SUBLEASE TERMINATION AND RELEASE AGREEMENT


     THIS  AGREEMENT is made and entered into as of the 26th day of August, 2002
(the  "Effective  Date")  by  and  between  Sage,  L.L.C.,  a Washington limited
liability  company  doing  business  in  Massachusetts  as Sage Assisted Living,
L.L.C.  ("Landlord")  and  Emeritus  Properties  XIV,  LLC, a Washington limited
liability  company  ("Tenant").

                                    RECITALS

     A.     Pursuant to a Lease dated as of January 1, 2002 between Auburn Land,
LLC  ("Owner") and Landlord (the "Lease") Landlord is the lessee of that certain
real  property located at 669 Washington Street, Auburn, MA  01501 which is more
fully  described  in  Exhibit  A  hereto  (the "Real Property") and the 108 unit
assisted living facility located thereon and commonly known as The Lodge at Eddy
Pond  (the  "Facility"),  and Landlord subleases the Facility to Tenant pursuant
to  that  certain  Sublease  Agreement  dated  January 1, 2002 (the "Sublease").

     B.     Under  the  terms  of  Section  2.2  of  the Lease, Owner granted to
Landlord the right to purchase the Real Property and the Facility (the "Purchase
Option").  Owner  further  granted  Landlord  the  right  to assign the Purchase
Option  to  Emeritus  Corporation ("Emeritus") or to any subsidiary or affiliate
entity  whose  ownership  is  at  least 51% in common with Emeritus and of which
Emeritus  has  control  or  in  common  control.

     C.     Tenant  is  wholly  owned  by  Emeritus.

D.     Landlord  has  assigned the Purchase Option to Tenant and Tenant has duly
exercised  the  Purchase  Option.

E.     In  connection  with  the  sale  of the Real Property and the Facility by
Landlord  to  Tenant (the "Sale Transaction"), Owner and Landlord have agreed to
terminate  the  Lease  and  Landlord  and  Tenant  have  agreed to terminate the
Sublease.

     F.     Landlord  and Tenant are interested in (i) confirming termination of
the  Sublease  and  (ii)  releasing  each other from further liability under the
Sublease.

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

     1. Sublease Termination. Landlord and Tenant hereby confirm the termination
of  the  Sublease  as  the  Effective  Date.

     2.  Release.

     a.     As  of  the  Effective Date, Landlord hereby releases Tenant and any
past  or  present  officer,  director,  employee,  agent  or shareholder thereof
(collectively, the "Tenant Released Parties") and the Tenant does hereby release
Landlord  and  any  past  or  present  officer,  director,  employee,  agent  or
shareholder thereof (the "Landlord Released Parties") from any and all liability
under  the  Sublease;  provided,  however,  nothing herein shall be construed as
releasing  Landlord  from  its  obligation  to  return to Tenant within five (5)
business  days  after  the  Effective  Date any security deposit which it may be
holding  under the terms of the Sublease or as releasing Tenant or Landlord from
any  obligations  which  it may have under the Sublease with respect to its acts
or  omissions  prior  to  the  Effective  Date.

     c.     The  release  provided  for  in  this Paragraph 2 shall be fully and
unconditionally  effective  on  the  Effective  Date.

     3  Tenant Representations.     Notwithstanding anything contained herein to
the  contrary,  Tenant  represents  that: (i) Tenant is wholly owned by Emeritus
Corporation  and  (ii)  Tenant  is  not aware of any default, or event given the
passage of time that would become a default, by the Landlord under the Sublease,
and  has  not  received,  or  is  aware  of,  any form of governmental notice of
violation  of  any law, code or similar restriction affecting or relating to the
Real  Property  and/or  the  Facility.

     4.  Further  Assurances. Notwithstanding anything to the contrary contained
herein,  Landlord  and  Tenant  agree  to  execute and/or file any and all other
documents, agreements or other instruments as may be necessary or appropriate to
confirm  the agreements reached by, and the obligations imposed on, Landlord and
Tenant  hereunder.

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

     6.  Entirety.  This  Agreement represents the entire and final agreement of
the  parties hereto with respect to the subject matter hereof and supersedes all
prior  discussions,  negotiations  and  writings  with  respect  thereto.  This
Agreement  may  only  be  amended  by  written  instrument signed by the parties
hereto.

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

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

     9.  Captions.  The  captions are included in this Agreement for convenience
of reference only and shall not be construed so as to define, limit or modify in
any  manner  any  of  the  terms  hereof.

     10.  Governing  Law.  This  Agreement shall be governed by and construed in
accordance  with  the  internal  laws  of  the  State  of  Massachusetts  .

<PAGE>

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


                              SAGE,  L.L.C.


                              By:         /s/  Daniel  R.  Baty
                              Name:            Daniel  R.  Baty
                              Its:     ______________________________


                              EMERITUS  PROPERTIES  XIV,  LLC


                              By:     Emeritus  Corporation
                              Its:     Sole  Member


                                   By:     /s/  Raymond  R.  Brandstrom
                                   Name:        Raymond  R.  Brandstrom
                                   Its:        CFO

<PAGE>
                                ACKNOWLEDGEMENTS

STATE  OF  WASHINGTON     )
                         )  ss.
COUNTY  OF  KING               )

     On this ___ day of ________________, 2002 before me appeared ___________ to
me personally known, who, being by me duly sworn, did say that he is the Manager
of  Sage,  L.L.C.,  a  Washington  limited liability company, that the foregoing
instrument was signed and sealed on behalf of said limited liability company and
he  acknowledged  said  instrument  to  be the free act and deed of said limited
liability  company.



                         ______________________________________
Notary  Public  in  and  for  the  State  of  Washington
                         My  Commission  Expires:     ________________


STATE  OF  WASHINGTON     )
                         )  ss.
COUNTY  OF  KING               )

     On this ___ day of ________________, 2002 before me appeared ___________ to
me  personally  known,  who,  being  by  me  duly  sworn, did say that he is the
__________  of Emeritus Corporation, the sole member of Emeritus Properties XIV,
LLC.,  a Washington limited liability company, that the foregoing instrument was
signed  and  sealed  on  behalf  of  said  limited  liability  company  and  he
acknowledged  said  instrument  to  be  the  free  act  and deed of said limited
liability  company.



                         ______________________________________
Notary  Public  in  and  for  the  State  of  Washington
                         My  Commission  Expires:     ________________