonable  discretion  may  refuse).
Lessee shall give written notice to Lessor within 60 days after the date of such
damage  or destruction whether Lessee chooses option (i) or (ii) and such notice
shall be accompanied by the offer referred to therein. In the event Lessee fails
to  give such notice or does not make an offer, Lessee shall promptly proceed to
restore  the  affected  Facility  to substantially the same condition as existed
immediately  prior to the damage or destruction. If Lessee's offer to substitute
for the affected Facility is reasonably refused by Lessor, Lessee shall promptly
proceed  to  restore the Facility to substantially the same condition as existed
immediately  prior  to  such  damage  for  destruction  or  acquire the affected
Facility from Lessor for a purchase price equal to the Minimum Purchase Price of
the  affected  Facility  immediately  prior  to  such  damage  or  destruction.
38.1     Reconstruction  in  the  Event  of Damage or Destruction Not Covered by
         -----------------------------------------------------------------------
Insurance.  Except as provided in Section 13.7, if during the Term a Facility is
   ------
totally  or  materially  destroyed  from  a  risk  not  covered by the insurance
described  in  Article 12, whether or not such damage or destruction renders the
Facility  Unsuitable  for  Its  Primary  Intended  Use,  Lessee  shall:
(14)     restore  the  Facility  to  substantially  the same condition it was in
immediately  prior  to such damage or destruction and such damage or destruction
shall  not  terminate  this  Lease,  and  all of Lessee's obligations hereunder,
including  Lessee's  obligations  with respect to the payment of the Rent, shall
continue  in  full  force  and  effect  and  not  be  affected  thereby,  or
(15)     offer  either  (A)  to  acquire the affected Facility from Lessor for a
purchase  price  equal  to  the Minimum Purchase Price immediately prior to such
damage or destruction, or (B) to substitute a new property or properties for the
affected  Facility  pursuant to and in accordance with the provisions of Article
20  (which  offer to substitute Lessor in its reasonable discretion may refuse);
provided  that  if  such damage or destruction is not material in the reasonable
opinion  of  Lessor, Lessee shall restore the affected Facility to substantially
the  same  condition  as  existed  immediately  prior  to  any  such  damage  or
destruction.
Lessee shall give written notice to Lessor within 60 days after the date of such
damage or destruction whether Lessee chooses option (i), (ii)(A) or (ii)(B) and,
in  the  event  of  either  option  (ii)(A)  or  (ii)(B),  such  notice shall be
accompanied  by the offer referred to therein. In the event Lessee fails to give
such  notice or does not make an offer, Lessee shall promptly proceed to restore
the affected Facility to substantially the same condition as existed immediately
prior  to the damage or destruction. If Lessor does not accept Lessee's offer to
substitute  for  or purchase the affected Facility within 30 days after the date
of  such  offer,  Lessee'  offer  shall be deemed withdrawn on such 30th day and
Lessee  shall promptly proceed to restore the affected Facility to substantially
the  same condition as existed immediately prior to such damage for destruction;
provided  that  if  such  damage or destruction occurs during any Extended Term,
then  Lessor  must  accept  Lessee's offer to acquire the affected Facility from
Lessor  for  a  purchase  price  equal to the Minimum Purchase Price immediately
prior  to  such  damage  or  destruction.
39.1     Personal  Property.  Lessee shall use any insurance proceeds payable by
         ------------------
reason  of any loss of or damage to any of the Personal Property to restore such
Personal  Property  to  the  affected  Facility  with  items  of  substantially
equivalent  value  to  the  items  being  replaced.
40.1     Restoration  of  Capital Additions.  If Lessee is required or elects to
         ----------------------------------
restore  a  Facility  as  provided  in  Sections 13.2 or 13.3, Lessee shall also
restore  the  Personal  Property related thereto as required by Section 13.4 and
all Capital Additions paid for or financed by Lessor. Insurance proceeds payable
by reason of damage to Capital Additions paid for or financed by Lessor shall be
paid to Lessor and Lessor shall hold such insurance proceeds in trust to pay the
cost  of  repairing or replacing such Capital Additions in the event Lessee does
not  purchase  or  substitute  other  property  or  properties  for the affected
Facility.
41.1     No  Abatement of the Rent. Except as otherwise provided in Section 2.6,
         -------------------------
this Lease shall remain in full force and effect and Lessee's obligation to make
rental payments and to pay all other charges required by this Lease shall remain
unabated  during  any  period  required  for  repair  and  restoration.
42.1     Damage  Near  End  of  Term. Notwithstanding any provisions of Sections
         ---------------------------
13.2  or  13.3 to the contrary, if damage to or destruction of a Facility occurs
during  the last 12 months of the Term, and if such damage or destruction cannot
be  fully  repaired and restored within the lesser of (i) six months or (ii) the
period remaining in the Term immediately following the date of loss, then either
party shall have the right to terminate this Lease as to such Facility by giving
notice  of termination to the other within 30 days after the date of such damage
or  destruction, in which event Lessor shall be entitled to retain the insurance
proceeds  and  Lessee shall pay to Lessor on demand the amount of any deductible
or uninsured loss arising in connection therewith; provided that any such notice
given  by Lessor shall be void and of no force and effect if Lessee exercises an
available  option  to  extend  the Term for one Extended Term, or one additional
Extended  Term,  as  the  case  may be, within 30 days following receipt of such
termination  notice.
43.1     Purchase  or  Substitution.  In  the  event Lessor accepts any offer by
         --------------------------
Lessee  to  purchase  the  affected  Facility  or  to  substitute  a property or
properties  for  the  affected  Facility, this Lease as to the affected Facility
shall terminate upon payment of the purchase price and execution and delivery of
all  documentation  in  accordance with Article 17, or execution and delivery of
all  documents  required  in connection with a Substitute Property under Article
20.  Lessor  shall  remit to Lessee, or in the case of a purchase allow Lessee a
credit  toward  the purchase price, in an amount equal to all insurance proceeds
being  held  in  trust  by  Lessor.
44.1     Waiver.  Lessee  hereby knowingly and expressly waives any statutory or
         ------
common  law  rights  of  termination  which may arise by reason of any damage or
destruction  of  the  Facilities.

                                  CONDEMNATION
                                  ------------
45.1     Parties'  Rights  and  Obligations.  If  during  the  Term there is any
         ----------------------------------
Taking  of  all or any part of the Leased Property or any interest in this Lease
by  Condemnation,  the rights and obligations of the parties shall be determined
by  this  Article  14.
46.1     Total  Taking.  If  there  is  a  Taking  of  all  of  a  Facility  by
         -------------
Condemnation,  this  Lease  shall  terminate  on  the  Date of Taking as to such
         --
Facility,  and  the  Minimum  Rent  and  all  Additional Charges paid or payable
hereunder  shall  be  apportioned  and  paid  to  the  Date  of  Taking.
47.1     Partial  Taking.  Except  as  provided  in  Section  2.7, if there is a
         ---------------
Taking  of a portion of a Facility by Condemnation such that the Facility is not
thereby  rendered  Unsuitable for Its Primary Intended Use, this Lease shall not
terminate  and  all  of  Lessee's  obligations  hereunder,  including  Lessee's
obligations  with  respect  to  the  payment of the Rent, shall continue in full
force  and  effect and shall not be affected thereby. If, however, a Facility is
thereby  rendered  Unsuitable for Its Primary Intended Use, Lessee shall either:
(16)     at  Lessee's  expense,  restore  the  affected  Facility, to the extent
possible,  to  substantially  the same condition as existed immediately prior to
the  partial Taking, in which case the proceeds of any Award shall be applied to
such  restoration  to  the  extent  necessary  or  appropriate,  or
(17)     offer  either  (A)  to  acquire the affected Facility from Lessor for a
purchase  price  equal  to  the  Minimum Purchase Price of the affected Facility
immediately prior to such partial Taking, or (B) to substitute a new property or
properties  for  the  affected  Facility  pursuant to and in accordance with the
provisions of Article 20 (which offer to substitute Lessor may in its reasonable
discretion  refuse),  or
(18)     terminate  this  Lease effective upon the effective date of such Taking
as  to  the  affected  Facility.
Lessee  will  give written notice to Lessor within 60 days after Lessee receives
notice  of the Taking which option Lessee chooses, and if option (ii) is chosen,
such  notice shall be accompanied by the offer referred to therein. In the event
Lessor  does  not  accept  Lessee's  offer  to so purchase the affected Facility
within  30 days after receipt of the notice described in the preceding sentence,
Lessee  may  either (a) withdraw its offer to purchase the affected Facility and
proceed  to  restore  the  affected  Facility,  to  the  extent  possible,  to
substantially  the  same  condition  as  existed  immediately before the partial
Taking,  or  (b) terminate the offer and this Lease by written notice to Lessor.
48.1     Restoration.  If there is a partial Taking of a Facility and this Lease
         -----------
     remains  in full force and effect pursuant to any provision of this Article
14, Lessee shall accomplish all necessary restoration in order that the affected
Facility  may  continue  to  be  used  for  its  Primary  Intended  Use.
49.1     Award  Distribution.  In the event Lessee purchases a Facility pursuant
         -------------------
to  Section 14.3 or Lessor accepts any offer by Lessee to purchase a Facility or
to  provide a Substitute Property therefor pursuant to this Article 14, then the
entire Award shall belong to Lessee and Lessor agrees to assign to Lessee all of
its  rights  thereto. Except as otherwise expressly provided in this Article 14,
in  any  other  event  the  entire  Award shall belong to and be paid to Lessor;
provided  that if this Lease is terminated in accordance with Section 14.2(b) or
14.3(a),  and  subject to the rights of any Facility Mortgagees, Lessee shall be
entitled  to  receive  from  the Award any sum attributable to Lessee's Personal
Property, loss of Lessee's business, moving expenses and any sum attributable to
any Capital Additions for which Lessee would be entitled to reimbursement at the
end of the Term pursuant to the provisions of Section 9.2(b), but only if any to
the  extent  such  Award  expressly  includes  such  items and allocates a value
thereto.  If  Lessee  is required or elects to restore a Facility, Lessor agrees
that, subject to the rights of the Facility Mortgagees, its portion of the Award
shall  be  used for such restoration and it shall hold such portion of the Award
in  trust,  for  application  to  the  costs  of  the  restoration.
50.1     Temporary  Taking.  The  Taking  of a Facility, or any part thereof, by
         -----------------
military  or  other  public  authority shall constitute a Taking by Condemnation
only when the use and occupancy by the Taking authority has continued for longer
than  six  months.  During  any such six-month period all the provisions of this
Lease  shall  remain in full force and effect and, except as provided in Section
2.6,  the  Rent  shall  not  be  abated or reduced during such period of Taking;
provided  that to the extent any compensation is paid by the Taking authority as
a  result  of  such  temporary  Taking,  Lessee  will  retain such compensation.
51.1     Purchase  or  Substitution.  In  the  event Lessor accepts any offer by
         --------------------------
Lessee  to  purchase  an  affected  Facility  or  to  substitute  a  property or
properties  for an affected Facility, this Lease shall terminate upon payment of
the  purchase price and execution and delivery of all appropriate documentation,
in  accordance  with  Article  17,  or  execution  and delivery of all documents
required  in  connection  with  a  Substitute  Property  under  Article  20.

                                     DEFAULT
                                     -------
52.1     Events  of Default.  The occurrence of any one or more of the following
         ------------------
events  shall  constitute events of default (individually, an "Event of Default"
and,  collectively,  "Events  of  Default")  hereunder:
(kk)     An event of default shall occur under any other lease or agreement (the
     "Related Leases") between Lessor or any of its Affiliates and Lessee or any
of  its  Affiliates,  which  event of default is not cured within the applicable
grace  period  set  forth  therein;
(ll)     Lessee shall fail to make a payment of the Rent payable by Lessee under
this  Lease when the same becomes due and payable and such failure continues for
a  period  of  ten  calendar  days  after  written notice from Lessor to Lessee;
(mm)     Lessee  shall  fail  to  observe or perform any other term, covenant or
condition of this Lease or any document executed in connection herewith and such
failure  is  not  cured  by  Lessee  within a period of 30 days after receipt by
Lessee  of notice thereof from Lessor specifying in reasonable detail the nature
of such default, unless such failure cannot with due diligence be cured within a
period of 30 days, in which case such failure shall not be deemed to continue if
Lessee  proceeds  promptly  and  with  due  diligence  to  cure  the failure and
diligently  completes  the  curing  thereof  (as  soon  as reasonably possible);
(nn)     Lessee  shall:
(19)     admit  in  writing  its  inability  to  pay its debts generally as they
become  due,
(20)     file  a  petition  in bankruptcy or a petition to take advantage of any
insolvency  law,
(21)     make  an  assignment  for  the  benefit  of  its  creditors,
(22)     consent  to  the appointment of a receiver of itself or of the whole or
any  substantial  part  of  its  property,  or
(23)     file  a  petition or answer seeking reorganization or arrangement under
the Federal bankruptcy laws or any other applicable law or statute of the United
States  of  America  or  any  state  thereof;  or
(oo)     Lessee  shall  default  beyond any applicable grace period contained in
one  or  more  major  credit  facilities  which  by their terms would permit the
acceleration  of  an outstanding balance equal to or greater than $10,000,000.00
in  the  aggregate  and  the  same  shall be accelerated by the lenders or other
applicable  parties.
53.1     Remedies.  If  an  Event of Default shall have occurred, Lessor may, at
         --------
its  election,  then  or  at  any time thereafter, pursue any one or more of the
following remedies, in addition to any remedies which may be permitted by law or
     by other provisions of this Lease, without further notice or demand, except
as  hereinafter  provided:
(pp)     Apply  or  appropriate,  as  the  case  may be, the Capital Replacement
Account,  without  prejudice  to any other remedies provided herein or at law or
equity.
(qq)     Without  any  notice  or  demand whatsoever, Lessor may take any one or
more  actions  permissible  at  law  to ensure performance by Lessee of Lessee's
covenants and obligations under this Lease. In this regard, it is agreed that if
Lessee  abandons  or  vacates  the  Leased  Property (other than as permitted by
Section 19.1), Lessor may enter upon and take possession of such Leased Property
in order to protect it from deterioration and continue to demand from Lessee the
monthly  rentals  and  other  charges  provided  in this Lease. Lessor shall use
reasonable  efforts  to relet but shall have no absolute obligation to relet. If
Lessor  does,  at  its sole discretion, elect to relet the Leased Property, such
action  by  Lessor shall not be deemed as an acceptance of Lessee's surrender of
the  Leased  Property unless Lessor expressly notifies Lessee of such acceptance
in writing, Lessee hereby acknowledging that Lessor shall otherwise be reletting
as  Lessee's agent. It is further agreed in this regard that in the event of any
Event  of  Default  described in this Article 15, Lessor shall have the right to
enter  upon  the Leased Property and do whatever Lessee is obligated to do under
the  terms  of  this  Lease. Lessee agrees to reimburse Lessor on demand for any
reasonable  expenses  which  Lessor  may incur in thus effecting compliance with
Lessee's  obligations under this Lease, and further agrees that Lessor shall not
be  liable  for  any damages resulting to Lessee from such action, except as may
result  from  Lessor's  gross  negligence  or  willful  misconduct.
(rr)     Lessor  may  terminate this Lease by written notice to Lessee, in which
event  Lessee  shall immediately surrender the Leased Property to Lessor, and if
Lessee  fails  to do so, Lessor may, without prejudice to any other remedy which
Lessor  may  have  for  possession  or arrearage in rent (including any interest
which  may  have  accrued  pursuant  to Section 2.3 of this Lease or otherwise),
enter upon and take possession of the Leased Property and expel or remove Lessee
and  any  other  person  who  may be occupying said premises or any part thereof
other  than  Residents  pursuant  to  Resident Agreements or Tenants pursuant to
Tenant  Leases. In addition, Lessee agrees to pay to Lessor on demand the amount
of  all  loss  and  damage  which Lessor may suffer by reason of any termination
effected pursuant to this subsection (c), said loss and damage to be determined,
at  Lessor's option, by either of the following alternative measures of damages:
(24)     Although  Lessor  shall  be under no absolute obligation to attempt and
shall be obligated only to use reasonable efforts, to relet the Leased Property,
     until  the Leased Property is relet Lessee shall pay to Lessor on or before
the  first day of each calendar month the difference between the monthly rentals
and  other  charges provided in this Lease and the amount paid by the new tenant
to  Lessor  under the terms of any new lease. After the Leased Property has been
relet  by  Lessor,  Lessee  shall pay to Lessor on the 10th day of each calendar
month  the  difference between the monthly rentals and other charges provided in
this  Lease  for  the  preceding  calendar  month and that actually collected by
Lessor  for  such month. If it is necessary for Lessor to bring suit in order to
collect  any deficiency, Lessor shall have a right to allow such deficiencies to
accumulate  and to bring an action on several or all of the accrued deficiencies
at one time. Any such suit shall not prejudice in any way the right of Lessor to
bring a similar action for any subsequent deficiency or deficiencies. Any amount
collected  by Lessor from subsequent tenants for any calendar month in excess of
the  monthly  rentals and other charges provided in this Lease shall be credited
to  Lessee  in  reduction of Lessee's liability for any calendar month for which
the  amount  collected by Lessor will be less than the monthly rentals and other
charges  provided  in  this Lease, but Lessee shall have no right to such excess
other  than  the  above  described  credit;  or
(25)     When Lessor desires, Lessor may demand a final settlement not to exceed
the Minimum Purchase Price at the time of such final settlement. Upon demand for
a  final  settlement,  Lessor shall have a right to, and Lessee hereby agrees to
pay,  the  difference between the total of all monthly rentals and other charges
provided  in  this Lease for the remainder of the Term and the reasonable rental
value  of  the  Leased  Property for such period (including a reasonable time to
relet  the Leased Property), as determined pursuant to the provisions of Article
28  hereof, such difference to be discounted to present value at a rate equal to
the Treasury Yield then in effect with maturity periods substantially equivalent
to  the  balance  of  the  Initial  Terns  or  any Extended Term then in effect.
The  rights  and remedies of Lessor hereunder are cumulative, and pursuit of any
of  the  above  remedies  shall  not  preclude  pursuit  of  any  other remedies
prescribed  in  other  sections of this Lease and any other remedies provided by
law  or  equity.  Forbearance  by  Lessor to enforce one or more of the remedies
herein  provided  upon  an  Event of Default shall not be deemed or construed to
constitute  a  waiver of such Event of Default. Exercise by Lessor of any one or
more  remedies  shall  not  constitute  an acceptance of surrender of the Leased
Property by Lessee, it being understood that such surrender can be effected only
by  the  prior  written  agreement  of  Lessor  and  Lessee.
54.1     Additional  Expenses.  In  addition  to  payments  required pursuant to
         --------------------
subsections  (a)  and  (b) of Section 15.2 above, Lessee shall compensate Lessor
for  all  reasonable  expenses  incurred  by  Lessor  in repossessing the Leased
Property  (including any increase in insurance premiums caused by the vacancy of
the  Leased  Property),  all reasonable expenses incurred by Lessor in reletting
(including  repairs,  remodeling,  replacements,  advertisements  and  brokerage
fees),  all  reasonable  concessions  granted  to  a  new  tenant upon reletting
(including  renewal  options),  all  fees  and  expenses incurred by Lessor as a
direct  or indirect result of any appropriate action by a Facility Mortgagee and
a  reasonable  allowance  for  Lessor's  administrative  efforts,  salaries  and
overhead  attributable  directly  or indirectly to Lessee's default and Lessor's
pursuing  the  rights  and  remedies  provided  herein and under applicable law.
55.1     Waiver.  If  this Lease is terminated pursuant to law or the provisions
         ------
of  this  Article  15, Lessee waives, to the extent permitted by applicable law,
(a)  any right of redemption, reentry or repossession and (b) the benefit of any
laws now or hereafter in force exempting property from liability for rent or for
debt.
56.1     Application  of  Funds.  All payments otherwise payable to Lessee which
         ----------------------
are  received  by  Lessor  under  any of the provisions of this Lease during the
existence  or  continuance  of any Event of Default shall be applied to Lessee's
obligations  in  the  order  which  Lessor may reasonably determine or as may be
prescribed  by  the  laws  of  the  state  in  which  the  Facility  is located.
57.1     Notices  by  Lessor.  The  provisions  of  this  Article  15 concerning
         -------------------
notices shall be liberally construed insofar as the contents of such notices are
concerned, and any such notice shall be sufficient if it shall generally apprise
Lessee  of the nature and approximate extent of any default in sufficient detail
so  as  to  enable  Lessee  to  undertake  the  necessary  corrective  action.
58.1     Lessor's  Security  Interest.  Lessee  hereby grants to Lessor, a valid
         ----------------------------
and continuing security interest to secure payment of all rentals and other sums
of  money  becoming  due  hereunder  from  Lessee,  and to secure payment of any
damages or loss which Lessor may suffer by reason of the breach by Lessee of any
covenant,  agreement  or  condition  contained  herein, upon all of the Personal
Property  owned  by Lessee and presently, or which may hereafter be, situated in
or  about  and used in connection with the operation of the Leased Property, and
all  proceeds  therefrom and accessions thereto and, except as a result of sales
made  in  the  ordinary  course of Lessee's business, such property shall not be
removed without the consent of Lessor until any arrearage in rent as well as any
and  all  other  sums  of  money  then  due to Lessor or to become due to Lessor
hereunder  shall  first  have  been  paid  and discharged and all the covenants,
agreements  and conditions hereof have been fully complied with and performed by
Lessee.  Upon  the  occurrence  of an Event of Default by Lessee, Lessor may, in
addition  to  any other remedies provided herein, enter upon the Leased Property
and  take  possession of any and all of the Personal Property, without liability
for trespass or conversion, and sell the same at public or private sale, with or
without  having such property at the sale, after giving Lessee reasonable notice
of  the time and place of any public sale or of the time after which any private
sale  is  to  be  made,  at which sale Lessor or its assigns may purchase unless
otherwise  prohibited  by  law  or  unless  such  removal  would  materially and
adversely  affect  the  compliance of the operations at the Facility with law or
jeopardize  resident  health or welfare or give rise to a default under a Tenant
Lease.  Unless  otherwise  provided by law, and without intending to exclude any
other  manner  of giving Lessee reasonable notice, the requirement of reasonable
notice  shall  be  met, if such notice is given in the manner prescribed in this
Lease  at  least seven days prior to the time of sale. Any sale made pursuant to
the  provision  of  this  paragraph  shall  be deemed to have been a public sale
conducted  in  commercially  reasonable  manner  if  held in the above described
premises  or  where  the property is located after the time, place and method of
sale  and  a  general  description of the types of property to be sold have been
advertised in a daily newspaper published in the county in which the property is
located,  for  five  consecutive  days before the date of the sale. The proceeds
from  any  such disposition, less any and all expenses connected with the taking
of  possession,  holding  and  selling  of  the  property  (including reasonable
attorneys'  fees  and  legal expenses), shall be applied as a credit against the
indebtedness  secured  by  the  security interest granted in this paragraph. Any
surplus  shall  be  paid to Lessee or as otherwise required by law; Lessee shall
pay any deficiencies forthwith. Upon request by Lessor, Lessee agrees to execute
and  deliver  to  Lessor a financing statement in form sufficient to perfect the
security  interest of Lessor in the aforementioned property and proceeds thereof
under  the  provision  of  the  Uniform  Commercial Code (or corresponding state
statute or statutes) in force in the state of Lessee's incorporation, as well as
any  other  state  the  laws  of  which  Lessor  may  at any time consider to be
applicable.  Notwithstanding anything to the contrary contained in this Section,
Lessor's  security  interest  in the property of Lessee described above shall be
subject  to  and  absolutely  subordinate to any and all purchase money security
interests  at any time given by Lessee to third parties and to the liens granted
to  Lessor  by  Lessee  under  the  terms  of  the  Leasehold  Mortgages.

                             LESSOR'S RIGHT TO CURE
                             ----------------------
If  Lessee,  without the prior written consent of Lessor, shall fail to make any
payment, or to perform any act required to be made or performed under this Lease
and  to cure the same within the relevant time periods provided in Section 15.1,
Lessor,  without  waiving  or  releasing any obligation or Event of Default, may
(but  shall be under no obligation to) make such payment or perform such act for
the  account  and  at the expense of Lessee, and may, to the extent permitted by
law,  enter  upon  the Leased Property for such purpose and take all such action
thereon  as,  in  Lessor's opinion, may be necessary or appropriate therefor. No
such  entry  shall  be deemed an eviction of Lessee. All sums so paid by Lessor,
together  with  a  late  charge  thereon (to the extent permitted by law) at the
Overdue  Rate  from the date on which such sums or expenses are paid or incurred
by  Lessor, and all costs and expenses (including reasonable attorneys' fees and
expenses,  in  each  case,  to the extent permitted by law) so incurred shall be
paid by Lessee to Lessor on demand and if not paid as provided herein such costs
and  expenses  shall  thereby  increase  the Project Amount.  The obligations of
Lessee  and  rights  of  Lessor  contained  in  this  Article  shall survive the
expiration  or  earlier  termination  of  this  Lease.

                         PURCHASE OF THE LEASED PROPERTY
                         -------------------------------
In  the event Lessee purchases the Leased Property, or any portion thereof, from
Lessor  pursuant  to  any  of  the  terms  of  this Lease (other than a purchase
pursuant  to  Section 29.2 which contains all of the provisions relevant to such
purchase  and  thus  such  purchase  shall  be governed by Section 29.2), Lessor
shall,  upon  receipt from Lessee of the applicable purchase price (after credit
for  the  balance of the Capital Replacement Account allocated to the applicable
portion  of  the Leased Property being purchased by Lessee based on the ratio of
the  number  of  units  at  the  applicable portion of the Leased Property being
purchased  by  Lessee to the total number of units at the Leased Property at the
time  of  such  purchase), together with full payment of any unpaid Rent due and
payable  with respect to any period ending on or before the date of the purchase
and  any  other  amounts  owing  to  Lessor  hereunder,  deliver  to  Lessee  an
appropriate  special  warranty deed and any other documents reasonably requested
by  Lessee to convey the interest of Lessor in and to the Leased Property or the
applicable  portion thereof to Lessee, and such other standard documents usually
and  customarily  prepared  in connection with such transfers, free and clear of
all  encumbrances  other  than (a) those that Lessee agrees to pay or discharge,
(b)  those  mortgage liens, if any, which Lessee agrees in writing to accept and
to  take title subject to, (c) any other Encumbrances permitted to be imposed on
the Leased Property under the provisions of Article 32 which are assumable at no
cost to Lessee and which Lessee elects in its sole discretion to assume, and (d)
any matters affecting the Leased Property, or the applicable portion thereof, on
or  as  of  the  Commencement  Date  as  shown on Exhibit B attached hereto. The
difference  between  the  applicable  purchase  price  and  the  total  of  the
encumbrances assigned or taken subject to shall be paid in cash to Lessor, or as
Lessor  may  direct,  in  federal or other immediately available funds except as
otherwise  mutually  agreed  by Lessor and Lessee.  The closing of any such sale
shall  be  contingent  upon  and  subject  to  Lessee  obtaining  all  required
governmental  consents  and  approvals for such transfer and on Lessor obtaining
the  legal  opinion described in the last sentence of this Article 17; provided,
however,  if  Lessor  cannot  obtain  the  legal opinion described herein, after
receipt  of Lessor's written notice that Lessor cannot obtain the required legal
opinion,  Lessee  shall  have ninety (90) days in which to elect to substitute a
new property in accordance with the provisions of Article 20 and upon failure to
give  written  notice  to  Lessor within said ninety (90) day period, Lessor may
elect  (i) not to consummate the transfer whereupon this Lease shall continue in
full  force  and  effect or (ii) to consummate the transfer whereupon this Lease
shall  terminate.  If  such  sale  shall fail to be consummated by reason of the
inability  of  Lessee  or  Lessor  to  obtain all such approvals and consents or
Lessor  to  obtain  the  legal  opinion  described  in the last sentence of this
Article  17,  any  options to extend the Term which otherwise would have expired
during  the  period  from  the  date  when Lessee elected or became obligated to
purchase  the  Leased  Property until Lessee's inability to obtain the approvals
and  consents is confirmed shall be deemed to remain in effect for 30 days after
the  end  of  such  period  and any other options available to Lessee under this
Lease  at  the time the purchase option was exercised shall be reinstated during
such  30  days  period.  The  closing  with  respect  to  any such sale shall be
appropriately  timed  to  accommodate  the determination of the Minimum Purchase
Price  in accordance with Article 28. All expenses of such conveyance, including
the  cost  of title examination or standard coverage title insurance, reasonable
attorneys'  fees incurred by Lessor in connection with such conveyance, transfer
taxes  and  recording  fees  shall  be paid by Lessee. Additionally, any sale to
Lessee shall be subject to delivery of an opinion of Lessor's counsel confirming
that  (i)  the  sale  will  not  result  in  ordinary recapture income to Lessor
pursuant to Code Section 1245 or 1250 or any other Code provision, (ii) the sale
will  result  in  income,  if any, to Lessor of a type described in Code Section
856(c)(2)  or  856(c)(3) and will not result in income of the types described in
Code  Section  856(c)(4)  or  result  in  the  tax  imposed  under  Code Section
857(b)(6),  and  (iii) the sale, together with all other substitutions and sales
made  or  requested  by  Lessee  pursuant  to  any  other  leases with Lessor of
properties  hereto  or  any  other  transfers  of  the  Leased  Property  or the
properties  leased  under  other such operating leases, during the relevant time
period,  will  not  jeopardize  the  qualification  of  Lessor  as a real estate
investment  trust  under  Code Sections 856-860.  Lessee shall have the right to
designate  a  third  party  to  take title to the Leased Property or any portion
thereof  acquired  by  Lessee  pursuant  to  this  Article  17.

                                  HOLDING OVER
                                  ------------
If Lessee shall for any reason remain in possession of the Leased Property after
the expiration of the Term or any earlier termination of the Term hereof without
Lessor  consent, such possession shall be as a tenancy at will during which time
Lessee shall pay as rental each month an amount equal to the sum of (a) 150 % of
the  aggregate of 1/12 of the aggregate Minimum Rent payable with respect to the
last  complete year prior to the expiration of the Term, plus (b) all Additional
Charges  accruing  during  such  month, plus (c) all other sums, if any, payable
pursuant  to  the  provisions of this Lease with respect to the Leased Property.
During  such  period of tenancy, Lessee and Lessor shall be obligated to perform
and  observe  all  of  the  terms, covenants and conditions of this Lease and to
continue  its occupancy and use of the Leased Property. Nothing contained herein
shall  constitute the consent, express or implied, of Lessor to the holding over
of  Lessee  after  the  expiration  or  earlier  termination  of  this  Lease.

                                   ABANDONMENT
                                   -----------
59.1     Discontinuance  of  Operations  on  the  Leased  Property;  Offer  of
         ---------------------------------------------------------------------
Substitution.  If  Lessee  has  discontinued  use of the Leased Property, or any
         ---
portion  thereof,  for  its Primary Intended Use for 90 consecutive days without
Lessor's prior written consent for alterations or remodeling pursuant to Article
     9,  repairs  or  restoration  pursuant  to  Article  13  or  Article  14 or
otherwise,  then  provided  Lessor  has  not  terminated  this Lease pursuant to
Section  15.2,  Lessee  may offer to substitute a new property or properties for
the  affected  portion of the Leased Property pursuant to and in accordance with
the  provisions  of  Article  20  (which  offer  to substitute Lessor may in its
reasonable  discretion  refuse).
60.1     Obsolescence  of  the Leased Property; Offer to Purchase. If the Leased
         --------------------------------------------------------
Property,  or  any  portion thereof, becomes Unsuitable for its Primary Intended
Use,  all  as  set forth in an Officer's Certificate delivered to Lessor, Lessee
may  (provided  this Lease is still in effect), purchase the affected portion of
the  Leased  Property  for  the Minimum Purchase Price on the first Payment Date
occurring  not  less than 120 days after the date of such Officer's Certificate.
61.1     Conveyance  of  Leased Property. In the event Lessee elects to purchase
         -------------------------------
the  affected  portion  of the Leased Property pursuant to Section 19.2, then on
the  first  Payment  Date occurring not less than 120 days after the date of the
Officer's  Certificate  referred  to in Section 19.2, Lessor shall, upon receipt
from  Lessee  of  the Minimum Purchase Price as of the date of such purchase and
all  Rent and or other sums then due and payable under this Lease (excluding any
installment  of  Minimum  Rent  due  on  such Payment Date), convey the affected
portion  of  the  Leased  Property to Lessee on such date in accordance with the
provisions  of  Article  17  and  this Lease shall thereupon terminate as to the
affected  Leased  Property.

                            SUBSTITUTION OF PROPERTY
                            ------------------------
62.1     Substitution  of  Property  for  the  Leased  Property.
(ss)     In  the  event  Lessor  accepts  an offer by Lessee to substitute other
property for all or any portion of the Leased Property under Article 13, Article
     14 or Article 19, and provided that no Event of Default shall have occurred
and  be  continuing,  Lessee shall have the right (subject to the conditions set
forth  below in this Article 20, and upon notice to Lessor) to substitute one or
more  properties  (collectively  referred  to  as  "Substitute  Properties"  or
individually  as a "Substitute Property") for the affected portion of the Leased
Property  on  a monthly Payment Date specified in such notice (the "Substitution
Date")  occurring  not less than 90 days after receipt by Lessor of such notice.
The  notice  shall  be in the form of an Officer's Certificate and shall specify
the  reason(s) for the proposed substitution and the proposed Substitution Date.
Notwithstanding  anything  contained  herein  to  the  contrary,  any  other
substitution  for  all  or  any portion of the Leased Property shall require the
prior  written  consent  of  Lessor which shall be within the sole discretion of
Lessor.
(tt)     If Lessee gives the notice referred to in Section 20.1(a) above, Lessee
shall  present to Lessor one or more properties (or groups of properties) having
comparable  operating  characteristics,  each  of  which  property (or groups of
properties)  shall  provide  Lessor  with a yield (i.e., an annual return on its
equity  in  such  property)  equal to or greater than the Current Yield (and the
yield  reasonably expected to be received thereafter throughout the remainder of
the  term)  from the affected portion of the Leased Property at the time of such
proposed  substitution (or in the case of a proposed substitution as a result of
damage, destruction or Condemnation, the Current Yield immediately prior to such
damage,  destruction  or  Condemnation)  and  as  reasonably  projected over the
balance  of  the  then effective Initial Term or Renewal Term (as applicable) of
this  Lease  and  shall have a Fair Market Value substantially equivalent to the
Fair  Market Value of the Leased Property, but in no event less than the Project
Amount.  Lessor  shall  have  a  period  of  90 days within which to review such
information  and  either  to  accept  or  to  reject  the Substitute Property or
Substitute  Properties  so  presented;  provided that if Lessee is required by a
court  order  or  administrative  action  to  divest or otherwise dispose of the
affected  portion  of the Leased Property within a shorter time period, the time
period  shall be shortened appropriately to meet the reasonable needs of Lessee,
but  in  no event shall said period be less than 15 Business Days after Lessor's
receipt  of  said notice (subject to further extension for any period of time in
which Lessor is not timely provided with the information provided for in Section
20.2  and  Section  20.3  below); provided that if Lessor shall contend that the
Substitute Properties fail to meet all the conditions for substitution set forth
in  this  Article  20, including the provisions of Sections 20.1(c), (d) and (e)
below,  Lessee  shall withdraw its offer to substitute property whereupon Lessee
shall  within  thirty (30) days of notice of its withdrawn offer of substitution
give  Lessor  written  notice  that  it  will  either  offer  (i)  to substitute
additional property or (ii) purchase the affected portion of the Leased Property
for  the  Minimum  Purchase  Price with either such election to be in accordance
with  the  provisions  of  this  Lease.
(uu)     It  shall  be a condition to consummation of any substitution hereunder
that  all  of  the  conditions  set forth in Section 20.2 below, shall have been
satisfied  with  respect to such substitution, and to the delivery of an opinion
of  counsel  for  Lessor  confirming that (i) the substitution of the Substitute
Property  for  the  affected  portion  of the Leased Property will qualify as an
exchange  solely  of  property  of alike-kind under Section 1031 of the Code, in
which,  generally,  except  for  "boot" such as cash needed to equalize exchange
values  or discharge indebtedness, no gain or loss is recognized to Lessor, (ii)
the substitution will not result in ordinary recapture income to Lessor pursuant
to Code Section 1245 or 1250 or any other Code provision, (iii) the substitution
will  result  in  income,  if any, to Lessor of a type described in Code Section
856(c)(2)  or  856(c)(3) and will not result in income of the types described in
Code  Section  856(c)(4)  or  result  in  the  tax  imposed  under  Code Section
857(b)(6),  and (iv) the substitution, together with all other substitutions and
sales  made  or  requested by Lessee pursuant to any other leases with Lessor of
properties  hereto  or any other transfers of the Leased Property or any portion
thereof  or  the properties leased under other such operating leases, during the
relevant  time period, will not jeopardize the qualification of Lessor as a real
estate  investment  trust  under  Code  Sections  856-860.
(vv)     In  the event that the equity value of the Substitute Property or group
of Substitute Properties (i.e., the Fair Market Value of the Substitute Property
or group of Substitute Properties minus the encumbrances subject to which Lessor
will  take  the Substitute Property or group of Substitute Properties) as of the
Substitution  Date  is  greater than the equity value of the affected portion of
the  Leased  Property  (i.e., the Fair Market Value of the Leased Property minus
the  encumbrances  subject  to which Lessee will take the Leased Property) as of
the Substitution Date (or in the case of damage destruction or Condemnation, the
Fair  Market  Value  immediately  prior  to  such  damage,  destruction  or
Condemnation),  Lessor  shall  pay  to Lessee an amount equal to the difference,
subject  to  the limitation set forth below. In the event that said equity value
of  the  Substitute Property or group of Substitute Properties is less than said
equity value of the affected portion of the Leased Property, Lessee shall pay to
Lessor  an  amount  equal to the difference, subject to the limitation set forth
below.  Notwithstanding  the  foregoing,  neither  Lessor  nor  Lessee  shall be
obligated to consummate any substitution if such party would be required to make
a  payment to the other in excess of an amount equal to ten percent of said Fair
Market Value of the Leased Property (the amount of cash paid by one party to the
other  being  hereinafter  referred  to  as  the  "Cash  Adjustment").
(ww)     The  Rent  for  such  Substitute Property in all respects shall provide
Lessor with a yield at the time of such substitution (i.e., annual return on its
investment in such Substitute Property) not less than the Current Yield (and the
yield  reasonably expected to be received thereafter throughout the remainder of
the  Term)  from  the  Leased  Property  prior  to  any  damage,  destruction or
Condemnation, taking into account the Cash Adjustment paid or received by Lessor
and  any  other  relevant  factors.
(xx)     The  Minimum  Purchase  Price  of any Substitute Property or Substitute
Properties  shall  be  an  amount  equal  to  the  Minimum Purchase Price of the
affected  portion  of the Leased Property on the Substitution Date (i) increased
by any Cash Adjustment paid by Lessor pursuant to Section 20.1(d) above, or (ii)
decreased  by  any  Cash  Adjustment  paid by Lessee pursuant to Section 20.1(d)
above.
63.1     Conditions  to  Substitution.  On the Substitution Date, the Substitute
         ----------------------------
Property  will  become  a part of the Leased Property hereunder upon delivery by
Lessee  to  Lessor  of  the  following  items  in  form and substance reasonably
satisfactory  to  Lessor:
(yy)     an  Officer's  Certificate representing, warranting and certifying that
(i) the Substitute Property has been accepted by Lessee for all purposes of this
     Lease  and there has been no material damage to the improvements located on
the  Substitute  Property  nor  is any condemnation or eminent domain proceeding
pending  with  respect  thereto;  (ii)  all  permits,  licenses and certificates
(including  a  permanent,  unconditional  certificate  of  occupancy and, to the
extent  permitted  by  law,  all  certificates  of  need and licenses) which are
necessary  to  permit  the use of the Substitute Property in accordance with the
provisions  of  this  Lease have been obtained and are in full force and effect;
(iii)  under  applicable  zoning and use laws, ordinances, rules and regulations
the  Substitute Property may be used for the purposes contemplated by Lessee and
all  necessary  subdivision  approvals  have  been  obtained;  (iv) there are no
mechanic's  or materialmen's liens outstanding or threatened to the knowledge of
Lessee  against the Substitute Property arising out of or in connection with the
construction  of  the  improvements thereon, other than those being contested by
Lessee  pursuant  to Article 11; (v) any mechanic's or materialmen's liens being
contested  by Lessee will be promptly paid by Lessee if such contest is resolved
in  favor  of the mechanic or materialman; (vi) to the best knowledge of Lessee,
there  exists  no  Event  of Default under this Lease, and no defense, offset or
claim  exists with respect to any sums to be paid by Lessee hereunder; and (vii)
any  exceptions  to  Lessor's title to the Substitute Property do not materially
interfere  with  the  intended  use  of  the  Substitute  Property  by  Lessee;
(zz)     a  special  warranty  deed with warranties against claims arising under
Lessee  conveying  to  Lessor title to the Substitute Property free and clear of
any  liens  and  encumbrances  except  those  approved  in writing or assumed by
Lessor;
(aaa)     an  amendment  to this Lease duly executed, acknowledged and delivered
by  Lessee,  setting  forth (i) the legal description of the Land related to the
Substitute  Property,  (ii) the Project Amount and the Minimum Rent allocated to
such  Substitute  Property  and  (iii) such other changes as may be necessary or
appropriate  under  the  circumstances;
(bbb)     a  standard  owner's  or  lessee's  (as  applicable)  policy  of title
insurance  covering  the Substitute Property (or a valid, binding, unconditional
commitment therefor), dated the Substitution Date, in current form and including
mechanics'  and  materialmen's lien coverage, if available in the State in which
the Substitute Property is located issued to Lessor by a title insurance company
reasonably satisfactory to Lessor. Such policy shall (i) insure (A) Lessor's fee
title  to  the  Substitute  Property, subject to no liens or encumbrances except
those approved or assumed by Lessor, and (B) that any restrictions affecting the
Substitute  Property have not been violated and that a further violation thereof
will  not  result in a forfeiture or reversion of title, (ii) be in an amount at
least  equal  to  the  Fair  Market  Value of the Substitute Property, and (iii)
contain  such endorsements as may be reasonably requested by Lessor if available
in  the  State  in  which  the  Substitute  Property  is  located;
(ccc)     certificates  of  insurance  with  respect  to the Substitute Property
fulfilling  the  requirements  of  Article  12;
(ddd)     current  appraisals  or  other evidence satisfactory to Lessor, in its
sole  discretion,  as  to  the  current  Fair  Market  Values of such Substitute
Property;
(eee)     all available revenue data relating to the Substitute Property for the
period  from  the date of opening for business of the Substitute Property to the
date of Lessee's most recent Fiscal-Year end, or for the most recent three years
or  the  period  of  Lessee's ownership or operation of the Substitute Property,
whichever  is  less;  and
(fff)     such  other certificates, documents, opinions of counsel (which may be
in-house  counsel),  and  other  instruments or information as may be reasonably
required  by  Lessor,  including,  but  not  limited  to ALTA/ACSM land surveys,
engineering  studies  and  environmental  assessments.
64.1     Conveyance  to  Lessee. On the Substitution Date Lessor will convey the
         ----------------------
affected portion of the Leased Property to Lessee (and terminate the Lease as to
     the  affected  portion of the Leased Property being replaced) in accordance
with  the  provisions  of  Article  17  (except as to payment of any expenses in
connection  therewith  which  shall  be  governed  by  Section  20.4 below) upon
conveyance  to  Lessor  of  the  Substitute  Property.
65.1     Expenses.  Lessee  shall  pay  or  cause  to  be  paid,  on demand, all
         --------
reasonable  costs and expenses paid or incurred by Lessor in connection with the
substitution  and conveyance of the Leased Property and the Substitute Property,
including (a) fees and expenses of Lessor's counsel, (b) Lessor's costs incurred
in due diligence and inspections of the Substitute Properties, (c) the amount of
any recording taxes and filing fees, (d) the cost of preparing and recording, if
appropriate,  a  release of the affected portion of the Leased Property from the
lien  of any mortgage, (e) broker's fees and commissions for Lessee, if any, (f)
documentary  stamp  and transfer taxes, if any, (g) title insurance charges, and
(h)  escrow  fees,  if  any.

                                  RISK OF LOSS
                                  ------------
Except  as  otherwise provided in this Lease, during the Term of this Lease, the
risk  of  loss  or of decrease in the enjoyment and beneficial use of the Leased
Property  in  consequence  of  the  damage  or  destruction thereof by fire, the
elements,  casualties,  thefts,  riots,  wars or otherwise, or in consequence of
foreclosures,  attachments, levies or executions (other than by Lessor and those
claiming  from,  through or under Lessor) is assumed by Lessee and, Lessor shall
in  no  event  be answerable or accountable therefor nor shall any of the events
mentioned  in this Section entitle Lessee to any abatement of the Rent except as
specifically  provided  in  this  Lease.

                                 INDEMNIFICATION
                                 ---------------
Notwithstanding the existence of any insurance or self insurance provided for in
Article  12,  and  without  regard to the policy limits of any such insurance or
self  insurance, Lessee will protect, indemnify, save harmless and defend Lessor
from  and  against  all  liabilities,  obligations,  claims, damages, penalties,
causes  of  action, costs and expenses (including reasonable attorneys' fees and
expenses),  to  the  extent  permitted  by  law,  imposed upon or incurred by or
asserted  against  Lessor  by reason of: (a) any accident, injury to or death of
persons or loss to property occurring on or about the Leased Property, including
any  claims  of malpractice, (b) any use, misuse, no use, condition, maintenance
or  repair  by Lessee of the Leased Property, (c) any Impositions (which are the
obligations  of  Lessee  to  pay  pursuant  to the applicable provisions of this
Lease),  (d)  any failure on the part of Lessee to perform or comply with any of
the  terms  of this Lease when due or within any applicable cure period, (e) the
non-performance  of  any of the terms and provisions of any and all existing and
future  subleases  of  the Leased Property to be performed by Lessee as landlord
thereunder  when  due or within any applicable cure period and (f) the violation
by  Lessee  of  any Hazardous Materials Law. Any amounts which become payable by
Lessee under this Section shall be paid within ten days after liability therefor
on  the  part  of  Lessor  is  finally  determined  by  litigation  or otherwise
(including  the  expiration  of  any  time for appeals) and, if not timely paid,
shall  bear  interest  (to the extent permitted by law) at the Overdue Rate from
the  date  of such determination to the date of payment. Lessee, at its expense,
shall  contest,  resist and defend any such claim, action or proceeding asserted
or  instituted against Lessor or may compromise or otherwise dispose of the same
as Lessee sees fit. Lessor shall cooperate with Lessee in a reasonable manner to
permit Lessee to satisfy Lessee's obligations hereunder, including the execution
of  any  instruments or documents reasonably requested by Lessee. Nothing herein
shall  be construed as indemnifying Lessor or its agents for their own negligent
acts  or omissions or willful misconduct. Lessee's liability for a breach of the
provisions  of  this  Article  shall  survive  any  termination  of  this Lease.

                            SUBLETTING AND ASSIGNMENT
                            -------------------------
66.1     Subletting and Assignment. Subject to the rights of (i) residents under
         -------------------------
     existing  resident  agreements,  (ii) Tenants under existing Tenant Leases,
(iii) the provisions of Section 23.3 below and (iv) any other express conditions
or  limitations set forth herein, Lessee may not, without the consent of Lessor,
sublet  all  or  any  part  of  the  Leased Property other than an assignment or
sublease to an entity which is controlled by or under common control with Lessee
in which case no such consent shall be required but Lessor shall be given notice
of  such  assignment  or  sublease  and  the  same  shall  otherwise  meet  the
requirements  of clauses (b) through (e) of the following sentence. Lessor shall
not  unreasonably withhold its consent to any subletting or assignment; provided
that  (a)  in  the  case  of  a  subletting, the sublessee shall comply with the
provisions of Section 23.2, (b) in the case of an assignment, the assignee shall
assume in writing and agree from and after the effective date of such assignment
to  keep  and perform all of the terms of this Lease on the part of Lessee to be
kept  and  performed  and  shall be and become jointly and severally liable with
Lessee  for  the  performance  thereof, (c) an original counterpart of each such
sublease  and  assignment  and  assumption,  duly  executed  by  Lessee and such
sublessee  or  assignee,  as  the  case may be, in form and substance reasonably
satisfactory  to  Lessor, shall be delivered promptly to Lessor, and (d) in case
of  either an assignment or subletting, Lessee shall remain primarily liable, as
principal  rather than as surety, for the prompt payment of the Rent and for the
performance  and  observance  of  all  of  the  covenants  and  conditions to be
performed  by  Lessee  hereunder.  In  addition to Lessee's rights to sublet and
assign as provided in this section above, Lessee shall also have the right (upon
Lessor's  prior  consent,  which  consent shall not unreasonably be withheld) to
enter  into Tenant Leases which extend beyond the Term of this Lease and (e) the
sublease  or  assignment  provides  for  a  use  of the Leased Property which is
consistent  with  the  Primary  Intended Use. To the extent that any such Tenant
Leases  extend  beyond  the  Term  of this Lease, Lessor shall receive the rents
from,  and  be  responsible  for  any obligations on the part of the landlord or
lessor  under such Tenant Leases for such excess period. Any and all such Tenant
Leases  shall,  to  the  extent applicable, be subject to the provisions of this
Section  and  Section  23.2.  Nothing in this Section 23.1 shall be construed as
prohibiting  Lessee  from  granting  the  Leasehold  Mortgages  or  Lessor  from
exercising  its  rights  thereunder.
67.1     Non-Disturbance,  Subordination  and Attornment. Lessee shall insert in
         -----------------------------------------------
each  sublease  permitted  under  Section 23.1 provisions to the effect that (a)
such  sublease  is subject and subordinate to all of the terms and provisions of
this  Lease  and  to the rights of Lessor hereunder, (b) in the event this Lease
shall terminate before the expiration of such sublease, the sublessee thereunder
will, at Lessor's option, attorn to Lessor and waive any right the sublessee may
have to terminate the sublease or to surrender possession thereunder as a result
of  the  termination of this Lease and (c) in the event the sublessee receives a
written  notice from Lessor or Lessor's assignees, if any, stating that there is
an  Event  of  Default  under  this  Lease,  the  sublessee, shall thereafter be
obligated  to pay all rentals accruing under said sublease directly to the party
giving such notice, or as such party may direct until advised that such Event of
Default  is  no  longer  outstanding. All rentals received from the sublessee by
Lessor or Lessor's assignees, if any, shall be credited against amounts owing by
Lessee  under  this  Lease.  Lessor  agrees  that  notwithstanding  any default,
termination, expiration, sale, entry or other act or omission of Lessee pursuant
to  the  terms  of this Lease, or at law or in equity, Tenant's possession shall
not  be disturbed unless such possession may otherwise be terminated pursuant to
the  terms  of  the applicable Tenant Lease. Lessor hereby agrees, upon Lessee's
request,  to  execute  a  nondisturbance  agreement in favor of any Tenant or in
favor  of  any  sublessee under any sublease permitted under Section 23.1 above;
provided  that  the  Tenant  or  any  such sublessee has acknowledged all of the
foregoing  provisions  and executed all documents required by this Section 23.2.
68.1     Sublease  Limitation.  Notwithstanding anything contained in this Lease
         --------------------
to  the  contrary, Lessee shall not sublet the Leased Property, including any of
the  Resident Agreements and Tenant Leases, on any basis such that the rental to
be  paid  by  the  sublessee  thereunder would be based, in whole or in part, on
either  (a)  the  income  or  profits  derived by the business activities of the
sublessee, or (b) any other formula such that any portion of the sublease rental
received  by  Lessor  would fail to qualify as "rents from real property" within
the meaning of Section 856(d) of the Code, or any similar or successor provision
thereto.
69.1     Sublease to Current Licensee.  Notwithstanding anything in this Article
         ----------------------------
23  to the contrary, Lessee shall have the right to sublease the Leased Property
to  the  current  holder  of  the  necessary license for operation of the Leased
Property  as  an  assisted  living  facility and to simultaneously enter into an
agreement  with  such  licensee  for the management of the Leased Property.  The
sublease and the management agreement shall be subject to the review and consent
of  Lessor.  Lessee  agrees  that  notwithstanding any sublease pursuant to this
Section  23.4,  Lessee shall proceed to and diligently pursue in conjunction and
cooperation  with  Lessor  to  have  all  required licenses for operation of the
Leased Property transferred to Lessee and within thirty (30) days of transfer of
or  issuance  of  the  required  license for operation of the Leased Property to
Lessee,  the  sublease  and  management  agreement  shall  be  terminated.

                 OFFICER'S CERTIFICATES AND FINANCIAL STATEMENTS
                 -----------------------------------------------
70.1     Estoppel Certificate.  At any time and from time to time within 20 days
     following  written  request  by  Lessor,  Lessee  will furnish to Lessor an
Officer's Certificate certifying that this Lease is unmodified and in full force
and  effect  (or  that  this  Lease  is in full force and effect as modified and
setting  forth the modifications) and the dates to which the Rent has been paid.
Any  such Officer's Certificate furnished pursuant to this Article may be relied
upon  by  Lessor, any prospective purchaser of the Leased Property and any third
parties  who  have  an  interest in the Leased Property, including any Lender or
professional  advisor  or  Lessor.
71.1     Financial  Statements  and  Certificates.  Lessee  will  furnish  the
following  statements  to  Lessor;  provided that Lessor shall keep confidential
items  furnished  by  Lessee  which  are  not generally available to the public:
(26)     within  120  days  after  the end of each Fiscal Year (A) a copy of the
Consolidated  Financial  Statements  for  such  Fiscal  Year;  (B)  an Officer's
Certificate  stating  (x)  that  no  Event  of Default, or event which, with the
giving  of  notice or the passage of time, or both, would constitute an Event of
Default,  has  occurred  and is continuing and has not been waived, or, if there
shall  have  occurred and be continuing such an Event of Default, specifying the
nature thereof and the steps being taken to remedy the same, and (y) that to the
     best  of the signer's knowledge and belief, Lessee is not in default in the
performance or observance of any of the terms of any loans or credit facilities,
with  an  outstanding  balance  equal  to  or greater than $10,000,000.00 in the
aggregate,  which  default  would  permit  the  holder thereof to accelerate its
stated  maturity;  (C)  a  current  rent or lease roll for each Facility setting
forth  rental  information in reasonable detail regarding all of the Tenants and
Tenant  Leases,  including  any  space  utilized  by  Lessee; (D) a statement of
revenues  and  expenses  of the Leased Property for the twelve-month period then
ended  in  detail reasonably satisfactory to Lessor; (E) balance sheets for each
Facility  for  the  twelve-month  period  then  ended,  in  detail  reasonably
satisfactory  to  Lessor,  and  (F) a certificate in form satisfactory to Lessor
setting  forth  the Consolidated Coverage Ratio and the Facility Coverage Ratios
for  the  twelve-month period then ended, each certified as accurate by Lessee's
chief  financial  officer;
(27)     within 30 days after the end of each calendar month, a statement of all
revenues  and  expenses  and balance sheets relating to the operation of each of
the Facilities during such calendar month, in each case certified as accurate by
Lessee's  chief  financial  officer;
(28)     within  15  days after request by Lessor, (A) a statement of the number
of  units  available  and  the  actual  resident-days for the most recent month,
quarter  and  year  to  date,  (B)  census  information  for  the  Facilities in
sufficient  detail  to  show resident-mix on a daily average basis for the prior
quarter  and  year,  and  (C)  an  aged accounts receivable report in sufficient
detail  to  show  amounts  due from each class of resident-mix (such as private,
Medicare,  Medicaid  and V.A.) by the account age classifications of 30 days, 60
days,  90  days,  120  days,  and  over  120  days;
(29)     if  applicable, within 15 days after filing or receipt, as the case may
be,  (A)  all  cost  reports  filed  with  any  regulatory  or  licensing agency
(including  any  cost  reports  for  Medicare  or  Medicaid)  and any amendments
thereto, together with all responses, audit reports or inquiries with respect to
such  cost reports, (B) copies of all licensure and certification survey reports
and  statements  of deficiencies with respect to the Facilities (with correction
plans  attached  thereto), (C) copies of the Medicaid rate calculation worksheet
(or  equivalent  thereof), if any, issued by the applicable Medicaid Agency, (D)
copies  of  all  notices  (regardless of form) from any and all licensing and/or
certifying  agencies  that the license or applicable reimbursement certification
for  the  Facilities  is  being downgraded to a substandard category, revoked or
suspended  or  that  action  is  pending  or  being considered to downgrade to a
substandard category, revoke or suspend any Facility's license or certification,
and  (E)  evidence  of  the  payment  of  any  bed  taxes  or  similar  taxes;
(30)     within  ten  days  after  receipt,  copies  of  all  licensure  and
certification  surveys,  reports  and statements of deficiencies with respect to
each of the Facilities together with any plans of correction applicable thereto,
if  any,  within  the  time  prescribed  by  any  applicable  Legal Requirement;
(31)     within  30  days  after  filing, copies of the 10-Q and 10-K Reports of
Lessee  filed  with  the  United  States  Securities  and  Exchange  Commission;
(32)     within  45  days  after  the end of each quarter, a certificate in form
acceptable  to Lessor that the required Consolidated Coverage Ratio and Facility
Coverage  Ratios  for  the  quarter  then  ended  has  been  achieved;  and

(33)     with  reasonable  promptness,  such  other  information  respecting the
financial  condition,  affairs and properties of Lessee as Lessor may reasonably
request  from  time  to  time and as is generally prepared by Lessee for its own
internal  reporting  purposes.

                                   INSPECTION
                                   ----------
Lessee  shall  permit  Lessor,  any  Facility  Mortgagee  and  their  authorized
representatives  to inspect the Leased Property on reasonable advance notice and
during  usual  business  hours  subject  to  any  security,  health,  safety  or
confidentiality  requirements of Lessee, the rights of the Residents, the rights
of  the  Tenants, any Insurance Requirements relating to the Leased Property, or
any  other  restrictions imposed by law or applicable regulations.  In addition,
during  each  year  of  the Term after the first anniversary of the Commencement
Date,  Landlord  shall  have  the  right  to inspect the Leased Property and all
systems  contained  therein  at  any  reasonable  time  to  determine  Tenant's
compliance  with  its  obligations under this Lease, including those obligations
set  forth  in  Article  7 herein.  Tenant shall be responsible for the costs of
such  annual  inspections,  which  costs shall be equal to the sum of $2,000 per
Facility.

                                 QUIET ENJOYMENT
                                 ---------------
So  long  as  Lessee  shall pay all Rent as the same becomes due and shall fully
comply  with  all  of  the terms of this Lease and fully perform its obligations
hereunder,  Lessee  shall  peaceably and quietly have, hold and enjoy the Leased
Property  for  the  Term  hereof, free of any claim or other action by Lessor or
anyone  claiming  by,  through  or  under  Lessor,  but subject to all liens and
encumbrances  of  record  as  of  the date hereof as shown on Exhibit B attached
hereto  or hereafter consented to by Lessee. No failure by Lessor to comply with
the  foregoing  covenant shall give Lessee any right to cancel or terminate this
Lease,  or  to fail to pay any other sum payable under this Lease, or to fail to
perform any other obligation of Lessee hereunder. Notwithstanding the foregoing,
Lessee  shall  have  the  right by separate and independent action to pursue any
claim  or seek any damages it may have against Lessor as a result of a breach by
Lessor  of  the  covenant  of  quiet  enjoyment  contained  in  this  Article.

                                     NOTICES
                                     -------
Any  notices,  demands,  approvals  and other communications provided for herein
shall  be  in  writing and shall be delivered by telephonic facsimile, overnight
air  courier, personal delivery or registered or certified U.S. Mail with return
receipt  requested,  postage  paid,  to  the appropriate party at its address as
follows:
If  to  Lessor:
3310  West  End  Avenue,  Suite  700
Nashville,  Tennessee  37203
Attention:  John  M.  Bryant,  Jr.,  Esq.
Telephone:  (615)  269-8175
Telecopy:  (615)  269-8122
With  a  copy  to:
John  A.  Gupton,  III
Baker,  Donelson,  Bearman  &  Caldwell
211  Commerce  Street,  Suite  1000
Nashville,  Tennessee  37201
Telephone:  (615)  726-5600
Telecopy:  (615)  726-7351
If  to  Lessee:
Emeritus  Corporation
3131  Elliott  Avenue,  Suite  500
Seattle,  Washington  98121
Telephone:  206/298-2909
Telecopy:  206/301-4500
Attn:  Raymond  Brandstrom
With  a  copy  to:
The  Nathanson  Group
1520  Fourth  Avenue
Sixth  Floor
Seattle,  Washington  98101
Telephone:  206-623-6239
Telecopy:  206-623-1738
Attn:  Randi  Nathanson

Addresses  for  notice may be changed from time to time by written notice to all
other  parties.  Any  communication given by mail will be effective (i) upon the
earlier  of  (a) three business days following deposit in a post office or other
official  depository  under  the  care  and  custody of the United States Postal
Service or (b) actual receipt, as indicated by the return receipt; (ii) if given
by telephone facsimile, when sent; and (iii) if given by personal delivery or by
overnight  air  courier,  when  delivered  to the appropriate address set forth.

                                    APPRAISAL
                                    ---------
In  the event that it becomes necessary to determine the Fair Market Value, Fair
Market  Value  Purchase Price, the Fair Market Added Value, the Minimum Purchase
Price  or  the  Fair  Market Rental Value of the Leased Property, or any portion
thereof,  or  a  Substitute  Property  for  any purpose of this Lease, the party
required  or  permitted  to  give  notice  of  such required determination shall
include  in  the  notice the name of a person selected to act as an appraiser on
its behalf. Within ten days after receipt of any such notice, Lessor (or Lessee,
as  the  case  may be) shall by notice to Lessee (or Lessor, as the case may be)
appoint  a  second  person  as  an  appraiser on its behalf. The appraisers thus
appointed  (each  of  whom  must  be  a member of the American Institute of Real
Estate  Appraisers  or any successor organization thereto) shall, within 45 days
after the date of the notice appointing the first appraiser, proceed to appraise
the  Leased Property or the affected portion thereof or the Substitute Property,
as  the case may be, to determine any of the foregoing values as of the relevant
date  (giving  effect to the impact, if any, of inflation from the date of their
decision  to  the relevant date); provided that if only one appraiser shall have
been  so  appointed,  or if two appraisers shall have been so appointed but only
one  such  appraiser shall have made such determination within 50 days after the
making of Lessee's or Lessor's request, then the determination of such appraiser
shall  be  final and binding upon the parties. If two appraisers shall have been
appointed  and  shall  have  made  their  determinations  within  the respective
requisite  periods  set forth above and if the difference between the amounts so
determined  shall not exceed ten percent of the lesser of such amounts, then the
Fair  Market  Value  or  Fair Market Added Value or the Fair Market Rental Value
shall  be  an amount equal to 50 of the sum of the amounts so determined. If the
difference  between  the amounts so determined shall exceed 10% of the lesser of
such  amounts,  then  such  two appraisers shall have 20 days to appoint a third
appraiser,  but  if such appraisers fail to do so, then either party may request
the  American  Arbitration  Association or any successor organization thereto to
appoint  an  appraiser within 20 days of such request, and both parties shall be
bound by any appointment so made within such 20-day period. If no such appraiser
shall  have been-appointed within such 20 days or within 90 days of the original
request  for  a determination of Fair Market Value or Fair Market Added Value or
the  Fair Market Rental Value, whichever is earlier, either Lessor or Lessee may
apply  to  any court having jurisdiction to have appointment made by such court.
Any  appraiser  appointed,  by  the  American Arbitration Association or by such
court,  shall  be  instructed  to determine the Fair Market Value or Fair Market
Added  Value or the Fair Market Rental Value within 30 days after appointment of
such  appraiser.  The determination of the appraiser which differs most in terms
of  dollar  amount  from the determinations of the other two appraisers shall be
excluded,  and 50% of the sum of the remaining two determinations shall be final
and binding upon Lessor and Lessee as the Fair Market Value or Fair Market Added
Value  or  the Fair Market Rental Value for such interest. However, in the event
that  following  the  appraisal  performed  by  said third appraiser, the dollar
amount  of  two  of such appraisals are higher and lower, respectively, than the
dollar  amount  of  the  remaining  appraisal  in  equal  dollar  amounts,  the
determinations  of both the highest and lowest appraisal, respectively, shall be
rejected  and  the  determination  of the remaining appraisal shall be final and
binding  upon  Lessor  and  Lessee as the Fair Market Value or Fair Market Added
Value  or  the  Fair  Market  Rental Value for such interest. This provision for
determination  by appraisal shall be specifically enforceable to the extent such
remedy  is available under applicable law, and any determination hereunder shall
be final and binding upon the parties except as otherwise provided by applicable
law.  Lessor  and  Lessee  shall each pay the fees and expenses of the appraiser
appointed  by  it  and  each  shall pay one-half of the fees and expenses of the
third  appraiser  and  one-half  of  all  other  costs and expenses, incurred in
connection  with  each  appraisal.

                                 PURCHASE RIGHTS
                                 ---------------
72.1     Right  of First Refusal. During the Term hereof (provided that no Event
         -----------------------
of  Default  has  occurred and is continuing), Lessee shall have a first refusal
option  to  purchase  the  Leased  Property or any portion thereof upon the same
terms  and conditions as Lessor, or its successors and assigns, shall propose to
sell the Leased Property or any portion thereof, or shall have received an offer
     from  a  Third  Party,  as defined herein, to purchase the Leased Property,
which  Lessor  intends  to  accept (or has accepted subject to Lessee's right of
first  refusal  granted  herein).  If,  during the Term, Lessor receives such an
offer  or  reaches  such  agreement  with a Third Party or proposes to offer the
Leased  Property  or any portion thereof for sale to a Third Party, Lessor shall
promptly  notify  Lessee  of  the  purchase price for the Leased Property or the
affected  portion  thereof  and  all other material terms and conditions of such
agreement  or proposed sale together with a copy of such offer, and Lessee shall
have  30  days  after  receipt  of  such notice from Lessor within which time to
exercise  Lessee's option to purchase. If Lessee exercises its option, then such
purchase shall be consummated within the time set forth in the Third-Party offer
and  in  accordance  with  the provisions of Article 17 hereof to the extent not
inconsistent  herewith. If Lessee shall not exercise Lessee's option to purchase
within said 30-day period after receipt of said notice from Lessor, Lessor shall
be  free  for  a period of 90 days after the expiration of said 30-day period to
sell  the  Leased Property or the affected portion thereof to the Third Party at
the  price  and  terms  set  forth  in  such  offer. Whether or not such sale is
consummated,  Lessee shall be entitled to exercise its right of first refusal as
provided  in  this  Article, as to any subsequent sale of the Leased Property or
any  portion thereof during the Term of this Lease.  Notwithstanding anything to
the  contrary  herein  set forth, it is agreed that for purposes of this Section
29.1,  a  "Third Party" shall be only such Person(s), entities or joint ventures
which  are  Affiliates  of  Lessor.  Without  limiting  the  foregoing,  Lessee
expressly  agrees that the proposed conveyance, sale, lease, assignment or other
transfer  of  any  nature  whatsoever  of  the  Leased  Property, or any portion
thereof, in any foreclosure proceeding initiated by any Facility Mortgagee or to
any  Affiliate  of  Lessor,  including  without  limitation,  any  subsidiary or
"special  purpose  entity"  established by Lessor at the request of any Facility
Mortgagee  or  proposed  Facility  Mortgagee, shall not obligate Lessor to serve
notice  upon  Lessee  as  contemplated hereby or permit Lessee to exercise those
first refusal rights granted hereby with respect to the Leased Property, in part
or  in  whole.
73.1     Option  to Purchase. Anytime subsequent to the first anniversary of the
         -------------------
Commencement  Date  and through the third year of the Initial Term, Lessee shall
have the option to purchase some or all of the Facilities in accordance with the
terms  of  this  Section  29.2 and the Contract for Sale of Real Estate attached
hereto  as  Exhibit "E" upon written notice to Lessor for a purchase price equal
            -----------
to  (i) the Project Amount if purchased in year two of the Initial Term and (ii)
the  Project  Amount  plus  three percent (3%) if purchased in year three of the
Initial  Term.  Upon Lessee's exercise of its option to purchase, Lessee, or its
affiliates,  and  Lessor  will  execute  the  Contract  for  Sale of Real Estate
attached  as  Exhibit  "E".  If  not  sooner  exercised,  the option to purchase
              ------------
granted  hereby  will  expire  and  be  of  no further force and effect upon the
expiration  of  the third year of the Initial Term or the earlier termination of
this  Lease.  As a condition to the exercise of Lessee's purchase option, Lessee
shall  be  required to simultaneously exercise its option to purchase the lesser
of (i) four (4) Facilities or (ii) the remaining Facilities then being leased by
Lessee;  provided,  however,  nothing  herein  shall be construed as prohibiting
Lessee  from  concurrently  exercising  its option to purchase more than four(4)
Facilities,  up  to  and  including all of the Facilities.  The Facilities as to
which  Lessee concurrently exercises its purchase option under this Section 29.2
shall hereinafter be referred to as the "Option Properties"  Except as otherwise
provided  herein,  Lessor shall have the right to approve the Option Properties.
Lessor  shall  have  a  period of ten (10) days after receipt of Lessee's option
exercise  notice  to  object  to any of the other Facilities included within the
Option  Properties  and, in the event Lessor so objects, Lessor and Lessee shall
have  a  period  of  thirty  (30) days in which to negotiate in good faith in an
effort  to agree upon the  Option Properties but failing such, Lessee shall have
the right, on written notice to Lessor, delivered within ten (10) days after the
end  of such thirty (30) day period to withdraw its option exercise notice as to
the  Option  Properties.  Provided  Lessor  and  Lessee  agree  upon  the Option
Properties,  the  purchase  and  sale  of  the  Option  Properties  shall  close
concurrently. Lessor shall have no right to approve the Option Properties if the
same  represent  all  of  the  Leased Property then subject to the terms of this
Lease.
74.1     Third Party Designee.  Lessee shall have the right to designate a third
         --------------------
party  to  take  title to all or any portion of the Leased Property purchased by
Lessee  pursuant  to  this  Article  29.

                                DEFAULT BY LESSOR
                                -----------------
75.1     Default  by Lessor. Lessor shall be in default of its obligations under
         ------------------
this  Lease  if  Lessor  shall  fail to observe or perform any term, covenant or
condition  of  this  Lease  on  its  part to be performed and such failure shall
continue  for  a  period  of 30 days after written notice thereof is received by
Lessor,  unless  such failure cannot with due diligence be cured within a period
of  30  days,  in  which  case  such  failure shall not be deemed to continue if
Lessor,  within  said 30-day period, proceeds promptly and with due diligence to
cure  the  failure  and diligently completes the curing thereof. The time within
which  Lessor  shall be obligated to cure any such failure shall also be subject
to  extension  of  time  due  to the occurrence of any Unavoidable Delay. In the
event  Lessor  fails  to  cure  any  such  default,  Lessee,  without waiving or
releasing  any  obligations  hereunder,  and  in  addition to all other remedies
available  to  Lessee  hereunder or at law or in equity, may purchase the Leased
Property  from  Lessor  for  a  purchase  price equal to the greater of the Fair
Market Value Purchase Price or the Minimum Purchase Price of the Leased Property
     minus  an  amount  equal to any damage suffered by Lessee by reason of such
default.  In  the  event Lessee elects to purchase the Leased Property, it shall
deliver  a  notice thereof to Lessor specifying a Payment Date occurring no less
than  90  days  subsequent to the date of such notice on which it shall purchase
the Leased Property, and the same shall be thereupon conveyed in accordance with
the  provisions  of  Article  17. Any sums owed Lessee by Lessor hereunder shall
bear  interest at the Overdue Rate from the, date due and payable until the date
paid.
76.1     Lessee's  Right  to Cure. Subject to the provisions of Section 30.1, if
         ------------------------
Lessor shall breach any covenant to be performed by it under this Lease, Lessee,
after  giving  notice to and demand upon Lessor in accordance with Section 30.1,
without waiving or releasing any obligation of Lessor hereunder, and in addition
to  all  other  remedies  available to Lessee hereunder and at law or in equity,
Lessee  may  (but  shall  be under no obligation at any time thereafter to) make
such  payment  or perform such act for the account and at the expense of Lessor.
All  sums  so  paid  by  Lessee and all costs and expenses (including reasonable
attorneys' fees) so incurred, together with interest thereon at the Overdue Rate
from  the  date  on  which such sums or expenses are paid or incurred by Lessee,
shall  be  paid  by  Lessor to Lessee on demand or set off against the Rent. The
rights  of  Lessee  hereunder  to  cure  and  to  secure  payment from Lessor in
accordance  with  this Section 30.2 shall survive the termination of this Lease.

                                   ARBITRATION
                                   -----------
77.1     Controversies.  Except  with  respect  to  the  payment of Minimum Rent
         -------------
hereunder,  in case any controversy shall arise between the parties hereto as to
any  of  the  requirements  of  this  Lease  or  the  performance  thereof which
controversy  the  parties shall be unable to settle by agreement or as otherwise
provided  herein,  such  controversy  shall  be  determined by arbitration to be
initiated  and  conducted  as  provided  in  this  Article  31.
78.1     Appointment of Arbitrators. The party or parties requesting arbitration
         --------------------------
shall serve upon the other a written demand therefor specifying the matter to be
submitted  to  arbitration, and nominating an arbitrator who is a member in good
standing  of  the American Arbitration Association ("AAA"). Within 20 days after
receipt  of  such  written  demand  and  notification, the other party shall, in
writing, nominate a person who is a member in good standing with AAA and the two
arbitrators  so  designated  shall,  within  ten days thereafter, select a third
arbitrator  who  is  a person who is a member in good standing with AAA and give
immediate  written notice of such selection to the parties and shall fix in said
notice  a time and place for the first meeting of the arbitrators, which meeting
shall  be  held  as  soon  as  conveniently  possible after the selection of all
arbitrators,  at  which time and place the parties to the controversy may appear
and  be  heard.
79.1     Third  Arbitrator.  In case the notified party or parties shall fail to
         -----------------
make a selection upon notice, as aforesaid, or in case the first two arbitrators
selected shall fail to agree upon a third arbitrator within ten days after their
selection,  then  such  arbitrator  or arbitrators may, upon application made by
either  of the parties to the controversy, after 20 days' written notice thereof
to the other party or parties, have a third arbitrator appointed by any judge of
any  United States court of record having jurisdiction in the state in which the
Leased  Property  is located or, if such office shall not then exist, by a judge
holding  an  office  most  nearly  corresponding  thereto.
80.1     Arbitration  Procedure. Said arbitrators shall give each of the parties
         ----------------------
not  less than ten days' written notice of the time and place of each meeting at
which  the  parties or any of them may appear and be heard and after hearing the
parties  in  regard to the matter in dispute and taking such other testimony and
making  such  other examinations and investigations as justice shall require and
as the arbitrators may deem necessary, they shall decide the questions submitted
to them in accordance with the rules of AAA. The decision of said arbitrators in
writing signed by a majority of them shall be final and binding upon the parties
to  such  controversy.  In  rendering  such decisions and award, the arbitrators
shall  not  add  to,  subtract  from  or otherwise modify the provisions of this
Lease.
81.1     Expenses.  Unless  otherwise  specified  in  the  decision  of  the
         --------
arbitrators,  the  prevailing  party  in  any  arbitration  proceeding  shall be
         --
reimbursed  its  reasonable  out-of-pocket expenses by the non-prevailing party,
including  travel  expenses and reasonable attorneys' fees and expenses, and the
non-prevailing  party  shall  pay  all  other  costs  of  such  proceeding.

                        FINANCING OF THE LEASED PROPERTY
                        --------------------------------
Lessor  agrees  that  it  will  not grant or create any mortgage, deed of trust,
lien, encumbrance or other title retention agreement upon the Leased Property to
secure any indebtedness of Lessor (an "Encumbrance"), unless each holder of such
an  Encumbrance  agrees  (a)  to  give  Lessee the same notice, if any, given to
Lessor  of  any  default  or  acceleration of any obligation underlying any such
Encumbrance or any sale in foreclosure of such Encumbrance, (b) to permit Lessee
to  appear  with  its  representatives and to bid at any public foreclosure sale
with  respect to any such Encumbrance, (c) agrees to release the Leased Property
from  the  Encumbrance  upon  the  exercise  by  Lessee  of  a right to purchase
contained  in  this  Lease  and the payment by Lessee of the applicable purchase
price,  and  (d)  enters into an agreement with Lessee containing the provisions
described  in  Article 33 of this Lease. Lessee agrees to execute and deliver to
Lessor  or  the  holder of an Encumbrance any written agreement required by this
Article  within  ten days of written request thereof by Lessor or such holder of
an  Encumbrance.  Lessee  hereby  consents  to  the assignment of and grant of a
security  interest  and lien in this Lease together with the other documents and
instruments  delivered  to  Lessor  by  Lessee pursuant hereto and in connection
herewith  (collectively,  the  "Assigned  Documents"),  including  all rights of
Lessor  in,  to  and  under  each  Assigned  Document, by Lessor to any Facility
Mortgagee  requesting same. Lessee hereby further agrees to execute a Consent to
Assignment in substantially the form attached hereto as Exhibit F.  Lessor shall
                                                        ---------
pay  any Encumbrance as and when due subject to any right granted Lessor in such
Encumbrance  to  contest  any obligation of Lessor or to withhold any payment or
sum  due  under  the  Encumbrance.

                  SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE
                  ---------------------------------------------
At  the  request from time to time by one or more holders of an Encumbrance that
may  hereafter  be  placed upon the Leased Property or any part thereof, and any
and  all  renewals,  replacements,  modifications, consolidations, spreaders and
extensions  thereof,  Lessee  will  subordinate  this  Lease and all of Lessee's
rights  and  estate  hereunder  to  each such Encumbrance and will attorn to and
recognize  such  holder  (or  the  purchaser at any foreclosure sale or any sale
under a power of sale contained in any such Encumbrance or a holder by a deed in
lieu  of  foreclosure,  as  the  case may be) as Lessor under this Lease for the
balance  of  the Term then remaining, subject to all of the terms and provisions
of  this Lease; provided that each such institutional holder simultaneously with
or  prior  to  recording  any  such  Encumbrance executes and delivers a written
agreement  in  recordable  form  (a) consenting to this Lease and agreeing that,
notwithstanding  any  such other lease, mortgage, deed of trust, right, title or
interest,  or  any default, expiration, termination, foreclosure, sale, entry or
other  act  or  omission  under,  pursuant to or affecting any of the foregoing,
Lessee  shall  not be disturbed in peaceful enjoyment of the Leased Property nor
shall  this  Lease  be  terminated  or canceled at any time, except in the event
Lessor  shall  have  the  right  to  terminate  this  Lease  under the terms and
provisions expressly set forth herein; (b) agreeing that it will be bound by all
the  terms  of  this  Lease, perform and observe all of Lessor's obligations set
forth  herein;  and  (c)  agreeing  that  all proceeds of the casualty insurance
described  in  Article  13  of this Lease and all Awards described in Article 14
will  be  made available to Lessor for restoration of the Leased Property as and
to  the  extent  required  by  this Lease, subject only to reasonable regulation
regarding  the  manner  of  disbursement  and  application thereof except to the
extent  the same are actually received by said Facility Mortgagee. Lessee agrees
to  execute  and  deliver  to Lessor or the holder of an Encumbrance any written
agreement required by this Article within ten days of written request thereof by
Lessor  or such holder of an Encumbrance.  From time to time throughout the Term
of  this  Lease,  Lessee  agrees  to  execute  at  the request of Lessor, or any
prospective  purchaser  of  the  Lessor interests in the Leased Property, or any
Facility  Mortgagee  or  proposed Facility Mortgagee a certificate setting forth
(i) the then-remaining Term of the Lease, (ii) the scope of defaults, if any, by
Lessor hereunder, (iii) the then-current Rents payable hereunder, (iv) the dates
through  which  Rent has been paid, and (v) such other matters as the requesting
party  may  reasonably  set  forth.  Further, without limiting the foregoing and
without  the  necessity  of  any  additional  documentation (unless any Facility
Mortgagee may request reaffirmation of the following by separate agreement which
Lessee  agrees  to  execute), for the benefit of each Facility Mortgagee, Lessee
agrees  that,  in  the  event  that  any such Facility Mortgagee succeeds to the
interest  of  Lessor  under the Lease, such Facility Mortgagee shall not be: (A)
liable for any act or omission of Lessor or any prior "Lessor" under this Lease;
or  (B) subject to any defense, set-offs, counter-claims or offsets which Lessee
may  have  against  any  prior  "Lessor" (including Lessor); or (C) bound by any
payment  of  Rent  including  Additional Charges, which Lessee may have paid for
more  than  one  (1)  month  in  advance  of the due date hereunder to any prior
"Lessor"  hereunder  (including Lessor); or (D) bound by any obligations to make
any  payment  to  Lessee  which  was  required to be paid prior to the time such
Facility  Mortgagee  succeeds  to  Lessor's interest; or (E) accountable for any
monies  deposited with any prior Lessor (including security deposits), except to
the  extent  same are actually received by said Facility Mortgagee; or (F) bound
by  any  surrender,  termination, amendment, restatement or modification of this
Lease  occurring or entered into after the date on which such Facility Mortgagee
first  provided  debt  secured  by  the  Facility or Facilities made without the
consent of said Facility Mortgagee; or (G) otherwise have any liability, duty or
obligation  whatsoever  under  this  Lease,  or  under  any extension or renewal
hereof,  either by virtue of any assignment of leases or rents granted by Lessor
to  said  Facility  Mortgagee  or the subsequent collection of rents thereunder,
until  said Facility Mortgagee, or its designee or nominee becomes the fee owner
of  the  Leased  Property,  and  then  only for such periods which such Facility
Mortgagee or its designee or nominee actually owns the Leased Property.  Nothing
in  this Article 33 shall affect the rights of Lessee granted in Section 29.1 of
this  Lease.

                                 EXTENDED TERMS
                                 --------------
If  no  Event of Default shall have occurred and be continuing, Lessee is hereby
granted  the  right  to  extend  the  Term  of  this Lease for three additional,
consecutive  five-year  periods  (each  such  period,  an "Extended Term") for a
maximum  possible  Term  of 25 years, by giving written notice to Lessor of each
such  extension  at  least  180  days,  but not more than 270 days, prior to the
expiration  of  the  then--current  Term; subject, however, to the provisions of
Section  13.7  hereof and any other provisions which provide a specific right to
renew  this  Lease  after  the  expiration  of the applicable renewal provision.
During  each  Extended Term, all of the terms and conditions of this Lease shall
continue  in  full force and effect, except that the Minimum Rent for and during
each  of  the  Extended Terms shall be the greater of (i) the Fair Market Rental
Value  on the first day of such Extended Term or (ii) the Minimum Rent in effect
immediately  prior  to  the  first  day of such Extended Term. In any event, the
Minimum  Rent  shall  continue  to be increased throughout the Extended Terms in
accordance  with  the  provisions  of  Section  2.1(b)  hereof.

                                  MISCELLANEOUS
                                  -------------
82.1     No  Waiver.  No  failure  by Lessor or Lessee to insist upon the strict
         ----------
performance  of  any  term  hereof  or  to  exercise  any right, power or remedy
consequent  upon  a breach thereof, and no acceptance of full or partial payment
of the Rent during the continuance of any such breach, shall constitute a waiver
     of  any  such  breach  or any such term. To the extent permitted by law, no
waiver  of  any breach shall affect or alter this Lease, which shall continue in
full  force  and  effect  with  respect to any other then existing or subsequent
breach.
83.1     Remedies  Cumulative.  To  the  extent  permitted  by  law, each legal,
         --------------------
equitable  or  contractual  right,  power  and remedy of Lessor or Lessee now or
hereafter  provided  either  in  this  Lease or by statute or otherwise shall be
cumulative  and  concurrent and shall be in addition to every other right, power
and  remedy and the exercise or beginning of the exercise by Lessor or Lessee of
any  one  or  more  of  such  rights, powers and remedies shall not preclude the
simultaneous  or  subsequent  exercise by Lessor or Lessee of any or all of such
other  rights,  powers  and  remedies.
84.1     Surrender.  No  surrender  to  Lessor  of  this  Lease or of the Leased
         ---------
Property  or  any  part  thereof,  or of any interest therein, shall be valid or
effective  unless  agreed  to  and  accepted  in writing by Lessor and no act by
Lessor  or  any  representative  or  agent  of Lessor, other than such a written
acceptance  by  Lessor,  shall  constitute  an acceptance of any such surrender.
85.1     No  Merger  of Title.  There shall be no merger of this Lease or of the
         --------------------
leasehold  estate  created  hereby  by  reason of the fact that the same person,
firm,  corporation  or  other  entity  may  acquire,  own  or  hold, directly or
indirectly,  (a)  this  Lease  or  the  leasehold  estate  created hereby or any
interest  in  this  Lease or (b) such leasehold estate and the fee estate in the
Leased  Property.
86.1     Transfers  by  Lessor.  If  Lessor or any successor owner of the Leased
         ---------------------
Property  shall  convey the Leased Property in accordance with the terms hereof,
other  than  as  security  for  a  debt, the grantee or transferee of the Leased
Property  shall  expressly assume all obligations of Lessor hereunder arising or
accruing  from  and  after the date of such conveyance or transfer, and shall be
reasonably  capable of performing the obligations of Lessor hereunder and Lessor
or  such  successor  owner, as the case may be, shall thereupon be released from
all  future  liabilities  and  obligations of Lessor under this Lease arising or
accruing  from  and  after the date of such conveyance or other transfer and all
such  future liabilities and obligations shall thereupon be binding upon the new
owner.
87.1     General.  Anything  contained  in  this  Lease  to  the  contrary
         -------
notwithstanding,  all  claims  against,  and  liabilities  of, Lessee and Lessor
         ----
against  the other arising out of or relating to this Lease and arising prior to
any  date  of  termination  of this Lease shall survive such termination. If any
term  or  provision of this Lease or any application thereof shall be invalid or
unenforceable,  the  remainder  of  this Lease and any other application of such
term  or  provision  shall not be affected thereby. If any late charges provided
for  in  any  provision  of  this  Lease  are based upon a rate in excess of the
maximum  rate  permitted  by applicable law, the parties agree that such charges
shall  be  fixed  at  the  maximum  permissible rate. Neither this Lease nor any
provision  hereof  may be changed, waived, discharged or terminated except by an
instrument  in writing signed by Lessor and Lessee. All the terms and provisions
of  this  Lease  shall  be  binding upon and inure to the benefit of the parties
hereto  and  their respective successors and assigns. The headings in this Lease
are  for  convenience  of reference only and shall not limit or otherwise affect
the  meaning hereof. This Lease shall be governed by and construed in accordance
with  the  laws  of  the  state where the Land is located, but not including its
conflict  of laws rules. This Lease may be executed in one or more counterparts,
each  of  which  shall be an original but, when taken together, shall constitute
but  one  document.
88.1     Memorandum  of  Lease.  Lessor  and  Lessee  shall,  promptly  upon the
         ---------------------
request  of  either,  enter  into  a short form memorandum of this Lease in form
suitable  for recording under the laws of the state in which the Leased Property
is  located  in which reference to this Lease, and all options contained herein,
shall  be  made.
89.1     Transfer  of  Licenses.  Upon  the expiration or earlier termination of
         ----------------------
the  Term,  Lessee  shall take all action necessary or appropriate to effect (or
useful  in  effecting)  the  transfer,  to  the  extent  permitted  by any Legal
Requirement,  to  Lessor  or Lessor's nominee of all licenses, operating permits
and  other  governmental  authorizations and all service contracts to the extent
permitted by the terms thereof which may be necessary or useful in the operation
of  the  Facility  and  which  relate exclusively to the Facility which have not
previously  been  transferred  or  assigned  to  Lessor.
90.1     Prior  Existing Property Conditions.  In no event shall Lessee have any
         -----------------------------------
obligation  for Hazardous Materials located in, under or upon any Facility prior
to  the  Commencement  Date  or  discovered  after the Commencement Date if such
Hazardous  Materials were created by the acts or omissions of Lessor or Balanced
Care  Corporation,  or its or their affiliates, and not otherwise exacerbated by
the  acts,  omissions  or negligence of Lessee once such Hazardous Materials are
known  to  Lessee.
91.1     Capital  Improvements  Term  Loan.  Provided  no  Event  of Default has
         ---------------------------------
occurred  or is continuing, upon written request of Lessee, Lessor shall loan to
Lessee  up  to  $600,000.00  to be evidenced by a term note with interest at ten
percent (10%) payable in equal consecutive monthly installments of interest only
with  a  balloon payment of the outstanding principal and all accrued but unpaid
interest  and  other  charges  on the first day of the last month of the Initial
Term  of  this  Lease  or  upon  the  purchase by Lessee of all (or the last, as
applicable) of the Facilities.  Notwithstanding anything herein to the contrary,
the loan may be prepaid on a pro rata basis (based on the ratio of the number of
Facilities  being  purchased  by  Lessee  to the total number of Facilities then
being leased by Lessee) if Lessee purchased some, but not all, of the Facilities
then  being  leased  by Lessee.  There shall be no prepayment premium charged at
payoff.  The  proceeds  of  the loan shall be used by Lessee solely for Lessee's
working  capital  purposes  and  for  capital  and  other  improvements  to  the
Facilities.  Lessee  may  borrow  all  or  any  portion of the $600,000.00 as it
chooses  but  in  no  event  shall  Lessor  be  obligated  to loan more than the
aggregate sum of $600,000.00.  The loan shall be secured by a leasehold mortgage
upon  the  interests  of Lessee in the Facilities.  The form of the term note is
attached  hereto  as  Exhibit  "F".
                      ------------
92.1     Facility  Repairs  and  Capital  Improvements.  Provided  no  Event  of
         ----------------------------------------------
Default  has  occurred  or is continuing, upon written request of Lessee, Lessor
shall  reimburse  Lessee  for up to $500,000.00 for Facility repairs and capital
improvements  in  accordance  with  Schedule  1  attached hereto and made a part
hereof including $50,000 for the purchase of vans.  Lessor's reimbursement shall
be  conditioned  upon  the  following  requirements:  (i) Lessee shall submit to
Lessor  paid invoices for all work and materials completed and incorporated into
the  Facilities  and  such  other  documentation  to  substantiate such work and
materials  as  Lessor shall require in its reasonable opinion, (ii) a release of
mechanics  and  materialmen's  liens  for  all  work and materials completed and
incorporated  into  the  Facilities;  (iii)  a  certificate  executed  by a duly
authorized  officer  of  Lessee  certifying that (a) all invoices, documents and
releases  submitted  to  Lessor are complete, true and accurate, (b) all sums as
invoiced  have  been  paid  by  Lessee,  (c) all work has been performed per the
invoices,  (d)  all  materials  as  invoiced  have  been  incorporated  into the
Facilities,  (e) to the best of Lessee's knowledge all work and materials are in
compliance  with  all  Legal Requirements, (f) to the best of Lessee's knowledge
all  work  has  been  performed  in  a workmanlike manner and (g) Lessee has not
permitted any liens to be filed against the Leased Property with respect to such
work  which  have  not  been released or bonded off, and (iv) from and after the
reimbursement  by Lessor of each invoice, the Minimum Rent shall be increased by
the  amount paid by Lessor times ten (10%) percent.  Lessor shall provide Lessee
thirty (30) days prior written notice of adjustments to Minimum Rent as required
in  this  Section  35.11.

                                GLOSSARY OF TERMS
                                -----------------
For purposes of this Lease, except as otherwise expressly provided or unless the
context  otherwise  requires,  (a) the terms defined in this Article 36 have the
meanings  assigned  to them in this Article 36 and include the plural as well as
the  singular,  (b)  all  accounting terms not otherwise defined herein have the
meanings  assigned  to  them  in  accordance  with generally accepted accounting
principles  as  at  the  time  applicable,  (c)  all references in this Lease to
designated  "Articles",  "Sections" and other subdivisions are to the designated
Articles,  Sections  and  other  subdivisions  of  this Lease, and (d) the words
"herein",  "hereof"  and  "hereunder" and other words of similar import refer to
this  Lease  as  a  whole  and  not  to any particular Article, Section or other
subdivision, (e) the word "including" shall mean "including without limitation,"
and  (f) all consents required of Lessor hereunder shall be in Lessor's sole and
absolute  discretion,  unless  otherwise  specifically  set  forth  herein.  For
purposes  of  this Lease, the following terms shall have the meanings indicated:
"AAA"  means  the  American  Arbitration  Association.
"Additional  Charges"  has  the meaning set forth in Section 2.3 hereof together
with  all  other  items  specifically  included  as "Additional Charges" in this
Lease.
"Adjustment  Date"  has  the  meaning  set  forth  in  Section  2.1(b)  hereof.
"Affiliate",  when  used  with  respect  to Lessee, means any Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with  Lessee.  For  the  purposes  of  this  definition, "control", as used with
respect to any Person, shall mean the possession, directly or indirectly, of the
power  to  direct  or cause the direction of the management and policies of such
Person,  through  the  ownership  of voting securities, partnership interests or
other  equity  interests.  Specifically  excluded from the term Affiliate is any
entity  in  which Dan Baty has an interest as an officer, director, shareholder,
member,  partner,  beneficiary  or  employee.
"Applicable  Period"  has  the  meaning  set  forth  in  Section  7.3.
"Assigned  Documents"  has  the  meaning  set  forth  in  Article  32  hereof.
"Award"  means  all  compensation,  sums  or  anything of value awarded, paid or
received  on  a  total  or  partial  Condemnation.
"Business  Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which
is  not  a  day  on which national banks in the City of Nashville, Tennessee are
closed.
"Capital  Additions"  means  one or more new buildings or one or more additional
structures  annexed  to any portion of any of the Leased Improvements, which are
constructed on any parcel or portion of the Land including any additions thereto
during  the  Term, including the construction of a new wing or new story, or the
rebuilding  of  the  existing  Leased  Improvements  or  any portion thereof not
normal,  ordinary  or  recurring  to  maintain  the  Leased Property, excluding,
however,  any  construction  governed  by  the  provisions  of  Article  13.
"Capital  Addition  Cost" means the cost of any Capital Additions proposed to be
made by Lessee whether paid for by Lessee or Lessor. Such cost shall include and
be  limited  to (a) the cost of construction of the Capital Additions, including
site  preparation  and  improvement,  materials,  labor, supervision and certain
related  design,  engineering  and  architectural  services  and the cost of any
fixtures,  construction financing and miscellaneous items approved in writing by
Lessor,  (b)  if agreed to by Lessor in writing in advance, the cost of any land
contiguous  to  the Leased Property purchased for the purpose of placing thereon
the  Capital  Additions  or any portion thereof or for providing means of access
thereto,  or  parking  facilities  therefor, including the cost of surveying the
same, (c) the cost of insurance, real estate taxes, water and sewage charges and
other  carrying  charges for such Capital Additions during construction, (d) the
cost  of  title insurance, (e) reasonable fees and expenses of legal counsel and
accountants,  (f)  filing,  registration  and  recording  taxes  and  fees,  (g)
documentary  stamp  taxes,  if  any,  (h) environmental assessments and boundary
surveys  and  (i)  all  reasonable  costs and expenses of Lessor and any Lending
Institution which has committed to finance the Capital Additions, including, (A)
the  reasonable  fees  and  expenses  of their respective legal counsel, (B) all
printing  expenses,  (C)  the  amount  of any filing, registration and recording
taxes  and  fees,  (D)  documentary  stamp  taxes,  if  any, (E) title insurance
charges,  appraisal  fees,  if  any,  (F)  rating  agency  fees, if any, and (G)
commitment  fees,  if  any,  charged  by  any  Lending  Institution advancing or
offering  to  advance  any  portion of the financing for such Capital Additions.
"Capital  Replacement  Account"  has  the  meaning  set forth in Section 2.1(c).
"Cash  Adjustment"  has  the  meaning  set  forth  in  Section  20.1(d).
"Charge"  has  the  meaning  set  forth  in  Article  11  hereof.
"Code"  means  the  Internal  Revenue  Code  of  1986,  as  amended.
"Commencement  Date"  has  the  meaning  set  forth  in  Article  1.
"Condemnation" means the transfer of all or any part of the Leased Property as a
result  of  (i)  the  exercise  of  any  governmental  power,  whether  by legal
proceedings or otherwise, by a Condemnor or (ii) a voluntary sale or transfer by
Lessor  to  any  Condemnor,  either  under threat of condemnation or while legal
proceedings  for  condemnation  are  pending.
"Condemnor"  means  any public or quasi-public authority, or private corporation
or  individual,  having  the  power  of  Condemnation.
"Consolidated  Financial  Statements"  means  for  any  fiscal  year  or  other
accounting period for Lessee and its respective consolidated Affiliates, audited
statements  of  earnings  and  retained  earnings  and  of  changes in financial
position for such period and for the period from the beginning of the respective
fiscal year of Lessee to the end of such period and the related balance sheet as
at  the  end  of such period, together with the notes thereto, all in reasonable
detail  and  setting forth in comparative form the corresponding figures for the
corresponding  period  in  the  preceding fiscal year of Lessee, and prepared in
accordance  with  generally accepted accounting principles consistently applied,
except  as  noted.
"Consumer  Price  Index"  or  "CPI" means the Consumer Price Index for All Urban
Consumers  for the U. S. City Average for all Items (1982-1984=100) as published
by  the  United  States  Department of Labor, Bureau of Labor Statistics. If the
manner  in  which  the Consumer Price Index is determined by the Bureau of Labor
Statistics  shall be substantially revised (including a change in the base index
year),  an  adjustment shall be made by Lessor in such revised index which would
produce  results  equivalent,  as  nearly as possible, to those which would have
been  obtained  if  the  Consumer  Price  Index  had not been so revised. If the
Consumer  Price Index shall become unavailable to the public because publication
is  discontinued or otherwise, or if equivalent data is not readily available to
enable  Lessor  to  make  the  adjustment referred to in the preceding sentence,
Lessor  will  substitute  therefor  a comparable index based upon changes in the
cost of living or purchasing power of the consumer dollar published by any other
governmental  agency,  or if no such index shall be available, then a comparable
index  published  by  a  major  bank  or  other  financial  institution  or by a
university  or  a  recognized  financial  publication.
"Coverage  Ratio"  has  the  meaning  set  forth  in  Section  7.3
"Credit  Enhancements"  means  all  cash collateral, security deposits, security
interests,  letters  of credit, pledges, prepaid rent or other sums, deposits or
interests  held  by  Lessee,  if  any, to secure obligations with respect to the
Leased  Property,  the  Resident Agreements, the Residents, the Tenant Leases or
the  Tenants.
"Current  Yield"  means as of any date the annual Minimum Rent, as adjusted from
time-to-time  pursuant to the terms of this Lease, divided by the sum of (i) the
Project  Amount  plus  (ii)  all Capital Additions Costs paid for or financed by
Lessor  which  have  not  been  repaid  by  Lessee.
"Date of Taking" means the date the Condemnor has the right to possession of the
property  being  condemned.
"EBITDARM"  has  the  meaning  set  forth  in  Section  7.3.
"Encumbrance"  has  the  meaning  set  forth  in  Article  32.
"Event  of  Default"  has  the  meaning  set  forth  in  Section  15.1.
"Extended  Term"  has  the  meaning  set  forth  in  Article  34.
"Facility"  has  the  meaning  set  forth  in  Article  1.
"Facility  Coverage  Ratio"  has  the  meaning  set  forth  in  Section  7.3.
"Facility  Mortgage"  has  the  meaning  set  forth  in  Section  12.1.
"Facility  Mortgagee"  has  the  meaning  set  forth  in  Section  12.1.
"Fair  Market  Added Value" means the Fair Market Value (as hereinafter defined)
of  the  Leased  Property (including all Capital Additions) less the Fair Market
Value  of  the Leased Property determined as if no Capital Additions paid for by
Lessee  without  financing  by  Lessor  had  been  constructed.
"Fair  Market  Rental  Value"  means  the fair market rental value of the Leased
Property  or  any  Substitute Property, (a) assuming the same is unencumbered by
this Lease, (b) determined in accordance with the appraisal procedures set forth
in  Article 28 or in such other manner as shall be mutually acceptable to Lessor
and  Lessee,  and  (c)  not taking into account any reduction in value resulting
from  an indebtedness to which the Leased Property or Substitute Property may be
subject.
"Fair  Market  Value"  means the fair market value of the Leased Property or any
Substitute  Property,  including all Capital Additions, (a) assuming the same is
unencumbered  by  this  Lease,  (b)  determined in accordance with the appraisal
procedures  set forth in Article 28 or in such other manner as shall be mutually
acceptable  to  Lessor and Lessee, and (c) not taking into account any reduction
in  value  resulting  from any indebtedness to which the Leased Property or such
Substitute  Property  is  subject  or  which  encumbrance  Lessee  or  Lessor is
otherwise  required  to remove pursuant to any provision of this Lease or agrees
to  remove  at  or prior to the closing of the transaction as to which such Fair
Market Value determination is being made. The positive or negative effect on the
value of the Leased Property or Substitute Property attributable to the interest
rate,  amortization  schedule, maturity date, prepayment penalty and other terms
and  conditions  of  any  Encumbrance  on  the Leased Property or any Substitute
Property,  as  the case may be, which is not so required or agreed to be removed
shall  be  taken  into  account  in  determining  such  Fair  Market  Value.
"Fair  Market  Value  Purchase  Price" means the Fair Market Value less the Fair
Market  Added  Value.
"Fiscal  Year"  means  the  12-month  period  from  January  1  to  December 31.
"Fixtures"  has  the  meaning  set  forth  in  Article  1.
"Full  Replacement  Cost"  has  the  meaning  set  forth  in  Section  12.2.
"Gross  Revenues"  shall  mean  all  revenues  received or receivable from or by
reason  of  the  operation  of the Facilities including, without limitation, all
resident  revenues  received or receivable for the use of or otherwise by reason
of  all  rooms, beds and other facilities provided, services performed, space or
facilities  subleased  or  goods  sold on the Leased Property, including without
limitation  and  except  as provided below, any consideration received under any
subletting,  licensing  or other arrangements with any person or entity relating
to  the possession or use of any portion of the Leased Property and all revenues
from  all  ancillary  services provided by Lessee; provided, however, that Gross
Revenues  shall  not  include  non-operating revenues such as interest income or
gain  from  the  sale of assets not sold in the ordinary course of business; and
provided,  further,  that  there  shall  be  deducted  from  such  revenues: (i)
contractual  allowances  (relating  to any period during the Term of this Lease)
for billings not paid by or received from the appropriate governmental authority
or  third  party  payor;  (ii)  allowances  according  to GAAP for uncollectible
accounts; (iii) all proper resident billing credits and adjustments according to
GAAP relating to health care accounting: and (iv) federal, state or local excise
taxes  and  any tax based upon or measured by said Gross Revenues which is added
to  or  made  a  part of the amount billed to the resident or other recipient of
such  services  or  goods, whether included in the billing or stated separately;
and,  provided,  further,  that Gross Revenues shall include, as to residents or
third  party  payors  who  receive discounts or as to residents who receive free
care  as  a  condition  to Lessee's participation in any federal, state or local
governmental  program,  only  the  revenues actually received or receivable from
such residents.  To the extent that all or any portion of the Leased Property is
subleased  by  Lessee,  Gross  Revenues  of  such  sublessee with respect to the
affected  portion  of  the  Leased  Property  but excluding the rent received or
receivable  by  Lessee  from  or  under  such  sublease.
"Hazardous  Materials"  means any substance, including asbestos or any substance
containing  asbestos,  the  group  of organic compounds known as polychlorinated
biphenyls,  flammable  explosives,  radioactive  materials,  medical  waste,
chemicals,  pollutants,  effluents, contaminants, emissions or any other related
materials  and  items  included  in the definition of hazardous or toxic wastes,
materials  or  substances  under  any  Hazardous  Materials  Law.
"Hazardous  Materials  Law"  means  any law, regulation or ordinance relating to
environmental  conditions,  medical  waste and industrial hygiene, including the
Resource  Conservation  and  Recovery  Act  of  1976 ("RCRA"), the Comprehensive
Environmental  Response,  Compensation  and Liability Act of 1980 ("CERCLA"), as
amended  by  the  Superfund Amendments and Reauthorization Act of 1986 ("SARA"),
the  Hazardous Materials Transportation Act, the Federal Water Pollution Control
Act,  the  Clean Air Act, the Clean Water Act, the Toxic Substances Control Act,
the  Safe  Drinking  Water  Act,  the Atomic Energy Act and all similar federal,
state  and  local  environmental  statutes and ordinances, whether heretofore or
hereafter  enacted  or  effective  and  all  regulations,  orders,  or  decrees
heretofore  or  hereafter  promulgated  thereunder.
"Impositions"  means,  collectively,  all taxes relating to the Leased Property,
including all ad valorem, sales and use, gross receipts, action, privilege, rent
(with  respect  to  the  Resident  Agreements  and the Tenant Leases) or similar
taxes,  assessments  (including  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), water, sewer or other rents and
charges,  excises,  tax  levies,  fees  (including  license, permit, inspection,
authorization  and  similar  fees),  and all other governmental charges, in each
case  whether  general  or  special,  ordinary  or extraordinary, or foreseen or
unforeseen, of every character in respect of the Leased Property and/or the Rent
(including  all  interest and penalties thereon due to any failure in payment by
Lessee),  which  at  any  time  during  or  in respect of the Term hereof may be
assessed or imposed on or in respect of or be a lien upon (a) Lessor or Lessor's
interest  in  the Leased Property, (b) the Rent, 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, sales from, or activity
conducted  on,  or  in  connection  with,  the  Leased  Property,  the  Resident
Agreements  or  the  Tenant  Leases  or  use  of the Leased Property or any part
thereof;  provided  that  nothing  contained in this Lease shall be construed to
require  Lessee to pay (1) any tax based on net income (whether denominated as a
franchise  or capital stock or other tax) imposed on Lessor, (2) any transfer or
net  revenue  tax  of  Lessor,  (3)  any  tax  imposed with respect to the sale,
exchange or other disposition by Lessor of any portion of the Leased Property or
the  proceeds  thereof,  (4) any principal or interest on any Encumbrance on the
Leased  Property,  or (5) any judgment lien against Lessor which does not relate
to  or  arise  out of any amount or obligation that Lessee is required to pay or
perform  pursuant to the terms of this Lease, except to the extent that any tax,
assessment, tax levy or charge which Lessee is obligated to pay pursuant to this
definition  and which is in effect at any time during the Term hereof is totally
or  partially  repealed,  and a tax, assessment, tax levy or charge set forth in
clause (1), (2) or (3) is levied, assessed or imposed expressly in lieu thereof.
"Initial  Term"  has  the  meaning  set  forth  in  Article  1.
"Insurance  Requirements"  means  all  terms of any insurance policy required by
this  Lease  and  all  requirements  of  the  issuer  of  any  such  policy.
"Land"  has  the  meaning  set  forth  in  Article  1.
"Lease"  means  this  Lease.
"Lease  Amendment"  has  the  meaning  set  forth  in  Section  9.3(b)(iv).
"Lease  Assignment"  means  that  certain  Assignment  of  Rents  and  Leases,
substantially  in the form attached hereto as Exhibit D, to be dated on or about
the date hereof executed by Lessee to the Lessor, pursuant to the terms of which
Lessee  assigns  to  the  Lessor  each  of  the  Tenant  Leases  and  the Credit
Enhancements,  as  security  for the obligations of Lessee under this Lease, and
any  other  obligations  of  Lessee,  or  any  Affiliate  of  Lessee  to Lessor.
"Leased  Improvements"  and  "Leased  Property"  have  the meanings set forth in
Article  1.
"Legal  Requirements"  means  all  federal,  state,  county, municipal and other
governmental  statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees  and  injunctions affecting the Leased Property or the construction, use
or  alteration thereof, whether now or hereafter enacted and in force, including
any  which  may  (a)  require repairs, modifications or alterations of or to the
Leased  Property,  or  (b)  in  any  way  adversely affect the use and enjoyment
thereof,  and  all  permits,  licenses,  authorizations and regulations relating
thereto,  and  all  covenants, agreements, actions and encumbrances contained in
any  instruments,  either  of record or known to Lessee (other than encumbrances
created by Lessor without the consent of Lessee), at any time in force affecting
the  Leased  Property.
"Lending  Institution" means any insurance company, federally insured commercial
or  savings  bank,  national  banking association, savings and loan association,
employees'  welfare,  pension  or  retirement  fund  or  system,  corporate
profit-sharing or pension plan, college or university, or real estate investment
company  including  any  corporation  qualified  to  be  treated for federal tax
purposes  as  a  real  estate  investment  trust  having a net worth of at least
$50,000,000.
"Lessee"  means  EMERITUS  CORPORATION, a Washington corporation, its successors
and  assigns.
"Lessor"  means  the  parties identified in the opening paragraph of this Lease,
and  their  successors  and  assigns.
"Minimum  Rent"  has  the  meaning  set  forth  in Section 2.1(a) and as to each
Facility  means  the  amount  set  forth  on  Schedule  G.
"Minimum  Purchase  Price" means the greater of (i) the Fair Market Value of the
Leased Property at the time of purchase hereunder by Lessee and (ii) the Project
Amount  (and  in  the case of a substitution pursuant to Article 20, as adjusted
pursuant  to  Section  20.1(f)) as such amount is increased at the rate of three
percent  compounded  annually  for  each year (to be prorated for partial years)
between the Commencement Date and the date of repurchase by Lessee, plus the sum
of  all  Capital  Addition  Costs  relating  to  the Leased Property paid for or
financed  by  Lessor  which  as of the date of repurchase of the Leased Property
have  not  been  repaid  by  Lessee, less the net amount (after deduction of all
reasonable  legal  fees  and  other costs and expenses, including expert witness
fees,  incurred  by  Lessor  in  connection  with  obtaining  any  such award or
proceeds)  of  all  Awards  received  by  Lessor from Condemnation of the Leased
Property  and  all  insurance  proceeds  received  by  Lessor from any damage or
destruction  of  the  Leased  Property.
"Net Income" means Gross Revenues less all expenses including but not limited to
operating  expenses, depreciation, amortization, rent, goodwill, property taxes,
income  taxes,  insurance,  and all other actual or accrued expenses computed in
accordance  with  generally  accepted accounting principles (other than resident
move  in  fees which are not accounted for in accordance with GAAP) consistently
applied  plus  non-operating  revenues  such as interest income or gain from the
sale  of  assets  not  sold  in  the  ordinary  course  of  business.
"Officer's  Certificate" means a certificate of Lessee signed by the Chairman of
the  Board  of  Directors,  the President, any Vice President or another officer
authorized  to  so  sign  by the Board of Directors or By-Laws of Lessee, or any
other  person whose power and authority to act has been authorized by delegation
in  writing  by  any  of  the  persons  holding  the  foregoing  offices.
"Ordinary  Course  of Business" means the ordinary course of business for Lessee
consistent  with  past  custom  and practice (including quantity and frequency).
"Overdue Rate" means as of any date, a rate per annum equal to the Prime Rate as
of  such  date,  plus  two  percent,
"Payment Date" means any due date for the payment of the installments of Minimum
Rent  under  this  Lease.
"Permitted  Exceptions"  has  the  meaning  set  forth  in  Article  1  hereof.
"Permitted  Liens"  means (i) the Permitted Exceptions, (ii) pledges or deposits
made to secure payments of worker's compensation insurance (or to participate in
any  fund  in  connection  with  worker's  compensation insurance), unemployment
insurance,  pensions  or  social  security  programs,  (iii)  liens  imposed  by
mandatory provisions of law such as for materialmen, mechanics, warehousemen and
other  like  liens  arising  in  the  Ordinary  Course  of  Business,  securing
indebtedness  whose  payment  is  not yet due and payable, (iv) liens for taxes,
assessments  and  governmental charges or levies if the same are not yet due and
payable  or  if  the  same  are  being  contested  in good faith and as to which
adequate  cash  reserves  have  been provided, (v) liens arising from good faith
deposits  in  connection  with leases, real estate bids or contracts (other than
contracts  involving  the  borrowing  of  money),  pledges or deposits to secure
public  or  statutory obligations and deposits to secure (or in lieu of) surety,
stay,  appeal  or  custom  bonds  and  deposits  to secure the payment of taxes,
assessments,  duties  or  other  similar  charges, (vi) liens to secure purchase
money  indebtedness,  so  long  as the indebtedness incurred to purchase the new
asset  is secured only by such asset, or (vii) encumbrances consisting of zoning
restrictions,  easements  or  other  restrictions  on  the use of real property;
provided that such items do not impair the use of such property for the purposes
intended,  none  of which is violated by existing or proposed structures or land
use.
"Person"  means  a natural person, corporation, partnership, trust, association,
limited  liability  company  or  other  entity.
"Personal  Property"  means  all  machinery,  equipment, furniture, furnishings,
computers,  signage,  trade  fixtures  or other personal property and consumable
inventory  and  supplies  used  in  the operation of the Leased Property for its
Primary Intended Use, together with all replacements and substitutions therefor.
"Primary  Intended,  Use"  has  the  meaning  set  forth  in  Section  6.2(a).
"Prime  Rate" means the annual rate reported by The Wall Street Journal, Eastern
Edition  (or,  if  The Wall Street Journal shall no longer be published or shall
cease  to  report such rates, then a publication or journal generally acceptable
in  the  financial  industry  as authoritative evidence of prevailing commercial
lending rates) from time to time as being the prevailing prime rate (or, if more
than  one such rate shall be published in any given edition, the arithmetic mean
of  such rates). The prime rate is an index rate used by The Wall Street Journal
to report prevailing lending rates and may not necessarily be its most favorable
lending rate available. Any change in the Prime Rate hereunder shall take effect
on  the  effective date of such change in the prime rate as reported by The Wall
Street Journal, without notice to Lessee or any other action by Lessor. Interest
shall  be computed on the basis that each year contains 360 days, by multiplying
the principal amount by the per annum rate set forth above, dividing the product
so obtained by 360, and multiplying the quotient thereof by the actual number of
days  elapsed.
"Project  Amount" means Lessor's investment in each Facility as shown on Exhibit
                                                                         -------
G  attached  hereto, as may be increased by Capital Additions which are financed
by  Lessor,  by  reimbursements  pursuant  to  Section  35.11  of  this Lease or
otherwise  pursuant  to  Article  16  of  this  Lease.
"Related  Leases"  has  the  meaning  set  forth  in  Section  15.1(a).
"Rent"  means,  collectively,  the  Minimum  Rent,  Additional  Charges  and the
Impositions.
"Request"  has  the  meaning  set  forth  in  Section  9.3(a).
"Substitution  Date"  has  the  meaning  set  forth  in  Section  20.1.
"Substitute  Properties"  has  the  meaning  set  forth  in  Section  20.1.
"Taking" means a taking or voluntary conveyance during the Term hereof of all or
part  of  the Leased Property, or any interest therein or right accruing thereto
or  use thereof, as the result of, or in settlement of any Condemnation or other
eminent  domain proceeding affecting the Leased Property whether or not the same
shall  have  actually  been  commenced.
"Tenant"  means  the  lessees  or  tenants  under  the  Tenant  Leases,  if any.
"Tenant  Leases"  means  all  leases,  subleases and other rental agreements and
resident  agreements  with  assisted  living  residents  and  guaranties thereof
(written or verbal, now or hereafter in effect) that grant a possessory interest
in  and  to occupy and enjoy all or any portion of the Property (save and except
any  and all leases, subleases or other agreements pursuant to which Assignor is
granted  a  possessory  interest  in  the Land, Credit Enhancements, Engineering
Documents  and Warranties), together with all the rights, power and authority of
Lessee  to  execute,  deliver, perform, enforce, alter, modify or supplement the
terms  of  such  leases and agreements or to surrender, cancel or terminate such
leases  and agreements without the prior written consent of Lessor and Assignee,
and  together  with  any  and  all guarantees of any of the tenant's obligations
under  any  of such leases. Any of the Tenant Leases are hereinafter referred to
individually  as  a  "Tenant  Lease"  and  collectively  as the "Tenant Leases".
"Term"  means  the  Initial  Term  and  any Extended Term as to which Lessee has
exercised  its  options  to extend contained in Article 34 hereof unless earlier
terminated  pursuant  to  the  provisions  hereof.
"Unavoidable Delays" means delays due to strikes, lockouts, inability to procure
materials  after the exercise of reasonable efforts, power failure, acts of God,
governmental  restrictions,  enemy  action,  civil  commotion, fire, unavoidable
casualty  or  other  causes  beyond  the  control  of  the party responsible for
performing  an  obligation  hereunder,  provided that lack of funds shall not be
deemed  a  cause  beyond  the control of either party hereto unless such lack of
funds  is  caused  by  the  failure  of  the  other  party hereto to perform any
obligations  of  such  other  party  under  this  Lease.
"Unsuitable  for Its Primary Intended Use" as used anywhere in this Lease, shall
mean  that,  by  reason  of  damage or destruction, or a partial Taking, (i) the
affected  Facility  is  required  to  be  demolished  pursuant  to  any  Legal
Requirement,  (ii)  Lessee is unable within 12 months to obtain any governmental
approval  pursuant to any Legal Requirement, or (iii) in the good faith judgment
of  Lessee, reasonably exercised, the Facility cannot be profitably operated for
its Primary Intended Use, taking into account, among other relevant factors, the
number of usable units and number and diversity of the Residents and the Tenants
affected  by  such  damage  or  destruction  or  partial  Taking.
[COUNTERPART  SIGNATURE  PAGES  FOLLOW]

<PAGE>
IN  WITNESS WHEREOF, the parties have caused this Lease to be executed and their
respective  corporate  seals  to  be  hereunto  affixed  and  attested  by their
respective  officers  thereunto  duly  authorized  as  of the date first written
above.

LESSOR:
HR  ACQUISITION  I  CORPORATION

By:
Its:

<PAGE>
------
IN  WITNESS WHEREOF, the parties have caused this Lease to be executed and their
respective  corporate  seals  to  be  hereunto  affixed  and  attested  by their
respective  officers  thereunto  duly  authorized  as  of the date first written
above.

LESSOR:
CAPSTONE  CAPITAL  OF  PENNSYLVANIA,  INC.

By:
Its:

<PAGE>
IN  WITNESS WHEREOF, the parties have caused this Lease to be executed and their
respective  corporate  seals  to  be  hereunto  affixed  and  attested  by their
respective  officers  thereunto  duly  authorized  as  of the date first written
above.

LESSOR:
HRT  HOLDINGS,  INC.

By:
Its:

<PAGE>
IN  WITNESS WHEREOF, the parties have caused this Lease to be executed and their
respective  corporate  seals  to  be  hereunto  affixed  and  attested  by their
respective  officers  thereunto  duly  authorized  as  of the date first written
above.

LESSEE:
EMERITUS  CORPORATION

By:
Its:

<PAGE>

                                    EXHIBIT A
                              PROPERTY DESCRIPTIONS
                                  DANVILLE, VA
                                LEGAL DESCRIPTION
                                -----------------
All that certain tract or parcel of land, together with improvements thereon and
appurtenances  thereunto  belonging,  situate in the City of Danville, Virginia,
described  as  follows:
     BEGINNING  at  an existing iron at the intersection of Lot 1-B, Section "K"
Wedgewood  and  Briarcliff Lane; thence with the right-of-way of Briarcliff Lane
along  an  arc  subtended  by  a chord having a bearing of N 38  19' 22" W and a
distance  of 224.87 feet; thence continuing along Briarcliff Lane, N 56  01' 10"
W  63.78  feet  to  an  iron;  thence along an arc subtended by a chord having a
bearing  of  N  16  08'  10"  W  and  a distance of 25.65 feet to an iron at the
intersection  of  Briarcliff  Lane  with  Hermitage  Drive;  thence  with  the
right-of-way  of Hermitage Drive, N 23  44' 50" E 438.93 feet to an iron; thence
continuing  with  Hermitage  Drive  along  an  arc subtended by a chord having a
bearing  of  N  37  51'  47"  E and a distance of 432.90 feet to an iron; thence
along  an  arc  subtended  by  a chord having a bearing of N 81  47' 39" E and a
distance  of  19.89  feet to a point at the intersection of Hermitage Drive with
River  Oak  Drive;  thence with the right-of-way of River Oak Drive along an arc
subtended  by  a  chord  having  a  bearing of S 39  36' 34" E and a distance of
479.45  feet  to a point; thence continuing with River Oak Drive S 10  49' 40" E
29.68 feet to an iron at the intersection of River Oak Drive and property of now
or  formerly  Danville  School  Board;  thence leaving River Oak Drive along the
dividing line with now or formerly Danville School Board, S 36  08' 05" W 627.79
feet  to  an iron, common with property of now or formerly Danville School Board
and  Lot  1-B  Section  "K"  Wedgewood;  thence along said property with Lot 1-B
Section  "K"  Wedgewood, S 69  10' 00" W 218.00 feet to the beginning; and being
Parcel  H, containing 9.863 acres, as shown on ALTA/ACSM Title Survey for BCC at
Danville,  Inc.,  a  Delaware corporation, dated March 5, 1997, revised June 19,
1997 by Dewberry & Davis, recorded in the Clerk's Office of the Circuit Court of
the  City of Danville, Virginia as Instrument No. 97-3866, to which map specific
reference  is here made for a more particular description of the property herein
conveyed.

                                   ROANOKE, VA
                                LEGAL DESCRIPTION
                                -----------------
     BEGINNING  at  Corner  #1,  an  iron  pin  set,  said corner located on the
northerly  right-of-way  of  U.S.  Route 221 (Brambleton Avenue, SW), said point
also  being  the southwesterly corner of Lot 2, J. Patton Webb Subdivision (Plat
Book  19,  Page  185);  thence  leaving Lot 2, and with the right-of-way of U.S.
Route  221,  for  the  following  three courses:  S 58  00' 00" W, 43.39 feet to
Corner  #2,  an  existing iron pin; thence N 77  00' 00" W, 35.36 feet to Corner
#3,  an  existing  iron pin; thence S 58  00' 00" W, 50.00 feet to Corner #4, an
existing  iron  pin;  said  point  being the southeasterly corner of Gerhard and
Janine O. Sigrist; thence leaving U.S. Route 221 and with Sigrist, N 32  00' 00"
W,  141.30 feet to Corner #5, an existing iron pin; thence S 58  00' 00" W, with
Sigrist  for  approximately 200.00 feet, in all 375.00 feet to Corner #6, an "X"
mark  on curb, said point located on the northerly boundary of Tri-State Clinic,
Inc.  (D.B.  1276,  Pg.  355); said corner also located on the easterly property
line  of  M.  T. Holding Company (D.B. 1238, Pg. 1119); thence leaving Tri-State
Clinic,  Inc. and with M. T. Holding Company, N 32  00' 00" W, for approximately
125  feet passing the southeasterly corner of Brambleton Storage (D.B. 1307, Pg.
62),  in  all  275.00 feet to Corner #7, an existing iron pin; said point in the
northeasterly  corner  on  Brambleton  Storage  and  said  corner located on the
southerly boundary of Stump Brothers Contracting, (Oakcliff Common Area); thence
leaving  Brambleton Storage and with Stump Brothers Contracting (Oakcliff Common
Area)  for the following two courses:  N 58  00' 00" E, 40.00 feet to Corner #8,
an  existing  iron  pin;  thence  N  32  00' 00" W, 151.86 feet to Corner #9, an
existing  iron  pin;  said  point  located on the southerly boundary of Block 5,
Section  #2,  Berwick  Heights  (P.B. 3, Pg. 136); thence leaving Stump Brothers
Contracting  (Oakcliff  Common  Area) and with the southerly boundary of Berwick
Heights,  N  85  32'  13"  E,  219.07  feet  to Corner #10, an existing concrete
monument;  said point being the southwesterly corner of Section #1, Map of H. S.
Turner (P. B. 2, Pg. 119); thence leaving Berwick Heights and with the southerly
boundary  of Map of H. S. Turner, N 85  22' 30" E, 291.81 feet to Corner #11, an
iron  pin set; said point being the northwesterly corner of Lot 2, Resubdivision
of  property  of  J. Patton Webb (P.B. 19, Pg. 185); thence leaving H. S. Turner
and  with  the westerly boundary of Lot 2, S 32  00' 00" E 357.70 feet to Corner
#1,  the  place  of  BEGINNING  and  containing  3.884  acres,  more  or  less.

                                GREENSBORO, N.C.
                                LEGAL DESCRIPTION
                                -----------------
BEGINNING  AT  A EXISTING IRON PIPE; SAID PIPE BEING THE SOUTHWESTERN  CORNER OF
LOT 2 OF THE HOUSTON NELSON FARM SUBDIVISION RECORDED THE OFFICE OF THE REGISTER
OF  DEEDS  OF GUILFORD COUNTY IN PLAT BOOK 5 PAGE 330; SAID PIPE BEING N 59  39'
44"  E  2534.53'  FROM  A  PRELIMINARY  NGS MONUMENT "DENTIST"; THENCE ALONG THE
WESTERN  LINE  OF  LOTS 2, 3, & 4 OF THE SAID PLAT N 01  06' 31" W 418.73' TO AN
EXISTING  IRON  PIPE;  THENCE  WITH THE NORTHERN LINE OF LOT 4 OF SAID PLAT S 86
48'  03"  E 367.99' TO A NEW IRON PIPE; SAID IRON BEING ON THE WESTERN LINE OF A
70'  RIGHT-OF-WAY  ON  LAWNDALE  DRIVE  AS  DESCRIBED IN DEED BOOK 3161 PAGE 483
RECORDED AT SAID REGISTRY; THENCE WITH SAID RIGHT-OF-WAY S 11  03' 18" E 385.80'
TO  A NEW IRON PIPE; SAID PIPE BEING AT THE INTERSECTION OF THE SOUTHERN LINE OF
LOT  2  OF SAID PLAT AND SAID 70' RIGHT-OF-WAY; THENCE WITH THE SOUTHERN LINE OF
LOT 2 OF SAID PLAT S 87  25' 38" W 433.73' TO THE POINT OF BEGINNING; CONTAINING
3.663  AC. MORE OR LESS DESCRIBED AS THE "BALANCED CARE ONE" SURVEY PERFORMED BY
ALLEY,  WILLIAMS,  CARMEN  &  KING,  INC.  DATED  8/27/96.

                                   RAVENNA, OH
                                LEGAL DESCRIPTION
                                -----------------
Situated  in the State of Ohio, County of Portage, Township and City of Ravenna,
being  part  of  Lot 15 and Lot 16, South Division in said Township and City and
bounded  and  described  as  follows:
Beginning  at  a  "  iron rod found in a monument box at the intersection of the
centerlines  of  North  Avenue  and  C.H.  324,  Chestnut  Street;
Thence N 13 deg. 39' 45" W along the centerline of C.H. 324 a distance of 445.16
feet  to  a  point  at the northwesterly corner of land now or formerly owned by
Ronald  A.  &  Donna  M.  Rush  (Vol.  1029,  Pg.  487);
Thence  continuing  N  13 deg. 39' 45" W along the centerline of said C.H. 324 a
distance  of  156.66 feet to a point which marks the true place of beginning for
the  following  described  parcel  of  land;
Thence  continuing  N  13 deg. 39' 45" W along the centerline of said C.H. 324 a
distance  of  80.00  feet  to  a  point;
Thence  N  76  deg.  27' 37" E a distance of 137.84 feet to a  " iron rod found;
Thence deflecting to the right of the arc of a circular curve having a radius of
375.31 feet, a chord of 94.21 feet a chord bearing N 83 deg. 40' 12" E, distance
of  94.46  feet  to  a  5/8"  iron  rod  set;
Thence  S  89  deg. 07' 11" E a distance of 62.30 feet to a  " iron rod found in
the  westerly  line  of  Lot  16,  South  Division;
Thence  N 01 deg. 25' 25" E along the westerly line of said Lot 16 a distance of
437.16  feet  to  a  "  iron  rod  found  in  a southerly line of the Maplegrove
Cemetery;
Thence  S 89 deg. 07' 11" E a distance of 213.84 feet to a  " iron pipe found in
an  easterly  line  of  said  Maplegrove  Cemetery;
Thence N 02 deg. 02' 39" E a distance of 85.26 feet to a  " iron pipe found in a
southerly  line  of  said  Maplegrove  Cemetery;
Thence  S 87 deg. 51' 43" E along said southerly line of the Maplegrove Cemetery
a  distance  of  335.45  feet  to  a  5/8"  iron  rod  set;
Thence  S  01  deg.  25' 25" W a distance of 299.18 feet to a 5/8" iron rod set;
Thence  deflecting to the left on the arc of a circular curve having a radius of
630.00  feet,  a chord of 189.43 feet and a chord bearing S 68 deg. 31' 37" W, a
distance  of  190.15  feet  to  a  5/8"  iron  rod  set;
Thence  S  59  deg.  52' 49" W a distance of 191.53 feet to a 5/8" iron rod set;
Thence  deflecting  to the right on the arcs of a circular curve having a radius
of  316.13 feet, a chord of 168.96 feet and a chord bearing S 75 deg. 22' 49" W,
a  distance  of  171.04  feet  to  a  5/8"'  iron  rod  set;
Thence  S  00  deg.  52'  49" W a distance of 60.00 feet to a 5/8" iron rod set;
Thence  N  89  deg.  07'  11" W a distance of 29.90 feet to a 5/8" iron rod set;
Thence  deflecting to the left on the arc of a circular curve having a radius of
332.00  feet,  a  chord  of  83.34  feet and a chord bearing S 83 deg. 40' 13" W
(crossing the line between Lot 16 and Lot 15) a distance of 83.56 feet to a 5/8"
iron  rod  set;
Thence  S  76  deg.  27'  37"  W  a distance of 213.38 feet to the true place of
beginning,  containing  5.565 acres of land, more or less, of which 0.494 acres,
more  or  less,  are  in  Lot 15 and 5.071 acres, more or less, are in Lot 16 as
surveyed  March of 1997 by Terrance G. Gurson P.S. No. 6562, for William R. Gray
Associates,  Inc.,  Professional  Engineers  and  Surveyors.
Excepting  therefrom  the  portion  of  dedicated  right-of-way  known  as being
Chestnut  Hill  Drive (50) as recorded in Portage County Record of Plats, Volume
91,  Page  2  and  Volume  91,  Page  11.

                                 BLOOMSBURG, PA
                                LEGAL DESCRIPTION
                                -----------------
     All  that certain piece or parcel of land situate in the Township of Scott,
County  of  Columbia  and Commonwealth of Pennsylvania, bounded and described as
follows:
     Beginning  at  a  PK nail (set); said point being the westerly bounds of PA
State  Route  1001  (Shaffer  Road) and being the southeasterly corner of Master
Lube, Inc. (D.B. 595, P. 943); thence from said point of Beginning S 24  31' 03"
E  139.65'  along  said  westerly bounds to a point; thence southwesterly 45.25'
along a curve with a radius of 25.00' (chord: S 27  19' 21" W 39.32') to a point
in the northerly bounds of a 60' wide private right-of-way; thence S 79  10' 20"
W  248.18' along said bounds to an iron pin (found) in the line of land of Larry
and  Susan  Krum  (D.B.  423, P. 188); thence along said Krum passing through an
iron  pin (found) at 352.98', N 12  59' 15" W 359.74' and N 79  10' 12" E 46.65'
to a point, said point being the northwesterly corner of said Master Lube, Inc.;
thence  along  said  Master  Lube,  Inc.  the following 3 courses and distances:
     1)     S 24  31' 33" E 148.30' passing through an iron pin (found) at 10.0'
to  an  iron  pin  (found);
     2)     S  10  50'  00"  E  48.80'  to  an  iron  pin  (found);
     3)     N  79  10'  20"  E  171.20'  to  the  point  or place of Beginning.
Containing  1.288  acres  of  land  more  or  less.
                                HARRISONBURG, VA
                                LEGAL DESCRIPTION
                                -----------------
All  that  certain  lot  or parcel of land containing 3.267 acres, more or less,
situate  on  the  western  side  of Deyerle Avenue, in the City of Harrisonburg,
Virginia,  being  more  particularly,  described and designated as Lot 1 on that
certain  subdivision  plat  entitled  "FINAL  PLAT BLUE STONE HILLS SUBDIVISION,
SECTION  7"  made  by Michael W. Mars, L. C., and dated February 10, 1997, which
plat  is  recorded  in  the  Office  of  the Circuit Court of Rockingham County,
Virginia,  in  Deed  Book  1493,  page  453.
BEING  the  same property conveyed unto Capstone Capital of Virginia, Inc., from
ALCO I, L.L.C. by deed dated June 15, 1998, and recorded in Deed Book 1597, page
282,  in  the  aforesaid  Clerk's  Office.

                                 HARRISBURG, PA
                                LEGAL DESCRIPTION
                                -----------------
     ALL  THAT  CERTAIN  tract  of land situate in Susquehanna Township, Dauphin
County,  Pennsylvania  described in accordance with a survey by Alpha Consulting
Engineers,  Inc.,  dated  March  18,  1997  as  follows:
     BEGINNING  at  an  iron  pin  at  lands  now on or formerly of Felix T. and
Dorothy  C.  Kitlinski,  lands  now or formerly of The Charrington Group and the
subject  tract;  thence from said point of BEGINNING the following seven courses
and  distances:
1)     North 83 degrees 01 minutes 49 seconds East a distance of 442.26     feet
to  a  point;  thence
2)     South 08 degrees 40 minutes 23 seconds West a distance of 172.50     feet
to  an  iron  pipe;       thence
3)     South 81 degrees 21 minutes 37 seconds East a distance of 206.19     feet
to  a  point;  thence
4)     along  the  non-tangent  curve to the left, with a radius of 1472.69 feet
and  an  arc  length  of     82.47  feet  to  a  point;  thence
5)     South  08 degrees 44 minutes 48 seconds West a distance of 65.70     feet
to  a  railroad       spike;  thence
6)     South 78 degrees 13 minutes 05 seconds West a distance of 639.71     feet
to  a  point;  thence
7)     North  02  degrees  07 minutes 52 seconds East a distance of 426.07 to an
iron  pin,  said     point  being  the  point  of  BEGINNING.
     SAID  lot  containing  209,937.35  square  feet  or  4.8195  acres.

                                   HAMPDEN, PA
                                LEGAL DESCRIPTION
                                -----------------
     ALL  THAT  CERTAIN tract of land situate in the Township Hampden, County of
Cumberland,  and  Commonwealth  of  Pennsylvania,  more particularly bounded and
described  as  follows,  to  wit:
     BEGINNING  at  a point on the southern line of Grandon Way at the corner of
Lot No. 169 of Phase I of Grandon Farms; thence by Lots 169, 168, 167 and 166 of
Phase I South 34 degrees 21 minutes 40 seconds East a distance of 297.25 feet to
an  iron  pin; thence by Lots Nos. 166, 165 and 164, South 21 degrees 22 minutes
00  seconds  East a distance of 199.77 feet to an iron pin at other lands of the
Grantors;  thence by same North 68 degrees 38 minutes 00 seconds East a distance
of  344.07  feet  to  an iron pin; thence by same North 38 degrees 22 minutes 51
seconds  East  a  distance of 257.95 feet to an iron pin in the center of a PP&L
right  of  way;  thence  through the PP&L right of way and by other lands of the
Grantors,  North  27 degrees 25 minutes 44 seconds West a distance of 90.31 feet
to  an  iron pin; thence by other lands of Grantors, North 71 degrees 27 minutes
32  seconds  West a distance of 372.31 feet to an iron pin; thence by same North
34  degrees  21  minutes 40 seconds West a distance of 106.15 feet to a concrete
monument  on  the  southern  side of Grandon Way; thence by the southern line of
Grandon  Way,  South  55 degrees 38 minutes 20 seconds West a distance of 323.00
feet  to  a  concrete  monument,  the  point  of  BEGINNING.
     CONTAINING  5.48  acres.
     BEING  Lot  No.  1  of a Preliminary/Final Subdivision and Land Development
Plan  for  Outlook  Pointe  at  Creekview,  Hampden Township, Cumberland County,
Pennsylvania,  prepared  by  H.  Edward  Black  &  Associates,  and  recorded in
Cumberland  County  Plan  Book  _____________,  Page  __________.

<PAGE>
B-1

                                    EXHIBIT B
                          LIST OF PERMITTED EXCEPTIONS
THE  AFOREMENTIONED  PROPERTY  IS  CONVEYED  SUBJECT  TO  THE  FOLLOWING:
LIST  FROM  TITLE  COMMITMENTS

<PAGE>
                                    EXHIBIT C
                     ALLOCATION OF MINIMUM RENT BY FACILITY
          EMERITUS
     LICENSED     MINIMUM     COMMENCEMENT
FACILITY     BEDS     RENT     DATE
Harrisburg     51     $376,614     May  1,  2003
----------     --     --------     -------------
Creekview     102     $665,054     May  1,  2003
Bloomsburg     46     $333,374     May  1,  2003
Harrisonburg     51     $481,474     May  1,  2003
Roanoke     58     $475,935     May  1,  2003
Danville     60     $386,679     May  1,  2003
Ravenna     53     $362,622     May  1,  2003
Greensboro     50     $368,248     May  1,  2003
TOTALS     471     $3,450,000


<PAGE>
                                    EXHIBIT D
                         ASSIGNMENT OF RENTS AND LEASES

STATE  OF                    )
KNOW  ALL  MEN  BY  THESE  PRESENTS:
COUNTY  OF                    )
THIS  ASSIGNMENT  OF  RENTS AND LEASES (this "Assignment") is entered into as of
the           day  of                 ,  200_,  by  and  between  EMERITUS
                       -
CORPORATION,  a  Washington  corporation  ("Assignor"), whose address for notice
hereunder  is  3131 Elliott Avenue, Suite 500, Seattle, Washington 98121, and HR
Acquisition  I  Corporation,  a  Maryland  corporation,  Capstone  Capital  of
Pennsylvania,  Inc.,  a  Pennsylvania  corporation,  and  Capstone  Capital  of
Virginia, Inc., an Alabama corporation (collectively, "Assignee"), whose address
for  notice  hereunder  is 3310 West End Avenue, Suite 700, Nashville, Tennessee
37203.
                                   WITNESSETH
                                     ARTICLE
                                   DEFINITIONS
As  used  herein,  the  following  capitalized  terms used herein shall have the
following  meanings:
"Credit  Enhancements"  means all security deposits, security interests, letters
of  credit,  pledges, prepaid rent or other sums, deposits or interests, if any,
held  by  Lessee  with respect to the Property, the Tenant Leases or the tenants
under  the  Tenant  Leases.
"Engineering  Documents"  means  all  site  plans,  surveys,  soil and substrata
studies, architectural drawings, plans and specifications, engineering plans and
studies,  floor  plans, landscape plans, and other plans and studies that relate
to  the Land, the Improvements or the Fixtures and are in Lessee's possession or
control.
"Fixtures"  means  all  permanently  affixed equipment, machinery, fixtures, and
other  items of real and/or personal property, including all components thereof,
now  and  hereafter  located  in, on or used in connection with, and permanently
affixed to or incorporated into the 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, and built-in vacuum,
cable  transmission,  oxygen  and similar systems, 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, but specifically excluding any of Tenant's trade fixtures or
other  fixtures  that a Tenant is permitted to remove pursuant to the applicable
Tenant  Lease.
"Improvements" means all buildings, improvements, structures and Fixtures now or
on  the  Commencement  Date  located on the Land, including, without limitation,
landscaping,  parking  lots and structures, roads, drainage and all above ground
and  underground  utility  structures,  equipment  systems  and  other so-called
"infrastructure"  improvements.
"Land" means the real property more particularly described on Exhibit A attached
hereto and made a part hereof, together with all covenants, licenses, privileges
and  benefits  thereto  belonging,  and  any easements, rights-of-way, rights of
ingress  or egress or other interests of Lessee in, on, or to any land, highway,
street,  road or avenue, open or proposed, in, on, across, in front of, abutting
or  adjoining  such  real property including, without limitation, any strips and
gores  adjacent  to  or  lying  between such real property and any adjacent real
property.
"Lease"  means  that  certain  lease  agreement  of  even  date herewith between
Assignee  and  Assignor.
"License"  has  the  meaning  set  forth  in  Section  3.1  hereof.
"Obligations"  means  any  and  all  of the indebtedness, liabilities, and other
obligations  made  or  undertaken  by  Assignor  to Assignee as set forth in the
Security  Documents  (hereinafter defined), the Lease and any lease, sublease or
other  form  of  conveyance or any other agreement pursuant to which Assignor is
granted  a  possessory  interest  in  the  Property.
"Obligation Documents" means any and all agreements, assignments and instruments
(including  any  renewals,  extensions,  modifications  or  amendments  thereof)
evidencing,  securing  or  pertaining  to  the  Lease.
"Property"  means,  collectively, the Improvements, the Credit Enhancements, the
Engineering  Documents  and  the  Warranties.
"Rents"  means  the  immediate,  absolute  and  continuing  right to collect and
receive  all  of  the  rents, income, receipts, revenues, proceeds, security and
other  types  of deposits, issues and profits now due or which may become due or
to  which  Assignor  may  now  or  shall  hereafter (whether upon any applicable
redemption  period or otherwise) become entitled or may demand or claim, arising
or  issuing  from or out of the Tenant Leases, or from or out of the Property or
any part thereof (subject only to the limited license granted herein by Assignee
to  Lessee to so collect and receive the Rents), including, without limiting the
generality  of  the  foregoing,  minimum  rents,  additional  rents,  parking
maintenance  charges  or fees, tax and insurance contributions, proceeds of sale
of  electricity, gas, chilled and heated water and other utilities and services,
deficiency  rents  and liquidated damages following default, premiums payable by
any  tenant  upon  the  exercise  of  a cancellation privilege provided for in a
Tenant  Lease  and  all  proceeds payable under any policy of insurance covering
loss  of rents resulting from untenantability caused by destruction or damage to
the  Property.
"Security  Documents" means this Assignment, and any and all other documents now
or  hereafter executed by Assignor, or any other person or party, to evidence or
secure  the  payment or performance and discharge of the Obligations, including,
without  limitation,  the  Lease.
"Tenant  Leases"  means  all  leases,  subleases and other rental agreements and
resident  agreements  with  assisted  living  residents  and  guaranties thereof
(written or verbal, now or hereafter in effect) that grant a possessory interest
in  and  to occupy and enjoy all or any portion of the Property (save and except
any  and all leases, subleases or other agreements pursuant to which Assignor is
granted  a  possessory  interest  in  the Land, Credit Enhancements, Engineering
Documents  and Warranties), together with all the rights, power and authority of
Lessee  to  execute,  deliver, perform, enforce, alter, modify or supplement the
terms  of  such  leases and agreements or to surrender, cancel or terminate such
leases  and agreements without the prior written consent of Lessor and Assignee,
and  together  with  any  and  all guarantees of any of the tenant's obligations
under  any  of such leases. Any of the Tenant Leases are hereinafter referred to
individually  as  a  "Tenant  Lease"  and  collectively  as the "Tenant Leases".
"Warranties"  means  all transferable warranties, representations and guaranties
with respect to the Property, whether express or implied, which Lessee now holds
or  under which Lessee is the beneficiary, including, without limitation, all of
the  representations,  warranties and guaranties given and/or assigned to Lessee
under  the  Tenant  Leases.
                                    ARTICLE 2
                                   ASSIGNMENT
Assignor,  in  consideration  of  the sum of $10.00, and other good and valuable
consideration,  the  receipt  and  sufficiency of which are hereby acknowledged,
does  hereby  grant,  sell,  convey,  assign, transfer, set over and deliver the
Tenant  Leases  and  the Rents unto the Assignee, to have and to hold the Tenant
Leases  and  the  Rents unto Assignee, and Assignor does hereby bind itself, its
successors  and assigns to warrant and defend the title to the Tenant Leases and
the  Rents unto Assignee against every person whomsoever lawfully claiming or to
claim  the  name  or  any  part  thereof,  by,  through  or under Lessee but not
otherwise.
                                    ARTICLE 3
                          LIMITED LICENSE, CONTINUATION
                          AND TERMINATION OF AGREEMENT
     3.1     Limited  License.  Lessee  shall  have  the  right  under a limited
             ----------------
license  (the  "License") which may be revoked by Assignee pursuant to the terms
of  Section 7.1, to collect upon, but not prior to accrual, all of the Rents and
Lessee  shall  receive  the  Rents  and  hold the same, as well as the right and
license  to  receive the Rents, as a trust fund to be applied, and Lessee hereby
covenants  to apply the Rents, to the payment, satisfaction and discharge of the
Obligations  then  due,  including  specifically, but without limitation, to the
payment  of taxes and assessments upon the Property before payment of penalty or
interest  are  due  thereon, to the cost of such insurance then due, maintenance
and  repairs  as  may  be required by the terms of the Security Documents and in
satisfaction  of  all  obligations of Assignor under the Tenant Leases then due;
all  prior  to  the application by Assignor of the Rents for any other purposes.
The  License  shall  also  include  the  right  of Assignor to execute, deliver,
perform,  enforce,  alter,  modify, change or supplement the terms of the Tenant
Leases  and  to  surrender,  cancel  or terminate such Tenant Leases without the
prior  written consent of Assignee except for any of the Tenant Leases executed,
modified  or  supplemented  after  the  date  hereof  whose  term (including any
possible  extensions  on  the  part of the applicable Tenant) extends beyond the
Term  of  the  Lease.  Thereafter,  so  long as there exists no Event of Default
hereunder  or under any of the Security Documents, Assignor may use the Rents in
any  manner  not  inconsistent  with  the  Security Documents. Upon the sale and
conveyance  by  Assignee  or  its  successors  or  assigns  of  the title to the
Property, all right, title, interest and power granted under the License granted
herein  shall  be automatically continued subject to the terms and conditions of
the  Lease  and  any  of  the  other  Security  Documents.
     3.2     Continuation  and  Termination  of Assignment.  Upon final payment,
             ---------------------------------------------
performance  and  discharge  in  full  of the Obligations, this Assignment shall
become  and  be  void  and  of no force or effect. Written demand by Assignor or
Assignee  delivered  to  any  Tenant  for  payment of the Rents by reason of the
occurrence of any Event of Default claimed by Assignor or Assignee, and the then
existence thereof, shall be sufficient evidence of each such Tenant's obligation
and  authority to make all future payments of the Rents to Assignor or Assignee,
as  the  case  may  be,  without the necessity for further consent by Assignor.
                                    ARTICLE4
                         WARRANTIES AND REPRESENTATIONS
Assignor hereby unconditionally warrants and represents to Assignee with respect
to  the  Tenant  Leases,  if  any,  in effect as of the date hereof, as follows:
     4.1     Ownership  of  Tenant Leases and the Rents. Subject to the terms of
             ------------------------------------------
the  Lease,  Assignor  has  good  title  to  the  Tenant  Leases  not previously
transferred  or  assigned to Assignee and the Rents and has all requisite right,
power  and authority to assign such Tenant Leases and the Rents to Assignee, and
no  other person, firm or corporation has any right, title or interest therein.
     4.2     No  Default.  Assignor  has  duly and punctually performed, all and
             -----------
singular,  the  terms, covenants, conditions and warranties of the Tenant Leases
on  Assignor's  part  to  be  kept,  observed and performed; and, to the best of
Assignor's  knowledge, the Tenants thereunder are not in material default of any
of  the  terms  or  provisions  of  the  respective  Tenant  Leases.
     4.3     No  Modification  of  the  Tenant  Leases  or  Anticipation  or
             ---------------------------------------------------------------
Hypothecation  of the Rents.  The Tenant Leases are valid and unmodified, except
           ----------------
as  indicated  herein,  and  remain  in  full force and effect; Assignor has not
previously  sold.  assigned,  transferred,  or  pledged the Tenant Leases or the
Rents,  or  any  part  thereof,  whether now due or hereafter to become due; the
Rents  now  due, or to become due, for any periods subsequent to the date hereof
have  not  been  collected  and  that  payment thereof has not been anticipated,
waived  or released, discounted, set off or otherwise discharged or compromised;
and  Assignor  has  not received any funds or deposits from any Tenant for which
credit  has  not  already  been  made  on  account  of  the  accrued  Rents.
                                    ARTICLE 5
                              AFFIRMATIVE COVENANTS
Assignor  hereby  unconditionally covenants and agrees with Assignee as follows:
     5.1     Performance.  Assignor  shall  observe, perform and discharge, duly
             -----------
and  punctually, all and singular, the obligations, terms, covenants, conditions
and  warranties  of the Tenant Leases to be observed, performed or discharged by
landlord thereunder; and Assignor shall promptly deliver to Assignee any notices
received  with  respect to the Tenant Leases alleging any failure on the part of
the  Assignor  to  observe,  perform  and  discharge  the  same.
     5.2     Notification to Tenants. Upon written request by Assignee, Assignor
             -----------------------
shall  notify  and  direct,  in writing, such and every present or future Tenant
that  any  Credit  Enhancement  delivered  to  Assignor  by such Tenant shall be
retained  by  Assignor  but  assigned  to  Assignee.
     5.3     Enforcement.  Assignor  shall  enforce  or  secure  in  the name of
             ------------
Assignor the performance of each and every obligation, term, covenant, condition
and  agreement  in the Tenant Leases by any Tenant to be performed, and Assignor
shall appear in and defend any action or proceeding arising under, occurring out
of  or in any manner connected with the Tenant Leases or the obligations, duties
or  liabilities  of  Assignor  and  any  Tenant  thereunder, and upon request by
Assignee,  Assignor will do so in the name and on behalf of Assignee, but at the
expense  of Assignor, and Assignor shall pay all costs and expenses of Assignee,
including  reasonable  attorneys'  fees  and  disbursements,  in  any  action or
proceeding  in  which  Assignee  may  appear.
     5.4     Anticipation  or  Hypothecation  of  the  Rents.  Assignor  hereby
             -----------------------------------------------
covenants  and  agrees (a) upon and after an Event of Default hereunder or under
any  of  the  Security  Documents  and while the same shall continue, to give to
Assignee  duplicate  notice of each default by each Tenant and copies of any and
all  notices  and communications received from any Tenant promptly upon delivery
or  receipt  thereof; (b) to comply with the terms and provisions of each Tenant
Lease;  (c)  not to assign, transfer, pledge, mortgage or otherwise encumber any
Tenant  Lease;  (d)  not  to  assign,  transfer,  pledge,  mortgage or otherwise
encumber  any  Rents;  (e) not to collect, accept from any Tenant, or permit any
Tenant  to  pay any Rents for more than one month in advance (whether in cash or
by  evidence  of  indebtedness)  excepting,  however, the collection of security
deposits;  (f)  except in the ordinary course of business and in accordance with
past  practice  and  custom,  not  to waive, excuse, condone, discount, set-off,
compromise  or  in  any  manner  release or discharge any Tenant of and from any
obligations,  covenants,  conditions  or  agreements  to  be  kept,  observed or
performed  by  such  Tenant,  under  and  in  accordance  with  the terms of the
respective  Tenant  Lease;  and (g) not to enter into any Tenant Lease or amend,
modify,  extend or renew any Tenant Lease for a time period extending beyond the
term  of  the  Lease, without prior written approval of Assignee, which approval
shall  not  be  unreasonably  withheld.
     5.5     Delivery  of  the  Tenant Leases; Further Acts and Assurance. Until
             ------------------------------------------------------------
the Obligations secured hereby have been paid in full, performed and discharged,
Assignor  shall  enter  into  only  leases of the Property in a form approved in
writing  by  Assignee  and  shall  upon  the written request of Assignee deliver
executed  copies  of  all  existing  and all other and future Tenant Leases when
executed  upon all or any part of the Property and will transfer and assign such
other  and  future  Tenant  Leases  upon the same terms and conditions as herein
contained, and Assignor hereby covenants and agrees to make, execute and deliver
to  Assignee,  upon demand and at any time or times, any and all assignments and
other  documents  and instruments which Assignee may deem advisable to carry out
the  true  purpose  and  intent  of  this  Assignment  .
                                    ARTICLE 6
                                EVENTS OF DEFAULT
The  term  "Event  of  Default",  as  used  herein, shall mean the occurrence or
happening,  at  any  time  and  from  time  to  time,  of any one or more of the
following:
     6.1     Performance  of  Obligations.  If  Assignor  shall  fail, refuse or
             ----------------------------
neglect  to  perform  and  discharge  fully  and  timely  any of its obligations
hereunder  and  such failure is not cured by Assignor within a period of 30 days
after  receipt  by  Lessee  of written notice thereof from Assignee, unless such
failure  cannot with due diligence be cured within a period of 30 days, in which
case  such failure shall not be deemed to continue if Assignor proceeds promptly
and  with  due diligence to cure the failure and diligently completes the curing
thereof  (as  soon  as  reasonably  possible).
     6.2     Security  Documents.  The  occurrence of any Event of Default under
             -------------------
and  as  defined  in  the  Lease  or  any  other  of  the  Security  Documents.
                                    ARTICLE 7
                                    REMEDIES
     7.1     Remedies.  Upon  or  any  time after the occurrence, and during the
             --------
continuance  thereof, of an Event of Default hereunder, Assignee, at its option,
shall have the complete right, power and authority hereunder, then or thereafter
until  the  Event of Default is cured, to exercise and enforce any or all of the
following  rights  and  remedies  set  out  in  this  Article  7:
          (a)     To  terminate  the  License  and  then and thereafter without
taking possession of the Property, to the extent permitted by law, in Assignor's
own  name,  to  demand, collect, receive, sue for, attach and levy the Rents and
give  proper  receipts,  releases and acquittances therefor, and after deducting
all  necessary  and  proper  costs  and expenses of operation and collection, as
determined  by Assignee, including reasonable attorneys' fees, and apply the net
proceeds  thereof,  together with any funds of Assignor deposited with Assignee,
in  reduction  or  repayment  of  the  Obligations  in such order of priority as
Assignee  may,  in  its sole discretion, determine in accordance with applicable
law;
          (b)     To  declare the Lease in default and, at its option, exercise
all  of  the  rights  and  remedies  contained  in the Lease or any other of the
Security  Documents;
          (c)     Without  regard  to  the  adequacy  of  the security, with or
without  any  action  or  proceeding through any person or by any agent, or by a
receiver  to be appointed by a court of competent jurisdiction, and irrespective
of  Assignor's possession, then or thereafter to enter upon, take possession of,
manage  and  operate  the  Property  or any part thereof; make, modify, enforce,
cancel  or  accept  surrender  of  a  Tenant Lease now in effect or hereafter in
effect  on the Property or any part thereof; remove and evict any Tenant that is
in  default of the applicable Tenant Lease; increase or decrease the Rents under
a  Tenant  Lease;  decorate, clean and repair, and otherwise do any act or incur
any  cost or expense which Assignee may deem reasonably necessary to protect the
status  and  value  of  the Property as fully and to the same extent as Assignor
could  do  if  in  possession  thereof; and in such event, to apply the Rents so
collected  to the operation and management of the Property, but in such order or
priority  as Assignee shall deem proper, and including the payment of reasonable
management,  brokerage and attorneys' fees and disbursements, and payment of the
Obligations  and  to  the  establishment and maintenance, without interest, of a
reserve  for  replacements;  and
          (d)     Any  other  remedy available to Assignee at law or in equity.
     7.2     Exculpation  of  Assignee.  The  acceptance  by  Assignee  of  this
             -------------------------
Assignment,  with  all  of  the rights, powers, privileges and authority created
hereby,  shall not, prior to entry upon and taking possession of the Property by
Assignee,  nor  thereafter  or  at any time or in any event obligate Assignee to
take  any  action  hereunder  or  to  expend  any money or incur any expenses or
perform  or  discharge any obligation, duty or liability under a Tenant Lease or
to  assume  any  obligation or responsibility for any security deposits or other
deposits  delivered  to  Lessee  by  a  Tenant and not assigned and delivered to
Assignee,  nor  shall  Assignee be liable in any way for any injury or damage to
persons or property sustained by any person, firm or corporation in or about the
Property  not attributable to the negligence or fault of Assignee, its agents or
affiliates.
     7.3     No  Waiver  or  Election  of  Remedies.
             --------------------------------------
          (a)     Waiver.  Neither  the collection of the Rents and application
                   ------
as  provided  for in this Assignment nor the entry upon and taking possession of
the  Property  by Assignee shall be deemed to cure or waive any Event of Default
or  waive, modify or affect any notice of default under any Security Document or
invalidate  any  act  done  pursuant  to  any  such  notice.  If  Assignee shall
thereafter  elect  to  discontinue  the  exercise  of  any  such right or remedy
hereunder,  such  right or remedy may be reasserted at any time and from time to
time  following  any  subsequent  Event  of  Default.
          (b)     Election  of  Remedies. The failure of Assignee to assert any
                   ----------------------
of  the terms, covenants or conditions of this Assignment for any period of time
or  at  any time or times shall not be construed or deemed to be a waiver of any
such right, and nothing herein contained nor anything done or omitted to be done
by  Assignee  pursuant  to  this Assignment shall be deemed to be an election of
remedies  or  a  waiver  by Assignee of any of its rights and remedies under any
other  Security  Document or under the law. The right of the Assignee to collect
and  enforce  the  payment and performance of the Obligations and to enforce any
security  therefor  may  be  exercised  by  the  Assignee  either  prior  to  or
simultaneously  with  or  subsequent  to  any  action  taken  hereunder.
     7.4     Appointment  of Attorney-in-Fact. Upon and following the occurrence
             --------------------------------
of  an  Event  of  Default  remaining  uncured,  Assignor hereby constitutes and
appoints  Assignee  the  true  and  lawful  attorney-in-fact,  coupled  with  an
interest,  of  Assignor  and in the name, place and stead of Assignor to demand,
sue  for,  attach, levy, recover and receive any premium or penalty payable upon
the  exercise  by  a  Tenant under a Tenant Lease of a privilege of cancellation
originally  provided  in such Tenant Lease and to give proper receipts, releases
and  acquittances therefor and, after deducting expenses of collection, to apply
the  net  proceeds  as  a credit upon any portion of the Obligations selected by
Assignee,  notwithstanding the fact that such portion of the Obligations may not
then  be  due  and  payable or that such portion of the Obligations is otherwise
adequately  secured; and Lessee does hereby authorize and direct any such Tenant
to  deliver  such  payment  to  Assignee in accordance with this Assignment, and
Assignor  hereby ratifies and confirms that Assignee, as attorney-in-fact, shall
do  or  cause  to  be  done  by  virtue  of the powers granted hereby. Under the
circumstances  referred  to  in  this  Section 7.4, the foregoing appointment is
irrevocable  and  continuing,  and  such  rights, powers and privileges shall be
exclusive  in  Assignee,  its successors and assigns, so long as any part of the
Obligations  secured  hereby  remain  unpaid  and  undischarged.
                                    ARTICLE 8
                                  MISCELLANEOUS
     8.1     Performance  at  Assignor's  Expense.  The  cost  and  expense  of
             ------------------------------------
performing  or  complying  with  any  and  all of the Obligations shall be borne
solely by Assignor, and no portion of such cost and expense shall be, in any way
and  to  any  extent  credited  against  any  installment  on  or portion of the
Obligations.
     8.2     Survival  of  Obligations.  Each  and  all of the Obligations shall
             -------------------------
survive  the  execution  and  delivery  of  the  Security  Documents  and  the
consummation  of  the transaction called for therein, and shall continue in full
force  and  effect  until  the Obligations shall have been paid and performed in
full.
     8.3     Further  Assurances.  Assignor,  upon the request of Assignee, will
             -------------------
execute,  acknowledge,  deliver  and record and/or file such further instruments
and  do  such further acts as may be necessary, desirable or proper to carry out
more  effectively  the  purpose  of the Security Documents and to subject to the
liens  and security interests thereof any property intended by the terms thereof
to  be  covered  thereby,  including  specifically,  but without limitation, any
renewals, substitutions, replacements, modifications or amendments to the Tenant
Leases.
     8.4     Recording  and  Filing.  Assignor will cause the Security Documents
             -----------------------
and  all  amendments  and  supplements  thereto and substitutions therefor to be
recorded,  filed,  re-recorded  and refiled in such manner and in such places as
Assignee  shall  reasonably  request,  and  will pay all such recording, filing,
re-recording  and  refiling  taxes,  fees  and  other  charges.
     8.5     Notices.  Any  notices, demands, approvals and other communications
             -------
provided  for  in  this Assignment shall be in writing and shall be delivered by
telephonic  facsimile, overnight air courier, personal delivery or registered or
certified  U.S.  Mail  with  return  receipt  requested,  postage  paid,  to the
appropriate  party  at  its  address  as  follows:
If  to  Assignee:
3310  West  End  Avenue,  Suite  700
Nashville,  Tennessee  37203
Attention:  John  M.  Bryant,  Jr.,  Esq.
Telephone:  615-269-8175
Telecopy:    615-269-8122
With  a  copy  to:
John  A.  Gupton,  II
Baker,  Donelson,  Bearman  &  Caldwell
211  Commerce  Street,  Suite  1000
Nashville,  Tennessee  37201
Telephone:  615-726-7351
Telecopy:    615-744-7351
If  to  Assignor:
Emeritus  Corporation
3131  Elliott  Avenue,  Suite  500
Seattle,  Washington  98121
Telephone:  206/298-2909
Telecopy:  206/301-4500
Attn:  Raymond  Brandstrom
With  a  copy  to:
The  Nathanson  Group  PLLC
1520  Fourth  Avenue,  Sixth  Floor
Seattle,  Washington  98101
Telephone:  206-623-6239
Telecopy:  206-623-1738
Attn:  Randi  Nathanson

Addresses  for  notice may be changed from time to time by written notice to all
other  parties.  Any  communication  given  by  mail  will be effective upon the
earlier  of (i) actual receipt or refusal of receipt, as indicated by the return
receipt;  (ii)  if  given  by  telephone facsimile, when sent and confirmed; and
(iii)  if given by personal delivery or by overnight air courier, when delivered
to  the  appropriate  address  set  forth.
     8.6     Successors and Assigns.  All of the terms of the Security Documents
             ----------------------
shall  apply to, be binding upon and inure to the benefit of the parties hereto,
their  successors,  assigns,  heirs  and  legal  representatives,  and all other
persons  claiming  by,  through  or  under  them.
     8.7     No Waiver; Severability.  Any failure by Assignee to insist, or any
             -----------------------
election  by  Assignee not to insist, upon strict performance by Assignor of any
of  the  terms,  provisions or conditions of the Security Documents shall not be
deemed  to  be  a  waiver  of  same or any other terms, provisions or conditions
thereof,  and  Assignee  shall have the right at any time or times thereafter to
insist upon strict performance by Assignor of any and all such terms, provisions
and  conditions.  The  Security  Documents  are  intended  to  be  performed  in
accordance  with,  and  only  to  the  extent permitted by, all applicable legal
requirements.  If  any  provision  of  any  of  the  Security  Documents  or the
application  thereof  to any person or circumstance shall, for any reason and to
any  extent,  be  invalid  or  unenforceable,  then neither the remainder of the
instrument  in  which  such  provision to other persons or circumstances nor the
other  instruments  referred  to  herein  shall be affected thereby, but rather,
shall  be  enforced  to  the  greatest  extent  permitted  by  law.
8.8     Entire  Agreement  and Modification. This Assignment contains the entire
        -----------------------------------
agreement  between  the  parties  relating to the subject matter hereof, and all
prior agreements relative thereto which are not contained herein are terminated.
This  Assignment  may  not  be amended, revised, waived, discharged, released or
terminated  orally,  but only by a written instrument or instruments executed by
the  party  against  which  enforcement  of  the  amendment,  revision,  waiver,
discharge,  release or termination is asserted. Any alleged amendment, revision,
waiver,  discharge,  release or termination which is not so documented shall not
be  effective  as  to  any  party.
     8.9     Counterparts.  This  Assignment  may  be  executed in any number of
             ------------
counterparts,  each  of  which  shall  be an original, but all of which together
shall  constitute  but  one  instrument.
     8.10     Applicable  Law.  The  Security Documents shall be governed by and
              ---------------
construed  according  to the laws of the State of Tennessee from time to time in
effect  except  to  the  extent  preempted  by  United States federal law. It is
expressly  stipulated  and agreed to be the intent of Lessee and Assignee at all
times  to  comply  with  applicable  law now or hereafter governing any interest
payable  under  the Lease, including any notes evidencing the Obligations or any
part  thereof.  If  the  applicable  law is ever revised, repealed or judicially
interpreted  so  as  to  render  usurious any amount called for under any of the
Security  Documents,  or  if  Assignee exercise of the opinion to accelerate the
maturity of the Obligations or if any prepayment by Assignor results in Assignor
having  paid  any  interest  in  excess  of  that  permitted  by law, then it is
Assignor's  and  Assignee's  express  intent  that  all excess amounts therefore
collected  by  Assignee  be  credited on the principal balance of he Obligations
(or,  if  the  Obligations have been paid in full, refunded to Assignor, and the
provisions  of  the  Security  Documents  immediately be deemed reformed and the
amounts thereafter collectible hereunder and thereunder reduced, so as to comply
with  the  then  applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder or thereunder). All sums paid or agreed to
be  paid  to  Assignee  for the use, forbearance or detention of the Obligations
shall  to  the  extent  permitted  by  applicable  law,  be amortized, prorated,
allocated  and  spread throughout the full term of the Obligations until payment
in  full  so  that the rate or amount of interest on account of such obligations
does  not exceed the usury ceiling from time to time in effect and applicable to
the  Obligations  so  long  as  debt  is  outstanding  thereunder.
     8.11     Headings.  The Article, Paragraph and Subparagraph headings hereof
              --------
are inserted for convenience of reference only and shall in no way alter, modify
or  define,  or  be used in construing, the text of such Articles, Paragraphs or
Subparagraphs.
     [COUNTERPART  SIGNATURE  PAGES  FOLLOW]

<PAGE>
This  Lease  EXECUTED  as of the date first above written, to be effective as of
the  date  first  above  written.
ASSIGNOR:
EMERITUS  CORPORATION

        By:/s/  Raymond R. Brandstrom
        Raymond R. Brandstrom
Its:    Chief Financial Officer
STATE  OF               )
                    :
_______________COUNTY     )
I,  the  undersigned  authority,  a Notary Public in and for said County in said
State,  hereby  certify  that  ________________________,  whose  name  as
_______________________,  of  Emeritus Corporation, a Washington corporation, is
signed  to  the foregoing instrument and who is known to me, acknowledged before
me  on this day that, being informed of the contents of said instrument, he/she,
as  such  officer and with full authority, executed the same voluntarily for and
as  the  act  of  said  corporation.
GIVEN  under  my  hand  and  seal,  this  __  day  of  ____________,  2003.
[  NOTARIAL  SEAL  ]
Notary  Public
My  Commission  Expires

<PAGE>
------
This  Lease  EXECUTED  as of the date first above written, to be effective as of
the  date  first  above  written.

ASSIGNEE:
HR  ACQUISITION  I  CORPORATION

By:     /s/  John M. Bryant, Jr.
        John M. Bryant, Jr.
Its:    VP/Assistant General Counsel

STATE  OF               )
                    :
                COUNTY)
I,  the  undersigned  authority,  a Notary Public in and for said county in said
state,  hereby  certify that                    , whose name as               of
HR Acquisition I Corporation, a Maryland corporation, is signed to the foregoing
instrument  and  who  is  known  to me, acknowledged before me on this day that,
being  informed  of the contents of the said instrument, he, as such officer and
with  frill  authority, executed the same voluntarily for and as the act of said
corporation.
GIVEN  under  my  hand  and  seal,  this  ____  day  of  __________,  2003.
[  NOTARIAL  SEAL  ]
Notary  Public
My  Commission  Expires

<PAGE>
------
This  Lease  EXECUTED  as of the date first above written, to be effective as of
the  date  first  above  written.

ASSIGNEE:
CAPSTONE  CAPITAL  OR  PENNSYLVANIA,  INC.

By:     /s/  John M. Bryant, Jr.
        John M. Bryant, Jr.
Its:    VP/Assistant General Counsel
STATE  OF               )
                    :
                COUNTY)
I,  the  undersigned  authority,  a Notary Public in and for said county in said
state,  hereby  certify that                    , whose name as               of
Capstone Capital of Pennsylvania, Inc., a Pennsylvania corporation, is signed to
the  foregoing instrument and who is known to me, acknowledged before me on this
day  that,  being  informed  of the contents of the said instrument, he, as such
officer  and  with frill authority, executed the same voluntarily for and as the
act  of  said  corporation.
GIVEN  under  my  hand  and  seal,  this  ____  day  of  __________,  2003.
[  NOTARIAL  SEAL  ]
Notary  Public
My  Commission  Expires

<PAGE>
This  Lease  EXECUTED  as of the date first above written, to be effective as of
the  date  first  above  written.

ASSIGNEE:

HRT  HOLDINGS,  INC.

By:     /s/  John M. Bryant, Jr.
        John M. Bryant, Jr.
Its:    VP/Assistant General Counsel
STATE  OF               )
                    :
                COUNTY)
I,  the  undersigned  authority,  a Notary Public in and for said county in said
state,  hereby  certify that                    , whose name as               of
HRT  Holdings,  Inc.,  a  Delaware  corporation,  is  signed  to  the  foregoing
instrument  and  who  is  known  to me, acknowledged before me on this day that,
being  informed  of the contents of the said instrument, he, as such officer and
with  frill  authority, executed the same voluntarily for and as the act of said
corporation.
GIVEN  under  my  hand  and  seal,  this  ____  day  of  __________,  2003.
[  NOTARIAL  SEAL  ]
Notary  Public
My  Commission  Expires

<PAGE>
                                    Exhibit A

<PAGE>

                                    EXHIBIT E
                        CONTRACT FOR SALE OF REAL ESTATE
     THIS  CONTRACT  of  sale made this _____ day of               , 200      by
and  between                         ,  a               ,  hereinafter  called
"Seller",  and                     hereinafter  called  "Buyer".
     WHEREAS,  Seller  desires  to  sell  and Buyer desires to purchase the real
property  more  particularly described on Exhibit "A" attached hereto and made a
part  hereof  (the  "Property');  and
     NOW,  THEREFORE,  in  consideration  of  the  premises  and  the  terms and
conditions  hereinafter  recited,  Seller  shall  sell the Property and Buyer or
Buyer's  designee  shall  purchase  the  Property  as  follows:
     1.     Seller  shall sell and tender to Buyer or Buyer's designee a limited
warranty  deed  for  the  Property  in  the  form attached hereto as Exhibit B.
     2.     Buyer  shall pay or cause to be paid to Seller in good funds the sum
of  $                     for  the  purchase  of  the  Property.
     -
     3.     Adjustments  to  be  made  at  time  of  closing:
          (i)  If  and  to  the extent that as of the Closing Date taxes for the
period  prior  to                       remain  due and owing the same shall be
                   -
paid  by  Seller  and  all  other  taxes  for  the  period  subsequent  to
shall  be  paid  by  Buyer.  Rent  with  respect  to  the Property due under the
existing Lease dated                     between Seller, as Landlord, and Buyer,
as  Tenant  (the  "Lease")  shall  be  prorated  as  of  the  date  of  Closing.
          (ii)  Sale  to  be closed on or before twenty (20) business days after
satisfaction  of  all  conditions  to  Seller's  obligations to sell and Buyer's
obligations  to  purchase  the  Property  but  in  no  event  later  than
                                                                           -
..
     4.     Conveyance  to  be  subject to existing building restrictions and/or
zoning  ordinances  and easements aforesaid and, except as otherwise provided in
Paragraph  6,  all  other  matters  of  record.
     5.     Title  Insurance  provided  by  Seller:  None
     6.     Buyer  may  review  title  to  the  Property.  Seller  shall have no
obligation  to  cure  title  objections other than liens of any mortgage held or
granted  by  Seller  or  its  assigns,  any  leases  entered  into  by Seller or
predecessors  in  interest  with  any  party, including Buyer and any options to
purchase  the  Property granted by Seller or its predecessors in interest to any
party,  including  Buyer, which Seller shall cause to be released at the closing
by  execution  and  delivery  of  any  and  all  necessary  release  documents
(collectively,  the  "Release").  Seller further agrees to remove any exceptions
or encumbrances to title which are created by, under or through Seller after the
date of this Contract without Buyer's consent.  Any other title objections Buyer
may cure at its sole cost and expense.  Buyer may terminate this Contract if the
title  materially  affects  Buyer's  or  Buyer's  designee's intended use of the
Property.
     7.     At  the  closing,  Seller  shall furnish and deliver for delivery to
Buyer  and/or  Buyer's  designee, the deed, an amendment to the Lease to reflect
the  termination  of  the  Lease  with  respect  to  the  Property  (the  "Lease
Amendment"),  a  bill  of  sale,  a certificate of non-foreign status, a closing
statement, the Release and such other documents and instruments as are customary
in the jurisdiction in which the Property is located to vest in Buyer fee simple
title  to  the  Property and release all security interests and rights of Seller
and any third party other than Buyer to enable Buyer to secure extended coverage
title  insurance  policies  at  Closing,  each  in form and substance reasonably
acceptable  to  Buyer  and/or  Buyer's  designee  and  each  duly  executed  and
acknowledged  by  Seller.
     8.     At  the  closing,  Buyer  shall  furnish  and deliver or cause to be
furnished  and  delivered  for  delivery  to  Seller:
          a.       Cash, wired funds or cashier's check payable to the order of
Seller  representing  the  cash  portion  of  the  Purchase  Price.
          b.       Such instruments as are necessary, or reasonably required by
Seller  to  evidence  the authority of Buyer to consummate the purchase and sale
transaction contemplated hereby and to execute and deliver the closing documents
on  the  Buyer's  part  to  be  delivered.
          c.       A  closing  statement.
          d.     The  Lease  Amendment.
          e.     Additionally  at  Closing  all rents due shall be prorated and
all  security  deposits  and  tax  impounds  held by Seller shall be returned to
Buyer.
          f.     Any  excise or transfer taxes shall be paid in accordance with
applicable  law;  if  no  such  law exists, in accordance with the custom of the
state  or  county  where  the  Property  is  located.
     9.     Seller  shall  be  deemed  to  be  in  default  hereunder  upon  the
occurrence  of  the  following  events:  (i)  any  of  Seller's  warranties  or
representations,  if  any,  set  forth  herein  shall  be untrue when made or at
closing;  or  (ii)  Seller  shall  fail  to  meet,  comply  with, or perform any
covenant,  agreement  or  obligation on its part required within the time limits
and  in  the  manner  required  in  this  Contract.
     10.     Seller  represents  to  Buyer  the  following:
          a.     Seller  is  a               , duly organized, validly existing
and  in good standing under the laws of the State of               .  Seller has
all  requisite  corporate  power and authority to own and operate its properties
and  to  carry  on its business as now conducted and as proposed to be conducted
and  to  enter  into  and carry out the terms of this Contract and any documents
executed  in  furtherance  hereof.
          b.     Seller is duly authorized to make and enter into this Contract
and  to carry out the transactions contemplated herein and is duly authorized to
make  and enter into any other documents executed in furtherance hereof to which
it is or will be a party and to carry out the transactions contemplated therein.
This  Contract  has been duly executed and delivered by Seller and is the legal,
valid  and binding obligation of Seller enforceable against Seller in accordance
with  its  terms,  except  as  such  enforceability may be limited by applicable
creditors  rights  laws  and  general  principles  of  equity.  All of the other
documents  to  which  Seller  is  or  will  be  a party have been, or will be by
Closing,  duly  executed  and  delivered  by  Seller, and each is, or will be by
Closing,  a  legal,  valid and binding obligation of Seller, enforceable against
Seller  in  accordance  with  its  terms,  except  as such enforceability may be
limited  by  applicable  creditors rights laws and general principles of equity.
          c.     The  execution,  delivery and performance of this Contract and
any  other  documents executed in furtherance hereof to which it is or will be a
party  and  the  consummation  of the transaction thereby contemplated shall not
result  in  any  breach  of,  or  constitute  a  default under, or result in the
acceleration  of, or constitute an event which, with the giving of notice or the
passage  of  time,  or  both,  could  result  in  default or acceleration of any
obligations  of  Seller  under  any  permit,  contract,  mortgage,  lien, lease,
agreement, instrument, franchise, arbitration award, judgment, decree, bank loan
or  credit  agreement,  trust indenture or other instrument to which Seller is a
party  or  by  which  Seller  may  be  bound  or  affected.
          d.     Except for such regulatory approvals, consents and filings, if
any,  which  Buyer  is  required to secure in connection with its acquisition of
title  to the Property under any licensure or other health care law to which the
Property  may  be subject (as to which Seller makes no representation and has no
knowledge)  (the  "Health  Care  Approvals"),  no  consent  or approval or other
authorization of, or exemption by, or declaration or filing with, any person and
no  waiver  of any right by any person is required to authorize or permit, or is
otherwise  required as a condition of the execution, delivery and performance of
Seller's  obligations  under  the  Contract  and any other documents executed in
furtherance  hereof  to  which  it  is  or  will  be  a  party.
          e.     The  Seller  is not a "foreign person" as that term is defined
in  the  Internal  Revenue  Code  of  1986,  as  amended  (the  "Code"), and the
regulations  promulgated  pursuant  thereto.
          f.     To  Seller's  actual  knowledge,  all  copies  of  documents
furnished  or  to  be  furnished  to the Buyer by the Seller or on its behalf in
connection with this Contract and the proposed purchase and sale of the Property
are  true  and  complete  copies  of  the  originals.
          g.     Other  than  the  Lease  and  as  set  forth in documents duly
recorded  in  the  public  records of the jurisdictions in which the Property is
located,  Seller  has  not  entered  into  and  will  not  enter  into any other
agreements  granting any person a right or interest in the Property.  Seller has
not  obligated and will not obligate itself in any manner whatsoever to sell the
Property  or  any  portion  thereof  to  any  party  other than Buyer or Buyer's
designee.
          h.     There  is  no claim, litigation, or proceeding pending against
Seller  with  respect  to  which  Seller  has  been  served  notice  (except for
mechanics'  liens  and  other  litigation,  claims  or  proceedings  arising  or
occurring  as  a result of the actions or inactions of  Buyer, its affiliates or
any  Person  acting  by,  through or under them), or, to Seller's current actual
knowledge,  threatened  against  Seller,  which  could  prevent  or  hinder  the
consummation  of  the transactions contemplated hereby or call into question the
validity  of any of the Contract and any other documents executed in furtherance
hereof  to  which it is or will be a party or any action taken or to be taken in
connection with the transactions contemplated thereunder or which relates to the
Property  or  the  transactions  contemplated  by  this  Contract.
          i.     Seller  has  received  no  written  notice of any condemnation
proceedings  relating  to  the  Property.
          j.     Except  as set forth on Schedule 1 attached hereto, Seller has
not received written notice, nor does Seller otherwise have actual knowledge, of
any  uncured  violation  of  any  federal,  state,  or local law relating to the
ownership,  use  or  operation  of  the  Property.
          k.     Seller  is  the  owner  of the Property and has, or at closing
will  have,  good  and  marketable title thereto free and clear of all liens and
encumbrances other than the encumbrances approved by Buyer pursuant to Paragraph
6.
     11.     Buyer's obligation to purchase Property hereunder is subject to the
following  conditions,  any  one  or  all  of  which  may  be waived by Buyer:
          (i)     The  title  insurance company shall issue with respect to the
Property  as  of the Closing Date, an owner's policy of title insurance to Buyer
or Buyer's designee in the full amount of the purchase price (the "Owner's Title
Policy"),  with  extended  coverage  without  survey  exception  and which shall
reflect  only  those  title  exceptions  approved  by  Buyer  in accordance with
Paragraph  6  and subject to such endorsements as may be reasonably requested by
Buyer  or  Buyer's  designee.
          (ii)     Buyer  shall  have  received  an ALTA survey of the property
showing  no  encroachments  not  acceptable to Buyer and certified to Buyer, the
title  insurance  company  and  Buyer's  designee,  if  applicable.
          (iii)     Buyer  shall  be  satisfied in its sole discretion that the
zoning  applicable  to  the  Property  permits  the  continued  operation of the
assisted  living facility located thereon and permits the reconstruction of such
facility  without the need to secure further approval in the event of the damage
or  destruction  thereof;  provided,  however,  this  condition  shall be deemed
satisfied unless Buyer advises Seller in writing at Closing that it has not been
satisfied.
          (iv)     No  material portion of the Property shall have been damaged
or destroyed by fire or other casualty, or shall have been taken or condemned by
any  public or quasi-public authority under the power of eminent domain.  In the
event  of  damage,  destruction  or  condemnation  notwithstanding any provision
herein  to  the  contrary, Buyer's remedies shall be limited to either (i) close
the  purchase  and  receive  the  insurance  or  condemnation  proceeds  or (ii)
terminate its obligation under this Agreement and proceed to exercise its rights
pursuant  to  the  Lease  between  Landlord  and  Buyer.
          (v) Seller shall not be in default, where said default cannot be cured
by  Closing, under any mortgage, contract, lease or other agreement affecting or
relating  to  the  Property.
          (vi)     Seller  shall  have  performed  all of its obligations under
this Agreement that are to be performed prior to or at Closing to the extent the
same  have  not  been  waived  by  Buyer  in  accordance  with the terms hereof.
          (vii)     Seller's  representations  and warranties contained in this
Agreement  or  in  any certificate or document delivered in connection with this
Agreement or the transactions contemplated herein shall be true at and as of the
date  of  Closing  as though such representations and warranties were then again
made.
     12.     Except as otherwise provided herein, Buyer shall be deemed to be in
default  hereunder  if  Buyer  shall fail to deliver, at the Closing, any of the
items  specified  in  Section  8  hereof  for any reason other than a default by
                      ----------
Seller  hereunder.
     13.     In  the  event Buyer or Seller shall be in default hereunder, Buyer
and  Seller's  remedy shall be to terminate this Contract in which event neither
party  shall  have  any  further  obligations or liability hereunder, each party
waiving  all  other  rights or remedies in the event of such default.  The Lease
shall  continue  in  full  force  and  effect.
     14.     All  notices, requests and other communications under this Contract
shall  be  in  writing  and shall be either (a) delivered in person, (b) sent by
certified mail, return receipt requested, (c) delivered by a recognized delivery
service  of  (d)  sent  by  facsimile  transmission  and  addressed as follows:
If  intended  for  Seller:
                         Healthcare  Realty  Trust  Incorporated
                         3310  West  End  Avenue,  Suite  700
                         Nashville,  Tennessee  37203
                         Phone:  (615)  269-8175
                         Fax:  (615)  269-8122
With  a  copy  to:                    John  A.  Gupton  III,  Esq
                         Baker,  Donelson,  Bearman  &  Caldwell
                         211  Commerce  Street,  Suite  1000
                         Nashville,  Tennessee  37201
                         Phone:  (615)  726-5600
                         Fax:  (615)  726-0464
If  intended  for  Buyer:               Emeritus  Corporation
                         3131  Elliott  Avenue
                         Suite  500
                         Seattle,  Washington  98121
                         Phone:  (206)  298-2909
                         Fax:  (206)  301-4500
                         Attn:  Raymond  R.  Brandstrom
With  a  copy  to:                    The  Nathanson  Group  PLLC
                         520  Fourth  Avenue
                         Sixth  Floor
                         Seattle,  Washington  98101
                         Phone:  (206)  623-6239
                         Fax:  (206)  623-1738
                         Attn:  Randi  S.  Nathanson
or  at  such  other  address,  and to the attention of such other person, as the
parties  shall  give  notice  as  herein  provided.  A notice, request and other
communication shall be deemed to be duly received if delivered in person or by a
recognized  delivery  service,  when left at the address of the recipient and if
sent  by  facsimile,  upon  receipt  by  the  sender  of  an  acknowledgment  or
transmission  report  generated by the machine from which the facsimile was sent
indicating  that  the  facsimile  was  sent  in  its entirety to the recipient's
facsimile  number;  provided that if a notice, request or other communication is
served by hand or is received by facsimile on a day which is not a business day,
or  after 5:00 P.M. on any business day at the addressee's location, such notice
or  communication  shall  be deemed to be duly received by the recipient at 9:00
a.m.  on  the  first  business  day  thereafter.
     15.     This  Contract  embodies  and  constitutes the entire understanding
between  the  parties  with respect to the transactions contemplated herein, and
all  prior  or  contemporaneous  agreements, understandings, representations and
statements (oral or written) related to the transactions contemplated herein are
merged  into  this Contract.  Neither this Contract nor any provision hereof may
be  waived,  modified, amended, discharged or terminated except by an instrument
in  writing  signed  by  the  party against whom the enforcement of such waiver,
modification,  amendment,  discharge  or termination is sought, and then only to
the  extent  set  forth  in  such  instrument.
     16.     THIS  CONTRACT  AND  THE  TRANSACTIONS CONTEMPLATED HEREBY SHALL BE
GOVERNED  BY  AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE(S) IN WHICH
THE  PROPERTY IS LOCATED.  The parties agree that jurisdiction and venue for any
litigation  arising out of this Contract shall be in the U.S. District Court for
the  Middle  District  of  Tennessee  and  accordingly,  consent  thereto.
     17.     This  Contract shall be binding upon and shall inure to the benefit
of  the  parties  hereto  and their respective heirs, executors, administrators,
legal  representatives,  successors,  and  assigns.
     18.     With  respect  to  all  provisions of this Contract, time is of the
essence.  However,  if  the first or last date of any period which is set out in
any provision of this Contract falls on a day which is not a Business Day, then,
in  such  event, the time of such period shall be extended to the next day which
is  a  Business  Day.
     19.     In  the  event  of  any  litigation  between the parties under this
Contract,  the  prevailing party shall be entitled to reasonable attorneys' fees
and  court  costs  at  all  trial  and  appellate  levels.
     THE  PROPERTY  IS SOLD BY SELLER AND ACCEPTED BY BUYER AS IS, WHERE IS, AND
WITH  ALL  FAULTS,  AND  WITHOUT  ANY  REPRESENTATIONS  OR WARRANTIES WHATSOEVER
EXPRESSED  OR IMPLIED, WRITTEN OR ORAL, EXCEPT FOR THE SPECIAL WARRANTY OF TITLE
AND  OTHER  SPECIFIC REPRESENTATIONS MADE BY SELLER AS HEREIN PROVIDED, IT BEING
THE  INTENTION  OF  SELLER  AND  BUYER  HEREUNDER  TO EXPRESSLY REVOKE, RELEASE,
NEGATE,  AND  EXCLUDE  ALL  REPRESENTATIONS  AND  WARRANTIES  INCLUDING, BUT NOT
LIMITED  TO, ANY AND ALL EXPRESS OR IMPLIED REPRESENTATIONS AND WARRANTIES AS TO
(I)  THE  CONDITION  OF  THE  PROPERTY OR ANY ASPECT THEREOF, INCLUDING, WITHOUT
LIMITATION,  ANY  AND  ALL  EXPRESS  OR  IMPLIED  REPRESENTATIONS AND WARRANTIES
RELATED  TO  SUITABILITY  FOR  HABITATION,  MERCHANTABILITY,  OR  FITNESS  FOR A
PARTICULAR  USE  OR  PURPOSE;  (II)  THE  NATURE  OR  QUALITY  OF  CONSTRUCTION,
STRUCTURAL  DESIGN, OR ENGINEERING OF THE IMPROVEMENTS; (III) THE QUALITY OF THE
LABOR  OR  MATERIALS  INCLUDED  IN  THE  IMPROVEMENTS; (IV) THE SOIL CONDITIONS,
DRAINAGE,  TOPOGRAPHICAL  FEATURES, OR OTHER CONDITIONS OF THE PROPERTY OR WHICH
AFFECT  THE  PROPERTY;  (V)  ANY  FEATURES  OR CONDITIONS AT OR WHICH AFFECT THE
PROPERTY  WITH  RESPECT TO ANY PARTICULAR PURPOSE, USE, DEVELOPMENTAL POTENTIAL,
CASH  FLOW,  OR  OTHERWISE;  (VI)  ALL  EXPRESS  OR  IMPLIED  REPRESENTATIONS OR
WARRANTIES  CREATED  BY ANY AFFIRMATION OF FACT OR PROMISE OR BY ANY DESCRIPTION
OF  THE  PROPERTY;  (VII)  ANY  ENVIRONMENTAL,  GEOLOGICAL,  METEOROLOGICAL,
STRUCTURAL, OR OTHER CONDITION OR HAZARD OR THE ABSENCE THEREOF HERETOFORE, NOW,
OR HEREAFTER AFFECTING IN ANY MANNER ANY OF THE PROPERTY OR THE LEASED PROPERTY;
AND (VIII) ALL OTHER EXPRESS OR IMPLIED WARRANTIES AND REPRESENTATIONS BY SELLER
WHATSOEVER.
     The  words  "Seller"  and  "Buyer"  when  used  in  this  Contract shall be
construed as plural whenever the number of parties to this contract so requires.
     This  Contract  may  be  executed  in  counterparts,  each  of  which shall
constitute  an  original  of  this  Contract.
     WITNESS  our  hands  the           day  of               ,  200     .
SELLER:                              BUYER
By:                                   By:
Its:                                   Its:  ________________________________

<PAGE>
                                    Exhibit A
                              Property Description


<PAGE>
                                    EXHIBIT F
                                 TERM LOAN NOTE
$  __________________                                   ____________________,
2003
FOR  VALUE  RECEIVED,  the  undersigned,  Emeritus  Corporation,  a  Washington
corporation (the "Maker"), hereby promises to pay to the order of HR ACQUISITION
I CORPORATION, a Maryland corporation, or assigns (the "Payee") at 3310 West End
Avenue,  Suite  400,  Nashville,  Tennessee  37203,  the  principal  amount  of
____________________________Dollars  ($___________________.00),  or  so  much
thereof  that  has  from time to time been advanced, together with interest at a
rate  per  annum  equal  to ten percent (10%).  Interest payable under this Note
shall  be  computed on the basis of a 365-day year and actual days elapsed.  All
past  due  principal  shall bear interest from the date of maturing thereof at a
rate equal to the lesser of eighteen percent (18%) per annum or the maximum rate
of  interest  permitted  from  time  to  time  by  applicable  law.
As  of  the  date hereof, this Note is secured by a Leasehold Deed of Trust (the
"Mortgage"),  of  even  date herewith, upon certain real estate and improvements
located  in                         .
This  Note  will be paid in monthly installments of interest only, commencing on
________________  and  continuing  thereafter  on the 1st day of each succeeding
month  thereafter  with  the  final  installment  to  be  made  on
______________________,  at  which  time  this  Note shall mature and all unpaid
principal  and  interest  hereunder  shall be due and payable in full.  Upon the
purchase  of any or all of the Facilities leased under that certain Lease by and
between  Maker  and  Payee  dated ______, 2003, Maker shall prepay the Note on a
prorata basis (based on the ratio of the number of Facilities being purchased by
Maker  to  the  total  number of Facilities then being leased by Maker) if Maker
purchases  some,  but  not all, of the Facilities then being leased by Maker and
shall  prepay  the  Note  in  full if Maker purchases all of the Facilities then
being  leased  by  Maker.
Except as otherwise expressly provided herein, each maker, surety, endorser, and
guarantor  of  this  Note  hereby  severally  waives demand and presentation for
payment, notice of non-payment, protest and notice of protest, and the diligence
of  bringing suit against any party hereto and consents that time of payment may
be  extended  from  time  to  time without notice thereof to each maker, surety,
endorser  or  guarantor.
All  amounts payable hereunder by the Maker shall be payable to the Payee at the
address set forth above or at such other place as the Payee or the holder hereof
may,  from  time to time, indicate in writing to the Maker, and shall be made by
the Maker in lawful money of the United States by check or in cash at such place
of  payment.
If  any  payment  required  to  be  made  hereunder becomes due and payable on a
non-business day, the maturity thereof shall extend to the next business day and
interest  shall be payable at the rate applicable thereto during such extension.
The  term  "business day" shall mean a calendar day excluding Saturdays, Sundays
or  other  days  on  which  banks  in  the  State  of  Tennessee are required or
authorized  to  remain  closed.
If  this Note is placed in the hands of an attorney for collection, Maker agrees
to  pay  reasonable  attorneys'  fees  and  costs  and  expenses  of collection,
including  but  not  limited  to  court  costs.
Upon  the  failure  of  prompt and timely payment when due of any installment of
principal  or  interest under this Note, such failure continuing for thirty (30)
calendar  days  after notice thereof from Payee to Maker, then the Payee, at its
option,  may declare the entire unpaid balance of principal and accrued interest
hereunder  to  be  immediately  due and payable.  Time is of the essence of this
Note  and  the  performance  of  each  of the covenants and agreements contained
herein.
This  Note shall be governed by and construed in accordance with the laws of the
State  of  Washington  and  applicable  laws of the United States.  MAKER HEREBY
CONSENTS  TO  THE  JURISDICTION  OF  ANY  STATE  OR FEDERAL COURT LOCATED WITHIN
DAVIDSON  COUNTY,  TENNESSEE  AND  IRREVOCABLY  AGREES  THAT, SUBJECT TO PAYEE'S
ELECTION,  ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE OR
THE  OTHER  LOAN  DOCUMENTS  SHALL BE LITIGATED IN SUCH COURTS.  MAKER EXPRESSLY
SUBMITS  AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY
DEFENSE  OF  FORUM  NON CONVENIENS.  MAKER HEREBY WAIVES PERSONAL SERVICE OF ANY
AND  ALL  PROCESS  AND  AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON
MAKER  BY  CERTIFIED  OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO
MAKER,  AT  THE  ADDRESS  SET  FORTH  IN  THIS NOTE AND SERVICE SO MADE SHALL BE
COMPLETE  TEN  (10)  DAYS  AFTER  THE  SAME  HAS  BEEN  POSTED.
TO THE EXTENT PERMITTED BY LAW, MAKER, AND PAYEE BY ITS ACCEPTANCE OF THIS NOTE,
HEREBY  WAIVE  THEIR  RESPECTIVE  RIGHTS  TO  A  TRIAL  BY JURY IN ANY ACTION OR
PROCEEDING  BASED  UPON,  OR RELATED TO, THE SUBJECT MATTER OF THIS NOTE AND THE
BUSINESS  RELATIONSHIP  THAT  IS  BEING  ESTABLISHED.  THIS WAIVER IS KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY MADE BY MAKER AND BY PAYEE, AND MAKER ACKNOWLEDGES
THAT  NEITHER  PAYEE  NOR  ANY  PERSON  ACTING  ON  BEHALF OF PAYEE HAS MADE ANY
REPRESENTATIONS  OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR HAS TAKEN ANY
ACTIONS  WHICH IN ANY WAY MODIFY OR NULLIFY ITS EFFECT.  MAKER AND PAYEE FURTHER
ACKNOWLEDGE  THAT  THEY HAVE BEEN REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO BE
REPRESENTED)  IN  THE  SIGNING  OF THIS NOTE AND IN THE MAKING OF THIS WAIVER BY
INDEPENDENT  LEGAL  COUNSEL.
In no contingency or event whatsoever shall the amount paid or agreed to be paid
by Maker, received by Payee, or requested or demanded to be paid by Maker exceed
the maximum amount permitted by applicable law.  In the event any such sums paid
to  Payee  by Maker would exceed the maximum amount permitted by applicable law,
Payee  shall  automatically  apply such excess to the unpaid principal amount of
this  Note  or, if the amount of such excess exceeds the unpaid principal amount
of  this Note, such excess automatically shall be applied by Payee to the unpaid
principal  amount  of  other indebtedness, if any, owed by Maker to Payee, or if
there  be  no  such other indebtedness, such excess shall be paid to Maker.  All
sums  paid  or  agreed  to  be paid by Maker, received by Payee, or requested or
demanded  to  be paid by Maker which are or hereafter may be construed to be, or
in  respect  of,  compensation  for  the use, forbearance, or detention of money
shall, to the extent permitted by applicable law, be amortized, prorated, spread
and allocated throughout the full term of all indebtedness of Maker to Payee, to
the  end  that the actual rate of interest hereon shall never exceed the maximum
rate  of  interest  permitted  from  time  to  time  by  applicable  law.
ORAL  AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR
FROM  ENFORCING  REPAYMENT  OF  A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
The  privilege  is  reserved and given to make payments on the principal of this
Note on the due date of any installment prior to maturity without the payment of
a  penalty  or  premium,  provided  that  not  less than twenty (20) days' prior
written  notice  of intent to prepay is given to the Holder hereof.  Any partial
prepayment  of  principal  shall,  however, not have the effect of suspending or
deferring  the monthly principal payments herein provided for but the same shall
continue  to  be due and payable on each due date subsequent to any such partial
prepayment  of  the  principal,  and shall operate to effect full payment of the
principal  at  an  early  date.
ENTERED  INTO  AT                         ,  on  the  day  and  year first above
written.
Emeritus  Corporation
By:

<PAGE>
                                    EXHIBIT G
                                [PROJECT AMOUNT]

               HRT
               ===
     Licensed          PROJECT
FACILITY     BEDS          AMOUNT
Harrisburg     51          4,606,784
----------     --          ---------
Creekview     102          7,990,971
Bloomsburg     46          4,277,867
Harrisonburg     51          5,689,443
Roanoke     58          5,576,337
Danville     60          4,919,294
Ravenna     53          4,435,632
Greensboro     50          4,704,450
TOTALS     471          42,200,778