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                         AGREEMENT TO PROVIDE MANAGEMENT
                SERVICES TO WASHINGTON ASSISTED LIVING FACILITIES

     This  Agreement  made  as of the 31st day of December, 2001, by and between
Regent  Assisted Living, Inc., an Oregon corporation (hereinafter referred to as
"Licensee")  and  Emeritus  Corporation,  a  Washington corporation (hereinafter
referred  to  as  "Manager").

     WHEREAS, as set forth more fully in Exhibit A, Licensee either owns, leases
or  manages  under  contract  or  in  its capacity as the managing member of the
Licensee  or  lessee of, the assisted living facilities which are licensed under
Washington  law  as  boarding  homes  and  which are described in Exhibit A (the
"Facilities"  and,  where  the context requires, individually, a "Facility") and
is, in each instance, authorized to engage a manager or submanager in connection
with  its  operation  of  the  Facilities;

     WHEREAS,  Licensee wants someone to manage or submanage, as applicable, the
Facilities  on  its  behalf;

     WHEREAS,  Manager  is  experienced  and  qualified in the field of assisted
living  facilities  management  and  has  agreed  to  manage  or  submanage,  as
applicable,  the  Facilities  on  behalf  of Licensee, pursuant to the terms and
conditions  set  forth  herein.

     NOW,  THEREFORE,  in consideration of the foregoing premises and the mutual
covenants  herein  contained,  IT  IS  AGREED  AS  FOLLOWS:

     I.     Responsibilities  of  Manager:  Licensee  hereby engages Manager and
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Manager  hereby  accepts  such  engagement  and  agrees  to  provide management,
consulting and advisory services to Licensee in connection with the operation of
the  Facilities,  upon  the  terms  and  conditions set forth in this Agreement;
provided,  however,  Licensee  has and retains under this Agreement the ultimate
responsibility  for the operational decisions of the Facility.  By entering into
this  Agreement,  Licensee  does  not  delegate to Manager any powers, duties or
responsibilities  which  it  is prohibited by law from delegating. Licensee also
retains  such  other  authority  as  shall  not have been expressly delegated to
Manager  pursuant  to  this  Agreement.  Subject to the foregoing, Manager shall
provide  the  following  services:

     (a)     Operational  Policies  and  Forms:  Manager  shall  develop  and
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implement such operational policies and procedures as may be necessary to ensure
the ongoing licensure of the Facilities and the establishment and maintenance of
operational  standards  appropriate  for  the nature of the Facilities. Licensee
shall  have the right to review and approve all such policies and procedures and
to  recommend  changes  to  such  policies  and  procedures in the event, in its
capacity  as  the  licensed  operator  of  the Facilities, it believes that such
changes  are  needed  to ensure the compliance of the Facilities with applicable
licensure  laws.

     (b)     Charges:  Manager  shall  establish  the  schedules  of recommended
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charges,  including  any  and  all  special charges for services rendered to the
residents  at  the  Facilities.   Licensee  shall  have  the right to review and
approve  the  fee schedules as the same may change from time to time.  Residents
of  the Facilities shall be provided with notice of any changes in the schedules
of  charges  in accordance with RCW Chapter 70.120, the Long Term Care Residents
Rights  Act,  and, if applicable, the terms of their admission agreement and the
policies  and  procedures  of  the  Facilities.

     (c)     Information:  Manager  shall  develop  any  informational material,
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mass  media releases, and other related publicity materials, which are necessary
or  appropriate for the operation of the Facilities, all of which Licensee shall
have  the  right to review and approve.  If and to the extent any such materials
developed  by  Manager  contain  Manager's  name or logo, the same shall clearly
reflect  that Manager is the manager and shall not, directly or indirectly, give
the  appearance  that  Manager  is  the licensee of the Facility.  Further, when
Manager  takes  any  action  on  behalf  of  Licensee,  any  communication  or
correspondence must clearly indicate that it is acting as the agent of Licensee.

     (d)     Regulatory  Compliance: Subject to the force majeure and notice and
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cure  right  contained  in the Agreement below, Manager shall assist Licensee in
maintaining  all  licenses,  permits,  qualifications  and  approvals  from  any
applicable  governmental  or  regulatory  authority  for  the  operation  of the
Facilities,  it  being understood and agreed that under Washington law, Licensee
is  responsible  for ensuring that all such licenses are obtained and maintained
and  that the Facilities are operated in compliance with all applicable laws and
regulations,  including,  but not limited to, the laws and regulations governing
the  licensure  of  boarding homes and local, state and federal employment rules
and  regulations.  Manager  shall  manage  the  operation of the Facilities in a
manner  which  will  ensure  their  full compliance with all applicable laws and
regulations;  provided, however, Manager shall not be deemed to be in default of
its  obligations  under this Section I(d) in the event (i) of a violation of any
applicable  law  or  regulation  which  occurs during the first thirty (30) days
after  the  Commencement  Date (the "Protected Period"), (ii) of the citation of
any  deficiency or deficiencies which do not result in the threatened revocation
of  the  licensure  or  Medicaid certification of, or the imposition of a ban on
admissions  at,  the  affected  Facility  or  Facilities and which deficiency or
deficiencies  are  timely  corrected  in  accordance  with  a plan of correction
approved by the applicable regulatory authority, (iii) Manager, at the direction
of Licensee, is duly contesting the application of any law to the operation of a
Facility or Facilities and compliance therewith is stayed during the period that
such  contest is pending or (iv) compliance with law requires the expenditure of
funds  which  require the approval of Licensee and for which Licensee refuses or
fails  to  provide  such approval.  In order to ensure Manager's compliance with
its  obligations under this Section I(d) Licensee shall provide Manager prior to
the  Commencement Date with a copy of any agreements or orders to which Licensee
may  be  a  party  in connection with the operation of the Facilities. Within 48
hours  of receipt or sooner if deemed necessary by Licensee to correct any cited
deficiencies  in  a timely manner, Manager shall provide Licensee with copies by
fax,  overnight  mail, email or other comparable means of expedited transmission
of any written notices of non-compliance which it receives from any governmental
authority  having  jurisdiction  over  the  Facilities in which such authorities
threaten  a loss or licensure or Medicaid certification of, or the imposition of
a ban on admissions at or the imposition of civil or criminal penalties against,
a  Facility  or Licensee. In addition, Licensee shall have the right to approve,
which  approval  shall  not  be  unreasonably  withheld,  any plan of correction
developed  by Manager including, but not limited to, any plan of correction with
respect to any survey or other governmental action which threatens revocation of
the  licensure  or  Medicaid  certification of, or a ban on admissions at or the
imposition of civil or criminal penalties against, a Facility or Licensee and to
approve  the  election  by  Manager to contest the application of any law to the
operation  of  a  Facility  or  Facilities.

     (e)     Capital  Repairs,  Replacements  and Improvements:  Recognizing the
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Licensee  is  ultimately  responsible  for  compliance  with  and  meeting  all
applicable  state  boarding  home licensing requirements, Manager shall make all
capital  repairs,  replacements  and  improvements  which  are necessary for the
efficient  and  effective  operation of the Facilities and their compliance with
law  unless  doing  so  involves an expenditure requiring Licensee's approval in
accordance  with  the terms of this Agreement and Licensee fails to provide such
approval.  The cost of such capital repairs, replacements and improvements shall
be within the budgetary limits set forth in the annual  capital budgets prepared
by  Manager  pursuant to Paragraph I(L); provided, however, Manager shall not be
deemed  to be in default of its obligations under this Section I(e) in the event
the  cost  of  such  repairs,  replacements  and/or  improvements  exceeds  the
applicable  budgetary  limits  provided  such   repairs,  replacements  and/or
improvements  are  (a)  of such an emergency nature that Licensee's prior notice
and  approval  is not feasible in order to adequately protect the Facilities and
the  health  and  safety  of  the  occupants  or (b) the cost of such   repairs,
replacements  and/or  improvements  are  within  10% of the budgetary limits set
forth  in  the  annual  approved  capital budget then in effect for the affected
Facility  or  Facilities  prepared  by  Manager pursuant to Paragraph I(L).  Any
other  capital  expenditures  for  repairs,  replacements  or  improvements that
exceed  such  budgetary  limits  shall  be  subject to the prior approval of the
Licensee,  which approval shall not be unreasonably withheld; provided, however,
Licensee  shall  not be deemed to have unreasonably withheld its approval if (i)
Licensee lacks the financial resources to cover the cost of such capital repair,
replacement  or improvement or (ii) the cost of such capital repair, replacement
or  improvement  will exceed $25,000 individually or in the aggregate with other
unbudgeted  capital  repairs, replacements or improvements undertaken by Manager
in  the  same  fiscal year.    In performing the foregoing repairs, replacements
and improvements Manager shall use the Facilities' on site maintenance personnel
as  and where possible and shall otherwise contract with qualified third parties
to provide the necessary services and shall undertake the same or cause the same
to  be  undertaken  in  a  workman  like  and  lien  free  manner.

(f)     Accounting:
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          (i)     Manager  shall,  at its expense, provide accounting support to
the  Facilities.  Licensee  acknowledges and agrees that such accounting support
shall  not  include the preparation of Licensee's corporate financial statements
or  securities  filings,  but  only  the individual financial statements for the
Facilities,  in  each  case  meeting  the requirements of Section 1(G).  Manager
shall  not be required to reflect in the financial statements for the Facilities
any  corporate accounting adjustments provided to Manager by Licensee until such
time  as  Manager  fully  understands  the  rationale  for  such  adjustment.

          (ii)     All  accounting  procedures and systems utilized in providing
said support shall be in accordance with the operating capital and cash programs
developed  by  Manager,  which  programs  shall  conform  to  generally accepted
accounting  principles ("GAAP") and shall not materially distort income or loss;
provided,  however,  Manager shall have no liability for errors in the financial
statements prepared during the term of this Agreement which arise from errors in
starting accounting balances provided by Licensee to Manager pursuant to Section
I(f)(v).

(iii)     In  addition,  as  a  cost  of operating the Facilities, Manager shall
prepare  or  cause  to  be  prepared  all payroll tax returns, sales and use tax
returns,  real  and  personal  property  tax returns, informational tax returns,
Forms  5500 and local or state gross receipts and/or business and occupation tax
returns  and  Manager  shall cause to be paid all of the taxes reflected on such
returns  as  being  due, which taxes shall be paid from the cash receipts of the
Facilities  or  the working capital provided by Licensee under the terms of this
Agreement.  All  other tax returns, including Licensee's local, state or federal
income  tax  returns  and  state corporate franchise tax returns and third party
payor  cost reports, shall be prepared by Licensee or its designee and the taxes
and  other payments due thereunder shall be the sole responsibility of Licensee.

     (iv)     Nothing  herein  shall preclude Manager from delegating to a third
party a portion of the accounting duties provided for in this section; provided,
that  such  delegation shall not relieve Manager from ultimate liability for the
timely  and  complete  performance of the obligations provided for herein or for
the  expense  thereof,  to  the  extent such expense is to be borne hereunder by
Manager.  Licensee acknowledges and agrees that in the event Manager retains one
or more third parties to review the real and/or personal property tax returns or
utility  bills  of  the  Facilities or other third party charges in an effort to
effect  cost  savings  for  the  Facilities, the fees and expenses of such third
parties  shall  be  paid from the cash receipts of the Facilities or the working
capital  provided  by  Licensee  under  the  terms  of  this  Agreement.

          (v)     In  order  to enable Manager to provide the accounting support
services  described  in  this  Section, prior to the Commencement Date, Licensee
shall  provide  to Manager the information and shall take the transition actions
described  in  Exhibit B hereto (the "Accounting Transition Services"), it being
understood  and  agreed  that  Manager  will  not  be  able to fully perform its
obligations under this Section I(f) unless and until Licensee has fully complied
with  its  obligations  with  respect  to  the  Accounting  Transition Services.
Manager acknowledges and agrees that the Accounting Transition Services address,
among  other  things,  resident  trust  funds.  Manager  and  Licensee  further
acknowledge  and  agree  that  all  trust  funds held by Licensee for resident's
custodial  accounts  shall  remain the responsibility of Licensee to administer;
provided, Manager shall provide to Licensee an accounting of all amounts held in
trust  for  residents  on  not  less  than  a  monthly basis.  Licensee shall be
responsible  for  all  fiduciary  and custodial obligations with respect to such
funds  and  be  directly  accountable  to  the  residents  with respect thereto;
provided, Manager shall comply with all legal requirements related to accounting
for  and  holding resident trust funds to the extent that Manager is involved in
the  Facility's  resident  trust  funds.

     (g)     Reports:  Manager  shall  prepare  and  provide  to  Licensee  any
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reasonable  financial and operational information with respect to the Facilities
which may from time to time be specifically requested by Licensee, including any
information needed to assist Licensee in completing the tax returns for which it
is  responsible  under  Section I(f),in complying with any reporting obligations
imposed on Licensee or Licensee's parent under its leases and loan agreements or
as  a  publicly  traded  company,  in refinancing any of the debt secured by the
Facilities  and in complying with the reporting obligations described in Exhibit
C. In addition, by no later than thirty (30) days after the end of each calendar
month,  Manager  shall  provide  Licensee with an unaudited balance sheet of the
Facilities,  dated  the  last  day  of such month, and an unaudited statement of
income  and  expenses for such month and for the fiscal year to date relating to
the  operation  of  the  Facilities  showing the variance between the actual and
budgeted  operating  results  of  the  Facilities for said month and in the form
attached  hereto  as Exhibit D and with a census report for the month indicating
the  number  of  units  occupied  and the number of units vacant.   Upon request
Manager  shall cooperate with Licensee or Licensee's certified public accountant
in  the  event Licensee elects, or is required, to have audited annual financial
statements  prepared.  The  financial  statements  prepared  by Manager shall be
prepared in accordance with (i) GAAP, consistently applied, (ii) this Agreement,
and  (iii)  the  procedures  and  practices  provided  for  in  this  Agreement.

     (h)     Bank  Accounts:
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          (i)     With  respect  to  each  of  the  Facilities,  Manager  shall
establish and maintain a checking account for each of the Facilities in the name
set  forth  opposite  the  name of each of the Facilities in Exhibit E  (each of
which accounts shall hereinafter be referred to as the "Depository Account") and
shall  deposit  therein  all money received during the term of this Agreement in
the  course  of  the  operation  of  the applicable Facility including any money
received  upon the collection of accounts receivable which are outstanding as of
the  Commencement  Date  for  goods  sold or services rendered at the Facilities
prior  to the Commencement Date and shall pay therefrom the expenses incurred in
the  operation  of the applicable Facility during the Term of, and in accordance
with  the  terms  of,  this  Agreement.

          (ii)     During  the  Term  hereof,  withdrawals and payments from the
Depository  Account  for  each Facility shall be made only on checks signed by a
person  or  persons  designated  by  Manager but Manager shall have no ownership
interest  in  or  other rights to the Depository Account other than the right to
make  withdrawals  therefrom and to make deposits thereto; and provided, further
that  Licensee  shall  be  given  notice  as  to the identity of said authorized
signatories.

          (iii)     Withdrawals  from  the  Depository Account for each Facility
shall  be  made  first to pay to Licensee the management fee due with respect to
such  Facility  as  set forth in Exhibit F (the "Regent Management Fees"), which
Regent  Management Fees shall be deposited in an account established by Licensee
in Seattle, Washington (the "Regent Account") and thereafter to pay the expenses
of  operating  such  Facility,  including  payroll and related state and federal
payroll  tax  obligations  (the  "Daily  Operating  Expenses") and rent and debt
service  payments to the lenders and landlords set forth in Exhibit G and in the
amounts  set  forth in Exhibit G as the same may be amended from time to time to
reflect  changes  in  such  rent  and  debt  service payments  or in the amounts
otherwise  specified  by  Licensee  to Manager in writing from time to time (the
"Property  Expenses");  provided,  however,  that  regardless of the priority of
payments  set  forth  in  this  Section I(h)(iii), Licensee shall be required to
ensure  that all expenses related to the care of the residents of the Facilities
are  paid,  it  being  understood and agreed that any limitation on resources or
insufficiency  of  funds  of  the  Licensee  or  the Facilities shall not excuse
Licensee,  as  the  licensed  operator  of  the  Facility,  from  fulfilling its
obligation  to  ensure  that  the Facilities meet all applicable state licensing
requirements.  Exhibit  G  shall  also  reflect  when  the  rent or debt service
payment is due under the terms of the applicable lease or loan documents and any
available  grace  period. The Daily Operating Expenses and the Property Expenses
shall  be paid by Manager in such order of priority as Manager deems appropriate
from  time  to time to the operation of such Facility,  provided, however, Daily
Operating  Expenses  and  the  Property  Expenses shall be paid by no later than
their  due date or, if applicable, before the expiration of any applicable grace
period  in  which payment may be made prior to the occurrence of a default under
the  terms  of  the  applicable  lease,  loan  agreement, contract, agreement or
purchasing arrangement, unless resulting from the failure of Licensee to provide
the  Working  Capital  Funds (as defined in Section I(h)(v) below) or Management
Fee  Funds  (as  defined in Section I(h)(v) below) as and when due in accordance
with  Section  I(h)(v)  below.  Manager  shall  make  any  rent and debt service
payments  which  are  made  by  it  by  wire  transfer in accordance with wiring
instructions  provided  by  Licensee  to  Manager.

          (iv)     Any  excess  funds  in the Depository Account for a Facility,
after  establishing  the  working  capital reserves required by Section VIII(c),
shall  be  distributed  by  Manager  to  Licensee.

          (v)     In  the  event  (A)  at  any  time  Manager  determines in the
exercise  of  its  reasonable  judgment that there are insufficient funds in the
Depository Account or in the Other Authorized Accounts (as hereinafter defined),
in  the  case of a Designated Facility (as hereinafter defined), to maintain the
minimum  bank  balance  required  by Section VIII(c) and pay all Daily Operating
Expenses  and Property Expenses due and payable in the following thirty (30) day
period  (the  "Working Capital Funds") or (B) in the event there are at any time
insufficient  funds  available  in  the  Regent  Account  to  pay Manager's Base
Management  Fee  (as  defined  below) (the "Management Fee Funds"), no less than
three  (3)  days  prior  to  the  date  on which Manager determines that Working
Capital  Funds  or  Management  Fee Funds, as applicable, are required,  Manager
shall  provide  Licensee  with  a  verbal  demand therefor followed by a written
confirmation  of  such  demand,  which  written  confirmation  shall  specify in
reasonable detail the amount needed and the reason therefor and, Licensee shall,
within five (5) business days of its receipt of  such written demand by Manager,
deposit  in  the  applicable  Depository  Account  or  the  Regent  Account,  as
applicable,  the  amount so demanded by Manager.  For purposes hereof, the Other
Authorized Accounts shall be defined as  those accounts designated in writing by
Licensee  to  Manager from which Manager is authorized to draw funds in order to
meet the working capital needs of certain other Facilities designated in writing
by  Licensee  to  Manager  (the  "Designated  Facilities"  or  individually  a
"Designated  Facility"),  provided the designation shall not be effective unless
the  same  is  accompanied  by either (i) an opinion of Licensee's outside legal
counsel  confirming  that  it  has  reviewed  all  necessary legal documents and
determined  that  Licensee is authorized to lend money from the Other Authorized
Accounts  for the benefit of the Designated Facilities or (ii) a certificate, in
form  and  substance  reasonably  acceptable  to  Manager  signed  by Licensee's
Representative  to the effect that Licensee is authorized to lend money from the
Other  Authorized  Accounts  for the benefit of the Designated Facilities, along
with  appropriate  supporting  documentation  with  respect  to  the  statements
contained  in  such  certificate,  which  documentation  shall  be  in  form and
substance  acceptable  to  Manager in the exercise of its reasonable discretion.
Licensee  acknowledges  and  agrees  that  in  no  event  will  Manager have any
obligation  to  pay  any  Daily  Operating Expenses or the Regent Management Fee
other  than from funds available in the applicable Depository Account, including
funds  deposited  therein  by  Manager  after  withdrawing  funds from the Other
Authorized  Accounts,  if  applicable, or to provide its own funds to satisfy or
support  in any manner the working capital needs of the Facilities or to pay its
own  Base  Management  Fee,  and that (i) such working capital is to be provided
solely  from the cash receipt of the Facilities, if applicable, withdrawals from
the  Other  Authorized  Accounts  and  the  working capital provided by Licensee
pursuant  to this Section I(h) and (ii) such management fees are to be paid from
the  funds  deposited by Manager in payment of the Regent Management Fees and by
Licensee pursuant to this Section I(h)(v), if applicable, in the Regent Account.

          (vi)     Licensee  acknowledges  and  agrees that in the course of its
operation  of the Facilities Manager may incur common expenses benefiting all of
the  facilities  owned and/or operated by Manager, including the Facilities (the
"Common  Expenses").  Such  Common  Expenses  shall  be  included  in the  Daily
Operating  Expenses  of  the  Facilities  and  may  be paid from the cash in the
applicable  Depository  Account(s)  if (i) the same relate to the direct cost of
corporate,  regional or divisional meetings or training sessions held by Manager
and  in  which  the administrative personnel of the Facilities have participated
("Meeting  and Training Common Expenses"), (ii) the same are included within the
approved  annual  capital  or  operating budgets ("Budgeted Common Expenses") or
(iii)  the  same are not Meeting and Training Common Expenses or Budgeted Common
Expenses  (the  "Other  Common  Expenses")  but  are approved by Licensee, which
approval  shall  not  be  unreasonably  withheld,  after  Manager  has  provided
Licensee  with  a specification setting forth in reasonable detail the nature of
such  Other  Common  Expenses.

(i)     Personnel:  All  of  the  personnel  of  the  Facilities,  including the
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community  directors,  business  managers  and  the  Wellness  Directors,  if
applicable,  shall  be  the  employees  of  Licensee  and the salaries, bonuses,
commissions,  state  and federal payroll and social security tax obligations and
benefits  paid  to or on behalf of such employees shall be deemed to be included
in  the  Daily  Operating Expenses of the Facilities and thus shall be paid from
the  Facilities  Depository  Account,  subject  to  the  limitation set forth in
Section II with respect to the payment of Insurance Costs (as defined in Section
     II).  Notwithstanding  the foregoing, Manager shall recruit, employ, train,
promote,  direct,  discipline,  suspend  and  discharge  the  personnel  of  the
Facilities;  establish  salary levels, personnel policies and employee benefits;
and  establish  employee performance standards, all as needed during the term of
this  Agreement  to ensure the efficient operation of all departments within and
services  offered  by  the  Facilities; provided, however, that ultimate control
over  the  community  directors, including their appointment, and over personnel
matters relating to the operation of the Facilities and the care provided to the
residents  of  the  Facilities  and  responsibility for the staffing levels, and
training  of  the  personnel  at,  the  Facilities  shall  remain with Licensee.

     (j)     Supplies  and  Equipment:  Manager  shall  purchase  supplies  and
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non-capital  equipment  needed  to  operate  the Facilities.  In purchasing said
supplies and equipment, if possible without Manager incurring personal liability
for the cost of such supplies and equipment, Manager shall take advantage of any
national  or  group  purchasing  agreements  to  which  Manager  may be a party.

     (k)     Legal  Proceedings:  Manager  shall, with the assistance and at the
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direction  of Licensee and its legal counsel, take any and all appropriate steps
to  protect  and/or  assist  in litigating to a final decision in an appropriate
court  or  forum  any  such  third  party  claim  of  violation,  order, rule or
regulation  affecting  the  Facilities  and  its  operation  or any claim, loss,
violation or cause of action relating to the Facilities, it being understood and
agreed  that  under  Washington  law  any administrative appeals of licensing or
contract  action/enforcement  imposed by the Washington Department of Social and
Health  Services  ("DSHS")  may only be filed by Licensee or by Manager if it is
expressly  authorized  to  do  so by Licensee.  All of the costs incurred in any
litigation  of  third  party  claims  respecting  the  Facilities, including the
reasonable  legal fees and expenses of legal counsel retained to defend Licensee
and/or  Licensee  and  Manager  jointly  and/or any landlord or lender, shall be
included  in the Daily Operating Expenses and shall be reimbursed from the funds
in  the  Depository  Account  of the applicable Facility established pursuant to
Section  1(h)  if previously paid by Licensee or shall be paid from the funds in
the  Depository  Account  of  the  applicable Facility if not previously paid by
Licensee.  Nothing herein shall be construed as precluding Licensee from seeking
to  recover from Manager the fees and expenses described in this Section I(k) to
the  extent  Manager  is  otherwise  liable  therefore  under  the  default  or
indemnification  provisions  of  this  Agreement.

(l)     Budgets:
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(i)     The  Facilities  shall be operated on a fiscal year of January 1 through
December  31.

          (ii)     Licensee  and  Manager  shall agree prior to the Commencement
Date  (as hereinafter defined) on an initial operating budget and capital budget
for  the  period  from  the  Commencement  Date  through  December  31,  2002.

          (iii)     Prior  to  the start of each subsequent fiscal year, Manager
shall prepare and submit to Licensee for its review and approval, which approval
shall  not  be  unreasonably  withheld,  an  annual  operating budget, an annual
capital  expenditure  budget, an annual operating plan, an annual marketing plan
and  an  annual  cash  flow  projection  for each of the Facilities.  The annual
operating  budget  and  capital  expenditure  budget shall be prepared using the
format set forth in Exhibit H. In the event a budget for a Facility has not been
agreed  upon  by  the  beginning  of  the  fiscal year for any reason whatsoever
including  Licensee's  or  Manager's  unreasonable  refusal to approve the same,
Manager sole remedy shall be that the operating results of the prior fiscal year
for  such  Facility  plus  5% shall serve as the budget for the following fiscal
year  for such Facility unless and until the new budget is agreed upon, it being
understood  and  agreed  that  the  refusal  by Licensee or Manager to approve a
budget  shall  not  be  deemed  to  be  an  Event  of  Default  hereunder.

     (m)     Collection  of  Accounts:  Manager  shall issue bills for goods and
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services furnished by the Facilities during the term of this Agreement and shall
attempt  to  collect  the  balances  reflected on such bills, including, but not
limited  to,  enforcing  the  rights  of Licensee and the Facilities as creditor
under  any  contract  or  in  connection  with  the  rendering  of any services;
provided,  however,  that  any  expenses  incurred  by  Manager in so doing with
respect  to  any  Facility  shall be included in the Daily Operating Expenses of
such  Facility  and  shall  be  payable out of funds deposited in the Depository
Account  of  such Facility described in Section I(h).  In addition, upon request
by  Licensee, Manager shall issue bills and collect accounts and monies owed for
goods  and  services furnished by the Facilities prior to the Commencement Date.
Regardless  of any standard of performance set forth in this Agreement, Licensee
acknowledges  and  agrees  that  there can be no assurances that Manager will be
able  to  collect  any  or  all  of  the  Facilities'  accounts  receivable.

     (n)     Contracts.  Manager  shall  negotiate  and  enter  into any and all
             ---------
contracts  necessary  from  time  to  time  in  connection  with  the day to day
operation  of the Facilities including, but not limited to, contracts for water,
electricity,  natural  gas,  telephone,  sewer,  cleaning,  trash  removal, pest
control  and  extermination,  cable,  elevator  and boiler maintenance, pharmacy
services,  therapy  services  and  other  appropriate  ancillary  services  and
contracts  for  the provision of various services which are designed to identify
potential  cost  savings  to the Facilities, such as utility and tax bill review
services; provided that such contracts can be terminated on no more than 90 days
notice.  Any  contract which cannot be terminated on no more than 90 days notice
shall  require  the  approval  of  Licensee  before  the same may be executed by
Manager,  which approval shall not be unreasonably withheld.  Manager shall have
the right to contract with entities which are owned by or under common ownership
with Manager provided the terms of any such contracts are no less favorable than
the  terms then offered by unrelated third parties for the same or similar goods
or  services.  All  contracts  shall  be entered into in the name of Licensee or
the  Facilities.  All  resident  leases  or admission agreements entered into by
Manager in connection with the operation of the Facilities shall comply with the
Long  Term  Care  Residents  Act,  RCW  Chapter  70.129.

     (o)     Manager's  and  Licensee's Representative:  Manager hereby appoints
             ------------------------------------------
Frank  Ruffo  (the "Manager's Representative") as the person employed by Manager
with  whom  Licensee  shall  interact and upon whose decisions Licensee shall be
authorized  to  rely,  and  Licensee hereby appoints Walt Bowen (the "Licensee's
Representative")  as  the  person  employed  by Licensee with whom Manager shall
interact  and  upon  whose  decisions  Manager shall be authorized to rely, with
respect  to  the  performance by Manager of its duties hereunder.  Manager shall
have  the  right  from time to time during the term of this Agreement to replace
the  Manager's  Representative  upon  written notice to Licensee designating the
replacement Manager's Representative and Licensee shall have the right from time
to  time  during  the  term  of  this  Agreement  to  replace  the  Licensee's
Representative  upon  written  notice  to  Manager  designating  the replacement
Licensee's  Representative.  Nothing  herein  shall be construed as imposing any
personal  liability on the Manager's Representative or Licensee's Representative
with  respect  to  the  acts  or omissions of Manager or Licensee, respectively,
under this Agreement.  Owner and Licensee shall use good faith efforts to notify
DSHS  in  the  event  of  any  changes  in  the  Manager's Representative or the
Licensee's  Representative  but  neither  shall be in default of its obligations
hereunder should it fail to do so.  Any such notice to DSHS shall be sent to the
following  address  (the  "DSHS  Address"): Residential Care Services (Attn: Deb
Burman,  PO  Box  45600,  Olympia,  WA  98504-5600).

     II.     Insurance:   Licensee  shall, at its sole cost and expense, arrange
             ---------
for  and  maintain  all  necessary  and  proper  property insurance covering the
Facilities,  the  furniture,  fixtures,  and equipment situated thereon, and all
necessary  and  proper  professional  and commercial general liability insurance
for  Licensee's  and  Manager's  protection. Manager shall, at its sole cost and
expense,  maintain  commercial  general  liability insurance for its operations.
All  such  liability  insurance policies shall include coverage for liability to
each  party's  respective  employees involved in the operation of the Facilities
and  arising  from  any  improper  employment  practices  (except in the case of
Manager  where  Licensee  acknowledges  no  such  coverage  shall be provided by
Manager)  and  employee crime and theft coverage. All such policies of liability
insurance  shall  name  the  other  party  as, as well as any landlord or lender
identified  by  Licensee to Manager in writing as additional insureds thereunder
(except  in  the case of Manager's directors and officers insurance and employee
crime insurance as to which Licensee acknowledges Manager has advised it no such
additional  insureds  shall be named). In addition, each party shall provide all
employee  health  and  worker's  compensation  insurance  required  for  their
respective  employees.   Each party shall be responsible for all deductibles due
with  respect  to any insurance maintained by it and for any uninsured losses of
any nature whether arising from an failure by the party to maintain insurance or
from  the  loss  not  being  covered  under the terms of any policy of insurance
maintained  by  the  party.  All premiums, claims and deductibles related to the
Licensee's  insurance  covered by this Section II (the "Insurance Costs") shall,
at  Licensee's  request,  be  paid  by  Manager  from  the applicable Facility's
Depository  Account  provided  (i) Licensee has provided Manager in writing with
reasonable  details  concerning  the  amount  to be paid and the purpose of such
payment,  (ii)  there are sufficient funds, whether in the form of cash receipts
of  the  Facilities  or  working  capital  funds  deposited  by Licensee, in the
Depository  Account  to  enable  Manager  to  pay  the  same from the Depository
Account,  (iii) all other Daily Operating Expenses and the Regent Management Fee
which  are then due and payable have been paid from the Depository Account as of
the  time  when  Licensee  requests  payment of the premiums, deductibles and/or
claims  from the Depository Account, (iv) Manager's Base Management Fee which is
then  due and payable have been paid from the Regent Account as of the time when
Licensee  requests  payment  of the premiums, deductibles and/or claims from the
Depository  Account  and  (v)  Licensee  in  not  otherwise  in  default  of its
obligations  under  this  Agreement.

     III.     Proprietary  Interest  and  Noncompetition:
              ------------------------------------------

          (a)     The  systems,  methods,  procedures  and  controls employed by
Manager  and  Licensee  and any written materials, computer software or policies
developed  by  Manager  and  Licensee  to  document  the  same are to remain the
property  of Manager and Licensee, respectively, and are not, at any time during
or  after  the  term  of  this Agreement, to be utilized, distributed, copied or
otherwise  employed or acquired, except as authorized by the respective Licensee
thereof,  provided,  however,  that  upon  request  of  Licensee,  Manager shall
negotiate  in  good  faith  the  terms and conditions upon which Licensee may be
permitted  by  Manager  to  use  such  systems,  methods,  procedures, controls,
materials, software or brochures containing Manager's name or logo for a limited
transitional period following the termination of this Agreement, which terms and
conditions  shall  be  satisfactory  to  both  Manager  and  Licensee  in  their
respective  discretion.  Any  written  materials developed or used by Manager in
connection  with  the operation of the Facilities shall meet the requirements of
Section  I(c)  of  this  Agreement,  if  applicable.

          (b)     With  respect to each of the Facilities, from the Commencement
Date  until  the  earlier  to  occur of (i) the termination of this Agreement by
Manager  as  a  result of the occurrence of an Licensee Event of Default or (ii)
the  date  on which Licensee, voluntarily or involuntarily, losses possession of
such  Facility  or  (iii)  three  years after the expiration of the term of this
Agreement  as  to such Facility for any reason whatsoever other than the reasons
set forth in clause (ii), Manager shall not solicit, discuss, negotiate or enter
into  any  agreement  or  arrangement  by  which  the  Manager  would obtain any
substantial  control  of  the ownership or management of  such Facility from any
third party having an interest in  such Facility superior to the Licensee's. The
restrictions  in the preceding sentence shall be applicable, without limitation,
to  any purchase, lease, license, franchise, partnership, joint venture or other
means,  direct or indirect by which Manager or any entity or person controlling,
controlled by or under common control with Manager obtains substantial ownership
or  control  of one or more of the Facilities; provided, however, nothing herein
shall be construed to prohibit the acquisition by an entity under common control
with  Manager of the Facility in Folsom, California and of one of the Facilities
in  Scottsdale,  Arizona.

     IV.     Term  of  Agreement  and  Termination  Payments:
             -----------------------------------------------

(a)     The  Term  of  this  Agreement  shall  commence  on January 1, 2002 (the
"Commencement  Date.

      (b)     The Term of this Agreement shall terminate upon the first to occur
of  the  following:

(i)     the  occurrence  of  an  Event  of Default hereunder and the exercise by
Manager  or Licensee, as applicable, of its right to terminate this Agreement as
a  result  thereof;  or

(ii)     on  written  notice  from Licensee to Manager delivered within the last
ninety  days  of  the third year of the term of this Agreement (the "Termination
Period") terminating this Agreement as of the end of the third (3rd) year of the
     term  of  this  Agreement (the "Termination Notice"); provided, however, if
the  Termination  Notice  is  not  delivered  by Licensee within the Termination
Period,  then  this  Agreement shall automatically renew for successive one year
terms,  subject to Licensee's right to terminate the same on no less than ninety
(90)  days  written  notice  to  Manager;  or

(iii)     on  no  less than ninety (90) days written notice from either Licensee
or  Manager  as  to  all,  but  not  less  than  all,  of  the  Facilities;  or

(iv)     with  respect  to  one or more Facilities, by Licensee or Manager on no
less  than  ninety (90) days prior written notice  in the event that at any time
during  the  term  of this Agreement Licensee will no longer own or control such
Facilities  whether resulting from a sale or other reasons, whether voluntary or
involuntary;  or

(v)     with  respect to one of more of the Facilities, by Licensee in the event
it  is  unable  on  or  before  February  28, 2002 to secure any consents of its
lenders,  landlords  or  joint  venture partners which may be required for it to
enter  into  this Agreement with Manager (the "Third Party Consents"); provided,
however,  in the event of the termination of this Agreement by Licensee pursuant
to this Section IV(b)(v), effective with the termination of this Agreement as to
     the  affected Facility, Licensee and Manager shall enter into an Accounting
Services  Agreement  with  respect  to  such  Facility unless prohibited by such
lender,  landlord or joint venture partner; and provided, further, that Licensee
shall  be  solely responsible for any and all costs of securing such Third Party
Consents,  including  any  consent  fees or other consideration required by such
landlords,  lenders  or  joint venture partners as a condition to granting their
consent;  or

(vi)     by  either  Licensee or Manager on thirty (30) days notice to the other
in  the  event  that on or before February 28, 2002 they have not secured formal
approval of this Management Agreement from DSHS (the "State Approval"), it being
     understood  and  agreed  that  this  Agreement has been drafted in a manner
intended  to  address the concerns identified by DSHS in a letter dated December
10,  2001  from  Deb  Burman to Chris Radzom and that the parties have agreed to
negotiate  in good faith the terms of any reasonable amendments or modifications
hereto  which  may  be  required  to  secure  the  State  Approval;  or

(vii)     by  Licensee  effective as of a date specified by DSHS if DSHS is able
to  demonstrate  to  the  satisfaction  of Licensee and Manger that DSHS has the
authority to lawfully require Licensee to terminate this Management Agreement as
     to  any or all of the Facilities as a result of violations of law occurring
at  any  or  all  of  the  Facilities.

     For  the  purposes  of  Sections  IV,  V,  and  VI  of  this Agreement, any
termination due to an Licensee Event of Default or a Manager Event of Default or
by  Licensee  pursuant  to Section IV(b)(v) shall be a partial termination as if
there  were  a  separate  Agreement for each Facility if the Event of Default or
failure  to secure the necessary Third Party Consent relates to less than all of
the  Facilities.  In  such  event,  Licensee's or Manager's required termination
payments  shall  only  be  with respect to the Facilities covered by the partial
termination.  Each  of  Licensee  and  Owner agrees to use good faith efforts to
give  notice  of  the  termination of this Agreement to DSHS at the DSHS Address
prior  to  the  effective  date  thereof  but neither shall be in default of its
obligations  hereunder  should  it  fail  to  do  so.

          (c)   In  the  event of the termination of this Agreement prior to the
end of the third year of this Agreement, the following payments shall be due and
owing  from  Manager  or  Licensee,  as  applicable:

(i)     In  the  event  of  the  termination  of this Agreement by Licensee as a
result  of  the  occurrence  of a Manager Event of Default, Manager shall pay to
Licensee  an  amount  equal to one month's base management fee concurrently with
the  termination  of  this  Agreement.

     (ii)     In the event of the termination of this Agreement during the first
year  either  by  Manager  as a result of the occurrence of an Licensee Event of
Default  of  the  Term  or by Licensee pursuant to Section IV(b)(iii) other than
with  respect to the Bowen Facility (as hereinafter defined), Licensee shall pay
to  Manager  an  amount  equal  to  the  difference  between  the aggregate Base
Management Fee due during the first year of the Term and the Base Management Fee
actually  paid to Manager to the date of such termination.  For purposes hereof,
the  Bowen  Facility  shall  mean  the  Facility located in Redmond, Washington.

(iii)     In  the  event  of the termination of this Agreement at any time after
the first year of the Term either by Manager as a result of the occurrence of an
Licensee  Event  of  Default  or  by  Licensee  pursuant  to Section IV(b)(iii),
Licensee  shall  pay  to  Manager  an  amount  equal to the then applicable Base
Management  Fee  multiplied  by  three.

(iv)     In  the  event of the termination of this Agreement by Manager pursuant
to  Section  IV(b)(iii)  no  payment  shall be due from Manager to Licensee upon
termination  and  in  the event of the termination of this Agreement by Licensee
pursuant  to  Sections  IV(b)(v),  (vi)  or  (vii)  no payment shall be due from
Licensee  to  Manager  upon  termination.

(v)     Examples of the calculation of the termination fees due pursuant to this
     Section  IV(c)  are  set  forth  in  Exhibit  I.

     (d)     In  the  event  of the termination of this Agreement by Licensee or
Manager  in  accordance  with the terms hereof, (A) no such termination shall be
effective  until  all  amounts  due  and  owing  from  one party to the other in
accordance  with  the  terms  of  this Agreement, including the monetary damages
specifically  provided for in Sections VI(a) and (b), but specifically excluding
any  other  damages  alleged to have been suffered by a party as a result of the
termination  of this Agreement after the occurrence of an Event of Default, have
been paid in full and (B) Manager shall cooperate with Licensee or its designee,
at  no  cost  to  Manager and without the assumption of any further liability by
Manager  other than the liability imposed on Manager under this Agreement, in an
orderly  transition  of  operational responsibility for the affected Facility or
Facilities  to  Licensee  or its designee (who the parties acknowledge and agree
may  only  assume operational responsibility in accordance with the requirements
of  Washington  law) subject to the limitation set forth in this Section IV with
respect  to Licensee's obligation to remove Manager from any affected Facility's
license  before  such  termination  and  transfer  are  effective.

     (e)     In  the  event of the termination of this Agreement for any reason,
Licensee  shall  continue to be responsible for the care of the residents of the
Facilities  until  the  earlier  to  occur  of  (i) the transfer of the affected
Facility  or  Facilities to a new licensee or (ii) the transfer of the residents
another  facility  or  facilities  licensed  under applicable state law or (iii)
management  responsibility for the affected Facility or Facilities is assumed by
a  manager  operating  under  a  management agreement which has been approved by
DSHS.

     V.     Default:  Either party may terminate this Agreement, as specified in
            -------
this  Section  V,  in  the  event of a default ("Event of Default") by the other
party.

          (a)     With  respect  to  Manager,  it shall be an "Event of Default"
hereunder:

               (i)     If  Manager  shall  fail  to keep, observe or perform any
material  agreement, term or provision of this Agreement, and such default shall
continue  for  a  period  of  forty five (45) days (subject to the force majeure
provisions  below)  after  notice  thereof  shall  have been given to Manager by
Licensee,  which notice shall specify in detail the event or events constituting
the  default;

               (ii)     If  Manager  shall  (A)  apply  for  or  consent  to the
appointment  of  a  receiver,  trustee  or  liquidator  of  Manager  of all or a
substantial  part of its assets, (B) file a voluntary petition in bankruptcy, or
admit  in  writing its inability to pay its debts as they become due, (C) make a
general  assignment  for  the benefit of creditors, or (D) file a petition or an
answer  seeking reorganization or arrangement with creditors or taking advantage
of  any  insolvency law, or if an order judgment or decree shall be entered by a
court  of competent jurisdiction, on the application of a creditor, adjudicating
Manager,  a bankrupt or insolvent or approving a petition seeking reorganization
of  Manager,  or appointing a receiver, trustee or liquidator of Manager, of all
or  a  substantial  part  of  its  assets;

     (iii)     If,  at  anytime  after the Protected Period, (A) proceedings are
commenced  which  threaten  to  revoke,  rescind,  terminate  or  not  renew the
licensure  or certification of the Facilities and Manager is unable to develop a
plan  of  correction  with respect thereto which is acceptable to the applicable
state  or federal authorities within the applicable cure period provided by such
authorities  or  (B)  a  ban on admissions lasting more than ninety (90) days is
imposed  against  the  Facilities;  or

               (iv)     If  at  the  end  of any year, the actual "Net Operating
Income/Loss Before Property" less "Property Insurance" and "Liability Insurance"
for  any  Facility  as  reflected  on the financial statements of the Facilities
prepared by Manager is more than ten percent (10%) less than the amount for "Net
Operating  Income/Loss Before Property" less "Property Insurance" and "Liability
Insurance"  as  reflected  in  the  annual  approved  operating  budget for such
Facility  the  same  shall  be  an Event of Default but only with respect to the
affected  Facility  .

          (b)     With  respect  to  Licensee,  it  shall be an Event of Default
hereunder:

               (i)     If  Licensee  shall  fail to make or cause to be made any
payment to Manager required to be made hereunder (other than its working capital
obligation  which  is addressed in clause (iii)) and such failure shall continue
for  a  period  of thirty (30) days after notice, which notice shall specify the
payment  or  payments  which  Licensee  has  failed  to  make;

               (ii)     If  Licensee  shall fail to keep, observe or perform any
material  agreement,  term or provision of this Agreement and such default shall
continue for a period of forty five (45) days after notice (subject to the force
majeure  provisions  below),  which  notice shall specify in detail the event or
events  constituting  the  default  thereof  by  Manager  to  Licensee;

               (iii)     If  Licensee  shall  fail  to provide necessary working
capital  upon  demand  by  Manager  with  respect  to  the  payment of the Daily
Operating  Expenses  or  the  Base Management Fee due to Manager within the time
provided  in  Section  I(h),  and  such  failure  continues uncured for five (5)
business  days  after  Manager  gives  Licensee  notice  of  such  failure;

               (iv)     If  Licensee  shall  fail  to make payments, or keep any
covenants,  owing  to any third party which are beyond the control of Manager to
make  or  keep  (which  for purposes hereof shall include any covenants by which
Licensee may be bound as of the Commencement Date (the "Pre-Existing Covenants")
or  to  which Licensee may agree to be bound after the Commencement Date without
the  prior  approval  of  Manager (the "Unapproved Covenants")), and which would
cause  Licensee  to  lose  possession of the Facilities or any personal property
required  to  operate the Facilities in the normal course; provided that Manager
shall  give  Licensee  prompt  notice  of any such payment and failure to pay of
which  Manager  has  knowledge;

               (v)     If  Licensee  shall  be  dissolved  or shall apply for or
consent  to  the appointment of a receiver, trustee or liquidator of Licensee or
of  all  or  a  substantial  part  of  its  assets, file a voluntary petition in
bankruptcy,  or  admit  in writing its inability to pay its debts as they become
due,  make a general assignment for the benefit of creditors, file a petition or
an  answer  seeking  reorganization  of  arrangement  with  creditors  or taking
advantage  of  any  insolvency  law, or if an order, judgment or decree shall be
entered  by a court of competent jurisdiction, on the application of a creditor,
adjudicating  Licensee  a  bankrupt or insolvent or approving a petition seeking
reorganization  of  Licensee  or appointing a receiver, trustee or liquidator of
Licensee  of  all  or  a  substantial  part  of  its  assets;  or

               (vi)      If  Licensee  or  any  of  its  principal  officers  is
convicted  or a crime that materially affects the operation or regulation of the
Facilities.

          (c)     Licensee  and  Manager shall use good faith efforts to provide
DSHS  at  the  DSHS Address with copies of any written notices of default issued
under  the  terms of this Section V but neither Licensee nor Manager shall be in
default  of  its  obligations  hereunder  should  it  fail  to  do  so.

     VI.     Remedies  and  Obligations  Upon  Default:
             -----------------------------------------

          (a)     If  any Event of Default by Licensee shall occur, Manager may,
in  addition  to any other remedy available to it in law or equity on account of
such  Event  of  Default,  forthwith terminate this Agreement, and neither party
shall  have  any  further obligations whatsoever under this Agreement except for
Manager's  right  to  receive  damages  from Licensee in the amount specified in
Section  IV  and  except  any  settlement  and  payment  obligations  and  other
obligations  that  by  their  nature  survive  termination  of  this  Agreement.

          (b)     If  any Event of Default by Manager shall occur, Licensee may,
in  addition  to any other remedy available to it in law or equity on account of
such  Event  of  Default,  forthwith  terminate  this Agreement and the right to
possession  of  the  Facilities  granted to Manager hereunder, and neither party
shall  have  any  further obligation whatsoever under this Agreement; except for
Licensee's  right  to  receive  payment of liquidated damages from Manager in an
amount  specified  in  Section  IV.

     1.     Licensee's  Inspection:  Manager acknowledges and agrees that during
            ----------------------
the  term  of  this  Agreement,  Licensee is ultimately responsible for the care
provided  to  the  residents  of  the  Facilities  and for the compliance of the
Facilities  with  applicable law.  Accordingly, during the term hereof, Licensee
may  enter  and inspect the Facilities at any time provided Licensee coordinates
such  inspections with the on site administrative personnel at the Facilities in
order  to  minimize  any  disruption  of  Manager's day to day operations of the
Facilities and to ensure that such inspections do not violate resident rights to
privacy  under  state or federal resident rights laws.  During such inspections,
Licensee  may  inspect  and/or  audit  all  books  and records pertaining to the
operation  of  the  Facilities.  In  addition,  Licensee shall have the right to
conduct  telephonic  or  personal interviews with the Community Directors and/or
with  any  of  Manager's  regional  personnel  involved  in the operation of the
Facilities  with respect to any matters related to the operation thereof subject
to  the  same  duty to minimize the disruption to Manager's operations resulting
from  such  interviews.  Licensee  and  Manager  acknowledge  and agree that the
efficient and effective operation of the Facility requires that the employees of
the  Facility  obtain  direction from only one party.  Accordingly, Licensee and
Manager  further acknowledge and agree that prior to the occurrence of a Manager
Event  of  Default,  if Licensee has any concerns with respect to the day to day
operations  of  the  Facility  rather  than  communicating those concerns to the
employees  of  the Facility and/or overriding directions given by Manager to the
employees  of  the  Facility,  Licensee shall advise Manager of its concerns and
shall  attempt  to resolve the same directly with Manager; provided, however, if
Licensee  and  Manager  are unable within a reasonable period of time to resolve
Licensee's  concerns  to Licensee's reasonable satisfaction then, in recognition
that  Licensee  is ultimately responsible for the operational decisions and care
of  the  residents  at  the Facility, Licensee shall have the right to take such
action  and provide such directions to the employees at it deems to be necessary
to  ensure  the  ongoing operation of the Facility in compliance with applicable
laws and in a manner which protects the residents of the Facility; and provided,
further,  that  from and after and during the continuance of  a Manager Event of
Default,  Licensee  shall  have  the  right  to  provide  such directions to the
employees  of  the  Facility  as  it deems to be necessary to ensure the ongoing
operation  of  the  Facility  in compliance with applicable laws and in a manner
which  protects  the  residents  of  the  Facility  with prior consultation with
Manager.  Nothing  in  this  Section  or  elsewhere  in  this Agreement shall be
construed  as  limiting  in  any  manner  Manager's  or Licensee's obligation to
retain,  disclose  or  produce  appropriate  documentation  and  records  to any
governmental  agency having authority over the Facilities pursuant to applicable
laws  and  regulations  or  as  limiting  the  rights  of  the  residents of the
Facilities  to  address  to Licensee any concerns, questions or complaints which
they  may  have  with  respect  to  the  operation  of  the  facilities.

     VII.     Operations  of  the  Facilities:
              -------------------------------

          (a)     Standard  of Performance:  In performing its obligations under
                  ------------------------
this  Agreement,  Manager  shall  manage  the  Facilities  as  assisted  living
facilities  licensed  under  Washington law as boarding homes in accordance with
the  terms of this Agreement, including, but not limited to, the limitations set
forth herein on operating and capital expenditures, and the policies adopted by,
and  resources  available to, the Facilities; provided, however, that regardless
of  the  standard  of performance imposed by this Section VIII(a), Manager shall
have  no  liability  in the event the operation of the Facilities fail to comply
with  the  Pre-Existing  Covenants  or  the  Unapproved Covenants; and provided,
further,  that  nothing in this Agreement shall relieve Licensee as the licensed
operator  of the Facilities from its ultimate responsibility under State law for
the  care  provided  at  the  Facilities.

          (b)     Force  Majeure:  Neither  party  will  be  deemed  to  be  in
                  --------------
violation of this Management Agreement if it is prevented from performing any of
its  obligations hereunder for any reason beyond its control, including, without
limitation,  strikes,  shortages,  acts  of  terrorism,  war,  acts of God, (but
excluding  lack  of  the  party's  own  financial  resources),  or  any statute,
regulation  or  rule of federal, state or local government or agency thereof or,
in  the  case  of  Manager, unreasonable interference by Licensee with Manager's
performance  of  its  duties  hereunder or in the case of Licensee, unreasonable
interference  by  Manager  with  Licensee's performance of its duties hereunder.

          (c)          Minimum  Bank  Balances: During the Term hereof, Licensee
                       -----------------------
and  Manager  shall attempt to agree on the necessary minimum cash balance to be
maintained in the Depository Account for each Facility but if they are unable to
so  agree  such minimum cash balance shall upon demand of Manager be required to
be equal to the amount reflected in Exhibit J opposite the name of such Facility
and  Licensee  shall upon demand in accordance with Section I(h) provide Manager
with  any working capital which may be needed to enable Manager to maintain such
minimum  cash  balances.  In addition, during the Term hereof, Licensee shall at
all  times  maintain  a  minimum  balance  in  the  Regent  Account  of $80,000.

          (d)     Facility  Records.  All of the records of the Facilities shall
                  -----------------
be  and  remain the property of Licensee and Manager shall at all times maintain
the  confidentiality of all resident records, including, without limitation, all
medical  records  and  shall only disclose the same as required by law and/or as
authorized  by the resident to whom such record relates; provided, however, that
Manager's  failure  to  maintain  the  confidentiality  of  resident  records in
accordance  with  the  requirements  of  this  Section VIII(d) shall not relieve
Licensee  of  liability should any such resident records be improperly disclosed
in  whole  or  in  part.

          (e)     Notice to Residents.  Within a reasonable period of time after
                  -------------------
the  Commencement  Date,  Manager  shall  provide  written  notice to all of the
residents  of  the  Facilities that it has assumed management responsibility for
the  Facilities  and  confirming  the  address  at which they can reach Licensee
should  they  elect  to  do  so  for  any  reason.

     VIII.     Management  Fee:
               ---------------

     (a)     In  consideration for the provision of the services contemplated in
this Agreement, Manager shall receive a management fee of $8,000 per month  (the
"Base  Management Fee") payable in advance on the first day of each month during
the  term  of  this Agreement except for the month of January 2002, one third of
which  shall be paid on the earlier to occur of the first day of February, March
and  April  of  2002  or the date of the termination of this Agreement. The Base
Management  Fee payable with respect to all of the Facilities shall be increased
by  5%  on  the  second  anniversary  of  the  Commencement  Date.

     (b)     If  the  services of Manager commence or terminate (for any reason,
including  those  set  forth  in Paragraph V) other than on the first day of the
month,  the  revenues  upon  which  the  fee  is calculated shall be prorated in
proportion  to  the  number  of  days  for which services are actually rendered.

     (c)     The  Base  Management Fee provided for herein shall be disbursed by
Manager to itself out of the Regent Account in accordance with the provisions of
I(H).

     (d)     Any  amounts  due  from  Licensee to Manager or Manager to Licensee
pursuant  to  this Section IX which are not paid when due shall bear interest at
the  annual rate equal to the Prime Rate as set forth in the Money Rates Section
of  The  Wall  Street Journal (as the same may change from time to time) plus 5%
from  the  date  due  to  the  date  paid  in  full.

     X.     Assignment:  Except  as  otherwise  provided  in  Section I(f), this
            ----------
Agreement  shall  not  be  assigned  by  either  party without the prior written
consent of the other party; provided, however, Manager shall have the right upon
notice  to  Licensee  to  assign  this  Agreement to an entity which is owned or
controlled  by Manager or its principal shareholder, Daniel R. Baty, without the
prior  written  consent  of  Licensee;  provided, however, no assignment of this
Agreement  shall  be effective unless the assignee, in the case of an assignment
by  Licensee,  has  first  been  duly licensed by DSHS, or unless the Management
Agreement  between  Licensee  and  the assignee, in the case of an assignment by
Manager,  has  been  approved  by  DSHS.

     XI.     Notices:  All  notices  required  or  permitted  hereunder shall be
             -------
given  in  writing  by  hand  delivery, by registered or certified mail, postage
prepaid,  by  overnight  delivery  or  by  facsimile  transmission (with receipt
confirmed  with  the  recipient).  Notice  shall  be  delivered or mailed to the
parties at the following addresses or at such other places as either party shall
designate in writing.  The parties agree to use their good faith efforts to give
notice of any change of address to DSHS at the DSHS Address but neither shall be
in  default  of  its  obligations hereunder should it fail to do so. All notices
shall  be  deemed  duly given when delivery is received or refused by a party if
delivered by hand, three (3) business days after being deposited in the mails if
sent  by  registered  or  certified  mail,  on  the next business day if sent by
overnight  delivery and on confirmed receipt, if sent by facsimile transmission.

          To  Manager:     Emeritus  Corporation
                    3131  Elliott  Avenue
                    Suite  500
                    Seattle,  WA  98121
                    Facsimile:     206-301-4500
                    Attn:          Raymond R. Brandstrom, Vice President-Finance

          To  Licensee:     Regent  Assisted  Living,  Inc.
                    Bank  of  America  Building
                    121  SW  Morrison
                    Suite  100
                    Portland,  OR  97201
                    Facsimile:     503-274-4685
                    Attn:          Walt  Bowen,  President

     XII.     Relationship  of  the  Parties:  The  relationship  of the parties
              ------------------------------
shall  be that of principal and independent contractor and all acts performed by
Manager  during  the term hereof as Manager of the Facilities shall be deemed to
be performed in its capacity as an independent contractor.  Nothing contained in
this  Agreement is intended to or shall be construed to give rise to or create a
partnership  or  joint  venture  or  lease  between Licensee, its successors and
assigns  on  the  one hand, and Manager, its successors and assigns on the other
hand.  Notwithstanding  the  foregoing,  Manager  shall be authorized to execute
certain documents in the course of the day to day operation of the Facilities as
the  agent  of  Licensee,  such  as  credit  applications  for supplies, banking
resolutions  for  the  Depository  Account,  utility  deposit  forms,  etc.

     XIII.     Indemnification:  Manager  shall  indemnify,  defend  and  hold
               ---------------
harmless  Licensee  from  any  loss incurred by or damage to Licensee where such
loss  or  damage results from the negligence or willful misconduct of Manager in
performing  its  obligations  under  this  Agreement  or  from  a breach of this
Agreement  by Manager; provided, however, Licensee specifically acknowledges and
agrees  that  nothing  in  this  Section XIII shall be construed as imposing any
liability  on  Manager for any insurance deductibles for which Licensee shall be
solely responsible under Section II hereof. Licensee shall indemnify, defend and
hold  Manager harmless from any loss incurred by or damage to Manager where such
loss  or damage results from the negligence or willful misconduct of Licensee in
performing  its obligations under the Agreement, from a breach of this Agreement
by  Licensee,  from Licensee's lack of authority to enter into this Agreement or
in  the  event any lease, loan, limited liability company operating agreement or
other  document  or instrument to which Licensee (or, in the case of third party
management  agreements,  Licensee's  principal) may be a party prohibits Manager
from fulfilling any of the obligations imposed on Manager or from exercising any
of  the  rights  granted  to  Manager  hereunder.

     XIV.     Entire  Agreement:  This  Agreement  contains the entire agreement
              -----------------
between  the  parties  relating  to the operation of the Facilities and shall be
binding  upon  and  inure  to the benefit of their successors and assigns.  This
Agreement  may not be modified or amended except by written instrument signed by
both  of the parties hereto.  Licensee and Manager agree to use their good faith
efforts  to  give  DSHS  at  the  DSHS  Address copies of any amendments to this
Agreement but neither shall be in default of its obligations hereunder should it
fail  to  do  so.

     XV.     Captions:  The  captions  used  herein  are  for  convenience  of
             --------
reference  only  and shall not be construed in any manner to limit or modify any
of  the  terms  hereof.

     XVI.     Arbitration:  In  the  event  of  any  dispute  among  the parties
              -----------
regarding the Facilities or this Agreement, the parties agree to submit the same
to  resolution  before an arbitrator, in the case of disputes alleged to involve
less  than  $250,000,  and  before  a panel of three arbitrators, in the case of
disputes  alleged  to  involve $250,000 or more, selected by mutual agreement of
the  parties or, if the parties are unable to agree on an arbitrator or panel of
arbitrators  within  a  period  of  twenty  (20)  days,  selected  by a court of
competent  jurisdiction.  Such  arbitration shall be held in accordance with the
rules of the American Arbitration Association and the decision of the arbitrator
shall  be  final  and  binding  on the parties and may be enforced by a court of
competent  jurisdiction.  The party requesting arbitration shall do so by giving
notice  to  that  effect  to the other party, specifying in reasonable detail in
said  notice  the  nature  of  the dispute; provided, however, in the event that
notwithstanding  the  terms  hereof, a party commences legal proceedings, rather
than  arbitration  proceedings,  before  a  court of competent jurisdiction, the
other  party  shall  be  deemed to have forfeited its right to have such dispute
determined  by  binding  arbitration  in accordance with this Section XVI unless
within thirty (30) days after being served with the first pleading in such legal
proceedings,  it  files a motion to dismiss such legal proceedings and serves on
the  other party notice of its intent to submit such dispute to arbitration. Any
party  who  fails  to submit to binding arbitration following a lawful demand by
the  other  party  shall  bear  all  costs  and  expenses,  including reasonable
attorneys  fees  (including  those incurred in any trial, bankruptcy proceeding,
appeal or review) incurred by the other party in obtaining a stay of any pending
judicial  proceeding  concerning  a dispute which by the terms of this Agreement
has  been  properly  submitted  to  mandatory  arbitration  and/or in compelling
arbitration  of  any  dispute.  All  disputes  under  this  Section XVI shall be
determined  in  the City of Portland, Oregon, if the arbitration is initiated by
Licensee and in the City of Seattle, Washington, if the arbitration is initiated
by  Manager,  by  a  single  arbitrator.  All  arbitrators  shall  be a licensed
attorneys  having  at  least  ten  (10) years experience, with at least five (5)
years  experience  with  assisted  living  facility  sale,  lease  or management
transactions.  The  award in such arbitration may be enforced on the application
of  either  party by the order of judgment of a court of competent jurisdiction.
The  prevailing  party  shall  be  entitled  to  recover the reasonable fees and
expenses  of  its  attorneys  and  experts.  The arbitrator(s) shall resolve all
disputes  in  accordance  with  the substantive law of the state of Oregon.  The
arbitrator(s)  shall  have  no authority or jurisdiction to award any damages or
any  other remedies beyond those which could have been awarded in a court of law
if  the  parties  had  litigated  the  claims  instead of arbitrating them.  The
parties  shall  not  assert  any  claim  for  punitive  damages.  The  Federal
Arbitration  Act,  Title  9  of  the  United  States Code, is applicable to this
transaction  and  shall  be  controlling  in any judicial proceedings and in the
arbitration  itself as to issues of arbitrability and procedure.  Nothing herein
shall preclude a party from curing either their own or the other party's alleged
default  which  is,  or could be, the subject of an arbitration proceeding under
this  Section XVI or from seeking equitable relief which the arbitrator or panel
of  arbitrators  is not empowered to award, such as an injunction, receivership,
attachment  or  garnishment.

     XVII.     Severability:  In  the  event  one  or  more  of  the  provisions
               ------------
contained in this Agreement is deemed to be invalid, illegal or unenforceable in
any  respect  under applicable law, the validity, legality and enforceability of
the  remaining  provisions  hereof  shall  not  in  any way be impaired thereby.

     XVIII.     Cumulative; No Waiver:  No right or remedy herein conferred upon
                ---------------------
or  reserved  to either of the parties hereto is intended to be exclusive of any
other  right  or remedy, and each and every right and remedy shall be cumulative
and  in  addition  to  any  other  right  or  remedy  given hereunder, or now or
hereafter legally existing upon the occurrence of an Event of Default hereunder.
The  failure  of  either  party  hereto  to  insist  at any time upon the strict
observance  or  performance  of  any  of  the provisions of this Agreement or to
exercise  any right or remedy as provided in this Agreement shall not impair any
such  right or remedy or be construed as a waiver or relinquishment thereof with
respect  to subsequent defaults.  Every right and remedy given by this Agreement
to  the parties hereof may be exercised from time to time and as often as may be
deemed  expedient  by  the  parties  thereto,  as  the  case  may  be.

     XIX.     Authorization  for  Agreement:  The  execution  and performance of
              -----------------------------
this  Agreement  by  Licensee  and  Manager  have  been  duly  authorized by all
necessary  laws, resolutions or corporate action, and this Agreement constitutes
the valid and enforceable obligations of Licensee and Manager in accordance with
its  terms.

     XX.     Counterparts:  This  Agreement  may  be  executed  in any number of
             ------------
counterparts,  each  of  which  shall  be an original, and each such counterpart
shall  together  constitute  but  one  and  the  same  Agreement.

     XXI.     Confidentiality:  Throughout  the Term of this Agreement and for a
              ----------------
period  of  one  (1)  year  after  the expiration or earlier termination of this
Agreement,  each  of Manager and Licensee agrees to maintain the confidentiality
of  any  proprietary information concerning the other or the Facilities to which
they  may  gain access during the term of this Agreement and shall only disclose
the  same  with  the  consent of the other party or as required by an order of a
court  of  competent  jurisdiction.

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

<PAGE>

          IN  WITNESS  WHEREOF, the parties have hereto caused this Agreement to
be  duly  executed,  as  of  the  day  and  year  first  above  written.

                    REGENT  ASSISTED  LIVING,  INC.

                    By:     /s/    Walt  Bowen
                         Walt  Bowen
                    Its:     _____________________________________


                    EMERITUS  CORPORATION


                    By:     /s/   Raymond  R.  Brandstrom
                         Raymond  R.  Brandstrom
                    Its:     _____________________________________



<PAGE>
                                    EXHIBIT A
                    DESCRIPTION OF THE FACILITIES, INCLUDING
                   WHETHER OWNED, LEASED OR MANAGED BY REGENT

<PAGE>
                                    EXHIBIT B
                         ACCOUNTING TRANSITION SERVICES

<PAGE>
                                    EXHIBIT C
             ADDITIONAL  SPECIFIC REPORTING OBLIGATIONS BY FACILITY


<PAGE>
                                    EXHIBIT D
                          FORM OF FINANCIAL STATEMENTS

<PAGE>
                                    EXHIBIT E
                        FACILITY BANK ACCOUNT INFORMATION

<PAGE>
                                    EXHIBIT F
                       REGENT MANAGEMENT FEES BY FACILITY

<PAGE>
                                    EXHIBIT G
                   RENT AND DEBT SERVICE PAYMENTS BY FACILITY

<PAGE>
                                    EXHIBIT H
                                 FORM OF BUDGET

<PAGE>
                                    EXHIBIT I
                      TERMINATION FEE CALCULATION EXAMPLES

<PAGE>
                                    EXHIBIT J
                              MINIMUM BANK BALANCES