AMENDED AND RESTATED MASTER LEASE

                      HEALTH CARE PROPERTY INVESTORS, INC.,
                                   HCPI TRUST
                                       and
                             TEXAS HCP HOLDING, L.P.
                             collectively, as Lessor
                                       AND
                              EMERITUS CORPORATION,
                                       and
                    ESC III, L.P., d/b/a TEXAS-ESC III, L.P.
                             collectively, as Lessee



                         Dated as of September 18, 2002


<PAGE>


                                TABLE OF CONTENTS
ARTICLE  I.     1
1.1     Leased  Property;  Term.     1
ARTICLE  II.     2
2.1     Definitions     2
ARTICLE  III.     16
3.1     Rent.     16
3.2     Quarterly  Calculation  and  Payment  of  Percentage  Rent;  Annual
Reconciliation     18
3.3     [Intentionally  Omitted]     19
3.4     Confirmation  of  Percentage  Rent.     19
3.5     Additional  Charges     20
3.6     Late  Payment  of  Rent     20
3.7     Net  Lease     20
ARTICLE  IV.     21
4.1     Impositions.     21
4.2     Utilities     22
4.3     Insurance     22
4.4     Impound  Account     22
4.5     Tax  Service     22
ARTICLE  V.     23
5.1     No  Termination,  Abatement,  etc     23
5.2     Termination  with  Respect  to  Fewer  than All of the Facilities     23
ARTICLE  VI.     24
6.1     Ownership  of  the  Leased  Property     24
6.2     Personal  Property     24
6.3     Transfer  of  Personal  Property  and Capital Additions to Lessor     24
ARTICLE  VII.     24
7.1     Condition  of  the  Leased  Property     24
7.2     Use  of  the  Leased  Property.     25
7.3     Lessor  to  Grant  Easements,  etc     26
7.4     Preservation  of  Gross  Revenues     26
ARTICLE  VIII.     27
8.1     Compliance  with  Legal  and  Insurance  Requirements,  Instruments, etc
27
ARTICLE  IX.     27
9.1     Maintenance  and  Repair.     27
9.2     Encroachments,  Restrictions,  Mineral  Leases,  etc     29
ARTICLE  X.     30
10.1     Construction  of  Capital  Additions  to  the  Leased  Property.     30
10.2     Construction  Requirements  for  all  Capital  Additions     31
10.3     Funding  by  Lessor.     32
10.4     Capital  Additions  Financed  by  Lessee     33
ARTICLE  XI.     34
11.1     Liens     34
ARTICLE  XII.     34
12.1     Permitted  Contests     34
ARTICLE  XIII.     35
13.1     General  Insurance  Requirements     35
13.2     Replacement  Cost     36
13.3     Additional  Insurance     36
13.4     Waiver  of  Subrogation     37
13.5     Policy  Requirements     37
13.6     Increase  in  Limits     37
13.7     Blanket  Policies  and  Policies  Covering  Multiple  Locations     37
13.8     No  Separate  Insurance     38
ARTICLE  XIV.     38
14.1     Insurance  Proceeds     38
14.2     Insured  Casualty.     38
14.3     Uninsured  Casualty     39
14.4     No  Abatement  of  Rent     40
14.5     Waiver     40
14.6     Damage  Near  End  of  Term     40
ARTICLE  XV.     40
15.1     Condemnation.     40
15.2     Award-Distribution     41
15.3     Temporary  Taking     41
ARTICLE  XVI.     41
16.1     Events  of  Default     41
16.2     Certain  Remedies     43
16.3     Damages     44
16.4     Receiver     45
16.5     Lessee's  Obligation  to  Purchase     45
16.6     Waiver     46
16.7     Application  of  Funds     46
16.8     [Reserved]     46
16.9     [Reserved]     46
16.10     Landlord's  Security  Interest     46
ARTICLE  XVII.     47
17.1     Lessor's  Right  to  Cure  Lessee's  Default     47
ARTICLE  XVIII.     47
18.1     Purchase  of  the  Leased  Property     47
18.2     Allocation  of  the  Boise,  Idaho  Purchase  Price     48
ARTICLE  XIX.     48
19.1     Renewal  Terms     48
ARTICLE  XX.     49
20.1     Holding  Over     49
ARTICLE  XXI.     49
21.1     Letters  of  Credit     49
21.2     Times  for  Obtaining  Letters  of  Credit     50
21.3     Amounts  for  Letters  of  Credit.     50
21.4     Uses  of  Letters  of  Credit     51
21.5     Cash  Security  Deposit  Option     51
ARTICLE  XXII.     53
22.1     Risk  of  Loss     53
ARTICLE  XXIII.     53
23.1     General  Indemnification     53
ARTICLE  XXIV.     54
24.1     Subletting  and  Assignment.     54
24.2     Consent     55
24.3     Costs     56
24.4     No  Release  of  Lessee's  Obligations     56
24.5     Assignment  of  Lessee's  Rights  Against  Sublease     57
24.6     Reserved     57
24.7     REIT  Protection     57
24.8     Prepaid  Rent     58
ARTICLE  XXV.     58
25.1     Officer's  Certificates  and  Financial  Statements.     58
25.2     Charges     60
ARTICLE  XXVI.     60
26.1     Lessor's  Right  to  Inspect  and  Show the Leased Property and Capital
Additions     60
ARTICLE  XXVII.     60
27.1     No  Waiver     60
ARTICLE  XXVIII.     60
28.1     Remedies  Cumulative     60
ARTICLE  XXIX.     61
29.1     Acceptance  of  Surrender     61
ARTICLE  XXX.     61
30.1     No  Merger     61
ARTICLE  XXXI.     61
31.1     Conveyance  by  Lessor     61
31.2     New  Lease     61
ARTICLE  XXXII.     63
32.1     Quiet  Enjoyment     63
ARTICLE  XXXIII.     63
33.1     Notices     63
ARTICLE  XXXIV.     64
34.1     Appraiser     64
ARTICLE  XXXV.     65
35.1     Lessee's  Option  to  Purchase  the  Leased  Property.     65
35.2     Defaults.     68
35.3     Escrow  Provisions.     69
35.4     Lessor's  Option  to  Purchase  Lessee's  Personal  Property     70
ARTICLE  XXXVI.     70
36.1     Lessor  May  Grant  Liens     70
36.2     Attornment     70
ARTICLE  XXXVII.     71
37.1     Hazardous  Substances     71
37.2     Notices     71
37.3     Remediation     71
37.4     Indemnity     72
37.5     Environmental  Inspection     73
ARTICLE  XXXVIII.     73
38.1     Memorandum  of  Lease     73
ARTICLE  XXXIX.     73
39.1     Sale  of  Assets     73
ARTICLE  XL.     74
40.1     Subdivision     74
ARTICLE  XLI.     75
41.1     Authority     75
ARTICLE  XLII.     75
42.1     Attorneys'  Fees     75
ARTICLE  XLIII.     75
43.1     Brokers     75
ARTICLE  XLIV.     75
44.1     Miscellaneous.     75
ARTICLE  XLV.     79
45.1     Restatement  of  Original  Leases     79
ARTICLE  XLVI.     79
46.1     Provisions  Relating  to  Master  Lease     79


<PAGE>

Exhibits:
--------

Exhibit  A     Legal  Description  of  the  Land
Exhibit  B     List  of  Lessor's  Personal  Property
Exhibit  C     Description  of  Facilities  and  Certain  Material  Terms
Exhibit  D     IRR  Percentages
Exhibit  E     Property  Condition  Reports
Exhibit  F     Letter  of  Credit  Amounts
Exhibit  G     Letter  of  Credit  Reduction  Fraction
Exhibit  H     Rent  for  the  Extended  Terms
Exhibit  I     Capital  Repair  Requirements
Exhibit  J     Form  of  Letter  of  Credit
Exhibit  K     Form  of  Amendment  to  Pennsylvania  Land  Leases
Exhibit  L     Boise  Work  Letter
Exhibit  M     Permitted  Competing  Facilities
<PAGE>


                                        2
                                      LEASE
     THIS  AMENDED AND RESTATED MASTER LEASE ("Lease") is dated as of the 18 day
of September, 2002 (the "Restatement Date"), and is between HEALTH CARE PROPERTY
INVESTORS,  INC.,  a  Maryland  corporation,  HCPI TRUST, a Maryland real estate
trust,  and  TEXAS  HCP  HOLDING,  L.P.,  a  Delaware  limited  partnership
(collectively, as "Lessor"), and EMERITUS CORPORATION, a Washington corporation,
and  ESC  III,  L.P., a Washington limited partnership d/b/a TEXAS-ESC III, L.P.
(collectively,  as  "Lessee").
ARTICLE  I.
-----------
1.1     Leased  Property;  Term.
        -----------------------
     Upon  and subject to the terms and conditions hereinafter set forth, Lessor
leases  to  Lessee  and  Lessee  leases  from  Lessor all of Lessor's rights and
interest  in  and  to  the  following  with respect to each Facility (as defined
below)  (collectively  the  "Leased  Property"):
(a)     the  real  property or properties described in Exhibit A attached hereto
                                                       ---------
(collectively,  the  "Land");
(b)     all  buildings,  structures, Fixtures (as hereinafter defined) and other
improvements  of  every  kind  now  or  hereafter located on the Land including,
alleyways  and  connecting tunnels, sidewalks, utility pipes, conduits and lines
(on-site  and  off-site  to  the  extent Lessor has obtained any interest in the
same),  parking  areas and roadways appurtenant to such buildings and structures
and  Capital Additions funded by Lessor of each such Facility (collectively, the
"Leased  Improvements");
(c)     all  easements,  rights  and  appurtenances relating to the Land and the
Leased  Improvements  (collectively,  the  "Related  Rights");
(d)     all  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,  apparatus,  sprinkler  systems,  fire  and  theft
protection  equipment,  and built-in oxygen and vacuum systems, all of which, to
the  greatest  extent  permitted  by  law,  are hereby deemed to constitute real
estate, together with all replacements, modifications, alterations and additions
thereto  (collectively,  the  "Fixtures");  and
(e)     the  machinery,  equipment,  furniture  and  other  personal  property
described  on  Exhibit  B  attached  hereto,  together  with  all  replacements,
               ----------
modifications,  alterations  and  substitutes  therefore  (whether  or  not
constituting  an  upgrade)  (collectively,  "Lessor's  Personal  Property").
     SUBJECT, HOWEVER, to the easements, encumbrances, covenants, conditions and
restrictions  and  other  matters  which  affect  the  Leased Property as of the
Original  Lease  Commencement  Date  with  respect to each portion of the Leased
Property  or  which are created thereafter as permitted under the Original Lease
or  hereunder  to  have  and  to  hold (i) for a fixed term with respect to each
Facility  (with  respect  to  each Facility, the "Fixed Term") commencing on the
Restatement  Date and ending at 11:59 p.m. on the applicable Expiration Date (as
defined  below),  and (ii) the Extended Terms provided for in Article XIX unless
this  Lease  is  earlier  terminated  as  hereinafter  provided.
ARTICLE  II.
------------
2.1     Definitions
        -----------
     .  For  all  purposes of this Lease, except as otherwise expressly provided
or  unless the context otherwise requires, (i) the terms defined in this Article
have  the  meanings  assigned  to them in this Article and include the plural as
well  as  the  singular;  (ii) all accounting terms not otherwise defined herein
have  the  meanings  assigned  to  them  in  accordance with GAAP as at the time
applicable;  (iii)  all  references  in  this  Lease  to  designated "Articles,"
"Sections"  and  other subdivisions are to the designated Articles, Sections and
other  subdivisions of this Lease; (iv) the word "including" shall have the same
meaning  as  the  phrase  "including,  without  limitation,"  and  other similar
phrases; and (v) 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:
Added  Value  Percentage:  As  defined  in  Section  10.4.
------------------------
Additional  Charges:  As  defined  in  Article  III.
-------------------
Additional  Rosewood  Option  Payment:  As  defined  in  Article  XXXV.
-------------------------------------
Additional  Rent:  The  sum  of  Allocated  Additional  Rent  for  all  of  the
----------------
Facilities.
----------
Affiliate:  Any  Person which, directly or indirectly, controls or is controlled
---------
by  or  is  under  common  control  with any other Person.  For purposes of this
definition,  "control"  (including  the  correlative  meanings  of  the  terms
"controlled  by"  and  "under common control with"), 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.  When  used  with  respect  to  any  corporation,  the  term
"Affiliate"  shall  also  include any Person which owns, directly or indirectly,
fifty  percent  (50%)  or more of any class of security of such corporation, but
shall  exclude  any  affiliate  of Daniel R. Baty which but for its relationship
with  Daniel  R.  Baty  would  not  be  considered  an  Affiliate  of  Lessee.
Allentown  Land  Lease:  The amended and restated land lease dated April 7, 1988
----------------------
by  and  between  Columbian  Home  of  Allentown,  a  non-profit  Pennsylvania
corporation  of the City of Allentown, Lehigh County, Pennsylvania and Allentown
Personal  Care  General  Partnership,  a  Pennsylvania general partnership, with
respect  to  certain  land  located  in  the  City  of Allentown, Lehigh County,
Pennsylvania.
Allocated  Additional  Rent:  With  respect  to  each  Facility,  the  amount of
---------------------------
Additional  Rent  allocated  to such Facility as determined by Section 3.1.2 and
-------
Exhibit  C  attached  hereto.
----------
Allocated Initial Investment:  With respect to each Facility, at any given time,
----------------------------
the  "Allocated  Initial  Investment" allocated to such Facility as set forth on
Exhibit  C  attached  hereto.
  --------
Allocated  Minimum  Rent:  With  respect to each Facility, the amount of Minimum
------------------------
Rent  allocated  to  such  Facility  as  set forth on Exhibit C attached hereto.
--                                                    ---------
Applicable  Boise  Minimum  Rent  Increase:  As  defined  in  Section  3.1.1.
------------------------------------------
Appraiser:  As  defined  in  Article  XXXIV.
---------
Appreciation  Amount:  With  respect to a Purchase Group, the amount, if any, by
--------------------
which  the  aggregate Fair Market Value of such Facilities exceeds the aggregate
Minimum  Repurchase  Price  of  such  Facilities  (as  defined  below) as of the
applicable  Outside  Closing  Date.
Award:  All compensation, sums or anything of value awarded, paid or received on
-----
a  total  or  partial  Condemnation.
Base  Gross  Revenues:  With respect to each Facility, the Gross Revenues as set
---------------------
forth  on  Exhibit  C  attached  hereto.
-          ----------
Base  Period:  The  period commencing on that date which is eighteen (18) months
------------
prior  to  the  date  any  appraisal  of  any  Facility  is made pursuant to the
provisions of Article XXXIV and ending on the date which is six (6) months prior
to  the  date  any  such  appraisal  of  the  Facility  is  made.
BLS:  Bureau  of  Labor  Statistics,  U.S.  Department  of  Labor.
---
Boise  Additional  Rent  Increase:  As  defined  in  ExhibitC  attached  hereto.
---------------------------------                    -------
Boise  Capital  Renovation Project:  The "Capital Renovation Project" as defined
----------------------------------
in  the  Boise  Work  Letter.
Boise  Capital  Renovation  Project  Minimum  Rent Reset Date:  The date of each
-------------------------------------------------------------
advance of Boise Capital Renovation Project Costs by Lessor under the Boise Work
----
Letter.
Boise  Capital  Renovation  Project  Lease  Rate:  Eleven  and  One-Half Percent
------------------------------------------------
(11.5%).
------
Boise  Capital Renovation Project Costs:  The "Capital Renovation Project Costs"
---------------------------------------
as  defined  in  the  Boise  Work  Letter.
Boise  Completion  Date:  The  "Completion  Date"  as  defined in the Boise Work
-----------------------
Letter.
-----
Boise  Lessor Maximum Cost:  The "Landlord Maximum Cost" as defined in the Boise
--------------------------
Work  Letter.
Boise  Work  Letter:  The  Amended  and Restated Capital Renovation Project Work
-------------------
Letter  attached  hereto as Exhibit L and incorporated herein by this reference.
---                         ---------
Business Day:  Each Monday, Tuesday, Wednesday, Thursday and Friday which is not
------------
a  day on which national banks in the City of New York, New York are authorized,
or  obligated,  by  law  or  executive  order,  to  close.
Capital  Additions:  With respect to any Facility, one or more new buildings, or
------------------
one  or  more  additional structures annexed to any portion of any of the Leased
Improvements  of  such  Facility,  or  the  material  expansion  of  existing
improvements, which are constructed on any parcel or portion of the Land of such
Facility, during the Term, including construction of a new wing or new story, or
the  repair,  replacement,  restoration,  remodeling  or  rebuilding of existing
Leased  Improvements  on  such Facility or any portion thereof where the purpose
and  effect  of  such work is to provide a functionally new facility in order to
provide  services  not  previously  offered  in  such Facility.  Notwithstanding
anything  to  the contrary herein, the Boise Capital Renovation Project shall be
at  all  times  deemed  a  "Capital  Addition"  for  purposes  of  this  Lease.
Capital  Addition  Costs:  The  costs of any Capital Addition made to the Leased
------------------------
Property whether paid for by Lessee or Lessor, including (i) all permit fees and
--
other costs imposed by any governmental authority, the cost of site preparation,
the  cost of construction including materials and labor, the cost of supervision
and  related  design,  engineering  and  architectural services, the cost of any
fixtures,  and if and to the extent approved by Lessor, the cost of construction
financing;  (ii)  fees paid to obtain necessary licenses and certificates; (iii)
the cost of any land contiguous to the Leased Property which is to become a part
of  the Leased Property purchased for the purpose of placing thereon the Capital
Addition  or  any  portion  thereof or for providing means of access thereto, or
parking  facilities therefor, including the cost of surveying the same, but only
to  the extent approved by Lessor in writing and in advance if Lessor is funding
such  Capital Addition; (iv) the cost of insurance, real estate taxes, water and
sewage  charges  and  other  carrying  charges  for such Capital Addition during
construction; (v) the cost of title insurance; (vi) reasonable fees and expenses
of  legal  counsel;  (vii)  filing,  registration  and recording taxes and fees;
(viii)  documentary  stamp  and similar taxes; and (ix) all reasonable costs and
expenses  of  Lessor  and  any Person which has committed to finance the Capital
Addition,  including  (a)  the  reasonable fees and expenses of their respective
legal  counsel;  (b)  printing  expenses; (c) filing, registration and recording
taxes  and  fees;  (d)  documentary stamp and similar taxes; (e) title insurance
charges  and  appraisal  fees;  (f)  rating agency fees; and (g) commitment fees
charged  by  any  Person  advancing  or  offering  to advance any portion of the
financing  for  such Capital Addition.  Notwithstanding anything to the contrary
herein,  all  Boise Capital Renovation Project Costs advanced, funded or accrued
by  Lessor  under  the  Boise Work Letter shall be treated for all purposes as a
Capital  Addition  Cost  financed  and  paid  for  by  Lessor  under this Lease.
Capital  Repair  Requirements:  With  respect  to  each Facility, the applicable
-----------------------------
amount  as  set  forth  on  Exhibit  I  attached  hereto.
----                        ----------
Cash  Flow:  With  respect  to each Facility, the net income from such Facility,
----------
determined  on  the basis of GAAP applied on a consistent basis, plus the sum of
--
(i)  depreciation and amortization expense; (ii) Rent and other expenses payable
hereunder,  excluding,  however,  Impositions  for  such  Facility;  plus  (iii)
management  fees  for  such  Facility;  less  the  sum  of  (y) a management fee
allowance  of  five  percent (5%) of Gross Revenues for such Facility during the
corresponding  period  plus  (z)  an  annual  Two Hundred Dollar ($200) per unit
reserve  for  such  Facility,  pro-rated  for  the  corresponding  period.
Cash  Flow  Coverage:  With respect to each Facility, for any period, calculated
--------------------
as  of  the  last  day  of  the period, the ratio of Cash Flow for such Facility
attributable  to  such  period  to  total Rent payable for such period under the
Lease.
Cash  Security  Deposit:  As  defined  in  Section  21.5.
-----------------------
Close  of  Escrow:  As  defined  in  Article  XXXV.
-----------------
Code:  The  Internal  Revenue  Code  of  1986,  as  amended.
----
Collateral:  As  defined  in  Section  16.10.1.
----------
Condemnation:  The  exercise  of  any  governmental  power,  whether  by  legal
------------
proceedings  or  otherwise,  by  a  Condemnor or a voluntary sale or transfer by
--------
Lessor  to  any  Condemnor,  either  under threat of condemnation or while legal
----
proceedings  for  condemnation  are  pending.
----
Condemnor:  Any  public  or  quasi-public  authority,  or private corporation or
---------
individual,  having  the  power  of  Condemnation.
----
Consolidated  Financials:  For  any  fiscal  year or other accounting period for
------------------------
Lessee  and  its  consolidated Subsidiaries, 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 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,
and  prepared  in  accordance  with  GAAP.
Consolidated  Net  Worth:  At  any time, the sum of the following for Lessee and
------------------------
its  consolidated Subsidiaries, on a consolidated basis determined in accordance
--
with  GAAP
(i)     the amount of capital or stated capital (after deducting the cost of any
     shares  held  in  its  treasury),  plus
(ii)     the amount of capital surplus and retained earnings (or, in the case of
a  capital  surplus  or  retained  earnings  deficit,  minus  the amount of such
deficit),  minus
(iii)     the sum of the following (without duplication of deductions in respect
of  items  already  deducted  in arriving at surplus and retained earnings): (a)
unamortized  debt  discount  and  expense; and (b) any write-up in book value of
assets  resulting  from  a  revaluation  thereof  subsequent  to the most recent
Consolidated  Financials  prior  to the date hereof, excluding, however, any (i)
net write-up in value of foreign currency in accordance with GAAP, (ii) write-up
resulting  from a reversal of a reserve for bad debts or depreciation, and (iii)
write-up  resulting  from  a  change  in  methods  of  accounting for inventory.
     Cost  of  Living  Index:  The Consumer Price Index for All Urban Consumers,
     -----------------------
U.S. City Average (1982-1984 = 100), published by the BLS, or such other renamed
index.  If the BLS changes the publication frequency of the Cost of Living Index
so  that  a  Cost  of  Living  Index  is  not available to make a cost-of-living
adjustment  as specified herein, the cost-of-living adjustment shall be based on
the  percentage  difference  between  the  Cost  of Living Index for the closest
preceding  month  for  which a Cost of Living Index is available and the Cost of
Living  Index  for  the  comparison month as required by this Lease.  If the BLS
changes  the  base  reference period for the Cost of Living Index from 1982-84 =
100,  the  cost-of-living  adjustment  shall  be determined with the use of such
conversion  formula  or  table  as  may  be  published  by  the BLS.  If the BLS
otherwise  substantially  revises,  or  ceases publication of the Cost of Living
Index,  then  a  substitute  index  for  determining cost-of-living adjustments,
issued  by  the  BLS  or  by  a  reliable  governmental  or  other  nonpartisan
publication,  shall  be  reasonably  selected  by  Lessor  and  Lessee.
CPI  Increase:  (A)  With respect to any increase applicable at the commencement
-------------
of  the  second (2nd) Lease Year of a Facility, the percentage increase (but not
decrease)  in  (i)  the  Cost of Living Index published for the beginning of the
first  Quarter  of each Lease Year, over (ii) the Cost of Living Index published
for the month twelve (12) months prior to such date, and (B) with respect to all
subsequent  Lease  Years,  the percentage increase (but not decrease) in (i) the
Cost  of  Living  Index published for the beginning of the first Quarter of each
Lease  Year,  over  (ii) the Cost of Living Index published for the beginning of
the  first  Quarter  of  the  immediately  prior  Lease  Year.
CPI Increase (Group 4 Modified):  (A) With respect to any increase applicable at
-------------------------------
the  commencement  of  the second (2nd) Lease Year of a Facility, the percentage
increase  (rounded to two (2) decimal places), if any, in (i) the Cost of Living
Index  published  for  the  month  which  is  three  (3)  months  prior  to  the
commencement  of  the  applicable Lease Year, over (ii) the Cost of Living Index
published  for  the  month  twelve  (12) months prior to such date, and (B) with
respect  to  all subsequent Lease Years, the percentage increase (rounded to two
(2)  decimal  places), if any, in (i) the Cost of Living Index published for the
month  which  is  three  (3)  months prior to the commencement of the applicable
Lease  Year, over (ii) the Cost of Living Index published for the month which is
three  (3) months prior to the commencement of the immediately prior Lease Year.
CPI Percentage Cap:  With respect to each Facility, the applicable percentage as
------------------
set  forth  on  Exhibit  C  attached  hereto.
                ----------
CPI  Percentage Floor:  With respect to each Facility, the applicable percentage
---------------------
as  set  forth  on  Exhibit  C  attached  hereto.
                    ----------
CPI  Rent:  The  phrase  "CPI  Rent"  shall  have  the  following  meanings:
---------
          (I) With respect to the Group 4 Facilities, an amount equal to the sum
of  (i)  the  greater of (A) the lesser of (a) the product of (x) the sum of the
prior  Lease  Year's  Minimum  Rent  and  Additional  Rent multiplied by (y) the
current  CPI Increase (Group 4 Modified), multiplied by (z) two (2), and (b) the
CPI  Percentage Cap multiplied by the sum of the prior Lease Year's Minimum Rent
and  Additional Rent, and (B) (1) the CPI Percentage Floor multiplied by (2) the
sum  of  the  prior  Lease Year's Minimum Rent and Additional Rent, and (ii) the
prior  Lease  Year's CPI Rent.  If the prior Lease Year is less than twelve (12)
calendar  months,  the Minimum Rent, Additional Rent and CPI Rent for such Lease
year  shall  be  annualized  for  purposes  of  the  foregoing calculations; and
     (II)  With  respect  to all other Facilities, an amount equal to the sum of
(i) the greater of (A) the lesser of (a) the product of (y) the sum of the prior
Lease  Year's Minimum Rent and Additional Rent multiplied by (z) the current CPI
Increase,  and  (b)  the  CPI  Percentage Cap multiplied by the sum of the prior
Lease  Year's  Minimum  Rent and Additional Rent, and (B) (1) the CPI Percentage
Floor  multiplied  by  (2)  the  sum  of the prior Lease Year's Minimum Rent and
Additional  Rent,  and (ii) the prior Lease Year's CPI Rent.  If the prior Lease
Year is less than twelve (12) calendar months, the Minimum Rent, Additional Rent
and  CPI  Rent  for  such  Lease  year  shall  be annualized for purposes of the
foregoing  calculations.
Notwithstanding  anything in the foregoing to the contrary, with respect to each
Facility,  CPI Rent for the first Lease Year shall be equal to the amount as set
forth  on  Exhibit  C  attached  hereto.
           ----------
     Date  of Taking:  The date the Condemnor has the right to possession of the
     ---------------
property  being  condemned.
Deposit:  As  defined  in  Article  XXXV.
-------
Emeritus:  As  defined  in  the  preamble.
--------
Environmental  Costs:  As  defined  in  Article  XXXVII.
--------------------
Environmental  Laws:  Environmental  Laws shall mean any and all federal, state,
-------------------
municipal  and  local laws, statutes, ordinances, rules, regulations, guidances,
policies,  orders,  decrees,  judgments,  whether  statutory  or  common law, as
amended  from  time  to  time,  now  or  hereafter  in  effect,  or promulgated,
pertaining  to the environment, public health and safety and industrial hygiene,
including  the  use,  generation,  manufacture,  production,  storage,  release,
discharge,  disposal,  handling,  treatment,  removal, decontamination, cleanup,
transportation  or  regulation  of  any  Hazardous  Substance,  including  the
Industrial  Site Recovery Act, the Clean Air Act, the Clean Water Act, the Toxic
Substances  Control  Act,  the Comprehensive Environmental Response Compensation
and  Liability  Act,  the  Resource  Conservation  and Recovery Act, the Federal
Insecticide,  Fungicide,  Rodenticide  Act,  the Safe Drinking Water Act and the
Occupational  Safety  and  Health  Act.
Escrow:  As  defined  in  Article  XXXV.
------
Escrow  Holder:  As  defined  in  Articles  XXXV.
--------------
Event  of  Default:  As  defined  in  Article  XVI.
------------------
Expiration  Date:  With respect to each Facility, the expiration dates set forth
----------------
on  Exhibit  C  attached  hereto.
    ----------
Extended  Term(s):  With respect to each Facility, as defined in Article XIX and
-----------------
set  forth  on  Exhibit  C  attached  hereto.
                ----------
Extended  Term  Rent:  With  respect  to  each  Facility, an amount equal to the
--------------------
applicable  sum  as  set  forth  on  Exhibit  H  attached  hereto.
-----                                ----------
Facility:  Each  Facility  being (and to be) operated or proposed to be operated
--------
on  the  Leased  Property,  as more particularly described on Exhibit C attached
-                                                             ---------
hereto.  Notwithstanding  the  foregoing,  the  Boise Capital Renovation Project
shall  be  deemed  to  be  part  of  the "Facility" with respect to the Facility
located  in  Boise,  Idaho.
Facility  Mortgage:  As  defined  in  Article  XIII.
------------------
Facility  Mortgagee:  As  defined  in  Article  XIII.
-------------------
Fair  Market  Added Value:  With respect to each Facility, the Fair Market Value
-------------------------
(as  hereinafter  defined)  of  the  Leased  Property  (including  all  Capital
Additions) of such Facility less the Fair Market Value of the Leased Property of
such  Facility determined as if no Capital Additions financed by Lessee had been
constructed.
Fair Market Rental:  With respect to each Facility, the fair market rental value
------------------
of  the  Leased  Property  of  such  Facility,  or  applicable  portion  thereof
(including  any  periodic  increases therein), determined in accordance with the
appraisal  procedures  set  forth  in  Article  XXXIV.
Fair  Market Value:  With respect to each Facility, the fair market value of the
------------------
Leased  Property  and  all  Capital  Additions  of  such Facility, or applicable
portion(s)  thereof,  determined in accordance with the appraisal procedures set
forth  in  Article  XXXIV.  Fair  Market  Value  shall  be the value obtained by
assuming  that  the  Leased  Property  is encumbered by this Lease.  Further, in
determining  Fair  Market  Value the positive or negative effect on the value of
the  Leased  Property  attributable to the interest rate, amortization schedule,
maturity  date,  prepayment  penalty  and  other  terms  and  conditions  of any
encumbrance  which  will not be removed at or prior to the date as of which Fair
Market  Value  shall taken into account.  The Leased Property shall be valued at
its  highest  and  best  use  which shall be presumed to be as a fully-permitted
Facility  operated in accordance with the provisions of this Lease.  Fair Market
Value  of  the  Leased  Property  shall not include "going concern" or "business
enterprise" value attributable to factors other than the highest and best use of
the  Leased  Property.  In  addition,  the  following  specific matters shall be
factored  in  or  out,  as  appropriate,  in  determining  Fair  Market  Value:
     (i)     The  negative  value of (a) any deferred maintenance or other items
of  repair  or replacement of the Leased Property, (b) any then current or prior
licensure  or certification violations and/or admissions holds and (c) any other
breach  or  failure  of  Lessee  to perform or observe its obligations hereunder
shall  not  be  taken  into account; rather, the Leased Property, and every part
       ---
thereof  shall  be  deemed  to be in the condition required by this Lease (i.e.,
good  order and repair) and Lessee shall at all times be deemed to have operated
the  Facility  in  compliance  with and to have performed all obligations of the
Lessee  under  this  Lease.
(ii)     The  occupancy  level  of the applicable Facility shall be deemed to be
the  average  occupancy  during  the  Base  Period.
(iii)     If  the  applicable  Facility's  Primary Intended Use includes a mixed
use,  then  the  average  of such mix during the Base Period shall be taken into
account.
     First  Refusal  Facilities:  Each of those Facilities identified as a First
     --------------------------
Refusal  Facility  on  Exhibit  C  attached  hereto.
                       ----------
First  Refusal  Period:  As  defined  in  Section  35.1.4.
----------------------
Fixed  Term:  As  defined  in  Article  I.
-----------
Fixtures:  With respect to each Facility, the Fixtures (as defined in Article I)
--------
of  such  Facility.
Fullerton  Closing  Date:  The  date  of  closing  of  the sale by Lessor of the
------------------------
Facility  located in Fullerton, California provided for in Section 35.1.2, if at
------
all.
Fullerton  Purchase  Option  Term:  As  defined  in  Article  XXXV.
---------------------------------
GAAP:  Generally  accepted  accounting  principles.
----
Gross  Revenues:  With  respect  to  each  Facility,  all  revenues  received or
---------------
receivable  from  or by reason of the operation of the Facility or any other use
-------
of  the  Leased  Property  of  such Facility, Lessee's Personal Property and all
Capital  Additions  including all revenues received or receivable for the use of
or  otherwise  attributable to units, rooms, beds and other facilities provided,
meals  served,  services  performed  (including  ancillary  services),  space or
facilities  subleased  or  goods  sold  on  or  from the Leased Property and all
Capital Additions of such Facility, including, and except as provided below, any
consideration  received under any commercial (as opposed to resident or patient)
subletting,  licensing  or  other arrangements with third parties (a "Commercial
Sublessee")  relating  to  the  possession  or  use of any portion of the Leased
Property and all Capital Additions; provided, however, that Gross Revenues shall
not  include:
(i)     non-operating  revenues  such as interest income or income from the sale
of  assets  not  sold  in  the  ordinary  course  of  business;
(ii)     federal, state or local excise taxes and any tax based upon or measured
     by  such  revenues which is added to or made a part of the amount billed to
the  patient  or  other recipient of such services or goods, whether included in
the  billing  or  stated  separately;
(iii)     contractual  allowances (relating to any period during the Term of the
Lease)  for  billings  not paid by or received from the appropriate governmental
agencies  or  third  party  providers;  and
(iv)     all  proper  patient  billing  credits  and  adjustments  according  to
generally  accepted  accounting  principles  relating to health care accounting.
     Gross  Revenues for each Lease Year of such Facility shall reflect all cost
report  settlement  adjustments,  whether  positive  or negative, received in or
payable  during  such Lease Year in accordance with GAAP relating to health care
accounting,  regardless  of the year that such settlement amounts are applicable
to;  provided,  however, that to the extent settlement amounts are applicable to
years,  or  portions  thereof,  prior  to  the Restatement Date, such settlement
amounts  shall  not  be  reflected  in Gross Revenues for the Lease Year of such
Facility  in which such settlement amounts are received or paid.  Gross Revenues
shall include the Gross Revenues of any Commercial Sublessee with respect to any
applicable  portion  of  the Leased Property and/or any Capital Additions, i.e.,
the  Gross  Revenues  generated  from  the  operations conducted on or from such
portion  shall  be included directly in the Gross Revenues and the rent received
or  receivable  by  Lessee from such Commercial Sublessee shall be excluded from
Gross  Revenues  for  such  purpose.
Group  1  Facilities:  Each of those Facilities identified as a Group 1 Facility
--------------------
on  Exhibit  C  attached  hereto.
-   ----------
Group  2  Facilities:  Each of those Facilities identified as a Group 2 Facility
--------------------
on  Exhibit  C  attached  hereto.
-   ----------
Group  3  Facilities:  Each of those Facilities identified as a Group 3 Facility
--------------------
on  Exhibit  C  attached  hereto.
-   ----------
Group  4  Facilities:  Each of those Facilities identified as a Group 4 Facility
--------------------
on  Exhibit  C  attached  hereto.
-   ----------
Group  5 Facility:  Each of those Facilities identified as a Group 5 Facility on
-----------------
Exhibit  C  attached  hereto.
----------
Guarantors:  Any  future guarantor of all or any portion of Lessee's obligations
----------
pursuant  to  this  Lease  (each,  individually,  a  "Guarantor").
Guaranty:  Any  future  written  guaranty  of  Lessee's  obligations  hereunder
--------
executed  by  a  Guarantor.
-------
Handling:  As  defined  in  Article  XXXVII.
--------
Hazardous  Substances:  Collectively,  any  petroleum,  petroleum  product  or
---------------------
byproduct  or  any  substance, material or waste regulated or listed pursuant to
-------
any  Environmental  Law.
--
HCPI:  Health  Care  Property  Investors,  Inc.,  a  Maryland  corporation.
----
HCPI  Trust:  HCPI  Trust,  a  Maryland  real  estate  Trust.
-----------
Impositions:  Collectively,  all  taxes,  including capital stock, franchise and
-----------
other  state  taxes of Lessor (or, if Lessor is not HCPI, of HCPI as a result of
--
its  investment  in  Lessor),  ad  valorem,  sales,  use, single business, gross
receipts,  transaction  privilege,  rent or similar taxes; assessments including
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;  ground  rents;  water, sewer and other utility levies and charges; excise
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 and all interest and
penalties  thereon attributable to any failure in payment by Lessee which at any
time  prior  to,  during  or  in  respect  of the Term hereof may be assessed or
imposed on or in respect of or be a lien upon (i) Lessor or Lessor's interest in
the  Leased  Property,  (ii) the Leased Property or any part thereof or any rent
therefrom  or  any  estate,  right,  title  or  interest  therein,  or (iii) any
occupancy,  operation, use or possession of, or sales from or activity conducted
on or in connection with the Leased Property or the leasing or use of the Leased
Property  or any part thereof; provided, however, that nothing contained in this
Lease  shall  be  construed  to  require  Lessee to pay (a) any tax based on net
income  (whether  denominated  as  a  franchise  or  capital stock or other tax)
imposed  on  Lessor or any other Person, (b) any transfer, or net revenue tax of
Lessor or any other Person except Lessee and its successors, (c) any tax imposed
with  respect to the sale, exchange or other disposition by Lessor of any Leased
Property  or  the  proceeds  thereof,  or  (d)  any principal or interest on any
indebtedness  on  the  Leased  Property  owed  to a Facility Mortgagee for which
Lessor  is  the obligor, except to the extent that any tax, assessment, tax levy
or  charge,  which  is  otherwise  included  in  this  definition,  and  a  tax,
assessment,  tax  levy  or  charge  set  forth  in  clause (a) or (b) is levied,
assessed  or  imposed  in  lieu  thereof  or  as  a  substitute  therefor.
Incremental Gross Revenues:  With respect to each Facility, the positive amount,
--------------------------
if  any,  by which the Gross Revenues for such Facility during the current Lease
Year  exceeds  the Base Gross Revenues for such Facility.  The Incremental Gross
Revenues  for  any  partial  Lease  Year  shall be the amount by which the Gross
Revenues  for  such  partial Lease Year exceeds the Base Gross Revenues for such
Facility  as  prorated  for  such  partial  Lease  Year.
Initial  Rosewood  Option  Payment:  As  defined  in  Article  XXXV.
----------------------------------
Insurance  Requirements:  The  terms  of  any  insurance policy required by this
-----------------------
Lease and all requirements of the issuer of any such policy and of any insurance
----
board, association, organization or company necessary for the maintenance of any
such  policy.
Intangible Property:  All accounts, proceeds of accounts, rents, profits, income
-------------------
or  revenues  derived  from  the  use  of rooms or other space within the Leased
Property or the providing of services in or from the Leased Property; documents,
chattel  paper,  instruments,  contract  rights,  deposit  accounts,  general
intangibles,  causes  of  action,  now  owned  or  hereafter  acquired by Lessee
(including  any  right  to  any  refund  of  any Impositions) arising from or in
connection  with  Lessee's operation or use of the Leased Property; all licenses
and  permits now owned or hereinafter acquired by Lessee, which are necessary or
desirable  for Lessee's use of the Leased Property for its Primary Intended Use,
including,  if  applicable,  any certificate of need or similar certificate; the
right  to use any trade name or other name associated with the Facility; and any
and  all  third-party  provider  agreements  (including  Medicare and Medicaid).
IRR  Percentage:  With respect to each Purchase Option Property, an amount equal
---------------
to  the  applicable  percentage  as  set  forth  on  Exhibit  D attached hereto.
                                                     ----------
Land:  With  respect  to  each  Facility,  the  Land  (as  defined in Article I)
----
relating  to  such  Facility.
----
Land  Lease  Facilities:  Each  of  the  Facilities  identified  as a Land Lease
-----------------------
Facility  on  Exhibit  C  attached  hereto.
------        ----------
Land  Lease  Rent:  As  defined  in  Section  3.1.3.
-----------------
Landlord's Minimum Return Allocation:  An amount that yields an internal rate of
------------------------------------
return  on  the  Minimum  Repurchase  Price  for  the  period  commencing on the
applicable  Original  Lease  Commencement Date and ending on the closing date of
the purchase provided for in Section 35.1.1 hereof which internal rate of return
is  expressed  as a percentage equal to the sum of (i) an interest rate equal to
350  basis  points in excess of the Ten-Year Treasury Rate as of such date, and,
with respect to each Extended Term, the amount determined pursuant to Article 19
(but in no event less than 10.5% nor more than 11.5%) and (ii) 350 basis points.
Latrobe  Land  Lease:  The  land  lease,  dated October 14, 1986, by and between
--------------------
Wimmer  Corporation,  a  non-profit  Pennsylvania corporation of Unity Township,
----
Westmoreland  County, Pennsylvania and Unity Partnership, a Pennsylvania general
---
partnership,  as  amended  on  November  22,  1989, with respect to certain land
located  in  the  Township  of  Unity,  Westmoreland  County,  Pennsylvania.
Lease:  As  defined  in  the  preamble.
-----
Lease  Year:  The  first  Lease  Year  for  each  Facility  shall  be the period
-----------
commencing  on  the  Restatement Date and ending on the day immediately prior to
--------
the next occurring Lease Year Reference Date, and each subsequent Lease Year for
--
each Facility shall be each period of twelve (12) full calendar months after the
last  day  of  the prior Lease Year; provided, however, that the last Lease Year
for  a  Facility  during  the Term may be a period of less than twelve (12) full
calendar  months  and  shall  end on the last day of the Term for such Facility.
Lease  Year  Reference  Date:  With  respect  to  each  Facility, the Lease Year
----------------------------
Reference  Date  set  forth  on  Exhibit  C  attached  hereto.
------                           ----------
Leased Improvements:  With respect to each Facility, the Leased Improvements (as
-------------------
defined  in  Article  I)  of  such  Facility.
Leased Property:  With respect to each Facility, the Leased Property (as defined
---------------
in  Article  I)  of  such  Facility.
Legal  Requirements:  All  federal,  state,  county,  municipal  and  other
-------------------
governmental  statutes,  laws  (including  common  law  and Environmental Laws),
-----------
rules,  policies,  guidance,  codes,  orders,  regulations, ordinances, permits,
-----
licenses,  covenants,  conditions,  restrictions,  judgments,  decrees  and
----
injunctions affecting either the Leased Property, Lessee's Personal Property and
----
all  Capital  Additions  or the construction, use or alteration thereof, whether
now  or  hereafter  enacted  and  in  force, including any which may (i) require
repairs,  modifications  or  alterations  in or to the Leased Property, Lessee's
Personal  Property  and  all Capital Additions, (ii) in any way adversely affect
the  use  and enjoyment thereof, or (iii) regulate the transport, handling, use,
storage  or  disposal or require the cleanup or other treatment of any Hazardous
Substance.
Lessee:  As  defined  in  the  preamble.
------
Lessee's  Personal  Property:  With  respect  to  each  Facility,  the  Personal
----------------------------
Property  other  than  Lessor's Personal Property, allocable or relating to such
-------
Facility.
--
Lessee's  Share  of  the  Appreciation  Amount:  An  amount  determined  by  (i)
----------------------------------------------
subtracting the sum of Minimum Repurchase Price and the Appreciation Amount from
--------
Landlord's  Minimum Return Allocation, and (ii) multiplying the resultant amount
by  one-half.
Lessor:  Collectively,  HCPI,  Texas HCP, and HCPI Trust, as their interests may
------
appear.
Lessor's  Personal  Property:  With  respect to each Facility, Lessor's Personal
----------------------------
Property  (as  defined  in  Article  I)  allocable or relating to such Facility.
--
Lessor's  Shared Appreciation Amount:  Lessor's share of the Appreciation Amount
------------------------------------
which  shall  be calculated as follows: (i) first, Lessor shall be allocated the
first  dollars  of  the Appreciation Amount until such dollars together with all
Minimum  Rent  and  Additional  Rent  paid or payable to Lessor in the aggregate
under  the  Original  Leases as amended, consolidated and restated by this Lease
for  the  applicable  Purchase Group to the Outside Closing Date yield Lessor an
annual internal rate of return on the Minimum Repurchase Price of the applicable
Purchase  Group  in  the  aggregate equal to the IRR Percentage and (ii) second,
Lessor  and  its Affiliates shall be allocated one-half of any dollars remaining
in  the  Appreciation  Amount  after subtracting the portion of the Appreciation
Amount  allocated  to  Lessor  and  its  Affiliates  in  clause  (i)  above.
Letter  of  Credit Amount:  With respect to each Facility, the amount identified
-------------------------
as  the  Letter  of  Credit  Amount  on  Exhibit  F  attached  hereto.
-                                        ----------
Letter  of  Credit  Date:  As  defined  in  Section  21.2.
------------------------
LOC  Reduction  Fraction:  The  fraction  set forth on Exhibit G with respect to
------------------------                               ---------
each  Facility  listed  thereon.
---
Minimum  Rent:  The  sum  of  Allocated  Minimum Rent for all of the Facilities.
-------------
Minimum  Repurchase  Price:  With  respect  to  each  Facility  other  than  the
--------------------------
Facilities located in Biloxi, Mississippi, and Auburn California, the sum of (i)
--------
the  Allocated  Initial  Investment  with respect to such Facility plus (ii) any
Capital  Addition  Costs  funded  by  Lessor with respect to such Facility.  The
Minimum  Repurchase  Price  with  respect  to  the  Facility  located in Biloxi,
Mississippi  shall  be $8,849,392.03.  The Minimum Repurchase Price with respect
to  the  Facility  located  in  Auburn,  California  shall  be  $6,341,242.33.
Notwithstanding  the foregoing, the Minimum Repurchase Price with respect to the
Facility  located  in  San Antonio, Texas, commonly known as Hamilton House, the
Minimum  Repurchase  Price shall be reduced by the product of (x) a fraction the
numerator  of  which  is  the  gross  acres  of the Land removed from the Leased
Property  of  such Facility pursuant to Article XL, and the denominator of which
is  4.471,  and  (y)  $632,000.00.
New  Lease:  As  defined  in  Section  31.2.1.
----------
New  Lease  Effective  Date:  As  defined  in  Section  31.2.1.
---------------------------
Note:  That  certain  Promissory Note made by Emeritus in favor of HCPI dated as
----
of September 18, 2002, in an original principal amount of Eight Hundred Thousand
and  No/100  Dollars  ($800,000.00).
Offer:  As  defined  in  Section  35.1.4.
-----
Officer's  Certificate:  A certificate of Lessee signed by an officer authorized
----------------------
to  so  sign  by  its  board  of  directors  or  by-laws.
Original  Leases:  As  defined  in  Article  XLV.
----------------
Original  Lease  Commencement  Date.  With  respect  to  each  Facility,  the
-----------------------------------
"Commencement Date" as defined in the applicable Original Lease and as set forth
----------
on  Exhibit  I  attached  hereto.
    ----------
Opening  Deposit:  As  defined  in  Article  XXXV.
----------------
Outside  Closing  Date:  As  defined  in  Article  XXXV.
----------------------
Overdue  Rate:  On  any date, a rate equal to 2% above the Prime Rate, but in no
-------------
event  greater  than  the  maximum  rate  then  permitted  under applicable law.
Payment Date:  Any due date for the payment of the installments of Minimum Rent,
------------
Additional  Rent,  Land  Lease  Rent or any other sums payable under this Lease.
Pennsylvania  Land Leases:  The Allentown Land Lease and the Latrobe Land Lease.
-------------------------
Percentage  Rent:  With  respect  to  each  Lease Year of a Group 1 Facility, an
----------------
amount equal to the applicable percentage for each Group 1 Facility as set forth
----
on  Exhibit  C  attached  hereto multiplied by Incremental Gross Revenues during
    ----------
such  Lease  Year  for  such  Facility.
Person:  Any  individual,  corporation, partnership, joint venture, association,
------
joint  stock  company,  trust,  unincorporated  organization,  government or any
agency  or  political  subdivision  thereof  or  any  other  form  of  entity.
Personal  Property:  With respect to each Facility, all machinery, furniture and
------------------
equipment,  including  phone  systems  and computers, trade fixtures, inventory,
supplies  and  other  personal  property used or useful in the use of the Leased
Property  for  its  Primary  Intended  Use,  other  than  Fixtures.
Primary  Intended  Use:  With  respect  to  each  Facility,  an  Alzheimer care,
----------------------
congregate  care,  assisted-living,  or  skilled nursing facility and such other
-------
uses  necessary  or  incidental to such use.  Notwithstanding the foregoing, the
---
Primary  Intended  Use  of  the  Facilities  located  in Biloxi, Mississippi and
--
Auburn,  California  shall mean the foregoing-described facilities consisting of
--
81  units  and  89  units,  respectively.
Prime Rate:  On any date, a rate equal to the annual rate on such date announced
----------
by  the  Bank  of  New  York  to be its prime, base or reference rate for 90-day
unsecured loans to its corporate borrowers of the highest credit standing but in
no  event greater than the maximum rate then permitted under applicable law.  If
the  Bank of New York discontinues its use of such prime, base or reference rate
or  ceases to exist, Lessor shall designate the prime, base or reference rate of
another  state  or federally chartered bank based in New York to be used for the
purpose  of  calculating  the  Prime  Rate  hereunder.
Priority  Encumbrances:  As  defined  in  Article  XXXVI.
----------------------
Property Condition Reports:  The reports described on Exhibit E attached hereto.
--------------------------                            ---------
Purchase  Group:  Those  Facilities  identified  in  the aggregate as a Purchase
---------------
Group  on  Exhibit  C  attached  hereto.
----       ----------
Purchase  Option  Facilities:  Each of those Facilities identified as a Purchase
----------------------------
Option  Facility  on  Exhibit  C  attached  hereto.
-                     ----------
Purchase  Option  Purchase  Price:  The  Shared  Appreciation  Purchase  Price.
---------------------------------
Quarter:  During  each  Lease  Year,  the  first three (3) calendar month period
-------
commencing  on  the first (1st) day of such Lease Year and each subsequent three
----
(3)  calendar  month  period within such Lease Year; provided, however, that (i)
the  last Quarter during the first Lease Year may be a period of less than three
(3)  calendar  months and shall end on the last day of the first Lease Year; and
(ii)  last  Quarter  during  the  Term  may  be  a period of less than three (3)
calendar  months  and  shall  end  on  the  last  day  of  the  Term.
Renewal  Group:  Those Facilities identified in the aggregate as a Renewal Group
--------------
on  Exhibit  C  attached  hereto.
    ----------
Rent:  Collectively,  the  Minimum  Rent,  Additional  Rent, Land Lease Rent and
----
Additional  Charges,  all  as  defined  in  Article  III.
----
Restatement  Date:  As  defined  in  the  preamble.
-----------------
Rosewood:  As  defined  in  Article  XXXV.
--------
Rosewood  Option  Agreement:  As  defined  in  Article  XXXV.
---------------------------
SEC:  Securities  and  Exchange  Commission.
---
Separated  Property:  As  defined  in  Section  31.2.
-------------------
Shared  Appreciation  Purchase  Price:  The  Minimum  Repurchase  Price  of  the
-------------------------------------
Purchase  Option  Facilities  in the aggregate plus Lessor's Shared Appreciation
-------                                        ----
Amount.
--
State:  With  respect  to  each Facility, the State or Commonwealth in which the
-----
Leased  Property  for  such  Facility  is  located.
--
Subsidiaries:  Corporations,  limited  liability  companies  or partnerships, in
------------
which  Lessee owns, directly or indirectly, more than 50% of the voting stock or
---
partnership  interest.
Term:  Collectively, the Fixed Term and any Extended Term(s), as the context may
----
require,  unless  earlier  terminated.
Texas  HCP.  Texas  HCP  Holding,  L.P.,  a  Delaware  limited  partnership
----------
Transfer  Consideration:  As  defined  in  Article  XXIV.
-----------------------
Unavoidable  Delays:  Delays  due  to  strike,  lockout,  inability  to  procure
-------------------
materials,  power  failure,  act of God, governmental restriction, enemy action,
-------
civil commotion, fire, unavoidable casualty or other cause beyond the control of
--
the party responsible for performing an obligation hereunder; provided, however,
that  a  lack  of funds shall not be deemed a cause beyond the control of either
party  hereto.
Unsuitable for Its Primary Intended Use:  With respect to each Facility, a state
---------------------------------------
or  condition  of  such Facility such that by reason of damage or destruction or
Condemnation,  in  the  good  faith judgment of Lessor and Lessee, such Facility
cannot  be operated on a commercially practicable basis for its Primary Intended
Use  taking  into account, among other relevant factors, the number of units and
usable  beds  affected  by  such  damage  or  destruction  or  Condemnation.
ARTICLE  III.
-------------
3.1     Rent.
        ----
       From  and  after the Restatement Date Lessee will pay to Lessor in lawful
money  of  the  United  States  of  America  which shall be legal tender for the
payment  of  public  and private debts, without offset or deduction, the amounts
set  forth  hereinafter as Minimum Rent during the Term.  Lessee shall also pay,
where  applicable, the amounts set forth hereinafter as Additional Rent and Land
Lease  Rent.  Payments of Rent shall be made by wire transfer of funds initiated
by  Lessee  to  Lessor's  account or to such other Person as Lessor from time to
time  may  designate  in  writing.
3.1.1     Minimum  Rent.
          -------------
(a)     For  the  period from the Restatement Date through the expiration of the
Fixed  Term,  Lessee shall pay to Lessor as monthly "Allocated Minimum Rent" for
each  Facility  the amounts allocated to and set forth opposite such Facility on
Exhibit  Cattached  hereto and incorporated herein by this reference, in advance
 ---------
on  or  before  the  first  day  of  each  calendar  month.
(b)     With  respect  to  the  Facility  located  in  Boise, Idaho, the monthly
Allocated  Minimum  Rent  determined  pursuant  to subsection (a) above shall be
increased  by  amount  equal  to  the  product  of  (i)  the total Boise Capital
Renovation  Project Costs paid, funded or accrued by Lessor from the date of the
previous increase pursuant to this subsection (c) through the date of such Boise
Capital Renovation Project Minimum Rent Reset Date, times (ii) the Boise Capital
                                                    -----
Renovation  Project  Lease  Rate (the "Applicable Boise Minimum Rent Increase"),
and accordingly the monthly installments of monthly Allocated Minimum Rent shall
be increased by one-twelfth (1/12) of the Applicable Boise Minimum Rent Increase
payable  for  any  months  during  which  such  increase  is applicable shall be
prorated  based  upon  the number of days for which the different rental amounts
apply.  Following  any changes in monthly Allocated Minimum Rent with respect to
the  Facility  located in Boise, Idaho pursuant to this Lease, at the request of
either  party,  the  parties shall execute an amendment to this Lease to confirm
the  same  in  form  and  substance  reasonably acceptable to Lessor and Lessee.
Notwithstanding  the  foregoing,  the  failure  of  Lessor to prepare and/or the
failure  of  Lessee  to  execute and deliver any such amendment shall not affect
Lessor's determination of such monthly Allocated Minimum Rent payable hereunder.
3.1.2     Additional  Rent.  Lessee  shall  pay  to Lessor as monthly "Allocated
          ----------------
Additional  Rent"  for  each  Facility  the  amounts  set  forth  below:
(a)     Percentage  Rent.  With respect to the Group 1 Facilities, Lessee shall,
        ----------------
commencing  on the Restatement Date through the expiration of the Fixed Term for
each  such Facility, pay to Lessor Percentage Rent at the times and on the terms
described  in  Sections  3.2  and  3.3  below.
(b)     CPI  Rent.
        ---------
(i)     With  respect  to  the Group 1 Facilities and Group 2 Facilities, Lessee
shall,  commencing  on  the  Restatement  Date and through the expiration of the
Fixed  Term for each such Facility, pay to Lessor on the thirtieth (30th) day of
each  Quarter an amount equal to the CPI Rent allocable to the previous Quarter.
(ii)     With  respect  to  each  of  the  Group  3  Facilities,  Lessee  shall,
commencing  on (i) October 1, 2002, and continuing through the expiration of the
Fixed  Term  for  each such Facility, and (ii) the first (1st) calendar month of
the  second  (2nd)  Lease  Year of each Extended Term for a Group 3 Facility, if
any, and continuing through the expiration of such applicable Extended Term, pay
to  Lessor  the  CPI  Rent  in  advance  in  equal  monthly  installments.
(iii)     With  respect  to  each  of  the  Group  4  Facilities,  Lessee shall,
commencing on the Restatement Date, and continuing through the expiration of the
Term for each such Facility, including the Extended Terms, if any, pay to Lessor
the  CPI  Rent  in  advance  in  equal  monthly  installments.
3.1.3     Land  Lease  Rent.  With  respect to the Land Lease Facilities, Lessee
          -----------------
shall  pay  to  Lessor land lease rent ("Land Lease Rent") in an amount equal to
any  payments  made  or  to  be  made by Lessor to any lessor under a land lease
relating  to  a Land Lease Facility as set forth in a notice by Lessor to Lessee
that  such  payment  is  due.  Within  five (5) Business Days of receipt of such
written  notice, Lessee shall pay to Lessor such land lease rent with respect to
all  payments  disclosed  in  such  notice.
3.2     Quarterly  Calculation  and  Payment  of  Percentage  Rent;  Annual
        -------------------------------------------------------------------
Reconciliation
        ------
     .  The  following  shall  apply  with  respect  to  Group  1  Facilities:
3.2.1     Lessee  shall calculate and pay Percentage Rent quarterly, in arrears,
for  the  portion of the entire Lease Year, on a cumulative basis, up to the end
of  the  Quarter then most recently ended, less the Percentage Rent already paid
and  attributable to such Lease Year.  If at the time any calculation on account
of  Percentage  Rent  is  to  be  made the applicable Gross Revenues are not yet
available,  Lessee shall use its best estimate of the applicable Gross Revenues.
     Each  quarterly  payment  of  Percentage Rent shall be delivered to Lessor,
together  with  an  Officer's Certificate setting forth the calculation thereof,
within  thirty  (30)  days  after  the  end  of  the  corresponding  Quarter.
3.2.2     Within  ninety (90) days after the end of each Lease Year with respect
to  a  Group 1 Facility, Lessee shall deliver to Lessor an Officer's Certificate
setting forth the Gross Revenues for such Facility for such Lease Year.  As soon
as  practicable  following  receipt  by Lessor of such Certificate, Lessor shall
determine the Percentage Rent for such Lease Year for each such Group 1 Facility
and give Lessee notice of the same together with the calculations upon which the
Percentage  Rent  was  based.  If  such  Percentage  Rent exceeds the sum of the
quarterly  payments of Percentage Rent previously paid by Lessee with respect to
such  Lease Year, Lessee shall forthwith pay such deficiency to Lessor.  If such
Percentage  Rent  for such Lease Year is less than the amount previously paid by
Lessee  with respect thereto, Lessor shall, at Lessee's option, either (i) remit
to  Lessee  its check in an amount equal to such difference, or (ii) credit such
difference  against  the  quarterly payments of Percentage Rent next coming due.
3.2.3     Any  difference  between the annual Percentage Rent for any Lease Year
as  shown  in  said  Officer's  Certificate  and  the  total amount of quarterly
payments  for  such  Lease  Year  previously paid by Lessee, whether in favor of
Lessor  or  Lessee,  shall  bear interest at a rate equal to the rate payable on
90-day U. S. Treasury Bills as of the last Business Day of such Lease Year until
the  amount  of  such  difference  shall  be  paid  or  otherwise  discharged.
3.2.4     If the expiration or earlier termination of the Term with respect to a
Facility  is  a  day  other than the last day of a Lease Year for such Facility,
then  the  amount  of the last quarterly installment of Percentage Rent for such
Facility  shall  be  paid  pro rata on the basis of the actual number of days in
such  Lease  Year.
3.2.5     As  soon as practicable after the expiration or earlier termination of
the  Term,  a  final reconciliation of Percentage Rent shall be made taking into
account, among other relevant adjustments, any unresolved contractual allowances
which  relate to Gross Revenues accrued prior to such expiration or termination;
provided  that  if  the  final  reconciliation  has not been made within six (6)
months  of  such expiration or termination, then a final reconciliation shall be
made  at  that  time  based  on  all  available  relevant information, including
Lessee's  good  faith  best estimate of the amount of any unresolved contractual
allowances.
3.3     [Intentionally  Omitted]
3.4     Confirmation  of  Percentage  Rent.
       Lessee  shall  utilize, or cause to be utilized, an accounting system for
the  Leased Property in accordance with its usual and customary practices and in
accordance  with  GAAP  which will accurately record all Gross Revenues for each
Group  1  Facility and Lessee shall retain for at least five (5) years after the
expiration  of each applicable Lease Year reasonably adequate records conforming
to  such  accounting  system  showing all Gross Revenues for such Lease Year for
each  Group  1  Facility.  Lessor,  at  its  own  expense  except  as  provided
hereinbelow,  shall  have  the  right  from  time  to time by its accountants or
representatives,  to  review  and/or  audit  the  information  set  forth in the
Officer's  Certificate  referred  to  in Section 3.2 and in connection with such
review  and/or audit to examine Lessee's records with respect thereto (including
supporting  data  and  sales  tax  returns)  subject  to  any  prohibitions  or
limitations  on  disclosure of any such data under applicable law or regulations
including any duly enacted "Patients' Bill of Rights" or similar legislation, or
as  may  be  necessary  to  preserve the confidentiality of the Facility-patient
relationship  and  the  physician-patient  privilege.  If any such review and/or
audit  discloses  a  deficiency  in the payment of Additional Rent, Lessee shall
forthwith  pay  to  Lessor  the  amount of the deficiency together with interest
thereon  at  the Overdue Rate compounded monthly from the date when said payment
should  have  been  made to the date of payment thereof; provided, however, that
any  dispute concerning such deficiency shall be resolved through an arbitration
proceeding reasonably approved by the parties; provided, further, that as to any
audit  that  is  commenced more than two (2) years after the date Gross Revenues
for  any  Lease  Year  are reported by Lessee to Lessor, the deficiency, if any,
with respect to such Gross Revenues shall bear interest as permitted herein only
from the date such determination of deficiency is made unless such deficiency is
the  result of gross negligence or willful misconduct on the part of Lessee.  If
any such review and/or audit discloses that the Gross Revenues actually received
by  Lessee  for  any Lease Year exceed those reported by Lessee by more than two
percent  (2%),  Lessee  shall  pay  the  costs of such review and/or audit.  Any
proprietary  information obtained by Lessor pursuant to such review and/or audit
shall  be  treated  as  confidential,  except that such information may be used,
subject  to  appropriate  confidentiality  safeguards,  in  any  litigation  or
arbitration  proceedings  between the parties and except further that Lessor may
disclose  such  information  to  prospective  lenders  or  purchasers.
3.5     Additional  Charges
        -------------------
     .  In  addition  to the Minimum Rent, Additional Rent, and Land Lease Rent,
(i)  Lessee  shall  also pay and discharge as and when due and payable all other
amounts, liabilities, obligations and Impositions which Lessee assumes or agrees
to  pay  under  this  Lease; and (ii) in the event of any failure on the part of
Lessee  to  pay any of those items referred to in clause (i) above, Lessee shall
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  (i)  and  (ii)  above  being  referred  to  herein  collectively as the
"Additional  Charges"),  and  Lessor  shall  have  all  legal,  equitable,  and
contractual  rights,  powers  and  remedies  provided either in this Lease or by
statute  or otherwise in the case of non-payment of the Additional Charges as in
the  case  of  non-payment  of  the  Minimum  Rent.
3.6     Late  Payment  of  Rent
        -----------------------
     .  Lessee hereby acknowledges that late payment by Lessee to Lessor of Rent
will cause Lessor to incur costs not contemplated hereunder, the exact amount of
which  is  presently  anticipated  to be extremely difficult to ascertain.  Such
costs  may  include processing and accounting charges and late charges which may
be  imposed on Lessor by the terms of any loan agreement and other expenses of a
similar  or  dissimilar  nature.  Accordingly,  if any installment of Rent other
than  Additional Charges payable to a Person other than Lessor shall not be paid
within  three  (3)  Business  Days after its due date, Lessee will pay Lessor on
demand  a late charge equal to the lesser of (i) five percent (5%) of the amount
of  such  installment  or (ii) the maximum amount permitted by law.  The parties
agree  that  this  late  charge represents a fair and reasonable estimate of the
costs  that  Lessor will incur by reason of late payment by Lessee.  The parties
further agree that such late charge is Rent and not interest and such assessment
does  not  constitute  a lender or borrower/creditor relationship between Lessor
and  Lessee.  In  addition, the amount unpaid, including any late charges, shall
bear  interest  at the Overdue Rate compounded monthly from the due date of such
installment  to  the date of payment thereof, and Lessee shall pay such interest
to Lessor on demand.  The payment of such late charge or such interest shall not
constitute  waiver  of,  nor  excuse  or cure, any default under this Lease, nor
prevent  Lessor  from  exercising  any  other  rights  and remedies available to
Lessor.
3.7     Net  Lease
        ----------
     .  This  Lease  is  and is intended to be what is commonly referred to as a
"net, net, net" or "triple net" lease.  The Rent shall be paid absolutely net to
Lessor,  so  that this Lease shall yield to Lessor the full amount or benefit of
the  installments  of  Minimum  Rent,  Additional  Rent,  Land  Lease  Rent  and
Additional  Charges  throughout  the  Term with respect to each Facility, all as
more  fully  set forth in Article IV and subject to any other provisions of this
Lease  which  expressly  provide  for  adjustment  or abatement of Rent or other
charges.
ARTICLE  IV.
------------
4.1     Impositions.
        -----------
4.1.1     Subject  to  Article  XII relating to permitted contests, Lessee shall
pay,  or cause to be paid, all Impositions before any fine, penalty, interest or
cost  may be added for non-payment.  Lessee shall make such payments directly to
the  taxing authorities where feasible, and promptly furnish to Lessor copies of
official  receipts  or  other  satisfactory  proof  evidencing  such  payments.
Lessee's  obligation  to pay Impositions shall be absolutely fixed upon the date
such Impositions become a lien upon the Leased Property or any part thereof.  If
     any  Imposition  may,  at  the  option of the taxpayer, lawfully be paid in
installments, whether or not interest shall accrue on the unpaid balance of such
Imposition,  Lessee  may  pay  the  same, and any accrued interest on the unpaid
balance  of such Imposition, in installments as the same respectively become due
and  before  any  fine,  penalty, premium, further interest or cost may be added
thereto.
4.1.2     Lessor  shall  prepare  and file all tax returns and reports as may be
required  by  Legal  Requirements  with  respect  to  Lessor's net income, gross
receipts,  franchise  taxes  and  taxes  on  its capital stock, and Lessee shall
prepare  and  file all other tax returns and reports as may be required by Legal
Requirements  with  respect  to  or relating to the Leased Property, all Capital
Additions  and  Lessee's  Personal  Property.
4.1.3     Any  refund due from any taxing authority in respect of any Imposition
paid  by  Lessee  shall  be  paid  over  to or retained by Lessee if no Event of
Default shall have occurred hereunder and be continuing.  Any other refund shall
be  paid  over  to  or retained by Lessor and applied to the payment of Lessee's
obligations  under  this  Lease  in  such  order  of  priority  as  Lessor shall
determine.
4.1.4     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.
If any property covered by this Lease is classified as personal property for tax
purposes,  Lessee  shall  file  all  personal  property  tax  returns  in  such
jurisdictions where it must legally so file.  Lessor, to the extent it possesses
the  same,  and  Lessee,  to the extent it possesses the same, shall 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 to the
extent  practicable,  Lessee shall be provided with copies of assessment notices
indicating a value in excess of the reported value in sufficient time for Lessee
to  file  a  protest.
4.1.5     Lessee  may, upon 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,  at  Lessee's  expense  as  aforesaid, shall
reasonably cooperate with Lessee in such protest, appeal, or other action but at
no cost or expense to Lessor.  Billings for reimbursement by Lessee to Lessor of
personal  property  or  real  property taxes shall be accompanied by copies of a
bill  therefor and payments thereof which identify the personal property or real
property  with  respect  to  which  such  payments  are  made.
4.1.6     Lessor  shall  give prompt notice to Lessee of all Impositions payable
by  Lessee hereunder of which Lessor has knowledge, but Lessor's failure to give
any  such  notice shall in no way diminish Lessee's obligations hereunder to pay
such  Impositions.
4.1.7     Impositions  imposed  or  assessed in respect of the tax-fiscal period
during which the Term terminates with respect to such Facility shall be adjusted
and prorated between Lessor and Lessee with respect to such Facility, whether or
not such Imposition is imposed or assessed before or after such termination, and
Lessee's  obligation  to  pay  its  prorated  share  thereof  shall survive such
termination  with  respect  to  such  Facility.
4.2     Utilities
        ---------
     .  Lessee shall pay or cause to be paid all charges for electricity, power,
gas,  oil, water and other utilities used in the Leased Property and all Capital
Additions  thereto.  Lessee shall also pay or reimburse Lessor for all costs and
expenses  of  any  kind  whatsoever  which  at any time with respect to the Term
hereof  with  respect to any Facility may be imposed against Lessor by reason of
any  of  the  covenants,  conditions  and/or  restrictions  affecting the Leased
Property or any portion thereof, or with respect to easements, licenses or other
rights  over,  across  or  with  respect to any adjacent or other property which
benefits  the  Leased  Property,  including  any  and  all  costs  and  expenses
associated  with  any  utility,  drainage  and  parking  easements.
4.3     Insurance
        ---------
     .  Lessee  shall  pay  or  cause  to be paid all premiums for the insurance
coverage  required  to  be  maintained  by  Lessee  hereunder.
4.4     Impound  Account
        ----------------
     .  Lessor  may,  at its option to be exercised by thirty (30) days' written
notice  to  Lessee,  require  Lessee  to  deposit, at the time of any payment of
Minimum Rent, an amount equal to one-twelfth of Lessee's estimated annual taxes,
of every kind and nature, required pursuant to Section 4.1 plus, if Lessee fails
to  pay  any  insurance  premium  in  a timely manner as required by this Lease,
one-twelfth of Lessee's estimated annual insurance premiums required pursuant to
Section  4.3, into an impound account as directed by Lessor.  Such amounts shall
be  applied  to  the payment of the obligations in respect of which said amounts
were deposited in such order of priority as Lessor shall determine, on or before
the  respective  dates on which the same or any of them would become delinquent.
The cost of administering such impound account shall be paid by Lessee.  Nothing
in  this  Section  4.4  shall  be deemed to affect any right or remedy of Lessor
hereunder.
4.5     Tax  Service
        ------------
     .  If  requested  by  Lessor,  Lessee  shall, at its sole cost and expense,
cause  to  be  furnished  to Lessor a tax reporting service, to be designated by
Lessor,  covering  the  Leased  Property.
ARTICLE  V.
-----------
5.1     No  Termination,  Abatement,  etc
        ---------------------------------
     .  Except  as  otherwise  specifically provided in this Lease, Lessee shall
remain bound by this Lease in accordance with its terms and shall not seek or be
entitled to any abatement, deduction, deferment or reduction of Rent, or set-off
against  the Rent.  The respective obligations of Lessor and Lessee shall not be
affected by reason of (i) any damage to or destruction of the Leased Property or
any  portion  thereof  from  whatever  cause  or  any Condemnation of the Leased
Property  or  any  portion thereof; (ii) other than a result of Lessor's willful
misconduct  or  gross  negligence,  the  lawful  or  unlawful prohibition of, or
restriction  upon,  Lessee's use of the Leased Property, or any portion thereof,
the  interference  with  such  use  by  any  Person  or by reason of eviction by
paramount title; (iii) any claim that Lessee has or might have against Lessor by
reason of any default or breach of any warranty by Lessor hereunder or under any
other  agreement  between  Lessor  and  Lessee or to which Lessor and Lessee are
parties;  (iv)  any  bankruptcy,  insolvency,  reorganization,  composition,
readjustment,  liquidation,  dissolution,  winding  up  or  other  proceedings
affecting  Lessor  or any assignee or transferee of Lessor; or (v) for any other
cause,  whether  similar  or  dissimilar  to  any of the foregoing, other than a
discharge of Lessee from any such obligations as a matter of law.  Lessee hereby
specifically  waives all rights arising from any occurrence whatsoever which may
now  or  hereafter  be  conferred  upon  it  by  law (a) to modify, surrender or
terminate  this  Lease  or  quit or surrender the Leased Property or any portion
thereof; or (b) which may 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.  However, nothing shall preclude
Lessee  from  bringing  a separate action and Lessee is not waiving other rights
and  remedies not expressly waived herein.  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 or by termination of this Lease
other  than  by  reason  of  an  Event  of Default.  Lessee's agreement that any
eviction  by  paramount  title  as described in item (ii) above shall not affect
Lessee's obligations under this Lease shall not in any way discharge or diminish
any  obligation of any insurer under any policy of title or other insurance and,
to the extent the recovery thereof is not necessary to compensate Lessor for any
damages  incurred by any such eviction, Lessee shall be entitled to a credit for
any  sums recovered by Lessor under any such policy of title or other insurance,
and  Lessor,  upon  request  by  Lessee, shall assign Lessor's rights under such
policies  to  Lessee provided such assignment does not adversely affect Lessor's
rights  under  any such policy and provided further that Lessee shall indemnify,
defend, protect and save Lessor harmless from and against any liability, cost or
expense  of any kind that may be imposed upon Lessor in connection with any such
assignment.
5.2     Termination  with  Respect  to  Fewer  than  All  of  the  Facilities
        ---------------------------------------------------------------------
     .  Wherever  in this Lease the action of terminating the Lease with respect
to a Facility (or action of similar import) is discussed, such action shall mean
the  termination  of  Lessee's  rights in and to the Leased Property relating to
such  Facility.  Notwithstanding anything in this Lease to the contrary, if this
Lease  shall  be  terminated  by  Lessor  or  Lessee  pursuant to rights granted
hereunder  with  respect  to any Facility, such termination shall not affect the
applicable  Term of this Lease with respect to the balance of the Facilities not
so  terminated by Lessor, and this Lease shall continue in full force and effect
with  respect  to  each  other such Facility, except that the total Minimum Rent
payable  hereunder shall be reduced by the amount of Allocated Minimum Rent with
respect  to  such  Facility  as to which  this Lease has so terminated, subject,
however, to Lessor's right, in the event of a termination because of an Event of
Default,  to  recover damages with respect to any such Facility as to which this
Lease  has  been  terminated  as  provided  in  Article  XVI.
ARTICLE  VI.
------------
6.1     Ownership  of  the  Leased  Property
        ------------------------------------
     .  Lessee  acknowledges  that the Leased Property is the property of Lessor
and  that  Lessee  has only the right to the exclusive possession and use of the
Leased  Property  upon  the  terms  and  conditions  of  this  Lease.  Upon  the
expiration  or  earlier  termination  of this Lease with respect to any Facility
Lessee  shall,  at  its  expense,  restore  the Leased Property relating to such
Facility  to  the  condition  required  by  Section  9.1.4.
6.2     Personal  Property
        ------------------
     .  During  the  Term, Lessee may, as necessary and 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 Lessee's Personal Property and replacements thereof
which  shall  be  the  property  of  and owned by Lessee.  Except as provided in
Sections  6.3,  6.10  and 35.4, Lessor shall have no rights to Lessee's Personal
Property.  With  respect  to  each  Facility,  Lessee shall provide and maintain
during  the  entire  Term  applicable  to  such  Facility  all Personal Property
necessary  in order to operate the Facility in compliance with all licensure and
certification  requirements,  all  Legal  Requirements  and  all  Insurance
Requirements  and  for  the  Primary  Intended  Use and as required, in Lessee's
prudent  business  judgment,  to  meet  the  needs of residents of the Facility.
6.3     Transfer  of  Personal  Property  and  Capital  Additions  to  Lessor
        ---------------------------------------------------------------------
     .  Upon the expiration or earlier termination of this Lease with respect to
a  Facility, Lessee's Personal Property relating to such Facility which does not
provide  a  new  function with respect to Lessor's Personal Property relating to
such  Facility  shall become the property of Lessor, free of any encumbrance and
Lessee  shall execute all documents and take any actions reasonably necessary to
evidence  such  ownership  and  discharge  any  encumbrance.
ARTICLE  VII.
-------------
7.1     Condition  of  the  Leased  Property
        ------------------------------------
     .  Lessee  acknowledges  receipt  and  delivery of possession of the Leased
Property  and  confirms  that Lessee has examined and otherwise has knowledge of
the condition of the Leased Property prior to the execution and delivery of this
Lease  and,  as  of  the  Original  Lease Commencement Date with respect to each
portion  of  the  Leased  Property,  has  found the same to be in good order and
repair, free from Hazardous Substances not in compliance with Legal Requirements
(except as disclosed on the Property Condition Reports) and satisfactory for its
purposes  hereunder.  Regardless, however, of any examination or inspection made
by  Lessee  and  whether  or  not  any  patent or latent defect or condition was
revealed or discovered thereby, Lessee is leasing the Leased Property "as is" in
its  present  condition.  Lessee  waives  any  claim or action against Lessor in
respect of the condition of the Leased Property including any defects or adverse
conditions  not discovered or otherwise known by Lessee as of the Original Lease
Commencement  Date.  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,  DESIGN  OR  CONDITION  FOR  ANY PARTICULAR USE OR PURPOSE OR
OTHERWISE,  OR  AS  TO  THE  NATURE  OR  QUALITY  OF THE MATERIAL OR WORKMANSHIP
THEREIN,  OR  THE EXISTENCE OF ANY HAZARDOUS SUBSTANCE, IT BEING AGREED THAT ALL
SUCH  RISKS,  LATENT  OR  PATENT, ARE TO BE BORNE SOLELY BY LESSEE INCLUDING ALL
RESPONSIBILITY  AND  LIABILITY  FOR ANY ENVIRONMENTAL REMEDIATION AND COMPLIANCE
WITH  ALL  ENVIRONMENTAL  LAWS.
7.2     Use  of  the  Leased  Property.
        ------------------------------
7.2.1     Lessee  covenants  that it will obtain and maintain all authorizations
and  approvals  needed  to use and operate the Leased Property and each Facility
for  such Facility's respective Primary Intended Use and any other use conducted
on  the  Leased  Property  as  may  be  permitted from time to time hereunder in
accordance  with  Legal  Requirements  including  applicable  licenses, provider
agreements,  permits,  and,  if  appropriate,  Medicare  and/or  Medicaid
certification.
7.2.2     Lessee  shall  use  or  cause  to  be used the Leased Property and the
improvements  thereon  of  each  Facility  for its Primary Intended Use.  Lessee
shall not use the Leased Property or any portion thereof or any Capital Addition
thereto  for  any  other  use without the prior written consent of Lessor, which
consent  Lessor  may  withhold  in  its  sole  discretion.
7.2.3     Lessee  shall operate continuously the Leased Property and all Capital
Additions  of each Facility in accordance with its Primary Intended Use.  Lessee
shall  devote the entirety of each Facility and all Capital Additions thereto to
the  Primary  Intended  Use,  except for areas reasonably required for office or
storage  space  uses  incidental  to the Primary Intended Use.  Lessee shall not
modify the services offered or take any other action (e.g., removing patients or
residents  from  any Facility or directing patients or residents, or prospective
patients  or residents, to another Facility) which would materially reduce Gross
Revenues.  Lessee  shall at all times maintain an adequate staff for the service
of  its  residents  and/or  patients.  Lessee  shall  employ  its best judgment,
efforts  and abilities to operate the entirety of each Facility in such a manner
so  as  to  maximize  Gross  Revenues  and  to  enhance  the  reputation  and
attractiveness  of  each  Facility.
7.2.4     Lessee  shall conduct its business at each Facility in conformity with
prudent  standards  of  patient  or  resident  care  practice.
7.2.5     Lessee  shall  not  commit  or suffer to be committed any waste on the
Leased  Property or any Capital Addition thereto or cause or permit any nuisance
thereon.
7.2.6     Lessee  shall  neither  suffer  nor  permit the Leased Property or any
portion thereof or any Capital Addition thereto financed by Lessor to be used in
such  a  manner as (i) might reasonably tend to impair Lessor's title thereto or
to  any  portion  thereof  or  (ii)  may make possible a claim of adverse use or
possession,  or  an  implied  dedication  of  the Leased Property or any portion
thereof  or  any  Capital  Addition  thereto  financed  by  Lessor.
7.2.7     For  purposes  of  computing  Incremental Gross Revenues for any Lease
Year or other period during which Lessee is in breach or violation of any of the
covenants set forth in Sections 7.2.1 through 7.2.4, Lessee's Gross Revenues for
such  Lease  Year  or  other  period  shall  be  deemed to be the greater of (i)
Lessee's Gross Revenues for such Lease Year or other period, or (ii) eighty-five
percent  (85%) of the average Gross Revenues for the prior three (3) Lease Years
or  any  corresponding period of the prior three (3) Lease Years, as applicable,
as  determined by Lessor; provided however that during the first three (3) Lease
Years  averaging shall take place over the prior Lease Year(s) and corresponding
periods,  if  any,  pursuant to which the Leased Property was operated under any
Original  Leases,  prior  to  the  Restatement  Date.
7.3     Lessor  to  Grant  Easements,  etc
        ----------------------------------
     .  Lessor  shall,  from  time  to  time  so long as no Event of Default has
occurred  and  is  continuing, at the request of Lessee and at Lessee's cost and
expense,  but  subject  to  the  approval of Lessor, which approval shall not be
unreasonably  withheld  or  delayed  (i) grant easements and other rights in the
nature  of  easements;  (ii)  release  existing easements or other rights in the
nature  of  easements  which  are  for the benefit of the Leased Property; (iii)
dedicate  or  transfer  unimproved  portions  of  the  Leased Property for road,
highway  or  other  public  purposes;  (iv) execute petitions to have the Leased
Property  annexed  to any municipal corporation or utility district; (v) execute
amendments  to  any  covenants, conditions and restrictions affecting the Leased
Property;  and (vi) execute and deliver to any Person any instrument 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  that  such  grant  release, dedication,
transfer,  petition or amendment is not detrimental to the proper conduct of the
business  of  Lessee  on  the Leased Property and does not materially reduce the
value  of  the  Leased  Property.
7.4     Preservation  of  Gross  Revenues
        ---------------------------------
     .  Lessee  acknowledges  that  a fair return to Lessor on its investment in
the  Leased  Property  is dependent, in part, on the concentration on the Leased
Property  during  the  Term  of  the  assisted living business of Lessee and its
Affiliates  in  the  geographical  area  of the Leased Property.  Lessee further
acknowledges  that  diversion  of residents and/or patients, as applicable, from
any  Facility  to  other  facilities or institutions owned, operated or managed,
whether directly or indirectly, by Lessee or its Affiliates will have a material
adverse  impact  on  the value and utility of the Leased Property.  Accordingly,
Lessor  and  Lessee  agree  as  follows:
7.4.1     If,  during  the Term with respect to a Facility, either Lessee or any
of  its  Affiliates,  directly or indirectly, shall operate, own, manage or have
any  interest  in or otherwise participate in or receive revenues from any other
facility or institution providing services or similar goods to those provided in
     connection with any Facility and the Primary Intended Use (which Lessee did
not  operate,  own,  manage  or  have any interest in on the applicable Original
Lease Commencement Date), within a ten (10) mile radius outward from the outside
boundary  of  the  Leased  Property of such Facility, thereafter Percentage Rent
shall  be  determined  using  the  greater of the actual Gross Revenues for such
Facility  in  the  applicable  Lease  Year  or  eighty-five percent (85%) of the
average Gross Revenues for such Facility for the immediately preceding three (3)
Lease  Years;  provided  however  that  during  the  first three (3) Lease Years
averaging  shall  take  place  over  the  prior  Lease Year(s) and corresponding
periods,  if  any,  pursuant to which the Leased Property was operated under any
Original  Leases prior the Restatement Date.  All distances shall be measured on
a  straight line rather than on a driving distance basis.  In the event that any
portion  of such other facility or institution is located within such restricted
area  the  entire  facility  or  institution shall be deemed located within such
restricted  area.  Notwithstanding the foregoing, the provisions of this Section
7.4.1  shall  not apply to Lessee's operation of the facilities and institutions
set  forth  on  Exhibit  M  attached  hereto  and  incorporated  herein.
                ----------
ARTICLE  VIII.
--------------
8.1     Compliance  with  Legal  and  Insurance  Requirements,  Instruments, etc
        ------------------------------------------------------------------------
     .  Subject  to  Article  XII  regarding  permitted contests, Lessee, at its
expense,  shall  promptly  (i)  comply with all Legal Requirements and Insurance
Requirements  regarding  the use, operation, maintenance, repair and restoration
of  the  Leased  Property,  Lessee's Personal Property and all Capital Additions
whether or not compliance therewith may require structural changes in any of the
Leased  Improvements  or Capital Additions thereto or interfere with the use and
enjoyment  of the Leased Property and (ii) procure, maintain and comply with all
licenses,  certificates  of  need,  provider  agreements (but only to the extent
Lessee, in its prudent business judgment, elects to participate in the Medicare,
Medicaid  or other third party payor programs) and other authorizations required
for  the  use of the Leased Property, Lessee's Personal Property and all Capital
Additions  for  the  applicable  Primary  Intended  Use and any other use of the
Leased Property, Lessee's Personal Property and all Capital Additions then being
made,  and  for  the proper erection, installation, operation and maintenance of
the  Leased  Property, Lessee's Personal Property and all Capital Additions.  In
an  emergency or in the event of a breach by Lessee of its obligations hereunder
which  is not cured within any applicable cure period, Lessor may, but shall not
be  obligated  to,  enter  upon  the  Leased  Property and all Capital Additions
thereto  and  take such actions and incur such costs and expenses to effect such
compliance  as it deems advisable to protect its interest in the Leased Property
and  Capital  Additions thereto, and Lessee shall reimburse Lessor for all costs
and  expenses  incurred  by  Lessor  in  connection  with  such actions.  Lessee
covenants  and  agrees  that the Leased Property, Lessee's Personal Property and
all  Capital  Additions  shall  not  be  used  for  any  unlawful  purpose.
ARTICLE  IX.
------------
9.1     Maintenance  and  Repair.
        ------------------------
9.1.1     Lessee,  at its expense, shall maintain the Leased Property, and every
portion  thereof,  Lessee's Personal Property and all Capital Additions, and all
private  roadways,  sidewalks  and curbs appurtenant to the Leased Property, and
which  are  under  Lessee's  control in good order and repair whether or not the
need  for  such  repairs  occurs as a result of Lessee's use, any prior use, the
elements  or  the age of the Leased Property, Lessee's Personal Property and all
Capital  Additions,  and,  with  reasonable  promptness,  make all necessary and
appropriate  repairs  thereto  of  every  kind  and  nature,  including, without
limitations  all  repairs  described  in  Section  9.1.6 within the time periods
specified  in  Section  9.1.6, and those necessary to comply with changes in any
Legal  Requirements, whether interior or exterior, structural or non-structural,
ordinary  or  extraordinary,  foreseen  or  unforeseen or arising by reason of a
condition existing prior to the Restatement Date.  All repairs shall be at least
     equivalent  in  quality to the original work.  Lessee will not take or omit
to  take  any action the taking or omission of which might materially impair the
value  or  the  usefulness  of  the  Leased  Property or any part thereof or any
Capital  Addition  thereto  for  its  Primary  Intended  Use.
9.1.2     Lessor  shall  not under any circumstances be required to (i) build or
rebuild  any  improvements  on  the  Leased  Property;  (ii)  make  any repairs,
replacements,  alterations, restorations or renewals of any nature to the Leased
Property,  whether  ordinary  or  extraordinary,  structural  or non-structural,
foreseen  or  unforeseen,  or  to  make  any expenditure whatsoever with respect
thereto;  or  (iii)  maintain  the  Leased  Property  in any way.  Lessee hereby
waives, to the extent permitted by law, the right to make repairs at the expense
of  Lessor  pursuant  to  any law in effect at the time of the execution of this
Lease  or  hereafter  enacted.
9.1.3     Nothing  contained  in  this Lease and no action or inaction by Lessor
shall  be  construed  as  (i)  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 labor or services or the furnishing of
any  materials  or  other  property  for the construction, alteration, addition,
repair  or  demolition  of  or to the Leased Property or any part thereof or any
Capital  Addition  thereto; or (ii) giving Lessee any right, power or permission
to  contract  for  or  permit  the  performance  of any labor or services or the
furnishing  of  any  materials or other property in such fashion as would permit
the  making  of  any  claim  against  Lessor  in  respect thereof or to make any
agreement  that  may  create,  or in any way be the basis for, any right, title,
interest,  lien,  claim  or  other  encumbrance upon the estate of Lessor in the
Leased  Property,  or  any  portion  thereof  or  any  Capital Addition thereto.
9.1.4     Unless  Lessor  shall  convey  any  of  the  Leased Property to Lessee
pursuant  to  the provisions of this Lease, Lessee shall, upon the expiration or
earlier termination of the Term with respect to a Facility, vacate and surrender
the  Leased  Property,  Lessor's  Personal  Property,  the  portion  of Lessee's
Personal  Property  for  which  Lessor  exercises its option pursuant to Section
35.4,  and  all Capital Additions in each case with respect to such Facility, to
Lessor  in  the  condition  in  which such Leased Property and Lessor's Personal
Property  were  originally  received  from  Lessor  and  such  Lessee's Personal
Property  and  Capital  Additions  were  originally introduced to such Facility,
except  as  repaired,  rebuilt,  restored,  altered  or added to as permitted or
required  by the provisions of this Lease and except for ordinary wear and tear.
9.1.5     Without  limiting Lessee's obligations to maintain the Leased Property
under  this  Lease,  within  thirty (30) days of the end of each Lease Year with
respect to a Facility, Lessee shall provide Lessor with evidence satisfactory to
Lessor in the reasonable exercise of Lessor's discretion that Lessee has in such
Lease  Year  spent,  with respect to only the Group 1 Facilities and the Group 5
Facility,  at  least the dollar amount as set forth on Exhibit I attached hereto
                                                       ---------
per  living  unit  as  such amounts are increased by the increase in the Cost of
Living  Index  from the applicable Original Lease Commencement Date to the first
day  of  such  Lease Year, for repair and maintenance of such Facility excluding
normal  janitorial  and  cleaning.  If  Lessee  fails to make at least the above
amount  of  expenditures, Lessee shall promptly on demand from Lessor (but in no
event  more  than  five  (5)  days)  pay  to  Lessor the applicable shortfall in
expenditures.  Such funds shall be the sole property of Lessor and Lessor may in
its  sole  discretion  provide  such funds to Lessee to correct the shortfall in
expenditures  or  may  simply  retain such funds as supplemental Rent hereunder.
9.1.6     Lessee  covenants  and agrees to commence, complete and perform timely
all  obligations  of Lessee with respect to the Boise Capital Renovation Project
as  set  forth  in  the  Boise  Work  Letter.
9.2     Encroachments,  Restrictions,  Mineral  Leases,  etc
        ----------------------------------------------------
     .  If  any  of  the  Leased Improvements or Capital Additions shall, at any
time,  encroach  upon any property, street or right-of-way, or shall violate any
restrictive  covenant  or  other agreement affecting the Leased Property, or any
part  thereof  or  any  Capital  Addition thereto, or shall impair the rights of
others  under  any  easement  or  right-of-way  to  which the Leased Property is
subject,  or  the  use of the Leased Property or any Capital Addition thereto is
impaired,  limited  or interfered with by reason of the exercise of the right of
surface  entry or any other provision of a lease or reservation of any oil, gas,
water  or other minerals, then promptly upon the request of Lessor or any Person
affected  by any such encroachment, violation or impairment, Lessee, at its sole
cost  and expense, but subject to its right to contest the existence of any such
encroachment,  violation  or impairment, shall protect, indemnify, save harmless
and defend Lessor from and against all losses, liabilities, obligations, claims,
damages,  penalties,  causes of action, costs and expenses (including reasonable
attorneys',  consultants' and experts' fees and expenses) based on or arising by
reason  of  any  such encroachment, violation or impairment.  In the event of an
adverse  final determination with respect to any such encroachment, violation or
impairment,  Lessee  shall  either  (i)  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  (ii)  make  such changes in the Leased Improvements and any Capital
Addition  thereto,  and  take  such  other  actions, as Lessee 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  or any Capital Addition
thereto,  and in any event take all such actions as may be necessary in order to
be  able  to  continue  the operation of the Leased Improvements and any Capital
Addition thereto for the Primary Intended Use substantially in the manner and to
the  extent the Leased Improvements and Capital Additions were operated prior to
the  assertion  of  such  encroachment,  violation  or  impairment.  Lessee's
obligations  under  this Section 9.2 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,  to  the  extent the recovery thereof is not necessary to
compensate  Lessor  for any damages incurred by any such encroachment, violation
or  impairment,  Lessee  shall be entitled to a credit for any sums recovered by
Lessor  under  any  such  policy  of  title  or other insurance and Lessor, upon
request  by  Lessee,  shall assign Lessor's rights under such policies to Lessee
provided  such  assignment  does  not adversely affect Lessor's rights under any
such  policy  and  provided further that Lessee shall indemnify, defend, protect
and  save Lessor harmless from and against any liability, cost or expense of any
kind  that  may  be  imposed upon Lessor in connection with any such assignment.
Lessor  agrees  to  use  reasonable efforts to seek recovery under any policy of
title  or other insurance under which Lessor is an insured party for all losses,
liabilities,  obligations,  claims,  damages, penalties, causes of action, costs
and  expenses  (including  reasonable attorneys', consultants' and experts' fees
and  expenses) based on or arising by reason of any such encroachment, violation
or  impairment  as  set forth in this Section 9.2; provided, however, that in no
event  shall  Lessor  be  obligated  to institute any litigation, arbitration or
other  legal  proceedings  in  connection  therewith.
ARTICLE  X.
-----------
10.1     Construction  of  Capital  Additions  to  the  Leased  Property.
         ---------------------------------------------------------------
10.1.1     Requests.
           --------
     With  respect  to  each  Facility,  no Capital Addition shall be made which
would  tie  in  or  connect  any  Leased  Improvements  with any improvements on
property  adjacent  to the Land of such Facility without Lessor's approval which
may  be  withheld  in Lessor's sole and absolute discretion.  Except as provided
above, Lessee shall, with respect to only the Group 1 Facilities and the Group 3
Facilities,  have  the  right  to make a Capital Addition without the consent of
Lessor  if  the Capital Addition Cost for such Capital Addition project does not
exceed  $100,000.  All  other  Capital  Additions  shall  be subject to Lessor's
review  and approval which approval shall not be unreasonably withheld.  For any
Capital  Addition  which  does not require the approval of Lessor, Lessee shall,
prior  to  commencing construction of such Capital Addition, provide to Lessor a
written  description  of  such  Capital  Addition and on an ongoing basis supply
Lessor  with  related  documentation  and  information  as Lessor may reasonably
request.  If  Lessee  desires  to  make  a  Capital  Addition for which Lessor's
approval  is  required,  Lessee  shall  submit  to Lessor in reasonable detail a
general description of the proposal, the projected cost of construction and such
plans  and  specifications,  permits,  licenses, contracts and other information
concerning  the  proposal  as  Lessor  may reasonably request.  Such description
shall  indicate  the  use or uses to which such Capital Addition will be put and
the  impact,  if  any,  on  current  and forecasted gross revenues and operating
income attributable thereto.  It shall be reasonable for Lessor to condition its
approval  of  any  Capital  Addition  upon any or all of the following terms and
conditions:
(a)     Such  construction  shall  be  effected  pursuant  to detailed plans and
specifications  approved  by  Lessor;
(b)     Such construction shall be conducted under the supervision of a licensed
architect  or  engineer  selected  by  Lessee  and  approved  by  Lessor;
(c)     Lessee  shall  have  procured or caused to be procured a performance and
payment bond for the full value of such construction, which such bond shall name
Lessor  as  an  additional  obligee  and  otherwise be in form and substance and
issued  by  a  Person  reasonably  satisfactory  to  Lessor;  and
(d)     Such  construction shall not be undertaken unless Lessee demonstrates to
the  reasonable  satisfaction  of  Lessor  the financial ability to complete the
construction  without  adversely  affecting  its cash flow position or financial
viability.
10.2     Construction  Requirements  for  all  Capital  Additions
         --------------------------------------------------------
     .  Whether or not Lessor's review and approval is required, for all Capital
Additions:
(a)     Such  construction  shall  not  be  commenced  until  Lessee  shall have
procured  and  paid  for  all  municipal  and  other  governmental  permits  and
authorizations  required  therefor, and Lessor shall join in the application for
such  permits  or  authorizations  whenever  such action is necessary; provided,
however, that (i) any such joinder shall be at no cost or expense to Lessor; and
     (ii) any plans required to be filed in connection with any such application
which  require the approval of Lessor as hereinabove provided shall have been so
approved  by  Lessor;
(b)     Such construction shall not, and Lessee's licensed architect or engineer
shall  certify to Lessor that such construction shall not, impair the structural
strength  of  any  component  of  the  applicable  Facility  or  overburden  the
electrical,  water,  plumbing,  HVAC  or  other  building  systems  of  any such
component;
(c)     Lessee's licensed architect or engineer shall certify to Lessor that the
detailed  plans  and  specifications  conform  to and comply with all applicable
building, subdivision and zoning codes, laws, ordinances and regulations imposed
by  all governmental authorities having jurisdiction over the Leased Property of
the  applicable  Facility;
(d)     Such  construction  shall, when completed, be of such a character as not
to  decrease  the value of the Leased Property as it was immediately before such
Capital  Addition;
(e)     During  and following completion of such construction, the parking which
is  located  in  the  applicable  Facility or on the Land of such Facility shall
remain  adequate for the operation of such Facility for its Primary Intended Use
and in no event shall such parking be less than that which was or is required by
law  or  which  was  located  in  such  Facility  or  on  the Land prior to such
construction;  provided,  however,  with  Lessor's  prior  consent  and  at  no
additional  expense  to  Lessor,  (i)  to  the  extent additional parking is not
already a part of a Capital Addition, Lessee may construct additional parking on
the  Land; or (ii) Lessee may acquire off-site parking to serve such Facility as
long  as  such  parking  shall  be  dedicated to, or otherwise made available to
serve,  such  Facility;
(f)     All  work  done  in  connection  with  such  construction  shall be done
promptly and in a good and workmanlike manner using first-class materials and in
conformity  with  all  Legal  Requirements;  and
(g)     Promptly  following  the  completion  of such construction, Lessee shall
deliver to Lessor "as built" drawings of such addition, certified as accurate by
the  licensed  architect  or engineer selected by Lessee to supervise such work,
and  copies  of  any  new  or  revised  Certificates  of  Occupancy.
10.3     Funding  by  Lessor.
         -------------------
10.3.1     Lessee may request that Lessor fund a Capital Addition, in which case
     Lessee  shall provide to Lessor any information about such Capital Addition
which  Lessor  may  reasonably  request.  Lessor  may,  but  shall  be  under no
obligation  to,  provide the funds necessary to meet the request.  Within thirty
(30)  days  of  receipt of a request to fund a proposed Capital Addition, Lessor
shall  notify  Lessee  as  to whether it will fund 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.  Lessee shall have ten (10) days to accept
or  reject  Lessor's  funding  proposal.  In  no  event shall the portion of the
projected  Capital  Addition  Cost  comprised  of land, if any, materials, labor
charges  and  fixtures  be less than ninety percent (90%) of the total amount of
the  projected  cost  of  such  Capital  Addition.
10.3.2     If  Lessor  agrees  to  fund  a  proposed Capital Addition and Lessee
accepts  the terms thereof, Lessee shall provide Lessor with the following prior
to  any  advance  of  funds:
(a)     any  information, certificates, licenses, permits or documents requested
by Lessor which are necessary and obtainable 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;
(b)     an  Officer's Certificate and, if requested, a certificate from Lessee's
architect,  setting  forth  in reasonable detail the projected or actual Capital
Addition  Costs;
(c)     an  amendment to this Lease, in a form prepared by Lessor and reasonably
agreed  to by Lessee, providing for an increase in the Rent in amounts as agreed
upon  by  the  parties  hereto  and  other  provisions  as  may  be necessary or
appropriate;
(d)     a deed conveying title to Lessor to any land acquired for the purpose of
constructing  the  Capital  Addition free and clear of any liens or encumbrances
except  those  approved  by  Lessor,  and  accompanied by an ALTA survey thereof
satisfactory  to  Lessor;
(e)     for  each  advance,  endorsements  to  any  outstanding  policy of title
insurance  covering  the Leased Property or commitments therefor satisfactory in
form  and  substance  to  Lessor  (i)  updating  the same without any additional
exception  except  as may be approved by Lessor and (ii) 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  (f),  below;
(f)     if appropriate, an owner's policy of title insurance insuring fee simple
title  to  any  land  conveyed  to  Lessor  free  and  clear  of  all  liens and
encumbrances  except  those that do not materially affect the value of such land
and  do  not  interfere  with  the use of the Leased Property or are approved by
Lessor;
(g)     if  requested  by  Lessor,  a  M.A.I.  appraisal  of the Leased Property
indicating  that the Fair Market Value of the Leased Property upon completion of
the  Capital  Addition  will exceed the Fair Market Value of the Leased Property
immediately  prior  thereto by an amount not less than ninety-five percent (95%)
of  the  cost  of  the  Capital  Addition;  and
(h)     such  other  billing  statements,  invoices, certificates, endorsements,
opinions,  site  assessments, surveys, resolutions, ratifications, lien releases
and waivers and other instruments and information reasonably required by Lessor.
10.4     Capital  Additions  Financed  by  Lessee
         ----------------------------------------
     .  If  Lessee  provides or arranges such financing, this Lease shall be and
hereby  is  amended  to  provide  as  follows:
(a)     Upon  completion of any Capital Addition, Gross Revenues attributable to
any  Capital  Additions financed by Lessee shall be excluded from Gross Revenues
of  the  Leased  Property of the applicable Facility for purposes of calculating
Percentage  Rent.  The  Gross Revenues attributable to such Capital Addition and
all  other  Capital Additions, if any, financed by Lessee, shall be deemed to be
an  amount  which bears the same proportion to the total Gross Revenues from the
entire Leased Property (including all Capital Additions) of such Facility as the
     Fair  Market  Added  Value  of  all said Capital Additions to such Facility
financed  by Lessee bears to the Fair Market Value of the entire Leased Property
(including  all  Capital Additions) immediately after completion of said Capital
Addition.  The  above  referenced  proportion  of the Fair Market Added Value of
Capital  Additions  to a Facility paid for by Lessee to the Fair Market Value of
the  entire  Leased  Property  of  such  Facility  expressed  as a percentage is
referred to herein as the "Added Value Percentage" for such Facility.  The Added
Value  Percentage determined as provided above for Capital Additions financed by
Lessee with respect to a Facility shall remain in effect for such Facility until
any  subsequent  Capital  Addition  to  such Facility with respect to a Facility
financed  by  Lessee  is  completed.
(b)     There  shall  be no adjustment in the Minimum Rent or CPI Rent by reason
of  any  such  Capital  Addition.
(c)     Upon the expiration or earlier termination of this Lease with respect to
a  Facility,  except  by reason of the default by Lessee hereunder, Lessor shall
compensate  Lessee  for all Capital Additions financed by Lessee with respect to
such  Facility:
(i)     By  purchasing such Capital Additions from Lessee for cash in the amount
of  the  then  Fair  Market  Added  Value  of  such  Capital  Additions;  or
(ii)     By  such  other  arrangement  regarding  such  compensation as shall be
mutually  and  reasonably  acceptable  to  Lessor  and  Lessee.
ARTICLE  XI.
------------
11.1     Liens
         -----
     .  Subject to the provisions of Article XII relating to permitted contests,
Lessee  will  not  directly  or  indirectly  create  or allow to remain and will
promptly  discharge  at  its  expense  any  lien, encumbrance, attachment, title
retention  agreement  or  claim upon the Leased Property or any Capital Addition
thereto  or  any  attachment, levy, claim or encumbrance in respect of the Rent,
excluding,  however,  (i) this Lease; (ii) except with respect to the Facilities
located  in  Walla  Walla, Washington, Odessa, Texas, Boise, Idaho, and El Paso,
Texas  (Cambria), the matters that existed as of the Original Lease Commencement
Date  with  respect  to  such  Facility;  (iii)  restrictions,  liens  and other
encumbrances  which  are  consented  to  in  writing by Lessor, or any easements
granted  pursuant  to  the provisions of Section 7.3; (iv) liens for Impositions
which  Lessee  is  not  required  to  pay  hereunder; (v) subleases permitted by
Article  XXIV;  (vi)  liens  for  Impositions not yet delinquent; (vii) 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  under  any  related  contract for more than sixty (60) days after the
completion  of  the  action  giving  rise to such lien and such reserve or other
appropriate  provisions as shall be required by law or GAAP shall have been made
therefor  or  (2)  any  such  liens  are  in  the  process of being contested as
permitted  by  Article  XII;  (viii)  any  liens which are the responsibility of
Lessor  pursuant  to  the provisions of Article XXXVI; and (ix) liens related to
equipment  leases  for equipment which is used or useful in Lessee's business on
the  Leased  Property,  provided  that  the  payment  of any sums due under such
equipment leases shall either (1) be paid as and when due in accordance with the
terms  thereof,  or  (2)  be  in  the process of being contested as permitted by
Article  XII.
ARTICLE  XII.
-------------
12.1     Permitted  Contests
         -------------------
     .  Lessee,  upon  prior written notice to Lessor, on its own or in Lessor's
name,  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 licensure or certification decision,
Imposition,  Legal  Requirement,  Insurance Requirement, lien, attachment, levy,
encumbrance,  charge  or  claim;  provided,  however, that (i) in the case of an
unpaid  Imposition,  lien,  attachment,  levy, encumbrance, charge or claim, the
commencement  and  continuation of such proceedings shall suspend the collection
thereof  from  Lessor  and  from  the  Leased  Property  or any Capital Addition
thereto;  (ii)  neither the Leased Property or any Capital Addition thereto, the
Rent therefrom nor any part or interest in either thereof would be in any danger
of  being  sold,  forfeited,  attached  or  lost  pending  the  outcome  of such
proceedings; (iii) in the case of a Legal Requirement, neither Lessor nor Lessee
would  be  in  any  danger  of civil or criminal liability for failure to comply
therewith  pending  the  outcome  of  such proceedings; (iv) if any such contest
shall  involve  a  sum  of  money  or potential loss in excess of Fifty Thousand
Dollars  ($50,000), Lessee shall deliver to Lessor and its counsel an opinion of
legal counsel reasonably acceptable to Lessor to the effect set forth in clauses
(i),  (ii) and (iii) above, to the extent applicable; (v) in the case of a Legal
Requirement,  Imposition,  lien,  encumbrance  or charge, Lessee shall give such
reasonable  security  as may be required by Lessor to insure ultimate payment of
the  same  and  to  prevent any sale or forfeiture of the Leased Property or any
Capital  Addition  thereto  or  the  Rent  by  reason  of  such  non-payment  or
noncompliance;  (vi)  in  the  case  of  an  Insurance Requirement, the coverage
required  by  Article  XIII  shall  be  maintained; and (vii) if such contest be
finally  resolved against Lessor or Lessee, Lessee shall promptly pay the amount
required  to  be paid, together with all interest and penalties accrued thereon,
or  comply  with  the  applicable  Legal  Requirement  or Insurance Requirement.
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, Lessor
shall  join as a party therein.  The provisions of this Article XII shall not be
construed  to  permit  Lessee to contest the payment of Rent or any other amount
(other than Impositions or Additional Charges which Lessee may from time to time
be  required  to  impound  with  Lessor)  payable by Lessee to Lessor hereunder.
Lessee  shall  indemnify,  defend,  protect  and  save  Lessor harmless from and
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.
ARTICLE  XIII.
--------------
13.1     General  Insurance  Requirements
         --------------------------------
     .  During the Term, Lessee shall at all times keep the Leased Property, and
all  property located in or on the Leased Property, including Capital Additions,
the  Fixtures  and  the Personal Property, insured with the kinds and amounts of
insurance  described below.  Each element of insurance described in this Article
shall be maintained with respect to the Leased Property of each Facility and the
Personal  Property  and  operations thereon.  This insurance shall be written by
companies  authorized  to do insurance business in the State in which the Leased
Property  is  located.  All  liability  type  policies  must  name  Lessor as an
"additional  insured."  All property policies shall name Lessor as "loss payee."
All  business  interruption  policies  shall  name  Lessor  as "loss payee" with
respect  to  Rent  only.  Losses  shall  be  payable  to Lessor and/or Lessee as
provided  in Article XIV.  In addition, the policies, as appropriate, shall name
as  an  "additional insured" or "loss payee" the holder of any mortgage, deed of
trust  or  other  security  agreement  ("Facility  Mortgagee")  securing  any
indebtedness  or  any  other  Encumbrance  placed  on  the  Leased  Property  in
accordance  with the provisions of Article XXXVI ("Facility Mortgage") by way of
a  standard  form  of mortgagee's loss payable endorsement.  Any loss adjustment
shall require the written consent of Lessor, Lessee, and each Facility Mortgagee
unless  the  amount  of  the loss is less than $10,000 in which event no consent
shall be required.  Evidence of insurance shall be deposited with Lessor and, if
requested,  with  any  Facility  Mortgagee(s).  If any provision of any Facility
Mortgage requires deposits of insurance to be made with such Facility Mortgagee,
Lessee  shall either pay to Lessor monthly the amounts required and Lessor shall
transfer  such  amounts  to  each  Facility  Mortgagee,  or, pursuant to written
direction by Lessor, Lessee shall make such deposits directly with such Facility
Mortgagee.  The  policies  shall insure against the following risks with respect
to  each  Facility:
13.1.1     Loss  or  damage  by fire, vandalism and malicious mischief, extended
coverage  perils  commonly  known  as special form perils, earthquake (including
earth  movement) and windstorm in an amount not less than the insurable value on
a  replacement  cost  basis  (as  defined below in Section 13.2) and including a
building  ordinance  coverage  endorsement;
13.1.2     Loss  or  damage  by  explosion of steam boilers, pressure vessels or
similar  apparatus,  now or hereafter installed in each Facility, in such limits
with  respect  to any one accident as may be reasonably requested by Lessor from
time  to  time;
13.1.3     Flood  (when the Leased Property of a Facility is located in whole or
in  part  within  a designated 100-year flood plain area) and such other hazards
and  in  such amounts as may be customary for comparable properties in the area;
13.1.4     Loss  of  rental value in an amount not less than twelve (12) months'
Rent  payable  hereunder  or  business  interruption  in an amount not less than
twelve (12) months of income and normal operating expenses including payroll and
Rent  payable hereunder with an endorsement extending the period of indemnity by
at  least ninety (90) days (Building Ordinance - Increased Period of Restoration
Endorsement)  necessitated  by the occurrence of any of the hazards described in
Sections  13.1.1,  13.1.2  or  13.1.3;
13.1.5     Claims  for  personal  injury  or  property  damage under a policy of
comprehensive  general public liability insurance with amounts not less than One
Million  and  No/100  Dollars  ($1,000,000.00)  combined  single limit and Three
Million  No/100 Dollars ($3,000,000.00) in the annual aggregate, with respect to
each  Facility;  and
13.1.6     Medical professional liability with amounts not less than One Million
Dollars  ($1,000,000)  combined  single  limit  and  Three  Million  Dollars
($3,000,000)  in  the  annual  aggregate,  with  respect  to  each  Facility.
13.2     Replacement  Cost
         -----------------
     .  The  term  "replacement  cost" shall mean the actual replacement cost of
the  insured  property  from  time to time with new materials and workmanship of
like  kind  and quality.  If either party believes that the replacement cost has
increased  or  decreased at any time during the Term, it shall have the right to
have  such  replacement  cost  redetermined  by  an impartial national insurance
company  reasonably acceptable to both parties (the "impartial appraiser").  The
party  desiring to have the 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 the impartial appraiser
shall  be  final  and  binding on the parties hereto, and Lessee shall forthwith
increase  or  decrease  the  amount  of  the  insurance carried pursuant to this
Article  to  the  amount  so  determined by the impartial appraiser.  Each party
shall  pay  one-half  (1/2)  of the fee, if any, of the impartial appraiser.  If
Lessee  has  made  improvements  to  the Leased Property, Lessor may at Lessee's
expense  have  the  replacement  cost  redetermined  at  any  time  after  such
improvements  are  made,  regardless  of  when  the  replacement  cost  was last
determined.
13.3     Additional  Insurance
         ---------------------
     .  In addition to the insurance described above, Lessee shall maintain such
additional  insurance upon notice from Lessor as may be reasonably required from
time  to  time by any Facility Mortgagee and shall further at all times maintain
adequate workers' compensation coverage and any other coverage required by Legal
Requirements  for  all Persons employed by Lessee on the Leased Property and any
Capital  Addition  thereto  in  accordance  with  Legal  Requirements.
13.4     Waiver  of  Subrogation
         -----------------------
     .  All  insurance  policies  carried  by  either  party covering the Leased
Property  and  any  Capital  Addition  thereto  and  Lessee's  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.  The parties
hereto  agree that their policies will include such waiver clause or endorsement
so  long as the same are obtainable without extra cost, and in the event of such
an  extra  charge  the other party, at its election, may pay the same, but shall
not  be  obligated  to  do  so.  Each party waives any claims it has against the
other  party  to  the  extent  such  claim  is  covered  by  insurance.
13.5     Policy  Requirements
         --------------------
     .  All  of  the  policies of insurance referred to in this Article shall be
written  in  form  satisfactory  to  Lessor  and  by  insurance companies with a
policyholder  rating  of  "A"  and  a financial rating of "X" in the most recent
version  of  Best's  Key  Rating  Guide.  Lessee  shall  pay all of the premiums
therefor,  and  deliver such policies or certificates thereof to Lessor prior to
their  effective date (and with respect to any renewal policy, at least ten (10)
days  prior  to  the expiration of the existing policy), and in the event of the
failure of Lessee either 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 effect such insurance and pay the premiums therefor, in
which  event  the  cost  thereof,  together with interest thereon at the Overdue
Rate,  shall  be  repayable  to Lessor upon demand therefor.  Each insurer 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 ten (10) days'
written  notice  before  the  policy  or  policies in question shall be altered,
allowed to expire or cancelled.  Each property policy shall have a deductible or
deductibles,  if  any, which are no greater than $5,000, unless such requirement
is  specifically  waived  by  Lessor.  Each  earthquake  policy  shall  have  a
deductible  of  ten percent of real property, personal property and rental value
limit at the subject location, unless such requirement is specifically waived by
Lessor.
13.6     Increase  in  Limits
         --------------------
     .  If  either  party  shall at any time believe the limits of the insurance
required  hereunder  to  be  either excessive or insufficient, the parties shall
endeavor  to  agree  in  writing  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 to be carried shall be determined by an
impartial  third party reasonably selected by the parties.  Nothing herein shall
permit  the  amount  of  insurance  to  be  reduced  below the amount or amounts
required  by  any  Facility  Mortgagee.
13.7     Blanket  Policies  and  Policies  Covering  Multiple  Locations
         ---------------------------------------------------------------
     .  Notwithstanding  anything  to  the  contrary  contained in this Article,
Lessee's  obligations  to carry the insurance provided for herein may be brought
within  the  coverage  of  a blanket policy or policies of insurance carried and
maintained  by Lessee; provided, however, that the coverage afforded Lessor will
not  be  reduced  or  diminished or otherwise be different from that which would
exist  under  a separate policy for each Facility meeting all other requirements
of  this  Lease  by  reason  of the use of such blanket policy of insurance, and
provided  further  that  the  requirements  of  this  Article XIII are otherwise
satisfied.  For any liability policies covering one or more of the Facilities or
any  other  facilities  in addition to the Facilities, Lessor may require excess
limits  as  Lessor  reasonably  determines.
13.8     No  Separate  Insurance
         -----------------------
     .  Lessee  shall not, on Lessee's own initiative or pursuant to the request
or requirement of any third party, (i) take out separate insurance concurrent in
form  or contributing in the event of loss with that required in this Article to
be  furnished by, or which may reasonably be required to be furnished by, Lessee
or  (ii)  increase  the  amounts  of  any then existing insurance by securing an
additional policy or additional policies, unless all parties having an insurable
interest  in  the subject matter of the insurance, including in all cases Lessor
and all Facility Mortgagees, are included therein as additional insureds and the
loss  is  payable  under such insurance in the same manner as losses are 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 by securing an additional policy or additional policies.
ARTICLE  XIV.
-------------
14.1     Insurance  Proceeds
         -------------------
     .  All  proceeds  payable  by  reason  of  any loss or damage to the Leased
Property,  or  any portion thereof, under any policy of insurance required to be
carried hereunder shall be paid to Lessor and made available by Lessor to Lessee
from  time  to time for the reasonable costs of reconstruction or repair, as the
case  may  be,  of  any  damage to or destruction of the Leased Property, or any
portion thereof; provided, however, that if the total amount of proceeds payable
is $10,000 or less, the proceeds shall be paid to Lessee and used for the repair
of  any  damage  to  the  Leased  Property.  Any  excess  proceeds  of insurance
remaining  after  the  completion  of  the  restoration or reconstruction of the
Leased  Property  to  substantially  the  same  condition as existed immediately
before the damage or destruction and with materials and workmanship of like kind
and  quality and to Lessor's reasonable satisfaction shall be remitted by Lessor
to  Lessee  free  and  clear  upon completion of any such repair and restoration
except  as  otherwise  specifically  provided below in this Article XIV.  In the
event  neither Lessor nor Lessee is required or elects to repair and restore the
Leased  Property,  all  such insurance proceeds shall be retained by Lessor free
and  clear  except as otherwise specifically provided below in this Article XIV.
All salvage resulting from any risk covered by insurance shall belong to Lessor.
14.2     Insured  Casualty.
         -----------------
14.2.1     If the Leased Property and/or any Capital Additions of a Facility are
     damaged  or  destroyed  from  a risk covered by insurance carried by Lessee
such  that such Facility thereby is rendered Unsuitable for its Primary Intended
Use,  Lessee  shall either (i) restore such Leased Property to substantially the
same condition as existed immediately before such damage or destruction, or (ii)
offer to acquire the Leased Property of such Facility from Lessor for a purchase
price  equal  to the greater of (y) the Minimum Repurchase Price or (z) the Fair
Market  Value  immediately  prior to such damage or destruction.  If Lessor does
not  accept  Lessee's offer to so purchase the Leased Property of such Facility,
Lessee may either withdraw such offer and proceed to restore the Leased Property
of  such  Facility  to  substantially  the same condition as existed immediately
before  such  damage or destruction or terminate the Lease in which event Lessor
shall  be  entitled  to  retain  the  insurance  proceeds.
14.2.2     If the Leased Property and/or any Capital Additions of a Facility are
damaged from a risk covered by insurance carried by Lessee, but such Facility is
not  thereby  rendered  Unsuitable  for  its  Primary Intended Use, Lessee shall
restore  such  Leased  Property  to  substantially the same condition as existed
immediately  before  such  damage.  Such  damage shall not terminate this Lease;
provided, however, that if Lessee cannot within a reasonable time after diligent
efforts  obtain the necessary government approvals needed to restore and operate
such  Facility  for  its  Primary Intended Use, Lessee may offer to purchase the
Leased  Property  of  such Facility for a purchase price equal to the greater of
the  Minimum  Repurchase Price of such Facility or the Fair Market Value of such
Facility  immediately prior to such damage.  If Lessee shall make such offer and
Lessor  does  not  accept  the  same,  Lessee may either withdraw such offer and
proceed  to  restore  the  Leased Property of such Facility to substantially the
same  condition  as  existed  immediately  before such damage or destruction, or
terminate  the  Lease with respect to such Facility, in which event Lessor shall
be  entitled  to  retain  the  insurance  proceeds.
14.2.3     If  the  cost  of  the  repair  or  restoration exceeds the amount of
proceeds received by Lessor from the insurance required to be carried hereunder,
Lessee  shall  contribute  any  excess  amounts needed to restore such Facility.
Such  difference  shall  be  paid  by  Lessee  to Lessor together with any other
insurance  proceeds,  for  application  to  the  cost of repair and restoration.
14.2.4     If Lessor accepts Lessee's offer to purchase the Leased Property of a
Facility,  this  Lease  shall  terminate as to such Facility upon payment of the
purchase  price  and  Lessor  shall  remit  to  Lessee  all  insurance  proceeds
pertaining to the Leased Property of such Facility, including insurance proceeds
pertaining  to  Capital  Additions  and Lessee's Personal Property, then held by
Lessor.
14.3     Uninsured  Casualty
         -------------------
     .  If the Leased Property of a Facility is damaged or destroyed from a risk
not  covered  by  insurance  carried  by  Lessee,  whether or not such damage or
destruction  renders  such  Facility  Unsuitable  for  its Primary Intended Use,
Lessee  at  its  expense  shall  restore the Leased Property of such Facility to
substantially  the  same  condition  it was in immediately before such damage or
destruction  and  such  damage  or  destruction  shall not terminate this Lease;
provided, however, that if Lessee cannot within a reasonable time after diligent
efforts  obtain the necessary government approvals needed to restore and operate
the  Facility  for  its  Primary  Intended Use, Lessee shall purchase the Leased
Property  of  such  Facility  for  a  purchase price equal to the greater of the
Minimum  Repurchase  Price  or  the  Fair Market Value immediately prior to such
damage.
14.4     No  Abatement  of  Rent
         -----------------------
     .  This Lease shall remain in full force and effect and Lessee's obligation
to  pay  the  Rent  and  all  other  charges required by this Lease shall remain
unabated  during  the  period required for adjusting insurance, satisfying Legal
Requirements,  repair  and  restoration.
14.5     Waiver
         ------
     .  Lessee  waives  any  statutory  rights of termination which may arise by
reason  of  any  damage  or  destruction  of  the  Leased  Property.
14.6     Damage  Near  End  of  Term
         ---------------------------
     .  If  the  damage  or destruction contemplated hereunder occurs during the
last  year  of  the  Fixed  Term  or  any  Extended  Term, as applicable, of the
applicable  Facility  and  Lessee  terminates  any options it might then have to
purchase  the  Leased  Property or extend the Term of this Lease with respect to
such  Facility,  Lessee  may,  in  lieu  of  repairing  and restoring the Leased
Property  as  contemplated  hereunder, terminate this Lease with respect to such
Facility,  effective  as  of the date of payment to Lessor of the greater of (a)
the  insurance  proceeds  attributable to such damage or destruction and (b) the
cost  to  repair  such  damage or destruction as reasonably estimated by Lessor.
ARTICLE  XV.
------------
15.1     Condemnation.
         ------------
15.1.1     Total  Taking
           -------------
     .  If the Leased Property of a Facility is totally and permanently taken by
Condemnation, this Lease shall terminate with respect to such Facility as of the
day  before  the  Date  of  Taking  for  such  Facility.
15.1.2     Partial  Taking
           ---------------
     .  If  a  portion  of  the  Leased  Property  of  a  Facility  is  taken by
Condemnation,  this Lease shall remain in effect if the affected Facility is not
thereby  rendered  Unsuitable for Its Primary Intended Use, but if such Facility
is  thereby  rendered  Unsuitable for its Primary Intended Use, this Lease shall
terminate  with respect to such Facility as of the day before the Date of Taking
for  such  Facility.
15.1.3     Restoration
           -----------
     .  If  there  is  a  partial  taking  of the Leased Property and this Lease
remains  in  full  force  and effect pursuant to Section 15.2, Lessor shall make
available  to  Lessee  the  portion  of  the  Award  necessary  and specifically
identified  for  restoration  of the Leased Property and Lessee shall accomplish
all  necessary  restoration  whether or not the amount provided by the condemnor
for  restoration  is  sufficient.
15.2     Award-Distribution
         ------------------
     .  The  entire  Award  shall  belong to and be paid to Lessor, except that,
subject  to  the  rights of the Facility Mortgagees, Lessee shall be entitled to
receive  from  the  Award, if and to the extent such Award specifically includes
such  item,  lost profits value and moving expenses, provided, that in any event
Lessor  shall  receive  from  the  Award,  subject to the rights of the Facility
Mortgagees,  no less than the greater of the Fair Market Value of the applicable
Facility  prior to the institution of the Condemnation or the Minimum Repurchase
Price  of  the  applicable  Facility.
15.3     Temporary  Taking
         -----------------
     .  The taking of the Leased Property, or any part thereof, shall constitute
a taking by Condemnation only when the use and occupancy by the taking authority
has  continued for longer than 180 consecutive days.  During any shorter period,
which shall be a temporary taking, all the provisions of this Lease shall remain
in  full  force  and effect and the Award allocable to the Term shall be paid to
Lessee.
ARTICLE  XVI.
-------------
16.1     Events  of  Default
         -------------------
     .  Any one or more of the following shall constitute an "Event of Default":
(a)     a  default shall occur under any other lease or agreement between Lessor
or an Affiliate of Lessor and Lessee or an Affiliate of Lessee, or any letter of
     credit,  guaranty, mortgage, deed of trust, or other instrument executed by
Lessee  or  an Affiliate of Lessee in favor of Lessor or an Affiliate of Lessor,
in every case, whether now or hereafter existing, where the default is not cured
within  any  applicable  grace  period  set  forth  therein;
(b)     Lessee  shall  fail to pay any installment of Rent when the same becomes
due  and payable and such failure is not cured by Lessee within a period of five
(5)  days  after notice thereof from Lessor; provided, however, that such notice
shall  be in lieu of and not in addition to any notice required under applicable
law;
(c)     Lessee  shall  fail  to  obtain  a  letter of credit or deposit the Cash
Security  Deposit  as  required  by  Article  XXI;
(d)     if  Lessee  shall fail to observe or perform any other term, covenant or
condition  of  this  Lease and such failure is not cured by Lessee within thirty
(30)  days after notice thereof from Lessor, unless such failure cannot with due
diligence  be  cured  within  a  period  of thirty (30) days, in which case such
failure  shall  not  be  deemed  to  be  an  Event of Default if Lessee proceeds
promptly and with due diligence to cure the failure and diligently completes the
curing  thereof; provided, however, that such notice shall be in lieu of and not
in  addition  to  any  notice  required  under  applicable  law;
(e)     Lessee  or  any  Guarantor  shall:
(i)     admit in writing its inability to pay its debts generally as they become
     due,
(ii)     file  a  petition  in bankruptcy or a petition to take advantage of any
insolvency  act,
(iii)     make  an  assignment  for  the  benefit  of  its  creditors,
(iv)     consent  to  the appointment of a receiver of itself or of the whole or
any  substantial  part  of  its  property,  or
(v)     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;
(f)     Lessee  or  any Guarantor shall be adjudicated as bankrupt or a court of
competent  jurisdiction  shall  enter an order or decree appointing, without the
consent  of Lessee, a receiver of Lessee or of the whole or substantially all of
its property, or approving a petition filed against it seeking reorganization or
     arrangement  of  Lessee  under  the  Federal  bankruptcy  laws or any other
applicable  law or statute of the United States of America or any state thereof,
and  such  judgment, order or decree shall not be vacated or set aside or stayed
within  sixty  (60)  days  from  the  date  of  the  entry  thereof;
(g)     Lessee or any Guarantor shall be liquidated or dissolved, or shall begin
proceedings  toward  such  liquidation  or dissolution, or shall, in any manner,
permit  the  sale  or  divestiture  of  substantially  all  its  assets;
(h)     the  estate  or  interest  of  Lessee in the Leased Property or any part
thereof  shall  be  levied upon or attached in any proceeding and the same shall
not  be  vacated  or  discharged  within  the  later  of  ninety (90) days after
commencement  thereof  or  thirty  (30)  days  after receipt by Lessee of notice
thereof from Lessor; provided, however, that such notice shall be in lieu of and
not  in  addition  to  any  notice  required  under  applicable  law;
(i)     except  as  a  result  of  damage,  destruction  or Condemnation, Lessee
voluntarily  ceases  operations on the Leased Property for a period in excess of
thirty  (30)  days;
(j)     any  of the representations or warranties made by Lessee in the Guaranty
or  otherwise  proves  to  be  untrue  when  made  in any material respect which
materially  and  adversely  affects  Lessor;
(k)     any  applicable license or third-party provider reimbursement agreements
material  to a Facility's operation for its Primary Intended Use are at any time
terminated  or  revoked  or  suspended  for  more  than  twenty  (20)  days;
(l)     any  local,  state  or  federal  agency  having  jurisdiction  over  the
operation  of  any Facility removes ten percent (10%) or more of the patients or
residents  located  in  such  Facility;
(m)     Lessee  voluntarily  transfers  ten (10) or more patients located in the
Facility  to  any  other facility in which Lessee or any Affiliate of Lessee has
any  ownership  or other financial interest, including, without limitation, fees
earned  under  any  management agreement, provided that Lessee's transfer of any
patient  to  a  different  type  of  care facility as a result of such patient's
special  needs  that  cannot  be  met  at  such  Facility  shall not be deemed a
voluntary  transfer;
(n)     Lessee fails to give notice to Lessor not later than ten (10) days after
any  notice,  claim  or  demand  from  any governmental authority or any officer
acting on behalf thereof, of any violation of any law, order, ordinance, rule or
regulation  with  respect  to  the  operation  of  any  Facility;
(o)     Lessee  fails  to  notify  Lessor  within  twenty-four  (24) hours after
receipt  of any notice from any governmental agency terminating or suspending or
threatening  termination or suspension, of any material license or certification
relating  to  any  Facility;
(p)     Lessee fails to cure or abate any violation occurring during the Term of
a  Facility that is claimed by any governmental authority, or any officer acting
on  behalf  thereof, of any law, order, ordinance, rule or regulation pertaining
to  the  operation  of  such  Facility,  and  within  the time permitted by such
authority  for  such  cure  or  abatement;
(q)     any  proceedings  are  instituted  against  Lessee  by  any governmental
authority  which  are  reasonably  likely to result in (i) the revocation of any
license granted to Lessee for the operation of any Facility, (ii) if applicable,
the  decertification  of  any  Facility  from  participation  in the Medicare or
Medicaid  reimbursement program, or (iii) the issuance of a stop placement order
with  respect  to  any  Facility;
(r)     any  default  and  acceleration  of  any recourse funded indebtedness of
Lessee  or  any  recourse  funded  indebtedness  of  any Affiliate of Lessee has
occurred,  and  such  funded  indebtedness  has  an  unpaid principal balance of
$1,000,000 or more or such default and acceleration could reasonably be expected
to  have  a  material adverse impact on the financial condition or operations of
Lessee  or  any  Guarantor;  and
(s)     any  default  which is not cured within any applicable cure period shall
occur  under any guaranty of Lessee's or an Affiliate of Lessee's obligations to
Lessor or an Affiliate of Lessor, in every case, whether such guaranty is now or
hereafter  existing.
16.2     Certain  Remedies
         -----------------
     .  If  an  Event  of Default shall have occurred, Lessor may terminate this
Lease with respect to the Facility from which such Event of Default emanated, if
any,  and  any  one  or  more  (including  all,  if so elected by Lessor) of the
Facilities,  regardless of whether such Event of Default emanated primarily from
a  single  Facility,  by  giving  Lessee notice of such termination and the Term
shall  terminate  and  all  rights  of  Lessee under this Lease shall cease with
respect  to  all  such Facilities as to which Lessor has elected to so terminate
this  Lease.  Notwithstanding  the  foregoing,  an Event of Default shall not be
deemed  to  emanate  from  a  particular Facility or group of Facilities if such
Event  of  Default is of a monetary nature or is described in subparagraphs (b),
(c),  (e),  (f), (g), (h), (j), (r) and (s) of Section 16.1 above.  Lessor shall
have  all  rights  at  law  and in equity available to Lessor as a result of any
Event of Default.  Lessee shall pay as Additional Charges all costs and expenses
incurred  by  or  on  behalf of Lessor, including reasonable attorneys' fees and
expenses, as a result of any Event of Default hereunder.  If an Event of Default
shall  have  occurred  and  be  continuing,  whether  or not this Lease has been
terminated  with  respect  to  any  one or more (including all, if so elected by
Lessor) of the Facilities pursuant to Section 16. 1, Lessee shall, to the extent
permitted  by  law,  if  required  by  Lessor so to do, immediately surrender to
Lessor  possession  of  the  Leased  Property  and  any Capital Additions of the
Facilities  as  to  which Lessor has so elected to terminate this Lease and quit
the  same  and Lessor may enter upon and repossess such Leased Property and such
Capital  Addition thereto by reasonable force, summary proceedings, ejectment or
otherwise,  and, to the extent permitted by law, may remove Lessee and all other
Persons (other than the residents of each Facility) and any of Lessee's Personal
Property  from  such  Leased  Property  and  such  Capital  Addition  thereto.
16.3     Damages
         -------
     .  (i) The termination of this Lease with respect to any one or more of the
Facilities;  (ii)  the  repossession  of  the  Leased  Property  and any Capital
Additions  of  any  Facility;  (iii)  the  failure  of  Lessor,  notwithstanding
reasonable  good  faith  efforts,  to  relet  the Leased Property or any portion
thereof; (iv) the reletting of all or any portion of the Leased Property; or (v)
the  inability  of  Lessor  to  collect or receive any rentals due upon any such
reletting,  shall  not  relieve  Lessee  of  its  liabilities  and  obligations
hereunder,  all  of  which  shall  survive any such termination, repossession or
reletting.  If any such termination occurs, Lessee shall forthwith pay to Lessor
all  Rent  due  and  payable  with  respect  to  the  Facility terminated to and
including  the  date  of  such  termination.  Thereafter:
Lessee  shall forthwith pay to Lessor, at Lessor's option, as and for liquidated
and  agreed  current  damages  for  Lessee's  Default,  either:
     (A)     the  sum  of:
(i)     the  worth at the time of award of the unpaid Rent which had been earned
at the time of termination with respect to the terminated Facility to the extent
     not  previously  paid  by  Lessee  under  this  Section  16.3,
(ii)     the  worth  at the time of award of the amount by which the unpaid Rent
which  would  have  been earned after termination with respect to the terminated
Facility  until  the  time  of award exceeds the amount of such rental loss that
Lessee  proves  could  have  been  reasonably  avoided,
(iii)     the  worth at the time of award of the amount by which the unpaid Rent
for  the  balance of the Term after the time of award exceeds the amount of such
rental  loss  that  Lessee  proves  could  be  reasonably  avoided,  plus
(iv)     any  other  amount necessary to compensate Lessor for all the detriment
proximately  caused  by  Lessee's  failure to perform its obligations under this
Lease  or  which  in  the  ordinary  course  of things would be likely to result
therefrom.
As used in clauses (i) and (ii) above, the "worth at the time of award" shall be
computed  by  allowing  interest  at  the Overdue Rate.  As used in clause (iii)
above,  the  "worth  at the time of award" shall be computed by discounting such
amount  at the discount rate of the Federal Reserve Bank of San Francisco at the
time  of award plus one percent (1 %).  For purposes of determining the worth at
the  time  of  the  award,  Additional Rent that would have been payable for the
remainder  of  the Term shall be deemed to be the greater of (y) the same as the
Additional  Rent  for  the  then current Lease Year or, if not determinable, the
immediately  preceding  Lease  Year;  and  (z) such other amount as Lessor shall
demonstrate  could  reasonably  have  been  earned.
          or  (B)
without termination of Lessee's right to possession of the Leased Property, each
installment  of  said  Rent and other sums payable by Lessee to Lessor under the
Lease as the same becomes due and payable, together with interest at the Overdue
Rate  from  the  date  when due until paid, and Lessor may enforce, by action or
otherwise,  any  other  term  or  covenant  of  this  Lease.
     Notwithstanding  anything  in this Lease to the contrary, in the event that
this  Lease shall be terminated by Lessor with respect to any Facility by reason
of an Event of Default, such termination shall not affect the applicable Term of
this  Lease  with  respect to the balance of the Facilities not so terminated by
Lessor,  and  this Lease shall continue in full force and effect with respect to
each  such  other Facility, except that the total monthly Allocated Minimum Rent
and  Allocated  Additional Rent payable hereunder shall be reduced by the amount
of monthly Allocated Minimum Rent and Allocated Additional Rent as to which this
Lease  has so terminated, subject, however, to Lessor's right to recover damages
with  respect to any such Facility as to which this Lease has been so terminated
as  provided  in  this  Article  XVI.
16.4     Receiver
         --------
     .  Upon  the  occurrence  of  an Event of Default, and upon commencement of
proceedings to enforce the rights of Lessor hereunder, Lessor shall be entitled,
as  a  matter of right, to the appointment of a receiver or receivers acceptable
to  Lessor  of  the  Leased Property and any Capital Addition thereto and of the
revenues, earnings, income, products and profits thereof, pending the outcome of
such  proceedings,  with  such powers as the court making such appointment shall
confer.
16.5     Lessee's  Obligation  to  Purchase
         ----------------------------------
     .  If an Event of Default shall have occurred with respect to any Facility,
Lessor  may  require  Lessee to purchase the Leased Property of such Facility on
the  first  Minimum  Rent  Payment Date occurring not less than thirty (30) days
after  the date specified in a notice from Lessor requiring such purchase for an
amount  equal  to  the greater of (i) the Fair Market Value of such Facility, or
(ii)  the  Minimum Repurchase Price of such Facility, plus, in either event, all
Rent  then due and payable (excluding the installment of Minimum Rent due on the
purchase  date)  with respect to such Facility.  If Lessor exercises such right,
Lessor  shall  convey the Leased Property of such Facility to Lessee on the date
fixed  therefor  in accordance with the provisions of Article XVIII upon receipt
of  the  purchase  price  therefor and this Lease shall thereupon terminate with
respect  to  such  Facility.  Any purchase by Lessee of the Leased Property of a
Facility  pursuant  to this Section shall be in lieu of the damages specified in
Section  16.3  with  respect  to  such  Facility.
16.6     Waiver
         ------
     .  If  Lessor initiates judicial proceedings or if this Lease is terminated
by Lessor pursuant to this Article with respect to a Facility, Lessee waives, to
the extent permitted by applicable law, (i) any right of redemption, re-entry or
repossession;  and  (ii)  the  benefit  of  any  laws  now or hereafter in force
exempting  property  from  liability  for  rent  or  for  debt.
16.7     Application  of  Funds
         ----------------------
     .  Any  payments  received  by  Lessor  under any of the provisions of this
Lease during the existence or continuance of any Event of Default which are made
to  Lessor  rather than Lessee due to the existence of an 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.
16.8     [Reserved]
16.9     [Reserved]
16.10     Landlord's  Security  Interest
     .  The  parties intend that if an Event of Default occurs under this Lease,
Lessor  will  control  Lessee's Personal Property and the Intangible Property so
that  Lessor  or  its  designee  or  nominee can operate or re-let each Facility
intact  for its Primary Intended Use.  Accordingly, to implement such intention,
and  for  the  purpose  of  securing  the payment and performance obligations of
Lessee  hereunder,  Lessor  and  Lessee  agree  as  follows:
16.10.1     Lessee,  as  debtor,  hereby  grants  to Lessor, as secured party, a
security  interest  and  an express contractual lien upon all of Lessee's right,
title  and  interest  in  and  to  Lessee's  Personal Property and in and to the
Intangible  Property  and  any  and  all  products,  proceeds, rents and profits
thereof  in  which  Lessee  now owns or hereafter acquires an interest or right,
including  any  leased  Lessee's  Personal  Property  (collectively,  the
"Collateral").  This  Lease  constitutes  a security agreement covering all such
Lessee's  Personal  Property and the Intangible Property.  The security interest
granted  to  Lessor  with  respect to Lessee's Personal Property in this Section
16.10  is  intended  by  Lessor  and  Lessee  to  be subordinate to any security
interest  granted  in  connection  with  the  financing or leasing of all or any
portion  of  the  Lessee's  Personal  Property  so  long as Lessee uses its best
efforts to secure an agreement in Lessor's favor that the lessor or financier of
     such Lessee's Personal Property agrees to give Lessor written notice of any
default  by  Lessee  under  the terms of such lease or financing arrangement, to
give Lessor a reasonable time following such notice to cure any such default and
consents  to  Lessor's written assumption of such lease or financing arrangement
upon  Lessor's  curing  of  any  such defaults.  This security agreement and the
security  interest  created  herein  shall  survive the termination, but not the
expiration,  of  this  Lease  with respect to any or all of the Facilities until
such  time  as  Lessor has been fully compensated for all damages resulting from
such  termination.
16.10.2     Lessee  hereby  authorizes Lessor to file such financing statements,
continuation  statements and other documents as may be necessary or desirable to
perfect  or  continue  the  perfection  of  Lessor's  security  interest  in the
Collateral.  In  addition,  if  required  by Lessor at any time during the Term,
Lessee  shall  execute and deliver to Lessor, in form reasonably satisfactory to
Lessor,  additional  security  agreements, financing statements, fixture filings
and such other documents as Lessor may reasonably require to perfect or continue
     the  perfection  of  Lessor's  security interest in the Collateral.  In the
event Lessee fails to execute any financing statement or other documents for the
perfection or continuation of Lessor's security interest, Lessee hereby appoints
Lessor  as its true and lawful attorney-in-fact to execute any such documents on
its  behalf,  which  power  of attorney shall be irrevocable and is deemed to be
coupled  with  an  interest.
16.10.3     Lessee  will  give  Lessor  at least thirty (30) days' prior written
notice of any change in Lessee's name, identity, jurisdiction of organization or
     corporate structure.  With respect to any such change, Lessee will promptly
execute  and  deliver  such  instruments,  documents  and  notices and take such
actions,  as  Lessor deems necessary or desirable to create, perfect and protect
the  security  interests  of  Lessor  in  the  Collateral.
16.10.4     Upon the occurrence of an Event of Default, Lessor shall be entitled
to  exercise  any  and all rights or remedies available to a secured party under
the  Uniform  Commercial  Code,  or  available to a lessor under the laws of the
State,  with  respect to Lessee's Personal Property and the Intangible Property,
including  the  right  to  sell  the  same  at  public  or  private  sale.
ARTICLE  XVII.
--------------
17.1     Lessor's  Right  to  Cure  Lessee's  Default
         --------------------------------------------
     .  If  Lessee shall fail to make any payment or to perform any act required
to  be  made  or  performed  hereunder, Lessor, without waiving or releasing any
obligation  or  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 and any
Capital  Addition  thereto 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 and all costs
and  expenses,  including  reasonable attorneys' fees and expenses, so incurred,
together  with  interest thereon at the Overdue Rate from the date on which such
sums  or  expenses  are  paid  or incurred by Lessor, shall be paid by Lessee to
Lessor  on  demand.
ARTICLE  XVIII.
---------------
18.1     Purchase  of  the  Leased  Property
         -----------------------------------
     .  If  Lessee  purchases  the  Leased  Property of any Facility from Lessor
pursuant  to any provision of this Lease, Lessor shall, upon receipt from Lessee
of  the applicable purchase price, 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,  deliver  to  Lessee an appropriate deed or other conveyance conveying
the  entire  interest of Lessor in and to the Leased Property to Lessee free and
clear  of all encumbrances other than (i) those that Lessee has agreed hereunder
to  pay or discharge; (ii) those mortgage liens, if any, which Lessee has agreed
in  writing  to  accept  and  to  take  title  subject to; (iii) those liens and
encumbrances  which  were  in  effect  on  the date of conveyance of such Leased
Property  to  Lessor;  and (iv) any other encumbrances permitted hereunder to be
imposed  on  such Leased Property which are assumable at no cost to Lessee or to
which Lessee may take subject without cost to Lessee; provided, however, that in
no  event shall Lessee be obligated to assume or take subject to any encumbrance
with  a  principal balance in excess of the applicable purchase or option price,
and  provided  further  that  where  the  purchase price is equal to the Minimum
Repurchase Price and if any such encumbrance may not be removed without penalty,
the applicable purchase price shall be increased or decreased by an amount equal
to  the  positive  or  negative  effect on Fair Market Value attributable to the
interest  rate,  amortization  schedule,  maturity  date, prepayment penalty and
other  terms  and  conditions  of  such encumbrance.  The difference between the
applicable  purchase  price  and  the total of the encumbrances assumed or taken
subject  to  shall  be  paid  to  Lessor  or as Lessor may direct in immediately
available  funds.  All  expenses of such conveyance, including the cost of title
insurance, attorneys' fees incurred by Lessor in connection with such conveyance
and  release,  transfer  taxes  and  recording and escrow fees, shall be paid by
Lessee.
18.2     Allocation  of  the  Boise,  Idaho  Purchase  Price
         ---------------------------------------------------
     .  If  Lessee  purchases  the  Leased  Property  of the Facility located in
Boise,  Idaho  pursuant  to  any  of the terms of this Lease, the portion of the
purchase  price  paid by Lessee with respect to the Leased Improvements shall be
allocated  between  the portion constructed in accordance with the Boise Capital
Renovation  Project and the remainder of the Facility located in Boise, Idaho in
accordance  with  the  relative proportions of square feet contained within each
such  portion  of  the  Facility  located  in  Boise,  Idaho.
ARTICLE  XIX.
-------------
19.1     Renewal  Terms
         --------------
     .  With  respect  to  each  Facility, provided that no Event of Default, or
event  which, with notice or lapse of time or both, would constitute an Event of
Default,  has occurred and is continuing, either at the date of exercise or upon
the  commencement  of an Extended Term (as hereunder defined), then Lessee shall
have  the  right to renew this Lease with respect to all (but not less than all)
of  the Facilities in a Renewal Group for the Extended Term set forth on Exhibit
                                                                         -------
C upon giving written notice to Lessor of such renewal not less than twelve (12)
months and not more than fifteen (15) months prior to the expiration of the then
current  Fixed  Term  or  Extended  Term,  as  applicable.  With respect to each
Facility,  during  each  Extended  Term, all of the terms and conditions of this
Lease  shall  continue  in  full force and effect except that the annual Minimum
Rent and Additional Rent for and during such Extended Term shall be equal to the
Extended  Term  Rent,  subject  to increases after the first (1st) Lease Year of
such  Extended  Term  as  provided  in  Sections 3.1.2(b)(ii) and 3.1.2(b)(iii).
Notwithstanding  anything  to  the  contrary in this Article XIX, Lessor, in its
sole  discretion,  may waive the condition to Lessee's right to renew this Lease
that  no Event of Default, or event which, with notice or lapse of time or both,
would  constitute  an  Event of Default, have occurred or be continuing, and the
same  may  not  be  used  by  Lessee  as  a means to negate the effectiveness of
Lessee's  exercise  of  its  renewal  right  for  such  Extended  Term.
ARTICLE  XX.
------------
20.1     Holding  Over
         -------------
     .  Except  as provided in Section 19, if Lessee shall for any reason remain
in  possession  of  the  Leased  Property and/or Capital Additions of a Facility
after  the  expiration or earlier termination of the Fixed Term, such possession
shall  be  as  a  month-to-month  tenant  during  which time Lessee shall pay as
Minimum  Rent each month twice the sum of (i) monthly Minimum Rent applicable to
the  prior  Lease Year for such Facility, plus (ii) one-twelfth of the aggregate
Additional  Rent payable applicable to the prior Lease Year with respect to such
Facility,  together  with  all  Additional Charges and all other sums payable by
Lessee  pursuant  to  this Lease.  During such period of month-to-month tenancy,
Lessee shall be obligated to perform and observe all of the terms, covenants and
conditions  of  this  Lease,  but  shall have no rights hereunder other than the
right,  to  the extent given by law to month-to-month tenancies, to continue its
occupancy  and  use  of the Leased Property and/or any Capital Additions of such
Facility.  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.
ARTICLE  XXI.
-------------
21.1     Letters  of  Credit
         -------------------
     .  With  respect to each Facility except the Group 3 Facilities, during the
entire  Term and for sixty (60) days after the expiration or earlier termination
of this Lease, subject to Section 21.5 below, Lessee shall have obtained letters
of  credit  from a financial institution satisfactory to Lessor naming Lessor as
beneficiary  to  secure  Lessee's  obligations  hereunder  and  Lessee's and any
Affiliate  of  Lessee's  obligations under any other lease or other agreement or
instrument  with or in favor of Lessor or any Affiliate of Lessor, at the times,
in  the  amounts  and  for  the purposes set forth below.  Each letter of credit
shall  be  in substantially the form of Exhibit J hereto.  Each letter of credit
                                        ---------
shall  be  for  a term of not less than one (1) year and irrevocable during that
term.  Each letter of credit shall provide that it will be honored upon a signed
statement  by  Lessor  that Lessor is entitled to draw upon the letter of credit
under  this  Lease,  and  shall require no signature or statement from any party
other  than  Lessor.  No  notice to Lessee shall be required to enable Lessor to
draw  upon  the letter of credit.  Each letter of credit shall also provide that
following the honor of any drafts in an amount less than the aggregate amount of
the letter of credit, the financial institution shall return the original letter
of credit to Lessor and Lessor's rights as to the remaining amount of the letter
of  credit  will  not  be  extinguished.  In the event of a transfer of Lessor's
interest  in  the  Leased  Property, Lessor shall have the right to transfer the
letter  of  credit  to  the  transferee and thereupon shall, without any further
agreement  between  the  parties,  be  released  by  Lessee  from  all liability
therefor,  and  it  is  agreed  that  the provisions hereof shall apply to every
transfer  or  assignment of the letter of credit to a new Lessor.  The letter of
credit  may  be assigned as security in connection with a Facility Mortgage.  If
the  financial  institution  from  which  Lessee has obtained a letter of credit
shall  admit  in writing its inability to pay its debts generally as they become
due,  file  a  petition  in  bankruptcy  or  a petition to take advantage of any
insolvency  act,  make an assignment for the benefit of its creditors consent to
the  appointment of a receiver of itself or of the whole or any substantial part
of  its  property,  or  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, then Lessee shall
obtain  a  replacement letter of credit within thirty (30) days of such act from
another  financial  institution  satisfactory  to  Lessor.
21.2     Times  for  Obtaining  Letters  of  Credit
         ------------------------------------------
     .  The  initial  letter of credit shall be obtained and delivered to Lessor
prior  to  the  execution  and  delivery  of  this Lease.  The letters of credit
covering  subsequent  periods shall be obtained and delivered to Lessor not less
than  thirty  (30)  days  prior to the expiration of the then existing letter of
credit ("Letter of Credit Date").  The term for each such letter of credit shall
begin  no  later  than  the  expiration  date  of the previous letter of credit.
21.3     Amounts  for  Letters  of  Credit.
         ----------------------------------
21.3.1     With  respect  to  each  Facility as set forth in Section 21.1 above,
letters of credit shall be in an amount equal to the Letter of Credit Amount for
     such  Facility.
21.3.2     Notwithstanding  subsection 21.3.1 above, the Letter of Credit Amount
with  respect  to  such  Facility as set forth in subsection 21.3.1 above may be
reduced  on  the  following  conditions  and  to  the  following  amounts:
(a)     If  for  any  eight  (8)  consecutive  month  period during the Term the
average  Cash  Flow  Coverage  for  a  Facility described on Exhibit G equals or
                                                             ---------
exceeds  1.25  and  during  such time period Lessee maintains a Consolidated Net
Worth  in  excess  of Twenty Million Dollars ($20,000,000), then Lessee shall be
entitled  to  reduce the amount of the letter of credit for the then current and
each  subsequent  Lease  Year  by  the  LOC Reduction Fraction, if any, for such
Facility,  and if for any eight (8) consecutive month period during the Term the
average  Cash  Flow  Coverage  for  a  Facility described on Exhibit G equals or
                                                             ---------
exceeds  1.4  and  during  such  time period Lessee maintains a Consolidated Net
Worth  in  excess  of Twenty Million Dollars ($20,000,000), then Lessee shall be
entitled  to reduce the amount of the letter of credit required hereunder by the
amount  corresponding to such Facility on Exhibit F; provided, however, that if,
                                          ---------
following  any  such  reduction  in  the amount or elimination of the applicable
letter  of credit, the average Cash Flow Coverage for the Facility for any three
(3)  consecutive  month  period  decreases below 1.4, then Lessee shall again be
required  to provide a letter of credit for the then current and each subsequent
Lease  Year in an amount equal to the amount required by Exhibit F as multiplied
                                                         ---------
by  the fraction that is the complement of the applicable LOC Reduction Fraction
and Lessee shall promptly deliver to Lessor a letter of credit in the readjusted
     amount,  and  if  the  average  Cash Flow Coverage for the Facility for any
three  (3)  consecutive  month  period  decreases  below  1.25 or if at any time
Lessee's  Consolidated  Net  Worth  falls  below  Twenty  Million  Dollars
($20,000,000),  then Lessee shall again be required to restore the amount of the
letter  of  credit  required  hereunder for the then current and each subsequent
Lease  Year  to  the amount equal to that required by Exhibit F and Lessee shall
                                                      ---------
promptly deliver to Lessor a letter of credit in the readjusted amount; provided
further  that  following any such increase, the letter of credit may be reduced,
released  and  increased  as  provided  above.
(b)     With  respect  to each of the Group 2 Facilities, if for the twelve (12)
consecutive month period most recently completed as of the date of determination
     Lessee does not (a) permit the ratio of (i) Lessee's Cash Flow with respect
to a Facility to the sum of Allocated Minimum Rent and Allocated Additional Rent
payable during the Term with respect to such Facility and principal and interest
payments  payable to Lessee for any Quarter to be less than 2.5 to 1.0, nor (ii)
Lessee's  Cash  Flow  with  respect  to  such Facility to Allocated Minimum Rent
payable  by Lessee with respect to such Facility for any Quarter to be less than
1.4  to  1.0  or  (b)  fail  to  maintain,  as  of  the  end  of each Quarter, a
Consolidated  Net  Worth  of  at  least  Ten  Million  Dollars ($10,000,000), as
reflected  in financial statements prepared in accordance with GAAP, then Lessee
shall  be  entitled  to  reduce  the amount of the letter of credit for the then
current  and  each  subsequent Lease Year with respect to such Facility by fifty
percent  (50%)  of the amount required by Exhibit F; provided, however, that if,
                                          ---------
following  any  such  reduction  in  the amount or elimination of the applicable
letter  of  credit  Lessee fails to comply with the aforementioned requirements,
then  Lessee  shall again be required to provide a letter of credit for the then
current and each subsequent Lease Year in an amount equal to the amount required
by  Exhibit  F and Lessee shall promptly deliver to Lessor a letter of credit in
    ----------
the  readjusted  amount.
21.4     Uses  of  Letters  of  Credit
         -----------------------------
     .  Lessor  shall  have  the right to draw upon a letter of credit up to its
full  amount  whenever  an  Event of Default has occurred or an event of default
under  any other lease or agreement between Lessor or an Affiliate of Lessor and
Lessee  or  an  Affiliate of Lessee or any letter of credit, guaranty, mortgage,
deed  of trust, or other instrument executed by Lessee or an Affiliate of Lessee
in  favor  of  Lessor  or an Affiliate of Lessor has occurred and any applicable
cure  periods  have  expired;  provided  further,  if  Lessee  fails to obtain a
satisfactory  letter  of  credit  prior to the applicable Letter of Credit Date,
Lessor  may  draw  upon  the  full  amount of the then existing letter of credit
without  giving  any  notice  or time to cure to Lessee.  No such draw shall (i)
cure  or  constitute  a  waiver of an Event of Default, (ii) be deemed to fix or
determine the amounts to which Lessor is entitled to recover under this Lease or
otherwise,  or  (iii)  be  deemed to limit or waive Lessor's right to pursue any
remedies  provided  for  in  this  Lease.  If  all or any portion of a letter of
credit  is  drawn  against by Lessor, Lessee shall, within two (2) business days
after  demand  by  Lessor,  order  the  issuer of such letter of credit to issue
Lessor,  at Lessee's expense, a replacement or supplementary letter of credit in
substantially  the  form  attached  hereto  as  Exhibit J such that at all times
                                                ---------
during the Term, Lessor shall have the ability to draw on one or more letters of
credit  totaling, in the aggregate, the amount required pursuant to Section 21.3
and  Lessor,  upon  the receipt thereof, shall return any amounts drawn down and
held  pending  receipt  of  such  replacement or supplementary letter of credit.
21.5     Cash  Security  Deposit  Option
         -------------------------------
     .  Notwithstanding  anything  to  the  contrary  in  this Article XXI, with
respect  to  each  Facility with respect to which a Letter of Credit is required
under  Section  21.1,  Lessee shall have the option to deposit with Lessor a sum
equal  to  the  applicable  Letter of Credit Amount for such Facility above (the
"Cash  Security  Deposit").  If  Lessee exercises such option, during the entire
Term and for sixty (60) days after the expiration or earlier termination of this
Lease,  unless  such  Cash  Security  Deposit  is replaced by a Letter of Credit
complying  with this Article XXI, Lessee shall deposit the Cash Security Deposit
with  HCPI  cash  to  secure Lessee's obligations hereunder and Lessee's and any
Affiliate  of  Lessee's  obligations under any other lease or other agreement or
instrument with or in favor of Lessor or any Affiliate of HCPI, at the times, in
the  amounts  and  for  the  purposes set forth below.  On the first day of each
Quarter,  except  during  any period during which any Event of Default, or event
which,  with  notice  or  lapse  of  time  or both, would constitute an Event of
Default,  has  occurred  and  is continuing hereunder, the Cash Security Deposit
shall accrue, and HCPI shall pay to Lessee, or, at HCPI's option, credit for the
restoration  of  the  required amount of the Cash Security Deposit upon any draw
hereunder,  interest  on the aggregate Cash Security Deposit held by Lessor from
time  to  time  at an annual rate equal to nine percent (9%); provided, however,
that  Lessor  shall  not  be required to keep the Cash Security Deposit separate
from  its  general  funds,  and  Lessee  acknowledges that Lessor may invest and
reinvest  the  Cash  Security  Deposit  for  Lessor's own account.  No notice to
Lessee  shall  be  required  to  enable  Lessor  to draw upon such Cash Security
Deposit;  provided  however, that Lessor shall use reasonable efforts to provide
Lessee  with  written notice of such drawing within a reasonable time after such
drawing.  In  the  event  of  a  transfer  of  Lessor's  interest  in the Leased
Property,  Lessor  shall have the right to transfer the Cash Security Deposit to
the  transferee  and  thereupon shall, without any further agreement between the
parties,  be  released  by  Lessee from all liability therefor, and it is agreed
that  the  provisions hereof shall apply to every transfer or assignment of such
Cash  Security  Deposit  to  a  new  Lessor.  The  Cash  Security Deposit may be
assigned  as  security  in connection with a Facility Mortgage.  Notwithstanding
the  foregoing,  with  respect  to the Group 4 Facilities, Lessee's rights under
this  Section  21.5  to  deposit  a  Cash  Security  Deposit  shall be expressly
conditioned  upon  Lessee's repayment of all amounts outstanding under the Note.
LESSEE  WAIVES THE PROVISIONS OF ANY APPLICABLE LAWS NOW IN FORCE OR THAT BECOME
IN  FORCE  AFTER  THE  DATE OF EXECUTION OF THIS LEASE THAT PROVIDE IN SUBSTANCE
THAT  LESSOR  MAY  CLAIM FROM A CASH SECURITY DEPOSIT ONLY THOSE SUMS REASONABLY
NECESSARY  TO REMEDY DEFAULTS IN THE PAYMENT OF RENT, TO REPAIR DAMAGE CAUSED BY
LESSEE,  TO CLEAN THE PREMISES OR FOR OTHER LIMITED PURPOSES.  LESSOR AND LESSEE
AGREE  THAT  LESSOR  MAY,  IN ADDITION, CLAIM THOSE SUMS NECESSARY TO COMPENSATE
LESSOR  FOR  ANY OTHER FORESEEABLE OR UNFORESEEABLE LOSS OR DAMAGE CAUSED BY THE
ACT  OR  OMISSION OF LESSEE OR LESSOR'S OFFICERS, AGENTS, EMPLOYEES, INDEPENDENT
CONTRACTORS,  OR  INVITEES.
                             _______________________
                                Lessee's Initials

ARTICLE  XXII.
--------------
22.1     Risk  of  Loss
         --------------
     .  The  risk  of loss or of decrease in the enjoyment and beneficial use of
the  Leased  Property  as  a 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 Persons claiming from, through or under Lessor) is assumed by Lessee,
and  except  as  otherwise provided herein no such event shall entitle Lessee to
any  abatement  of  Rent.
ARTICLE  XXIII.
---------------
23.1     General  Indemnification
         ------------------------
     .  In  addition  to  the  other  indemnities  contained  herein,  and
notwithstanding  the existence of any insurance carried by or for the benefit of
Lessor or Lessee, and without regard to the policy limits of any such insurance,
Lessee  shall  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', consultants' and
experts'  fees  and  expenses,  imposed  upon or incurred by or asserted against
Lessor  by reason of: (i) any accident, injury to or death of Persons or loss of
or  damage  to  property  occurring on or about the Leased Property or adjoining
sidewalks;  (ii)  any  use, misuse, non-use, condition, maintenance or repair by
Lessee  of  the  Leased  Property;  (iii)  any  failure on the part of Lessee to
perform  or comply with any of the terms of this Lease; (iv) 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 any party thereunder; (v) any claim
for  malpractice, negligence or misconduct committed by any Person on or working
from  the  Leased  Property;  and  (vi)  the  violation  by  Lessee of any Legal
Requirement.  Any  amounts  which  become  payable  by Lessee under this Article
shall  be  paid  within  ten (10) days after liability therefor is determined by
litigation  or  otherwise,  and  if  not  timely paid shall bear interest at the
Overdue  Rate  from  the  date  of  such  determination  to the date of payment.
Lessee,  at its sole cost and 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.  For purposes of
this  Article  XXIII,  any acts or omissions of Lessee, or by employees, agents,
assignees,  contractors,  subcontractors  or  others  acting for or on behalf of
Lessee  (whether  or  not they are negligent, intentional, willful or unlawful),
shall  be  strictly  attributable  to  Lessee.
Lessor  shall  indemnify,  save  harmless and defend Lessee from and against all
liabilities,  obligations,  claims,  damages, penalties, causes of action, costs
and expenses, including, but not limited to, reasonable attorneys' fees, imposed
upon  or  incurred  by  or  asserted  against  Lessee  as  a result of the gross
negligence  or  willful  misconduct  of  Lessor.  Lessor,  at its expense, shall
contest,  resist,  and  defend  any  claim,  action  or  proceeding  asserted or
instituted  against  Lessee  with  respect to the foregoing or may compromise or
otherwise  dispose  of  the  same  as Lessor sees fit.  Any amounts which become
payable  by  Lessor  under this Section shall be paid within ten (10) days after
liability  therefor  on  the  part  of  Lessor  is  determined  by litigation or
otherwise,  and  if  not  timely  paid  shall  bear a late charge (to the extent
permitted by law) at the Overdue Rate from the date of such determination to the
date  of  payment.
ARTICLE  XXIV.
--------------
24.1     Subletting  and  Assignment.
         ---------------------------
24.1.1     Prohibition
           -----------
(a)     .  Lessee  shall  not, without Lessor's prior written consent, which may
be  withheld  in  Lessor's  sole  and  absolute  discretion,  voluntarily  or by
operation  of  law  assign (which term includes any sale, encumbering, pledge or
other  transfer  or  hypothecation) this Lease, master sublet all or any part of
the Leased Property of any Facility or engage the services of any Person for the
     management  or  operation of any Facility.  Lessee acknowledges that Lessor
is  relying  upon the expertise of Lessee in the operation of the Facilities and
that  Lessor  entered  into  this  Lease  with the expectation that Lessee would
remain in and operate such Facilities during the entire Term and for that reason
Lessor  retains  sole  and  absolute discretion in approving or disapproving any
assignment  or  master sublease.  If Lessee is a corporation or partnership, any
transfer  of  its stock (other than a transfer of any of Lessee's stock owned by
Daniel  R.  Baty  for estate planning purposes) or partnership interests (or the
stock  or  partnership interests of the entity(ies) that controls Lessee) or any
dissolution  or  merger  or  consolidation  of  Lessee  (or  its  controlling
entity(ies))  with  any  other  entity,  which results in any Person (other than
Daniel  R.  Baty)  and such Person's Affiliates collectively owning greater than
twenty-five  percent  (25%)  of  the  total  outstanding  shares of any class of
Lessee's stock or partnership interests, or the sale or other transfer of all or
substantially  all  of  the  assets  of Lessee (or its controlling entity(ies)),
shall  constitute  an  assignment  of Lessee's interest in this Lease within the
meaning  of  this  Article  XXIV  and the provisions requiring consent contained
herein  shall  apply  (provided, however, that the foregoing provision regarding
transfer  of  Lessee's  stock  constituting an assignment shall not apply if (i)
Lessee's  stock  is  publicly  traded,  and (ii) Lessee's Consolidated Net Worth
after  such  transfer is not less than Lessee's Consolidated Net Worth as of the
Original  Lease Commencement Date).  Any sublease of more than ten percent (10%)
of  any  Facility  to  any  Person or its Affiliates, in one transaction or in a
series  of transactions, shall be deemed to be a master sublease hereunder.  For
any  sublease  transaction not requiring the consent of Lessor hereunder, Lessee
shall, within ten (10) days of entering into any such sublease, notify Lessor of
the  existence  of  such  sublease  and the identity of the sublessee and supply
Lessor  with  a  copy  of  the sublease, any related documentation and any other
materials  or  information  reasonably  requested  by  Lessor.
24.1.2     Certain  Business  Reorganizations.  Lessor  will  not  unreasonably
           ----------------------------------
withhold  its  written  consent to an assignment of this Lease to (A) any Person
which  acquires all or substantially all of the assets and business of Lessee by
virtue of a merger or consolidation of, with or into Lessee or (B) any purchaser
     of  51%  or more of the outstanding voting stock or partnership interest of
Lessee,  if  in  Lessor's  reasonable  judgment such assignee, together with any
guarantor  of  such  assignee's  obligations  under  this  Lease,  has  (1)  a
consolidated  net worth equal to or greater than Lessee's consolidated net worth
at  the time of the proposed assignment or as of the Original Lease Commencement
Date,  whichever is greater, and (2) the operational expertise and reputation at
least  equal  to  that of Lessee at the time of the proposed assignment or as of
the  Original  Lease  Commencement  Date,  whichever  is  greater.
24.1.3     Public  Offering;  Public  Trading.  Notwithstanding  anything to the
           ----------------------------------
contrary in Section 24.1.2, Lessor's consent shall not be required in connection
with and the provisions of Section 24.1.2 shall not apply to any transfer of any
stock  of  Lessee  as  a result of a public offering of Lessee's stock which (a)
constitutes  a  bona  fide  public distribution of such stock pursuant to a firm
commitment  underwriting  or  a  plan  of  distribution  registered  under  the
Securities Act of 1933 and (b) results in such stock being listed for trading on
the  American  Stock  Exchange  or the New York Stock Exchange or authorized for
quotation  on the NASDAQ National Market immediately upon the completion of such
public  offering.  In  addition,  so long as such stock is listed for trading on
any  such  exchange  or authorized for quotation on such market, the transfer or
exchange  of  such  stock  over  such  exchange  or market shall not be deemed a
Transfer hereunder unless the same (whether in one transaction or in any step or
series  of  transactions) results in a change in control of Lessee or (including
pursuant  to  a  tender  or  similar offer to acquire the outstanding and issued
securities  of  such  entity).
24.2     Consent
         -------
     .  If Lessee desires at any time to assign this Lease, to master sublet any
Facility  or  any  portion  thereof or engage the services of any Person for the
management  or  operation  of such Facility, it shall first notify Lessor of its
desire  to  do  so  and  shall  submit in writing to Lessor: (i) the name of the
proposed master sublessee, assignee or manager; (ii) the terms and provisions of
the proposed master sublease, assignment or management agreement; and (iii) such
financial  information  as Lessor reasonably may request concerning the proposed
master  sublessee,  assignee  or  manager.
24.2.1     Lessor may, as a condition to granting such consent, require that the
     obligations of any sublessee, assignee, or manager which is an Affiliate of
another  Person  be  guaranteed  by  its parent or controlling Person if (i) the
Consolidated  Net  Worth  of  Lessee would be diminished as a result of any such
assignment  of Lessee's interest described in this Article XXIV, or (ii) the new
controlling Person(s) would have a consolidated net worth less than the Lessee's
consolidated  net  worth as of the Original Lease Commencement Date and that any
guaranty  of  this  Lease  be  reaffirmed  by any Guarantor notwithstanding such
subletting,  assignment  or  management  arrangement.  Any  sublease  shall  be
expressly subject and subordinate to all applicable terms and conditions of this
Lease  and  provide  that Lessor, at its option and without any obligation to do
so,  may  require any sublessee to attorn to Lessor, in which event Lessor shall
undertake  the  obligations of Lessee, as sublessor under such sublease from the
time  of  the exercise of such option to the termination of such sublease and in
such  case  Lessor shall not be liable for any prepaid rents or security deposit
paid  by  such sublessee to Lessee unless Lessor actually receives the same from
Lessee  or  for  any other prior defaults of Lessee under such sublease.  In the
event  that  Lessor  shall  not  require  such  attornment  with  respect to any
sublease,  then  such sublease shall automatically terminate upon the expiration
or  earlier termination of this Lease, including any early termination by mutual
agreement  of  Lessor  and  Lessee.  Furthermore,  any  sublease,  assignment or
management  agreement  shall  expressly  provide that the sublessee, assignee or
manager shall furnish Lessor with such financial and operational information and
information  about  the  physical  condition  of  such  Facility,  including the
information  required by Section 25.2 herein, as Lessor may request from time to
time.
24.2.2     Lessor  may,  as  a  condition  to  its  consent  to  any such master
subletting,  require  Lessee  to pay to Lessor one hundred percent (100%) of all
Transfer Consideration (defined below).  "Transfer Consideration" shall mean the
positive difference, if any, between the Fair Market Rental for the Facility and
the Rent payable by Lessee determined on a monthly basis, prorating the Rent, as
appropriate,  if less than all of such Facility is sublet; provided, however, in
no  event shall Lessor be entitled to receive any amount in excess of the amount
Lessee  is entitled to receive as a result of the master sublease.  The Transfer
Consideration  for each month shall be paid by Lessee to Lessor monthly when the
Minimum  Rent  is  due  for  the  duration  of  the  master  subletting.
24.2.3     Lessor  may,  as  a  condition  to  its  consent to any assignment or
management  arrangement, require Lessee to pay to Lessor upon the effective date
of  such  assignment  or  management  arrangement an amount equal to one hundred
percent (100%) of the Transfer Consideration for the remaining Term of the Lease
assuming  all renewal options are exercised and there is no early termination of
the Lease and Lessor shall refund any amounts attributable to renewal options if
they  subsequently  are  not  exercised with interest thereon at the Prime Rate;
provided, however, in no event shall Lessor be entitled to receive any amount in
excess of the amount Lessee is entitled to receive as a result of the assignment
or  management  agreement.
24.2.4     The  consent  by  Lessor  to  any  assignment,  master  subletting or
management  arrangement  shall  not  constitute  a  consent  to  any  subsequent
assignment,  master  subletting  or  management  arrangement by Lessee or to any
subsequent or successive assignment, master subletting or management arrangement
by  the  master  sublessee,  assignee  or  manager.  Any  purported or attempted
assignment,  sublease,  management  agreement  or  other  permission to use such
Facility  contrary  to  the provisions of this Article shall be void and, at the
option  of  Lessor,  shall  terminate  this  Lease.
24.2.5     Notwithstanding  the  preceding,  Lessee  may  sublease or assign the
Lease to an Affiliate of Lessee without the written consent of Lessor and Lessee
shall not be required to pay any Transfer Consideration to Lessor as a result of
such  sublease or assignment to an Affiliate, but such sublease or assignment of
the Lease from Lessee to an Affiliate of Lessee will not relieve Lessee from its
obligations  under  the  Lease  or  any Guarantor from its obligations under any
guaranty  of  this  Lease.
24.3     Costs
         -----
     .  Lessee shall reimburse Lessor for Lessor's reasonable costs and expenses
incurred in conjunction with the processing and documentation of any assignment,
master  subletting  or  management arrangement, including reasonable attorneys',
architects',  engineers'  or  other consultants' fees whether or not such master
sublease,  assignment  or  management  agreement  is  actually  consummated.
24.4     No  Release  of  Lessee's  Obligations
         --------------------------------------
     .  No  assignment,  subletting or management agreement shall relieve Lessee
of its obligation to pay the Rent and to perform all of the other obligations to
be  performed by Lessee hereunder.  The liability of Lessee named herein and any
immediate  and  remote  successor  in  interest  of  Lessee  (by  assignment  or
otherwise), and the due performance of the obligations of this Lease on Lessee's
part  to  be performed or observed, shall not in any way be discharged, released
or impaired by any (i) agreement which modifies any of the rights or obligations
of  the parties under this Lease, (ii) stipulation which extends the time within
which  an  obligation  under  this Lease is to be performed, (iii) waiver of the
performance  of  an  obligation  required  under  this Lease, or (iv) failure to
enforce  any  of  the  obligations  set  forth  in  this  Lease.
24.5     Assignment  of  Lessee's  Rights  Against  Sublease
         ---------------------------------------------------
     .  If  Lessor  shall  consent  to  a  master  subletting,  then the written
instrument  of  consent,  executed  and  acknowledged  by  Lessor,  Lessee  and
sublessee,  shall  contain  a  provision substantially similar to the following:
(i)     Lessee and sublessee hereby agree that, if sublessee shall be in default
     of  any  obligation  of  Lessee  under  the  sublease,  which  default also
constitutes  a default by Lessee under the Lease, then Lessor shall be permitted
to  avail  itself  of  all  of  the  rights  and remedies available to Lessee in
connection  therewith.
(ii)     Without  limiting  the  generality  of  the  foregoing, Lessor shall be
permitted  (by  assignment  of  a  cause of action or otherwise) to institute an
action or proceeding against sublessee in the name of Lessee in order to enforce
Lessee's  rights  under  the  sublease,  and also shall be permitted to take all
ancillary  actions  (e.g.,  serve  default  notices  and demands) in the name of
Lessee  as  Lessor  reasonably  shall  determine  to  be  necessary.
(iii)     Lessee  agrees to cooperate with Lessor, and to execute such documents
as  shall  be reasonably necessary, in connection with the implementation of the
foregoing  rights  of  Lessor.
(iv)     Lessee expressly acknowledges and agrees that the exercise by Lessor of
any  of  the  foregoing  rights and remedies shall not constitute an election of
remedies,  and  shall not in any way impair Lessor's entitlement to pursue other
rights  and  remedies  directly  against  Lessee.
24.6     Reserved
         --------
24.7     REIT  Protection
     .  Anything contained in this Lease to the contrary notwithstanding, Lessee
shall  not  (i)  sublet,  assign  or enter into a management arrangement for the
Leased Property on any basis such that the rental or other amounts to be paid by
the  sublessee,  assignee  or  manager thereunder would be based, in whole or in
part,  on  the  income  or  profits  derived  by  the business activities of the
sublessee,  assignee  or  manager;  (ii)  furnish  or render any services to the
sublessee,  assignee  or  manager  or  manage  or operate the Leased Property so
subleased,  assigned or managed; (iii) sublet, assign or enter into a management
arrangement for the Leased Property to any Person in which Lessee or Lessor owns
an  interest,  directly  or indirectly (by applying constructive ownership rules
set  forth  in  Section  856(d)(5) of the Code); or (iv) sublet, assign or enter
into  a management arrangement for the Leased Property in any other manner which
could cause any portion of the amounts received by Lessor pursuant to this Lease
or  any  sublease  to  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  or  which  could cause any other income of Lessor to fail to qualify as
income  described  in  Section  856(c)(2)  of  the  Code.
24.8     Prepaid  Rent
         -------------
     .  Lessee  shall  not  require or accept prepayment for more than three (3)
months'  use  of  individual units or rooms of any Facility.  Amounts charged to
residents  for  individual units or rooms shall not be materially less than fair
market  value.
ARTICLE  XXV.
-------------
25.1     Officer's  Certificates  and  Financial  Statements.
         ---------------------------------------------------
25.1.1     Officer's  Certificate
           ----------------------
     .  At any time and from time to time upon Lessee's receipt of not less than
ten  (10)  days' prior written request by Lessor, Lessee shall furnish to Lessor
an  Officer's  Certificate  certifying  (i) 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; (ii) the dates to which the Rent
has  been paid; (iii) whether or not, to the best knowledge of Lessee, Lessor is
in  default in the performance of any covenant, agreement or condition contained
in  this Lease and, if so, specifying each such default of which Lessee may have
knowledge;  and  (iv) responses to such other questions or statements of fact as
Lessor,  any  ground  or  underlying  lessor,  any  purchaser  or any current or
prospective  Facility  Mortgagee  shall reasonably request.  Lessee's failure to
deliver  such  statement within such time shall constitute an acknowledgement by
Lessee  that (x) this Lease is unmodified and in full force and effect except as
may  be  represented  to the contrary by Lessor; (y) Lessor is not in default in
the performance of any covenant, agreement or condition contained in this Lease;
and  (z)  the  other  matters  set  forth  in such request, if any, are true and
correct.  Any  such certificate furnished pursuant to this Article may be relied
upon  by  Lessor  and  any  current or prospective Facility Mortgagee, ground or
underlying  lessor  or  purchaser  of  the  Leased  Property.
25.1.2     Statements
           ----------
     .  Lessee  shall  furnish  the  following  statements  to  Lessor:
(a)     within  120  days after the end of each of Lessee's fiscal years, a copy
of  the  audited  consolidated  balance  sheets  of  Lessee and its consolidated
Subsidiaries as of the end of such fiscal year, and related audited consolidated
     statements  of  income,  changes  in  common  stock and other stockholders'
equity  and  changes  in  the  financial position of Lessee and its consolidated
Subsidiaries for such fiscal year, prepared in accordance with GAAP applied on a
basis  consistently maintained throughout the period involved, such consolidated
financial  statements  to be certified by nationally recognized certified public
accountants;
(b)     within  120  days  after  the end of Lessee's fiscal years, and together
with  the  annual audit report furnished in accordance with clause (a) above, an
Officer's  Certificate  stating  that  to the best of the signer's knowledge and
belief  after making due inquiry, Lessee is not in default in the performance or
observance  of any of the terms of this Lease, or if Lessee shall be in default,
specifying  all  such defaults, the nature thereof, and the steps being taken to
remedy  the  same;
(c)     within  thirty  (30)  days  after the end of each month for those months
occurring  from  the  Original Lease Commencement Date to three months after the
first  month  in which the average Cash Flow Coverage for any Facility equals or
exceeds  1.3  for such month, all consolidated financial reports Lessee produces
for  reporting  purposes  and  detailed  statements  of  income  and  detailed
operational  statistics  regarding occupancy rates, patient and resident mix and
patient  and  resident  rates  by  type for such Facility; and thereafter within
sixty  (60)  days  after  the  end  of  each of Lessee's quarters, all quarterly
consolidated  financial  reports  Lessee  produces  for  reporting  purposes and
detailed  statements  of  income  and  detailed operational statistics regarding
occupancy rates, patient and resident mix and patient and resident rates by type
for  such  Facility;
(d)     within  120  days after the end of each of Lessee's fiscal years, a copy
of  each cost report, if any, filed with the appropriate governmental agency for
each  Facility;
(e)     within  thirty  (30)  days  after they are required to be filed with the
SEC,  copies  of  any  annual  reports  and  of information, documents and other
reports,  or  copies  of  such  portions  of any of the foregoing as the SEC may
prescribe,  which Lessee is required to file with the SEC pursuant to Section 13
or  15(d)  of  the  Securities  Exchange  Act  of  1934;
(f)     within three (3) Business Days after Lessee's receipt thereof, copies of
all  written  communications  received  by  Lessee  from  any  regulatory agency
relating  to (i) surveys of any Facility for purposes of licensure, Medicare and
Medicaid  certification  and  accreditation  and  (ii) any proceeding, formal or
informal,  with  respect  to  cited  deficiencies  with  respect to services and
activities  provided  and  performed  at  any  Facility,  including  patient and
resident  care,  patient  and resident activities, patient and resident therapy,
dietary,  medical  records,  drugs  and  medicines,  supplies,  housekeeping and
maintenance,  or  the  condition  of  such  Facility, and involving an actual or
threatened  warning,  imposition  of  a  fine  or  a  penalty,  or  suspension,
termination  or  revocation  of  such  Facility's  license  to  be  operated  in
accordance  with  its  Primary  Intended  Use;
(g)     to the extent reasonably obtainable by Lessee, within 120 days after the
end  of  each  fiscal  year  of  the financial institution issuing the letter of
credit  required  under  Article XXI, a copy of the audited consolidated balance
sheets  of  such  financial  institution  as of the end of such fiscal year, and
related unaudited consolidated statements of income, changes in common stock and
other  stockholders  equity  and  changes  in  the  financial  position  of such
financial  institution  and  its  consolidated subsidiaries for each such fiscal
year,  prepared  in  accordance  with  generally  accepted accounting principles
applied  on a basis consistently maintained throughout the period involved, such
consolidated  financial  statements  to  be  certified  by nationally recognized
certified  public  accountants;
(h)     immediately  upon  Lessee's  receipt  thereof,  copies  of  all material
claims, complaints, notices, warnings or asserted violations relating in any way
to  the  Leased  Property  or  Lessee's  use  thereof;  and
(i)     with  reasonable  promptness,  such  other  information  respecting  the
financial  and operational condition and affairs of Lessee and each Facility and
the  physical  condition of the Leased Property and any Capital Addition thereto
as  Lessor  may reasonably request, in the form of a questionnaire or otherwise,
from  time  to  time.
25.2     Charges
         -------
     .  Lessee  acknowledges  that the failure to furnish Lessor with any of the
certificates  or  statements  required  by this Article XXV will cause Lessor to
incur  costs  and expenses not contemplated hereunder, the exact amount of which
is  presently  anticipated to be extremely difficult to ascertain.  Accordingly,
if  Lessee  fails  to  furnish Lessor with any of the certificates or statements
required  by this Article XXV, Lessee shall pay to Lessor upon demand $1,000 for
each  such  failure  as  Additional Charges.  The parties agree that this charge
represents a fair and reasonable estimate of the costs that Lessor will incur by
reason  of  Lessee's  failure  to  furnish  Lessor  with  such  certificates and
statements.
ARTICLE  XXVI.
--------------
26.1     Lessor's  Right  to  Inspect  and  Show the Leased Property and Capital
         -----------------------------------------------------------------------
Additions
    -----
     .  Lessee shall permit Lessor and its authorized representatives to inspect
the Leased Property and any Capital Addition thereto during usual business hours
and  on  reasonable  notice  subject  to  any  security,  health,  safety  or
confidentiality  requirements  of  Lessee  or any Legal Requirement or Insurance
Requirement.
ARTICLE  XXVII.
---------------
27.1     No  Waiver
         ----------
     .  No  failure  by Lessor to insist upon the strict performance of any term
hereof  or to exercise any right, power or remedy hereunder and no acceptance of
full  or  partial payment of Rent during the continuance of any default or Event
of Default shall constitute a waiver of any such breach or of any such term.  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.
ARTICLE  XXVIII.
----------------
28.1     Remedies  Cumulative
         --------------------
     .  Each  legal,  equitable or contractual right, power and remedy of Lessor
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 of any
one  or  more  of  such  rights,  powers  and  remedies  shall  not preclude the
simultaneous  or  subsequent  exercise  by  Lessor  of  any or all of such other
rights,  powers  and  remedies.
ARTICLE  XXIX.
--------------
29.1     Acceptance  of  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.
ARTICLE  XXX.
-------------
30.1     No  Merger
         ----------
     .  There  shall  be  no  merger  of  this  Lease or of the leasehold estate
created  hereby  by  reason of the fact that the same Person may acquire, own or
hold,  directly  or  indirectly,  (i) this Lease or the leasehold estate created
hereby  or  any interest in this Lease or such leasehold estate and (ii) the fee
estate  in  the  Leased  Property.
ARTICLE  XXXI.
--------------
31.1     Conveyance  by  Lessor
         ----------------------
     .  If Lessor or any successor owner of the Leased Property shall convey the
Leased  Property  other  than  as  security for a debt, Lessor or such successor
owner,  as  the  case  may  be,  shall  thereupon  be  released  from all future
liabilities  and  obligations of the 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.
31.2     New  Lease
         ----------
     .  Lessor  shall  have  the right, at any time and from time to time during
the  Term  for  any  purpose,  by written notice to Lessee, to require Lessee to
execute  an  amendment  to this Lease whereby the Leased Property of one or more
Facilities (individually, a "Separated Property" or collectively, the "Separated
Properties")  is  separated  and  removed from this Lease, and to simultaneously
execute  a  substitute  lease  with  respect to such Separated Property(ies), in
which  case:
31.2.1     Lessor  and  Lessee  shall  execute a new lease (the "New Lease") for
such  Separated  Property(ies),  effective  as  of the date specified in Section
31.2.3.  below  (the "New Lease Effective Date"), in the same form and substance
as  this  Lease,  but  with  such  changes  thereto  as necessary to reflect the
separation  of  the  Separated  Property(ies)  from  the  balance  of the Leased
Property,  including  specifically  the  following:
(a)     The total monthly Minimum Rent payable under such New Lease shall be the
     total  applicable  monthly  Allocated  Minimum  Rent  with  respect to such
Separated  Property(ies);
(b)     All  Minimum Rent rental escalations under the New Lease shall be at the
times and in the amounts set forth in this Lease for Minimum Rent increases; and
(c)     The  New  Lease  shall  provide  that  the  lessee  thereunder  shall be
responsible  for  the  payment,  performance  and  satisfaction  of  all duties,
obligations  and liabilities arising under this Lease, insofar as they relate to
the Separated Property(ies), that were not paid, performed and satisfied in full
prior  to the effective date of the New Lease (and Lessee under this Lease shall
also  be  responsible  for  the  payment,  performance  and  satisfaction of the
aforesaid  duties, obligations and liabilities not paid, performed and satisfied
in  full  prior  to  the  effective  date  of  such  New  Lease).
31.2.2     Lessor  and  Lessee  shall  also  execute  an amendment to this Lease
effective  as  of  the New Lease Effective Date reflecting the separation of the
Separated  Property(ies) from the balance of the Leased Property and making such
modifications  to  this  Lease  as  are  necessitated  thereby.
31.2.3     In  the case of any New Lease that is entered into in accordance with
this  Section  31.2  such  New Lease shall be effective on the date which is the
earlier  of  (i)  the  date the New Lease is fully executed and delivered by the
parties thereto and (ii) the date specified in the written notice from Lessor to
Lessee  requiring  a New Lease as described above, which date shall be no sooner
than  ten  (10)  days  after  the  date  such  notice  is  issued.
31.2.4     Lessee's  obligation  to  provide  letters  of  credit  and/or a Cash
Security Deposit in accordance with Article 21 of this Lease shall be segregated
so  that  (a)  the  applicable  Lessee  shall be required to provide a letter of
credit  and/or  a  Cash  Security Deposit pursuant to the New Lease, on the same
terms  and  conditions as set forth in this Lease, except that "Letter of Credit
Amount"  under  the  New  Lease  shall mean an amount equal to the then existing
Letter of Credit Amount under this Lease (prior to the amendment contemplated in
Section  31.2.2  above),  times a fraction, the numerator of which is the sum of
the  then  existing  annual Allocated Minimum Rent and Allocated Additional Rent
for  the  Substituted  Property(ies), and the denominator of which is the sum of
the  then existing total annual Minimum Rent and Additional Rent payable for all
Facilities  (including  the  Separated  Property(ies)),  and  (b) the "Letter of
Credit  Amount" under this Lease (as amended) shall be reduced by the "Letter of
Credit  Amount"  for  the New Lease determined in accordance with subsection (a)
above.
31.2.5     Lessee  and  Lessor  shall  take such actions and execute and deliver
such  documents,  including without limitation the New Lease and an amendment to
this  Lease,  as  are  reasonably  necessary  and  appropriate to effectuate the
provisions  and  intent  of  this  Section  31.2.
31.2.6     Lessor  shall  reimburse  Lessee  for  all  of  Lessee's  reasonable
out-of-pocket  costs  and expenses in connection with the preparation and review
of  any  New  Lease entered into in accordance with this Section 31.2, including
but  not  limited  to  reasonable  attorney's  and  accountant's costs, fees and
expenses  incurred  by  Lessee.
ARTICLE  XXXII.
---------------
32.1     Quiet  Enjoyment
         ----------------
     .  So  long  as Lessee shall pay the 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, 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 Original Lease Commencement Date with respect
to  the  applicable  portion  of  the  Leased  Property or created thereafter as
permitted  under  the Original Leases or hereunder or thereafter 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 abate, reduce or make a
deduction  from  or  offset against the Rent or 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 it may have against Lessor as a result of
a breach by Lessor of the covenant of quiet enjoyment contained in this Article.
ARTICLE  XXXIII.
----------------
33.1     Notices
         -------
     .  Any notice, consent, approval, demand or other communication required or
permitted  to  be  given  hereunder  (a  "notice") must be in writing and may be
served  personally  or  by  U.S.  Mail.  If  served  by  U.S.  Mail, it shall be
addressed  as  follows:

If  to  Lessor:     Health  Care  Property  Investors,  Inc.
4675  MacArthur  Court
Suite  900
Newport  Beach,  California  92660
Attn:  Legal  Department
Fax:  (949)  221-0600
with  a  copy  to:     Latham  &  Watkins
650  Town  Center  Drive,  Suite  2000
Costa  Mesa,  California  92626
Attn:  David  C.  Meckler,  Esq.
Fax:  (714)  755-8290

If  to  Lessee:     Emeritus  Corporation
3131  Elliott  Ave,  Suite  500
Seattle,  WA  98121
Fax  (206)  301-4500
Attn:  Raymond  Brandstrom
Fax:  (206)  443-5432
with  a  copy  to:     The  Nathanson  Group
1520  Fourth  Ave.,  Sixth  Floor
Seattle,  Washington  98101
Attn:  Randi  S.  Nathanson,  Esq.
Fax:  (206)  623-1738

     Any  notice  which is personally served shall be effective upon the date of
service;  any  notice  given  by U.S. Mail shall be deemed effectively given, if
deposited in the United States Mail, registered or certified with return receipt
requested,  postage  prepaid  and  addressed  as  provided above, on the date of
receipt,  refusal or non-delivery indicated on the return receipt.  In addition,
either  party  may  send  notices  by  facsimile  or  by a nationally recognized
overnight  courier service provides written proof of delivery (such as U.P.S. or
Federal  Express).  Any  notice  sent  by  facsimile  shall  be  effective  upon
confirmation  of  receipt  in  legible form, and any notice sent by a nationally
recognized  overnight  courier shall be effective on the date of delivery to the
party  at  its  address  specified  above as set forth in the courier's delivery
receipt.  Either  party  may,  by  notice  to the other from time to time in the
manner  herein  provided,  specify  a  different  address  for  notice purposes.
ARTICLE  XXXIV.
---------------
34.1     Appraiser
         ---------
     .  If  it  becomes  necessary  to  determine  the Fair Market Value or Fair
Market  Rental  of any Facility for any purpose of this Lease, the same shall be
determined  by  Valuation  Counselors,  or  in the event Valuation Counselors no
longer  exists  upon the date the same is to be determined, any other nationally
recognized  appraisal  firm,  in  which  one or more of the members, officers or
principals  of  such  firm  are members of the American Institute of Real Estate
Appraisers (or any successor organization thereto), as may be selected by Lesser
in  writing  to  Lessee (the "Appraiser").  Lessor shall cause such Appraiser to
determine the Fair Market Value or Fair Market Rental of such Facility as of the
relevant  date  (giving effect to the impact, if any, of inflation from the date
of  the Appraiser's decision to the relevant date) and the determination of such
Appraiser  shall  be  final  and  binding  upon  the parties.  If the applicable
Facility  had  reached  stabilized  operations  prior to the applicable Original
Lease  Commencement Date, to the extent consistent with sound appraisal practice
as then existing at the time of any such appraisal, an appraisal for Fair Market
Value  shall  be  made  on a basis consistent with the basis on which the Leased
Property  was appraised for purposes of determining its fair market value at the
time  the  Leased  Property  was  acquired  by  Lessor.  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 one-half of the fees and expenses of the
Appraiser  and  one-half  of  all other cost and expenses incurred in connection
with  such  appraisal.
ARTICLE  XXXV.
--------------
35.1     Lessee's  Option  to  Purchase  the  Leased  Property.
         -----------------------------------------------------
35.1.1     Subject  to  Sections  35.1.2  and  35.1.3 below, with respect to the
Purchase  Option  Facilities, provided no Event of Default, or event which, with
notice  or  lapse  of  time  or  both, would constitute an Event of Default, has
occurred  and  is continuing hereunder, Lessee shall have the option to purchase
the  Leased  Property  of  all  (but  not  less than all) of the Facilities in a
Purchase  Group upon the expiration of the Fixed Term and each Extended Term for
such  Facilities  at  the  Purchase  Option Purchase Price, calculated as of the
Outside  Closing  Date.  Lessee  may exercise such option to purchase the Leased
Property  of  the  Facilities  in  a  Purchase  Group  by opening an escrow (the
"Escrow")  with  and  by  depositing  a copy of this Lease with a national title
company  reasonably  acceptable  to  Lessor ("Escrow Holder") and giving written
notice to Lessor of such deposit with Escrow Holder no earlier than fifteen (15)
     months  and not less than twelve (12) months prior to the expiration of the
Fixed  Term  or the Extended Term, as applicable for such Facilities.  If Lessee
shall  not  be  entitled to exercise such option (e.g., by reason of an Event of
Default)  or  shall  be  entitled  to  exercise the same but shall fail to do so
within  the  time and in the manner herein provided, such option shall lapse and
thereafter  not be exercisable by Lessee.  No failure by Lessor to notify Lessee
of  any defect in any attempted exercise of the foregoing option shall be deemed
a  waiver by Lessor of the right to insist upon Lessee's exercise of such option
in  strict  accordance with the provisions hereof.  Not less than six (6) months
prior  to  the expiration of the Fixed Term or the Extended Term, as applicable,
Lessee  shall  deposit  one  and  one-half  percent  of  the  aggregate  Minimum
Repurchase  Price  of  the  Facilities  in  the  applicable  Purchase Group (the
"Opening  Deposit") with Escrow Holder.  In the event that Lessee shall properly
and  timely  exercise  such  option  and  make  the  Opening  Deposit, then such
transaction shall be consummated on or within ten (10) days after the expiration
of  the Fixed Term or Extended Term, as applicable (the "Outside Closing Date").
35.1.2     Notwithstanding  anything  to  the  contrary in Section 35.1.1 above,
with respect to the Facility located in Fullerton, California, provided that (i)
no Event of Default, or event which, with notice or lapse of time or both, would
constitute  an  Event of Default, has occurred and is continuing hereunder, (ii)
Rosewood  Assisted  Living,  Inc.,  a  California  corporation ("Rosewood"), has
exercised its option to purchase the Leased Property of the Facility pursuant to
the  terms  of  that  certain Sublessee Purchase Option Agreement (the "Rosewood
Option  Agreement")  and  (iii)  Lessee has paid over to Lessor when received by
Lessee  and  Lessor  has received the initial option payment (i.e., $250,000.00)
(the  "Initial  Rosewood  Option  Payment")  and  any additional option payments
(i.e.,  any  extension  payments  under  that  certain Sublease Agreement by and
between Lessee and Rosewood (the "Rosewood Sublease")) (the "Additional Rosewood
Option  Payments")  required to be paid to Lessee by Rosewood under the Rosewood
Option  Agreement,  Lessee shall have the option to purchase the Leased Property
of  such  Facility  at  any  time  after  the  Restatement Date and prior to the
expiration  or  earlier  termination  of  the  Rosewood Sublease (the "Fullerton
Purchase  Option  Term")  for  a purchase price equal to Two Million Two Hundred
Fifty  Thousand  Dollars  ($2,250,000.00).  Lessee  may  exercise such option to
purchase  the  Leased Property of such Facility by (a) delivering written notice
of Lessee's exercise of such option on or before the expiration of the Fullerton
Purchase  Option  Term  together  with  evidence that Rosewood has exercised its
purchase option under the Rosewood Option Agreement and substantially concurrent
therewith opening an Escrow with and by depositing a copy of this Lease with the
Escrow Holder.  If Lessee shall not be entitled to exercise such option (e.g. by
reason of an Event of Default or failure of any other condition set forth above)
or  shall  be  entitled  to exercise the same but shall fail to do so within the
time  and  in the manner herein provided, such option shall lapse and thereafter
not  be  exercisable  by  Lessee.  No  failure by Lessor to notify Lessee of any
defect  in  any  attempted  exercise  of  the foregoing option shall be deemed a
waiver by Lessor of the right to insist upon Lessee's exercise of such option in
strict  accordance  with  the provisions hereof.  In the event that Lessee shall
properly  and  timely  exercise  such  option,  then  such  transaction shall be
consummated on or within sixty (60) days after Lessee's exercise of such option.
As consideration for Lessor's grant of the purchase option to Lessee as provided
in  this Section 35.1.2, Lessee shall promptly pay and deliver over to Lessor as
an  Additional  Charge under this Lease, the Initial Rosewood Option Payment and
any  Additional  Rosewood  Option  Payments  required  to  be  paid to Lessee by
Rosewood  under  the  Rosewood  Option  Agreement.  Such Initial Rosewood Option
Payment  and  any  Additional  Rosewood  Option  Payments  shall  be  deemed
non-refundable  option  payments  and  not earnest money deposits.  In the event
that  the  Close  of  Escrow (as hereinafter defined) occurs with respect to the
Facility  located  in Fullerton, California, the Initial Rosewood Option Payment
and  any  Additional Rosewood Option Payment received by Lessor shall be applied
against  the  purchase  price  for  such  Facility.  The Initial Rosewood Option
Payment  and any Additional Rosewood Option Payment shall be deemed fully earned
by Lessor upon receipt thereof.  Accordingly, in the event that Lessee either is
not  entitled  to  exercise  its  purchase  option or fails to exercise the same
within  the  time and manner provided in subparagraph (b) above, or in the event
that  Lessee  shall  timely  and  properly exercise such option and the Close of
Escrow  fails  to  occur for any reason, the Initial Rosewood Option Payment and
any  Additional  Rosewood Option Payment shall be retained by Lessor and neither
Lessee  nor  Sublessee  shall  have  any  claim  thereto.
35.1.3     Notwithstanding  anything  to  the  contrary in Section 35.1.1 above,
with  respect to the Facility located in Latrobe, PA, in addition to the Opening
Deposit,  on the first day of each month Lessee shall pay Three Thousand Dollars
($3,000)  to  Lessor  during  the  Fixed  Term as a purchase option deposit (the
"Deposit").  The  Deposit  amounts shall bear interest at the 3-month LIBOR rate
published in the Wall Street Journal as of the last business day of the calendar
                 -------------------
quarter  ending  immediately prior to the Restatement Date which such rate shall
be  reset  on  the last Business Day of each calendar quarter and interest shall
compound  on  such last Business Day of each calendar quarter.  If Lessee causes
the lessor under the Allentown Land Lease to grant to Lessor an option to extend
the  Allentown  Land  Lease for two (2) ten (10)-year renewal periods and causes
the lessors under the Pennsylvania Land Leases to execute and deliver to Lessor,
for the purpose of improving the financeability of the Pennsylvania Land Leases,
lease  amendments  substantially  in  the form attached as Exhibit K, subject to
                                                           ---------
such modifications thereto as may be reasonably approved by Lessor, Lessee shall
no  longer  be  required  to  make  the  Deposits and the balance in the Deposit
account  shall be returned to Lessee within ten (10) days after receipt thereof.
Otherwise,  the balance in the account shall be applied to the purchase price if
Lessee  exercises  its  purchase option under Section 35.1.1.  If Lessee has not
obtained the above-referenced options to extend and lease amendments and has not
exercised  its  purchase option at the expiration of the Fixed Term, then Lessee
shall  forfeit  the Deposit account and all accrued interest to Lessor with such
amounts  to  be  separate  and  apart from the treatment of any Opening Deposit.
35.1.4     With respect to the First Refusal Facilities, during the last six (6)
months of the Term, as the same may have been extended ("First Refusal Period"),
provided  no  Event  of Default, or event which, with notice or lapse of time or
both,  would  constitute  an  Event  of  Default, has occurred and is continuing
hereunder,  Lessee  shall  have  a right of first refusal to purchase the Leased
Property  of  a  Facility  upon  the  same  terms and conditions of any offer or
counter  offer  from  a  third  party  to  purchase  the Leased Property of such
Facility  which  Lessor  intends  to accept (or has accepted subject to Lessee's
right of first refusal herein) (the "Offer");  provided, however that such first
refusal  option  shall  not apply to (a) any sale of the Leased Property of such
Facility  by  Lessor to an Affiliate of Lessor, (b) a sale or transfer of all or
substantially  all  of  the  outstanding  capital  stock  of Lessor or a sale or
transfer  of all or substantially all of the assets of Lessor, in each case to a
single  purchaser  or  transferee  in  a  single  transaction  or  (c) a merger,
consolidation  or  stock  exchange  to  which  Lessor  is  a party; and provided
further,  that in no event shall Lessor be required to make or provide to Lessee
any  representations  or  warranties  with  respect  to the Leased Property of a
Facility,  notwithstanding  the  terms  of  any  such Offer.  If, during a First
Refusal  Period,  Lessor  desires to accept (or has accepted subject to Lessee's
right  of first refusal herein) an Offer, Lessor shall promptly notify Lessee of
the  same, which notice shall set forth all of the material terms and conditions
of  such  Offer,  including  the  purchase  price for the Leased Property of the
applicable  Facility.  Lessee shall have fifteen (15) days after receipt of such
notice  from  Lessor  within  which  time  to  exercise  Lessee's right of first
refusal.  Lessee  may  exercise  such  right  of first refusal by (i) delivering
written notice to Lessor stating that Lessee unequivocally accepts the terms and
conditions  of  the  Offer  applicable  to Lessee as herein provided within such
fifteen  (15)  day  period  and  (ii)  opening  an  escrow (the "Escrow") with a
national  title  company  reasonably  acceptable to Lessor ("Escrow Holder") and
depositing  five percent (5%) of the purchase price (the "Opening Deposit") with
Escrow  Holder.  If  Lessee exercises its right of first refusal within the time
and in the manner herein provided, then such transaction shall be consummated on
or  before the date specified for closing in the terms of the Offer at the price
and  otherwise  in  accordance  with  (A) the terms and conditions of such Offer
applicable  to Lessee as herein provided and (B) the provisions of Article XVIII
and  Section 35.2 to the extent not inconsistent therewith.  If Lessee shall not
exercise  Lessee's  right  of  first  refusal  in the manner and within the time
period  provided  herein,  Lessor  shall be free for the remainder of such First
Refusal  Period after the expiration of said fifteen (15) day period to sell the
Leased  Property  to any third party at a price and upon terms no less favorable
to  Lessor  than those so offered to Lessee pursuant to the Offer.  If such sale
is  consummated,  Lessee's  right of first refusal hereunder shall automatically
terminate  and  the  same  shall  not apply to any subsequent sale of the Leased
Property  or any interest therein to any subsequent purchaser or transferee.  If
such  sale  is  not  consummated, Lessee's right of first refusal as provided in
this  Section  shall  be  reinstituted  as  to any subsequent sale of the Leased
Property  of  the  applicable  Facility  during  any  First  Refusal  Period.
35.1.5     Notwithstanding  anything  to  the  contrary in Section 35.1.4 above,
with  respect  to  each  of  the Facilities located in El Paso, Texas (Cambria),
Walla  Walla, Washington, Odessa, Texas and Boise, Idaho, Offers received at any
time  during  the  Term  of  such  Facility  shall be subject to Lessee's rights
described  in  Section  35.1.4.
35.2     Defaults.
         --------
35.2.1     Liquidated Damages.  IF, FOLLOWING A VALID AND PROPER EXERCISE OF THE
           ------------------
     FOREGOING  OPTION,  LESSEE  FAILS,  TO  COMPLETE THE PURCHASE OF THE LEASED
PROPERTY  AND  SUCH  FAILURE  CONSTITUTES  A  BREACH HEREOF, THEN LESSOR, AT ITS
OPTION,  MAY TERMINATE THE PURCHASE CONTRACT FORMED BY LESSEE'S EXERCISE OF SUCH
OPTION  AND THE ESCROW BY GIVING WRITTEN NOTICE TO LESSEE AND ESCROW HOLDER AND,
THEREUPON, THE ESCROW SHALL BE CANCELLED, ALL DOCUMENTS SHALL BE RETURNED TO THE
RESPECTIVE  PARTIES  WHO  DEPOSITED THE SAME, AND LESSEE SHALL PAY ALL TITLE AND
ESCROW  CANCELLATION  CHARGES  AND  ALL  OF  LESSOR'S  LEGAL FEES AND COSTS.  IN
ADDITION, LESSOR AND LESSEE AGREE THAT, BASED ON THE CIRCUMSTANCES NOW EXISTING,
KNOWN  OR UNKNOWN, IT WOULD BE EXCESSIVELY COSTLY AND IMPRACTICABLE TO ESTABLISH
LESSOR'S  DAMAGES  BY  REASON  OF LESSEE'S DEFAULT RESULTING IN A FAILURE OF THE
ESCROW  TO  CLOSE,  AND,  THEREFORE,  LESSOR  AND  LESSEE AGREE THAT IT WOULD BE
REASONABLE  TO  AWARD  LESSOR  LIQUIDATED  DAMAGES  IN THE AMOUNT OF THE OPENING
DEPOSIT  PLUS  ANY ACCRUED INTEREST ON THE OPENING DEPOSIT.  BY THEIR RESPECTIVE
INITIALS  SET  FORTH  BELOW,  LESSOR  AND  LESSEE ACKNOWLEDGE AND AGREE THAT THE
OPENING DEPOSIT, PLUS ANY INTEREST ACCRUED ON THE OPENING DEPOSIT, TOGETHER WITH
PAYMENT  OF  LESSOR'S  LEGAL FEES AND COSTS, IS REASONABLE AS LIQUIDATED DAMAGES
FOR  A DEFAULT OF LESSEE UNDER THE PURCHASE CONTRACT FORMED BY LESSEE'S EXERCISE
OF  SUCH OPTION THAT RESULTS IN A FAILURE OF THE ESCROW TO CLOSE AND SHALL BE IN
LIEU  OF ANY OTHER RELIEF, RIGHT OR REMEDY, AT LAW OR IN EQUITY, TO WHICH LESSOR
MIGHT  OTHERWISE  BE  ENTITLED BY REASON OF A LESSEE'S DEFAULT THAT RESULTS IN A
FAILURE  OF  THE  ESCROW  TO  CLOSE,  BUT  NOTHING  CONTAINED HEREIN SHALL LIMIT
LESSOR'S  RIGHTS  AND REMEDIES FOR LESSEE'S DEFAULT OCCURRING AFTER THE CLOSE OF
ESCROW  OR  FOR  LESSEE'S  DEFAULT  UNDER  THIS  LEASE.  ESCROW HOLDER IS HEREBY
AUTHORIZED  AND  INSTRUCTED TO RELEASE THE OPENING DEPOSIT PLUS ACCRUED INTEREST
THEREON  TO  LESSOR UPON THE DELIVERY OF UNILATERAL WRITTEN INSTRUCTIONS THEREOF
TO  ESCROW  HOLDER  BY  LESSOR,  AND  ESCROW  HOLDER  IS  HEREBY RELIEVED OF ALL
LIABILITY  THEREFOR.  IF  LESSEE  ATTEMPTS  TO INTERFERE WITH THE RELEASE OF ANY
SUCH  SUMS BY ESCROW HOLDER TO LESSOR, OR COMMENCES ANY ACTION AGAINST LESSOR OR
THE  LEASED  PROPERTY  ARISING  OUT  OF  THIS  ARTICLE, THEN LESSOR SHALL NOT BE
LIMITED  IN  THE  AMOUNT  OF  DAMAGES  IT  MAY  RECOVER  FROM  LESSEE.
Lessor's  Initials:
Lessee's  Initials:
35.2.2     Other  Defaults.  A default under any other lease or other agreement,
           ---------------
including  any  purchase  contract  formed  upon  exercise  of any other option,
between  Lessor or any Affiliate of Lessor and Lessee or any Affiliate of Lessee
where such default is not cured within the applicable time period, if any, shall
     be  deemed  a  default  under  this  Article XXXV and the purchase contract
formed  upon  proper exercise by Lessee of the option herein provided, entitling
Lessor,  as  seller,  at its option, to terminate such purchase contract and the
Escrow  and  upon  any  such  termination  the  Opening Deposit plus all accrued
interest  shall  be  paid  over  to  Lessee.
35.3     Escrow  Provisions.
         -------------------
35.3.1     Opening  of  Escrow.  Escrow  shall  be  deemed open when the Opening
           -------------------
Deposit  and  a  copy  of  this  Lease  are  delivered  to  Escrow  Holder.
35.3.2     General  and Supplemental Instructions.  Lessee and Lessor each shall
           --------------------------------------
execute,  deliver  and  be  bound  by  such further escrow instructions or other
instruments  as  may  be  reasonably  requested  by the other party or by Escrow
Holder from time to time, so long as the same are consistent with the provisions
of  this  Lease.
35.3.3     Disposition  of  Opening  Deposits.  Escrow  Holder  shall  hold  the
           ----------------------------------
Opening  Deposit  in  interest-bearing  accounts.  All  interest  earned  on the
Opening  Deposit  shall  accrue  to  Lessee's  benefit unless Lessor is entitled
thereto under Section 35.2.1. The Opening Deposit plus interest thereon shall be
(i)  applied against the purchase price (as herein determined) if Escrow closes,
(ii)  returned  to  Lessee in full if Escrow does not close for any reason other
than  Lessee's  default,  or (iii) be paid to Lessor as nonrefundable liquidated
damages  under  Section 35.2.1, if Escrow fails to close under the provisions of
hereof  as  a  result  of  Lessee's  default.
35.3.4     Closing  Funds.  At  least  one  (1) business day before the Close of
           --------------
Escrow,  Escrow  Holder  shall  calculate and Lessee shall wire cash into Escrow
(using  wiring  instructions  reasonably  satisfactory  to  Escrow Holder) in an
amount  which,  when added to the Opening Deposit and all accrued interest shall
equal  the purchase price for the applicable portion of the Leased Property plus
any  other  sums  payable  by  Lessee  pursuant  to  the  provisions  hereof.
35.3.5     Close  of  Escrow.  Escrow  shall  close on the Outside Closing Date.
           -----------------
The  term "Close of Escrow" as used in this Article shall mean the time and date
that  an appropriate deed or other conveyance document conveying Lessor's entire
interest in the Leased Property, subject to the permitted liens and encumbrances
described  in  Article  XVIII  hereof, is recorded in appropriate records of the
county  in which the Leased Property is located.  The Outside Closing Date shall
not  be  extended  for  any  reason.
35.3.6     Closing Costs.  The closing costs of consummating the purchase of the
           -------------
Leased  Property  shall  be  paid  by  Lessee  as  provided  in  Article  XVIII.
35.3.7     Assurances.  At any time prior to Close of Escrow, Lessor may request
           ----------
and  Lessee  shall  provide  reasonable  assurances  that  it  will  be  able to
consummate  the  purchase  of  the  Leased Property, including that Lessee has a
firm,  written  commitment  from a reputable lending institution to finance such
purchase  and/or  has  sufficient  liquidity  to pay any balance of the purchase
price  owing  by  Lessee  on the date of the Close of Escrow; provided, however,
that  in  no  event shall Lessee be entitled to exercise such option conditioned
upon  Lessee  obtaining  any  such  financing.
35.4     Lessor's  Option  to  Purchase  Lessee's  Personal  Property
         ------------------------------------------------------------
     .  Effective  on  not  less  than ninety (90) days prior written notice, or
such shorter notice as shall be appropriate if this Lease is terminated prior to
its  expiration  date,  Lessor  shall have the option to purchase some or all of
Lessee's  Personal Property, at the expiration or termination of this Lease, for
an  amount  equal to the then net book value thereof as shown on Lessee's books,
subject  to,  and  with appropriate price adjustments for, all equipment leases,
conditional sale contracts, UCC-1 financing statements and other encumbrances to
which  such  personal  property  is  subject.
ARTICLE  XXXVI.
---------------
36.1     Lessor  May  Grant  Liens
         -------------------------
     .  Without  the  consent of Lessee, Lessor may, from time to time, directly
or indirectly, create or otherwise cause to exist any lien, encumbrance or title
retention agreement upon the Leased Property, or any portion thereof or interest
therein,  whether  to  secure  any  borrowing  or  other  means  of financing or
refinancing.  This Lease is and at all times shall be subject and subordinate to
any  ground  or  underlying  leases, mortgages, trust deeds or like encumbrances
(collectively,  "Priority  Encumbrances"), which may now or hereafter affect the
Leased Property and to all renewals, modifications, consolidations, replacements
and  extensions  of  any  such  lease, mortgage, trust deed or like encumbrance;
provided,  however,  that  the  subjection  and  subordination of this Lease and
    --------------
Lessee's  leasehold  interest  hereunder  to  any  Priority Encumbrance shall be
    -
conditioned  upon  the  execution by the holder of each Priority Encumbrance and
    -
delivery  to  Lessee of a nondisturbance and attornment agreement which provides
that  so  long as no default has occurred and is continuing beyond the period of
time allowed for the remedy thereof under the terms of this Lease, the holder of
such  Priority  Encumbrance  (i)  shall  not  disturb  either Lessee's leasehold
interest  or  possession  of  the  Leased  Property in accordance with the terms
hereof,  or  any  of  its  rights,  privileges  and  options,  (ii) shall permit
application  of  all  proceeds  of  insurance  and  all  Awards  and payments in
connection  with  the  taking  of  all  or any portion of the Leased Property in
accordance  with  the  provisions  of  Articles  XIV and XV of this Lease, (iii)
waives  all Priority Encumbrance rights or interests in any of Lessee's Personal
Property,  and  (iv) shall execute a release of such rights, privileges, options
and  all  liens and claims that the holder of such Priority Encumbrance may have
in  the Leased Property upon payment of the purchase price therefor in the event
Lessee  exercises  any  of its options or rights to purchase the Leased Property
provided  in this Lease.  In connection with the foregoing and at the request of
Lessor, Lessee shall promptly execute a reasonable subordination, nondisturbance
and  attornment  agreement  which  will  incorporate  the terms set forth in the
preceding  sentence.  Except  for  the  documents  described  in  the  preceding
sentences,  this  clause  shall  be  self-operative and no further instrument of
subordination  shall  be  required  by any ground or underlying lessor or by any
mortgagee  or  beneficiary,  affecting  any  lease  or  the Leased Property.  In
confirmation  of  such  subordination,  Lessee  shall  execute  promptly  any
certificate  that  Lessor  may  request  for  such  purposes.
36.2     Attornment
         ----------
     .  If Lessor's interest in the Leased Property is sold or conveyed upon the
exercise  of  any  remedy provided for in any Facility Mortgage, or otherwise by
operation  of  law:  (i)  at  the new owner's option, Lessee shall attorn to and
recognize  the new owner as Lessee's Lessor under this Lease or enter into a new
lease  substantially  in  the  form of this Lease with the new owner, and Lessee
shall  take  such  actions  to  confirm the foregoing within ten (10) days after
request;  and (ii) the new owner shall not be (a) liable for any act or omission
of  Lessor  under  this Lease occurring prior to such sale or conveyance, or (b)
subject  to any offset, abatement or reduction of rent because of any default of
Lessor  under  this  Lease  occurring  prior  to  such  sale  or  conveyance.
ARTICLE  XXXVII.
----------------
37.1     Hazardous  Substances
         ---------------------
     .  Lessee  shall  not  allow  any Hazardous Substance to be located in, on,
under  or  about  the Leased Property or incorporated in any Facility; provided,
however, that Hazardous Substances may be brought, kept, used or disposed of in,
on  or about the Leased Property in quantities and for purposes similar to those
brought,  kept,  used or disposed of in, on or about similar facilities used for
purposes  similar  to  the  Primary  Intended  Use  or  in  connection  with the
construction  of  facilities  similar  to  the applicable Facility and which are
brought,  kept,  used  and  disposed  of  in  strict  compliance  with  Legal
Requirements.  Lessee  shall not allow the Leased Property to be used as a waste
disposal  site  or  for  the  manufacturing,  handling, storage, distribution or
disposal  of  any  Hazardous  Substance.
37.2     Notices
         -------
     .  Lessee  shall  provide  to Lessor promptly, and in any event immediately
upon  Lessee's  receipt  thereof,  a  copy  of  any notice, or notification with
respect  to,  (i)  any  violation  of  a Legal Requirement relating to Hazardous
Substances  located  in,  on,  or  under  the  Leased  Property  or any adjacent
property;  (ii)  any  enforcement,  cleanup,  removal,  or other governmental or
regulatory action instituted, completed or threatened with respect to the Leased
Property; (iii) any claim made or threatened by any Person against Lessee or the
Leased  Property  relating to damage, contribution, cost recovery, compensation,
loss,  or  injury  resulting  from  or  claimed  to  result  from  any Hazardous
Substance;  and  (iv)  any  reports  made  to  any  federal,  state  or  local
environmental  agency  arising  out  of  or  in  connection  with  any Hazardous
Substance  in,  on,  under  or  removed  from the Leased Property, including any
complaints,  notices,  warnings  or asserted violations in connection therewith.
37.3     Remediation
         -----------
     .  If Lessee becomes aware of a violation of any Legal Requirement relating
to  any  Hazardous  Substance  in, on, under or about the Leased Property or any
adjacent  property,  or if Lessee, Lessor or the Leased Property becomes subject
to  any  order of any federal, state or local agency to repair, close, detoxify,
decontaminate  or  otherwise  remediate  the  Leased  Property,  Lessee  shall
immediately  notify Lessor of such event and, at its sole cost and expense, cure
such  violation  or effect such repair, closure, detoxification, decontamination
or  other  remediation.  If  Lessee fails to implement and diligently pursue any
such  cure,  repair,  closure,  detoxification,  decontamination  or  other
remediation,  Lessor  shall have the right, but not the obligation, to carry out
such  action  and  to  recover  from  Lessee  all of Lessor's costs and expenses
incurred  in  connection  therewith.
37.4     Indemnity
         ---------
     .  Lessee  shall  indemnify,  defend,  protect,  save,  hold  harmless, and
reimburse  Lessor  for,  from  and against any and all costs, losses (including,
losses of use or economic benefit or diminution in value), liabilities, damages,
assessments, lawsuits, deficiencies, demands, claims and expenses (collectively,
"Environmental  Costs")  (whether  or  not arising out of third-party claims and
regardless  of  whether  liability  without  fault  is  imposed, or sought to be
imposed,  on Lessor) incurred in connection with, arising out of, resulting from
or  incident  to,  directly  or indirectly, before or during (but not after) the
Term  or  such  portion  thereof  during  which the Leased Property is leased to
Lessee  (i)  the  production, use, generation, storage, treatment, transporting,
disposal,  discharge,  release or other handling or disposition of any Hazardous
Substances from, in, on or about the Leased Property (collectively, "Handling"),
including the effects of such Handling of any Hazardous Substances on any Person
or  property  within  or outside the boundaries of the Leased Property, (ii) the
presence  of any Hazardous Substances in, on, under or about the Leased Property
and (iii) the violation of any Environmental Law.  "Environmental Costs" include
interest,  costs  of  response,  removal, remedial action, containment, cleanup,
investigation,  design, engineering and construction, damages (including actual,
consequential  and  punitive  damages)  for personal injuries and for injury to,
destruction  of  or  loss  of  property  or  natural  resources,  relocation  or
replacement  costs,  penalties,  fines,  charges  or  expenses, attorney's fees,
expert  fees,  consultation  fees,  and  court  costs,  and  all amounts paid in
investigating,  defending  or  settling  any  of  the  foregoing.
Without  limiting  the  scope  or  generality of the foregoing, Lessee expressly
agrees to reimburse Lessor for any and all costs and expenses incurred by Lessor
in  connection  with, arising out of, resulting from or incident to, directly or
indirectly,  before  or  during (but not after) the Term or such portion thereof
during  which  the  Leased  Property  is  leased  to  Lessee  of  the following:
(a)     In  investigating  any  and  all matters relating to the Handling of any
Hazardous  Substances,  in,  on,  from,  under  or  about  the  Leased Property;
(b)     In  bringing  the  Leased  Property  into  compliance  with  all  Legal
Requirements;  and
(c)     Removing,  treating, storing, transporting, cleaning-up and/or disposing
of any Hazardous Substances used, stored, generated, released or disposed of in,
on,  from,  under  or  about  the  Leased  Property  or  off-site.
     If  any  claim  is made by Lessor for reimbursement for Environmental Costs
incurred  by  it hereunder, Lessee agrees to pay such claim promptly, and in any
event to pay such claim within thirty (30) calendar days after receipt by Lessee
of  notice  thereof.  If  any such claim is not so paid and Lessor is ultimately
found  or agrees to be responsible therefore, Lessee agrees also to pay interest
on  the  amount  paid  from  the  date of the first notice of such claim, at the
Overdue  Rate.
37.5     Environmental  Inspection
         -------------------------
     .  Lessor  shall  have the right, from time to time, during normal business
hours  and  upon not less than five (5) days written notice to Lessee, except in
the  case of an emergency in which event no notice shall be required, to conduct
an  inspection  of the Leased Property to determine the existence or presence of
Hazardous  Substances  on  or  about the Leased Property.  Lessor shall have the
right  to  enter  and inspect the Leased Property, conduct any testing, sampling
and  analyses  it  deems necessary and shall have the right to inspect materials
brought  into  the  Leased Property.  Lessor may, in its discretion, retain such
experts  to conduct the inspection, perform the tests referred to herein, and to
prepare  a  written  report  in  connection  therewith.  All  costs and expenses
incurred  by  Lessor  under  this  Section shall be paid on demand as Additional
Charges  by Lessee to Lessor.  Failure to conduct an environmental inspection or
to  detect  unfavorable  conditions  if such inspection is conducted shall in no
fashion  be  intended as a release of any liability for environmental conditions
subsequently  determined  to  be  associated  with  or  to  have occurred during
Lessee's  tenancy.  Lessee  shall  remain liable for any environmental condition
related  to  or  having  occurred  during  its  tenancy  regardless of when such
conditions  are  discovered  and regardless of whether or not Lessor conducts an
environmental  inspection  at the termination of the Lease.  The obligations set
forth in this Article shall survive the expiration or earlier termination of the
Lease.
ARTICLE  XXXVIII.
-----------------
38.1     Memorandum  of  Lease
         ---------------------
     .  Lessor and Lessee shall, promptly upon the request of either, enter into
one  or  more short form memoranda of this Lease, in form suitable for recording
under  the  laws  of  the  State.  Lessee  shall  pay  all costs and expenses of
recording  any such memorandum and shall fully cooperate with Lessor in removing
from  record  any  such memorandum upon the expiration or earlier termination of
the  Term  with  respect  to  the  applicable  Facility.
ARTICLE  XXXIX.
---------------
39.1     Sale  of  Assets
         ----------------
     .  Notwithstanding  any  other provision of this Lease, Lessor shall not be
required  to  (i)  sell or transfer the Leased Property, or any portion thereof,
which is a real estate asset as defined in Section 856(c)(5)(B), or functionally
equivalent  successor  provision,  of  the  Code,  to Lessee if Lessor's counsel
advises  Lessor  that  such  sale  or  transfer  may  not  be a sale of property
described  in  Section  857(b)(6)(C),  or  functionally  equivalent  successor
provision,  of  the  Code  or  (ii) sell or transfer the Leased Property, or any
portion  thereof, to Lessee if Lessor's counsel advises Lessor that such sale or
transfer  could result in an unacceptable amount of gross income for purposes of
the ninety five percent (95 %) gross income test contained in Section 856(c)(2),
or  functionally equivalent successor provision, of the Code.  If Lessee has the
obligation  to purchase the property pursuant to the terms herein, and if Lessor
determines not to sell such property pursuant to the above sentence, then Lessee
shall  purchase  such  property,  upon  and  subject to all applicable terms and
conditions set forth in this Lease, including the provisions of Article XXXV, at
such  time  as  the transaction, upon the advice of Lessor's counsel, would be a
sale  of  property  (to  the  extent the Leased Property is a real estate asset)
described  in  Section  857(b)(6)(C),  or  functionally  equivalent  successor
provision,  of the Code, and would not result in an unacceptable amount of gross
income for purposes of the ninety five percent (95%) gross income test contained
in Section 856(c)(2), or functionally equivalent successor provision of the Code
and  until  such  time Lessee shall lease the Leased Property from Lessor at the
Fair  Market  Rental  determined  in  accordance  with  Article XXXIV; provided,
however,  that  if  Lessee's  obligation  to purchase arises pursuant to Section
16.5,  and  if  the  events giving rise to the Event of Default for which Lessor
exercised  its  right  to  put the Leased Property to Lessee pursuant to Section
16.5  has  been  cured  prior  to  the time Lessor determines to sell the Leased
Property,  then  this  Lease  shall continue in full force and effect as if such
Event  of  Default  had  not  occurred.  If Lessee has the right to purchase the
property pursuant to the terms herein, and if Lessor determines not to sell such
property pursuant to the above sentence, Lessee's right, if any, to purchase any
or  all  of  such  property  shall, upon notice to Lessor that Lessee intends to
continue  such  right,  continue  and  be  exercisable,  upon and subject to all
applicable  terms  and  conditions  set  forth  in  this  Lease,  including  the
provisions  of Article XXXV, at such time as the transaction, upon the advice of
Lessor's counsel, would be a sale of property (to the extent the Leased Property
is  a  real  estate  asset)  described  in Section 857(b)(6)(C), or functionally
equivalent  successor  provision,  of  the  Code,  and  would  not  result in an
unacceptable  amount  of  gross  income  for purposes of the ninety five percent
(95%)  gross  income  test  contained  in  Section  856(c)(2),  or  functionally
equivalent  successor  provision  of  the  Code and until such time Lessee shall
lease  the  Leased  Property from Lessor at the Fair Market Rental determined in
accordance  with  Article  XXXIV.
ARTICLE  XL.
------------
40.1     Subdivision
         -----------
     .  If  the  Land  is  in  excess  of  that which is required to operate the
Facilities in accordance with the Primary Intended Use, Lessor may subdivide the
Land and amend this Lease and the legal description attached hereto as Exhibit A
                                                                       ---------
such  that the Land contains only so much of the Land as is necessary to operate
each Facility in accordance with its Primary Intended Use.  If Lessor subdivides
the  Land,  Lessee  shall  have  the  right  to an appropriate abatement of Rent
payable and of the purchase price payable in the event that Lessee exercises its
option to purchase the Leased Property pursuant to Article XXXV and the right to
reasonably  adjust any other obligations of either party accordingly.  After any
such subdivision Lessee shall have no rights to any land which is no longer part
of  the  Leased Property and Lessor may sell, lease or develop any land which is
no  longer  part  of  the Leased Property, provided that Lessor may not use such
land  for  the  operation  of  a  facility  providing  adult congregate care and
assisted living services, and provided further that Lessor may not sell or lease
such  land  to  a third party that Lessor knows intends to use such land for the
development  of  a  facility providing adult congregate care and assisted living
services.  If  Lessor  elects  to subdivide the Land Lessee shall cooperate with
Lessor  and  take  all  actions  reasonably  requested  by Lessor to effect such
subdivision.
ARTICLE  XLI.
-------------
41.1     Authority
         ---------
     .  If  Lessee  is  a  corporation,  trust, or partnership, Lessee, and each
individual  executing this Lease on behalf of Lessee, represent and warrant that
each  is  duly  authorized to execute and deliver this Lease on behalf of Lessee
and  shall  within  thirty  (30)  days  after execution of this Lease deliver to
Lessor  evidence  of  such  authority  satisfactory  to  Lessor.
ARTICLE  XLII.
--------------
42.1     Attorneys'  Fees
         ----------------
     .  If  Lessor  or  Lessee  brings an action or other proceeding against the
other  to  enforce  any  of  the  terms,  covenants  or conditions hereof or any
instrument  executed  pursuant  to  this  Lease,  or  by reason of any breach or
default  hereunder  or  thereunder,  the  party prevailing in any such action or
proceeding  and  any  appeal  thereupon  shall  be  paid  all  of  its costs and
reasonable  outside  attorneys'  fees  incurred  therein.  In  addition  to  the
foregoing and other provisions of this Lease that specifically require Lessee to
reimburse,  pay or indemnify against Lessor's attorneys' fees, Lessee shall pay,
as  Additional  Charges,  all  of  Lessor's  reasonable  outside attorneys' fees
incurred  in  connection  with  the administration or enforcement of this Lease,
including  attorneys'  fees incurred in connection with Lessee's exercise of its
option  to  purchase  the  Leased  Property or the renewal of this Lease for any
Extended  Term,  the review of any letters of credit, the review, negotiation or
documentation  of  any  subletting, assignment, or management arrangement or any
consent  requested in connection therewith, and the collection of past due Rent.
ARTICLE  XLIII.
---------------
43.1     Brokers
         -------
     .  Lessee  warrants  that  it  has not had any contact or dealings with any
Person  or real estate broker which would give rise to the payment of any fee or
brokerage  commission in connection with this Lease, and Lessee shall indemnify,
protect,  hold  harmless  and  defend Lessor from and against any liability with
respect to any fee or brokerage commission arising out of any act or omission of
Lessee.  Lessor  warrants  that  it has not had any contact or dealings with any
Person  or real estate broker which would give rise to the payment of any fee or
brokerage  commission in connection with this Lease, and Lessor shall indemnify,
protect,  hold  harmless  and  defend Lessee from and against any liability with
respect to any fee or brokerage commission arising out of any act or omission of
Lessor.
ARTICLE  XLIV.
--------------
44.1     Miscellaneous.
         --------------
44.1.1     Survival
           --------
     .  Anything  contained  in  this Lease to the contrary notwithstanding, all
claims  against,  and  liabilities  and indemnities of, Lessee or Lessor arising
prior  to  the  expiration or earlier termination of the Term shall survive such
expiration  or  termination.
44.1.2     Severability
           ------------
     .  If  any term or provision of this Lease or any application thereof shall
be  held  invalid  or  unenforceable,  the remainder of this Lease and any other
application  of  such  term  or  provision  shall  not  be  affected  thereby.
44.1.3     Non-Recourse
           ------------
     .  Lessee  specifically  agrees  to  look solely to the Leased Property for
recovery  of  any  judgment  from  Lessor.  It  is  specifically  agreed that no
constituent  partner  in  Lessor  or officer or employee of Lessor shall ever be
personally  liable  for  any  such  judgment  or for the payment of any monetary
obligation  to Lessee.  The provision contained in the foregoing sentence is not
intended  to, and shall not, limit any right that Lessee might otherwise have to
obtain  injunctive  relief  against  Lessor,  or  any  action  not involving the
personal  liability  of  Lessor.  Furthermore,  except  as  otherwise  expressly
provided  herein,  in  no  event  shall  Lessor ever be liable to Lessee for any
indirect  or  consequential  damages  suffered  by  Lessee  from whatever cause.
44.1.4     Licenses
           --------
     .  Upon the expiration or earlier termination of the Term, Lessee shall use
its  best  efforts to transfer to Lessor or Lessor's nominee and shall cooperate
with Lessor or Lessor's designee or nominee in connection with the processing by
Lessor  or  Lessor's  designee  or nominee of any applications for all licenses,
operating permits and other governmental authorization, all contracts, including
contracts  with  governmental  or quasi-governmental entities, business records,
data,  patient  and  resident  records, and patient and resident trust accounts,
which  may  be necessary or useful for the operation of the applicable Facility;
provided  that  the costs and expenses of any such transfer or the processing of
any  such  application  shall be paid by Lessor or Lessor's designee or nominee.
Lessee  shall not commit any act or be remiss in the undertaking of any act that
would  jeopardize  the  licensure  or certification of such Facility, and Lessee
shall  comply  with  all  requests  for an orderly transfer of the same upon the
expiration  or early termination of the Term.  In addition, upon request, Lessee
shall  promptly  deliver  copies of all books and records relating to the Leased
Property  and its operation to Lessor or Lessor's designee or nominee but Lessee
shall  not  be  required  to  deliver corporate financial records or proprietary
materials.  Lessee  shall  indemnify,  defend,  protect and hold harmless Lessor
from  and  against  any  loss,  damage,  cost  or  expense incurred by Lessor or
Lessor's  designee  or  nominee in connection with the correction of any and all
deficiencies  of  a  physical  nature  identified  by any governmental authority
responsible  for  licensing  the  Leased Property in the course of any change of
ownership inspection and audit and previously identified during the Term by such
governmental  authority.
44.1.5     Successors  and  Assigns
           ------------------------
     .  This  Lease  shall be binding upon Lessor and its successors and assigns
and,  subject  to the provisions of Article XXIV, upon Lessee and its successors
and  assigns.
44.1.6     Governing  Law
           --------------
     .  THIS  LEASE  WAS  NEGOTIATED IN THE STATE OF CALIFORNIA, WHICH STATE THE
PARTIES  AGREE  HAS  A  SUBSTANTIAL  RELATIONSHIP  TO  THE  PARTIES  AND  TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY.  ACCORDINGLY, IN ALL RESPECTS THIS LEASE
(AND  ANY  AGREEMENT  FORMED PURSUANT TO THE TERMS HEREOF) SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA (WITHOUT REGARD OF PRINCIPLES OR CONFLICTS OF LAW) AND ANY APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA, EXCEPT THAT ALL PROVISIONS HEREOF RELATING
TO  THE  CREATION  OF THE LEASEHOLD ESTATE AND ALL REMEDIES SET FORTH IN ARTICLE
XVI  RELATING  TO  RECOVERY OF POSSESSION OF THE LEASED PROPERTY OF ANY FACILITY
(SUCH  AS  AN  ACTION  FOR  UNLAWFUL  DETAINER OR OTHER SIMILAR ACTION) SHALL BE
CONSTRUED  AND  ENFORCED ACCORDING TO, AND GOVERNED BY, THE LAWS OF THE STATE IN
WHICH  THE  LEASED  PROPERTY  OF  SUCH  FACILITY  IS  LOCATED.
44.1.7     Waiver  of  Trial  by  Jury
           ---------------------------
     .  EACH  OF  LESSOR  AND  LESSEE ACKNOWLEDGES THAT IT HAS HAD THE ADVICE OF
COUNSEL  OF  ITS  CHOICE  WITH  RESPECT TO ITS RIGHTS TO TRIAL BY JURY UNDER THE
CONSTITUTION  OF  THE  UNITED  STATES  AND THE STATE.  EACH OF LESSOR AND LESSEE
HEREBY  EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR  CAUSE  OF  ACTION  (i)  ARISING  UNDER  THIS  LEASE (OR ANY AGREEMENT FORMED
PURSUANT TO THE TERMS HEREOF) OR (ii) IN ANY MANNER CONNECTED WITH OR RELATED OR
INCIDENTAL  TO  THE DEALINGS OF LESSOR AND LESSEE WITH RESPECT TO TIES LEASE (OR
ANY  AGREEMENT  FORMED  PURSUANT  TO  THE TERMS HEREOF) OR ANY OTHER INSTRUMENT,
DOCUMENT  OR  AGREEMENT  EXECUTED  OR  DELIVERED  IN CONNECTION HEREWITH, OR THE
TRANSACTIONS  RELATED  HERETO  OR  THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREINAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; EACH
OF  LESSOR  AND  LESSEE  HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,
ACTION  OR CAUSE OF ACTION SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY, AND
THAT  EITHER  PARTY MAY FILE A COPY OF THIS SECTION WITH ANY COURT AS CONCLUSIVE
EVIDENCE  OF  THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL
BY  JURY.
LESSOR'S  INITIALS:
LESSEE'S  INITIALS:
44.1.8     Reserved
           --------
     .
44.1.9     Entire  Agreement
           -----------------
     .  This  Lease  and the Exhibits hereto constitutes the entire agreement of
the parties with respect to the subject matter hereof, and may not be changed or
modified  except  by  an agreement in writing signed by the parties.  Lessor and
Lessee  hereby  agree  that  all  prior  or contemporaneous oral understandings,
agreements  or  negotiations  relative to the leasing of the Leased Property are
merged  into  and revoked by this Lease.  Without limiting the generality of the
foregoing,  any  schedules, abstracts of Original Leases and any other materials
prepared  in connection with this Lease or the Original Leases are hereby merged
into  and  revoked  by  this  Lease.
44.1.10     Headings
            --------
     .  All  titles  and  headings to sections, subsections, paragraphs or other
divisions  of  this  Lease are only for the convenience of the parties and shall
not  be  construed  to  have  any  effect  or  meaning with respect to the other
contents  of  such  sections,  subsections,  paragraphs or other divisions, such
other  content  being  controlling as to the agreement among the parties hereto.
44.1.11     Counterparts
            ------------
     .  This  Lease may be executed in any number of counterparts, each of which
shall  be  a  valid  and  binding  original,  but  all  of  which together shall
constitute  one  and  the  same  instrument.
44.1.12     Joint  and  Several
            -------------------
     .  If more than one Person is the Lessee under this Lease, the liability of
such  Persons  under  this  Lease  shall  be  joint  and  several.
44.1.13     Interpretation
             -------------
     .  Both  Lessor  and Lessee have been represented by counsel and this Lease
and every provision hereof has been freely and fairly negotiated.  Consequently,
all  provisions  of  this  Lease  shall  be  interpreted according to their fair
meaning  and  shall  not  be  strictly  construed  against  any  party.
44.1.14     Time  of  Essence
            -----------------
     .  Time  is of the essence of this Lease and each provision hereof in which
time  of  performance  is  established.
44.1.15     Further  Assurances
            -------------------
     .  The  parties'  agree to promptly sign all documents reasonably requested
to  give  effect  to  the  provisions  of  this  Lease.
ARTICLE  XLV.
-------------
45.1     Restatement  of  Original  Leases
         ---------------------------------
     .  This  Lease  amends,  consolidates  and  restates  in their entirety the
Original  Leases,  and, to the extent applicable, shall constitute an assignment
by  each  lessee  under the Original Leases to all parties constituting "Lessee"
hereunder,  jointly and severally.  Lessor and Lessee acknowledge and agree that
from  and after the Restatement Date, Lessee shall occupy the Leased Property of
each  Facility  pursuant  to  the  Original Leases, as amended, consolidated and
restated  by this Lease.  Notwithstanding the foregoing amendment, consolidation
and  restatement  of  the  Original  Leases, the following obligations of Lessee
under  the  Original  Leases,  prior to amendment hereby, shall be preserved and
continue  subsequent  to  such  termination:
(a)     The  applicable  "Lessee"  under  each  Original  Lease  shall  remain
responsible  for  and  shall indemnify and hold Lessor harmless from and against
any  and  all  claims, liabilities, damages, actions and causes of action, costs
and  expenses,  including  attorneys' fees, for which such Person is responsible
pursuant  to  the  Original Leases and which accrue or have accrued on or before
the  Restatement  Date.
(b)     The  applicable  "Lessee"  under  each  Original  Lease  shall  remain
responsible  for  all  obligations  of the lessee under each applicable Original
Lease  which  have  accrued  on  or  before  the Restatement Date until full and
complete  payment  and/or  performance  of  the  same.
ARTICLE  XLVI.
--------------
46.1     Provisions  Relating  to  Master  Lease
         ---------------------------------------
     .  Lessor and Lessee hereby acknowledge and agree that, except as otherwise
expressly  provided herein to the contrary, this Lease is and the parties intend
the  same for all purposes to be treated as a single, integrated and indivisible
agreement.  Lessor  and  Lessee  acknowledge their desire to amend the terms and
conditions  of  the  Original  Leases  by  executing  this Master Lease, thereby
covering  all  of  the  Facilities  in  a  single,  integrated  and  indivisible
agreement.

<PAGE>
IN  WITNESS  WHEREOF,  the  parties  have  caused  this Lease to be executed and
attested  by  their  respective  officers  thereunto  duly  authorized.

"Lessor"
HEALTH  CARE  PROPERTY  INVESTORS,  INC.,
a  Maryland  corporation


By:     /s/  Arthur  G.  Sundby
        -----------------------
Name:  Arthur  G.  Sundby
Title:   Vice  President



HCPI  TRUST,
a  Maryland  real  estate  trust


By:     /s/  Arthur  G.  Sundby
        -----------------------
Name:  Arthur  G.  Sundby
Title:   Vice  President

TEXAS  HCP  HOLDING,  L.P.,
a  Delaware  limited  partnership

By:     Texas  HCP  G.P.,  Inc.,
     a  Delaware  corporation,
     its  general  partner
By:     /s/  Arthur  G.  Sundby
        -----------------------
Name:  Arthur  G.  Sundby
Title:   Vice  President



<PAGE>
"Lessee"
EMERITUS  CORPORATION,
a  Washington  corporation

By:     /s/  Raymond  R.  Brandstrom
        ----------------------------
Name:  Raymond  R.  Brandstrom
Title:      CFO


<PAGE>

ESC  III,  L.P.,
a  Washington  limited  partnership
d.b.a.  Texas  -  ESC  III,  L.P.
By:     ESC  G.P.  II,  Inc.,
     a  Washington  corporation,
     its  general  partner
By:  /s/  Raymond  R.  Brandstrom
    ----------------------------
Name:  Raymond  R.  Brandstrom
Title:      CFO


<PAGE>
------
                                      A-23
                                       A-1

                                   EXHIBIT A-1
                                   -----------
                               Description of Land
                          Allentown, PA (Green Meadows)
                          -----------------------------

<PAGE>
                                   EXHIBIT A-2
                                   -----------

                               Description of Land
                             Boise, ID (Summerwind)
                             ----------------------


<PAGE>
                                   EXHIBIT A-3
                                   -----------
                               Description of Land
                            Dover, DE (Green Meadows)
                            -------------------------

<PAGE>
                                   EXHIBIT A-4
                                   -----------

                               Description of Land
                     Latrobe, PA (Green Meadows of Latrobe)
                     --------------------------------------

<PAGE>
                                   EXHIBIT A-5
                                   -----------

                               Description of Land
                        Easley, SC (Countryside Village)
                        --------------------------------

<PAGE>
                                   EXHIBIT A-6
                                   -----------
                               Description of Land
                            Easley, SC (Summit Place)
                            -------------------------

<PAGE>
                                   EXHIBIT A-7
                                   -----------
                               Description of Land
                            Fullerton, CA (Rosewood)
                            ------------------------

<PAGE>
                                   EXHIBIT A-8
                                   -----------
                               Description of Land
                       Hendersonville, NC (Heritage Lodge)
                       -----------------------------------

<PAGE>
                                   EXHIBIT A-9
                                   -----------
                               Description of Land
                         Hendersonville, NC (Pine Park)
                         ------------------------------

<PAGE>
                                  EXHIBIT A-10
                                  ------------
                               Description of Land
                            Spartanburg, SC (Skylyn)
                            ------------------------

<PAGE>
                                  EXHIBIT A-11
                                  ------------
                               Description of Land
                             El Paso, TX (Palisades)
                             -----------------------

<PAGE>
                                  EXHIBIT A-12
                                  ------------
                               Description of Land
                          San Antonio, TX (Amber Oaks)
                          ----------------------------

<PAGE>
                                  EXHIBIT A-13
                                  ------------
                               Description of Land
                                 San Marcos, TX
                                 --------------

<PAGE>
                                  EXHIBIT A-14
                                  ------------
                               Description of Land
                              El Paso, TX (Cambria)
                              ---------------------

<PAGE>
                                  EXHIBIT A-15
                                  ------------
                               Description of Land
                           Odessa, TX (Sherwood Place)
                           ---------------------------

<PAGE>
                                  EXHIBIT A-16
                                  ------------
                               Description of Land
                        Walla Walla, WA (Garrison Creek)
                        --------------------------------

<PAGE>
                                  EXHIBIT A-17
                                  ------------
                               Description of Land
                                   Everett, WA
                                   -----------

<PAGE>
                                  EXHIBIT A-18
                                  ------------
                               Description of Land
                                   Phoenix, AZ
                                   -----------

<PAGE>
                                  EXHIBIT A-19
                                  ------------
                               Description of Land
                           Renton, WA (Renton Villas)
                           --------------------------

<PAGE>
                                  EXHIBIT A-20
                                  ------------
                               Description of Land
                                  Voorhees, NJ
                                  ------------


<PAGE>
                                  EXHIBIT A-21
                                  ------------
                               Description of Land
                                   Biloxi, MS
                                   ----------

<PAGE>
                                  EXHIBIT A-22
                                  ------------
                               Description of Land
                                   Auburn, CA
                                   ----------

<PAGE>
                                  EXHIBIT A-23
                                  ------------
                               Description of Land
                        San Antonio, TX (Hamilton House)
                        --------------------------------

<PAGE>
------

                                       B-2


                                       B-1

                                   EXHIBIT B-1
                                   -----------
                       List of Lessor's Personal Property
         With Respect to Each Facility Other Than The Group 2 Facilities
         ---------------------------------------------------------------
     All furniture, equipment, and tangible personal property, including but not
limited  to  the  following:  all  fabrics,  beds, mattresses, credenzas, desks,
mirrors,  framed  pictures,  prints,  art  work,  tables, chairs, lamps, luggage
racks,  draperies,  bed  spreads,  sofas,  nightstands, activity tables, stools,
shower curtains and hooks, registration equipment, planters, coat racks, ceiling
fans, memo holders, podiums, stands, window blinds, wastebaskets, copy machines,
file cabinets, typewriters, trash cans, safes, lockers, washers, dryers, towels,
washcloths, linens, blankets, mattress pads, pillows, laundry carts, maid carts,
vacuum  cleaners,  hand trucks, medical carts, time clocks, clothes hangers, ice
machines,  locksetters  and  equipment,  ice  bins,  blenders, moveable coolers,
beverage  dispensers, glass racks, syrup tanks, cash registers, coffee machines,
ranges, fryers, broilers, griddles, hot plates, warmers, toasters, waffle irons,
soup  wells,  microwaves,  heat  lamps,  timers,  dishwashers,  coffee grinders,
steamers, ovens, smallwares, china, silverware, glasses, t.v. sets, and supplies
of  every  type  and  nature  now  or  hereafter  used  in  the Facility and all
increases, substitutions, replacements, additions and accessions to any such, of
every  type,  and  any  certificate of occupancy and architectural drawings with
respect  to the Facility; excluding, however, other intangible personal property
relating  to the trade or business operated on the Facility, including operating
licenses  and  good will, and any inventory or vehicles relating to the trade or
business  operated  on  the  Facility.

<PAGE>
                                   EXHIBIT B-2
                       List of Lessor's Personal Property
                     With Respect to The Group 2 Facilities
                     --------------------------------------
          All  Personal  Property owned by Lessor and in, on or about the Leased
Property  as  of  the  Restatement  Date.

<PAGE>
                                       C-2


                                       C-1

                                    EXHIBIT C
                                    ---------

              DESCRIPTION OF FACILITIES AND CERTAIN MATERIAL TERMS
              ----------------------------------------------------

                               GROUP 1 FACILITIES

   FACILITY     MONTHLY ALLOCATED MINIMUM RENT     ALLOCATED INITIAL INVESTMENT
   --------     ------------------------------     ----------------------------
LEASE YEAR REFERENCE DATE     BASE GROSS REVENUES     CPI RENT AS OF RESTATEMENT
-------------------------     -------------------     --------------------------
     DATE     APPLICABLE % FOR PERCENTAGE RENT     CPI PERCENTAGE CAP     CPI
     ----     --------------------------------     ------------------     ---
             PERCENTAGE FLOOR     EXPIRATION DATE     EXTENDED TERM
             ----   ---------     ---------------     -------------
Allentown,  PA1,6,8,9,  17     $46,093.58     $4,994,406     November  1
--------------------------     ----------     ----------     -----------
$1,942,466     $49,598     10%     1.75%     0%     October  31,  2007     Three
----------     -------     ---     -----     --     ------------------     -----
five  (5)  year  terms
----------------------
Dover,  DE1,6,9,  17     $31,249.67     $4,525,000     November 1     $1,458,261
--------------------     ----------     ----------     ----------     ----------
$34,114     10%     1.75%     0%     October  31,  2007     Three  five (5) year
-------     ---     -----     --     ------------------     --------------------
terms
-----
Latrobe,  PA1,6,8,9,  17     $66,751.67     $9,055,653     November  1
------------------------     ----------     ----------     -----------
$2,394,700     $71,259     10%     1.75%     0%     October  31,  2007     Three
----------     -------     ---     -----     --     ------------------     -----
five  (5)  year  terms
----------------------
Easley, SC (Countryside)1,6,12, 19     $75,451.84     $10,088,151     February 1
----------------------------------     ----------     -----------     ----------
$3,910,786     $71,778     10%     1.75%     0%     January  31,  2011     Three
----------     -------     ---     -----     --     ------------------     -----
five  (5)  year  terms
----------------------
Easley,  SC (Summit Place)1,6,12,19     $30,652.31     $3,499,328     February 1
-----------------------------------     ----------     ----------     ----------
  $1,082,692     $29,238     10%     1.75%     0%     January 31, 2011     Three
  ----------     -------     ---     -----     --     ----------------     -----
                               five (5) year terms
                               -------------------
Hendersonville,  NC  (Heritage  Lodge)1,6,12,19     $17,291.05     $1,933,562
-----------------------------------------------     ----------     ----------
   February 1     $568,067     $16,754     10%     1.75%     0%     January 31,
   ----------     --------     -------     ---     -----     --     -----------
                       2011     Three five (5) year terms
                       ----     -------------------------
Hendersonville,  NC  (Pine  Park)1,6,12,  19     $61,304.62     $8,219,742
--------------------------------------------     ----------     ----------
February  1     $2,160,318     $59,520     10%     1.75%     0%     January  31,
-----------     ----------     -------     ---     -----     --     ------------
2011     Three  five  (5)  year  terms
----     -----------------------------
Spartanburg,  SC1,6,12,19     $136,027.11     $18,296,692     February  1
-------------------------     -----------     -----------     -----------
$5,839,730     $129,403     10%     1.75%     0%     January  31, 2011     Three
----------     --------     ---     -----     --     -----------------     -----
five  (5)  year  terms
----------------------
El  Paso,  TX  (Palisades)1,6,11,  18     $66,693.00     $8,520,398     April  1
-------------------------------------     ----------     ----------     --------
$2,385,076     $61,542     5%     1.5%     0%     March  31, 2012     Three five
----------     -------     --     ----     --     ---------------     ----------
(5)  year  terms
----------------
   FACILITY     MONTHLY ALLOCATED MINIMUM RENT     ALLOCATED INITIAL INVESTMENT
   --------     ------------------------------     ----------------------------
LEASE YEAR REFERENCE DATE     BASE GROSS REVENUES     CPI RENT AS OF RESTATEMENT
-------------------------     -------------------     --------------------------
     DATE     APPLICABLE % FOR PERCENTAGE RENT     CPI PERCENTAGE CAP     CPI
     ----     --------------------------------     ------------------     ---
             PERCENTAGE FLOOR     EXPIRATION DATE     EXTENDED TERM
             ----   ---------     ---------------     -------------
San  Antonio, TX(Amber Oaks)1,6,11, 18     $74,503.00     $9,606,452     April 1
--------------------------------------     ----------     ----------     -------
$1,964,084     $69,496     5%     1.5%     0%     March  31, 2012     Three five
----------     -------     --     ----     --     ---------------     ----------
(5)  year  terms
----------------
San  Marcos,  TX1,6,11,  18     $39,998.00     $3,758,493     April  1
---------------------------     ----------     ----------     --------
$1,476,210     $37,482     5%     1.5%     0%     March  31, 2012     Three five
----------     -------     --     ----     --     ---------------     ----------
(5)  year  terms
----------------
     Continuing to and until the later of (i) the Fixed Term Expiration Date and
(ii)  the  Fullerton  Closing  Date,  if at all, Lessee shall pay the following:

     2002-$43,357
     2003-$42,977
     2004-$42,107
     2005-$42,416
     2006-$42,731
     2007-$43,051
     2008-$43,376
     2009-$43,707
     2010-$44,044
     2011-$44,387
     2012-$44,736
     2013-$45,091
     2014-$45,452
     2015-$45,820

     Commencing  upon  the Fullerton Closing Date, if at all, and continuing for
the  balance  of  the  Fixed  Term,  Lessee  shall  pay  the  following:
     2002-2015:  $39,169
  Everett, WA1,7,10          $3,687,578     January 1     $1,375,676     $30,630
  -----------------          ----------     ---------     ----------     -------
10%     1.75%     0%     December  31,  2015     Three  five  (5)  year  terms
---     -----     --     -------------------     -----------------------------

<PAGE>
                                       C-3

   FACILITY     MONTHLY ALLOCATED MINIMUM RENT     ALLOCATED INITIAL INVESTMENT
   --------     ------------------------------     ----------------------------
LEASE YEAR REFERENCE DATE     BASE GROSS REVENUES     CPI RENT AS OF RESTATEMENT
-------------------------     -------------------     --------------------------
     DATE     APPLICABLE % FOR PERCENTAGE RENT     CPI PERCENTAGE CAP     CPI
     ----     --------------------------------     ------------------     ---
             PERCENTAGE FLOOR     EXPIRATION DATE     EXTENDED TERM
             ----   ---------     ---------------     -------------
Phoenix,  AZ1,7,10     $40,868.27     $4,949,024     January  1     $1,482,390
------------------     ----------     ----------     ----------     ----------
$41,312     10%     1.75%     0%     December  31,  2007     Three five (5) year
-------     ---     -----     --     -------------------     -------------------
terms
-----
     $31,642.84
   Renton, WA1,7,10          $3,105,270     January 1     $1,685,695     $27,336
   ----------------          ----------     ---------     ----------     -------
10%     1.75%     0%     December  31,  2015     Three  five  (5)  year  terms
---     -----     --     -------------------     -----------------------------
Voorhees,  NJ1,7,10     $53,694.75     $6,737,704     February  1     $2,385,723
-------------------     ----------     ----------     -----------     ----------
$52,294     10%     1.75%     0%     December  31,  2007     Three five (5) year
-------     ---     -----     --     -------------------     -------------------
terms
-----

                               GROUP 2 FACILITIES

   FACILITY     MONTHLY ALLOCATED MINIMUM RENT     ALLOCATED INITIAL INVESTMENT
   --------     ------------------------------     ----------------------------
LEASE YEAR REFERENCE DATE     BASE GROSS REVENUES     CPI RENT AS OF RESTATEMENT
-------------------------     -------------------     --------------------------
     DATE     APPLICABLE % FOR PERCENTAGE RENT     CPI PERCENTAGE CAP     CPI
     ----     --------------------------------     ------------------     ---
             PERCENTAGE FLOOR     EXPIRATION DATE     EXTENDED TERM
             ----   ---------     ---------------     -------------

Boise,  ID2,  7,  16,  20     $26,250.00     $3,044,158     September  1     N/A
-------------------------     ----------     ----------     ------------     ---
$61,35521     N/A        4%     2.5%     August  31,  2015     Six five (5) year
---------     ---     -----     ----     -----------------     -----------------
terms
-----
El  Paso,  TX  (Cambria)2,  7,  15     $45,346.00     $4,350,072     September 1
----------------------------------     ----------     ----------     -----------
N/A     $76,43221     N/A     4%     2.5%     October  31, 2006     Six five (5)
---     ---------     ---     --     ----     -----------------     ------------
year  terms
-----------
Odessa,  TX2,7,  15     $44,046.79     $4,250,072     October  1     N/A
-------------------     ----------     ----------     ----------     ---
$73,833     N/A     4%     2.5%     October 31, 2006     Six five (5) year terms
-------     ---     --     ----     ----------------     -----------------------
     Walla Walla, WA2,7, 15     $49,416.21     $5,579,971     August 1     N/A
     ----------------------     ----------     ----------     --------     ---
$114,384     N/A     4%     2.5%     October  31,  2006     Six  five  (5)  year
--------     ---     --     ----     ------------------     --------------------
terms
-----



<PAGE>
                                       C-5

                                       C-4

                               GROUP 3 FACILITIES

   FACILITY     MONTHLY ALLOCATED MINIMUM RENT     ALLOCATED INITIAL INVESTMENT
   --------     ------------------------------     ----------------------------
LEASE YEAR REFERENCE DATE     BASE GROSS REVENUES     CPI RENT AS OF RESTATEMENT
-------------------------     -------------------     --------------------------
     DATE     APPLICABLE % FOR PERCENTAGE RENT     CPI PERCENTAGE CAP     CPI
     ----     --------------------------------     ------------------     ---
             PERCENTAGE FLOOR     EXPIRATION DATE     EXTENDED TERM
             ----   ---------     ---------------     -------------
  Biloxi, MS3,13     $58,128.05     $6,333,703     October 1     N/A     $58,110
  --------------     ----------     ----------     ---------     ---     -------
N/A     3.5%     0%     September  30,  2016     One  ten  (10)  year  term
---     ----     --     --------------------     --------------------------
  Auburn, CA3,13     $81,119.43     $8,847,077     October 1     N/A     $81,072
  --------------     ----------     ----------     ---------     ---     -------
N/A     3.5%     0%     September  30,  2016     One  ten  (10)  year  term
---     ----     --     --------------------     --------------------------


                               GROUP 4 FACILITIES
   FACILITY     MONTHLY ALLOCATED MINIMUM RENT     ALLOCATED INITIAL INVESTMENT
   --------     ------------------------------     ----------------------------
LEASE YEAR REFERENCE DATE     BASE GROSS REVENUES     CPI RENT AS OF RESTATEMENT
-------------------------     -------------------     --------------------------
     DATE     APPLICABLE % FOR PERCENTAGE RENT     CPI PERCENTAGE CAP     CPI
     ----     --------------------------------     ------------------     ---
             PERCENTAGE FLOOR     EXPIRATION DATE     EXTENDED TERM
             ----   ---------     ---------------     -------------
San  Antonio, TX (Hamilton House)4, 14     $79,034.68     $7,811,869     January
--------------------------------------     ----------     ----------     -------
1     N/A     $0.00     N/A     2.75%     0%     September  30, 2017     Two ten
-     ---     -----     ---     -----     --     -------------------     -------
(10)  year  terms
-----------------
                               GROUP 5 FACILITIES
   FACILITY     MONTHLY ALLOCATED MINIMUM RENT     ALLOCATED INITIAL INVESTMENT
   --------     ------------------------------     ----------------------------
LEASE YEAR REFERENCE DATE     BASE GROSS REVENUES     CPI RENT AS OF RESTATEMENT
-------------------------     -------------------     --------------------------
     DATE     APPLICABLE % FOR PERCENTAGE RENT     CPI PERCENTAGE CAP     CPI
     ----     --------------------------------     ------------------     ---
             PERCENTAGE FLOOR     EXPIRATION DATE     EXTENDED TERM
             ----   ---------     ---------------     -------------

                                    2002 - $16,500
                                    2003 - $17,500
                                    2004 - $19,000
                                    2005 - $19,333
                                    2006 - $19,671
                                    2007 - $20,015
                                    2008 - $20,365
                                    2009 - $20,722
                                    2010 - $21,084
                                    2011 - $21,453
                                    2012 - $21,829
                                    2013 - $22,211
                                    2014 - $22,599
Fullerton,  CA5,6,7,  12     2015  -  $22,995     $4,003,174     May  1     N/A
------------------------     ----------------     ----------     ------     ---
 N/A     N/A     N/A     0%     December 31, 2015     Three five (5) year terms
 ---     ---     ---     --     -----------------     -------------------------




 1Group  1  Facility
  2Group  2  Facility
  3Group  3  Facility
  4Group  4  Facility
  5Group  5  Facility
  6Purchase  Option  Facility
  7First  Refusal  Facility
  8Land  Lease  Facility
  9Renewal  Group  A:  Allentown,  PA;  Latrobe,  PA;  Dover,  DE
10Renewal  Group  B:  Renton,  WA;  Everett,  WA;  Phoenix,  AZ;  Voorhees,  NJ
11Renewal  Group  C:  El Paso, TX (Palisades); San Antonio, TX (Amber Oaks); San
Marcos,  TX
12Renewal  Group  D:  Easley,  SC  (Countryside);  Easley,  SC  (Summit  Place);
Fullerton,  CA;  Hendersonville,  NC  (Heritage Lodge); Hendersonville, NC (Pine
Park);  Spartanburg,  SC
13Renewal  Group  E:  Biloxi,  MS;  Auburn,  CA
14Renewal  Group  F:  San  Antonio,  TX  (Hamilton  House)
15Renewal  Group  G:  El  Paso,  TX  (Cambria);  Odessa,  TX;  Walla  Walla,  WA
16Renewal  Group  H:  Boise,  ID
17Purchase  Group  A:  Allentown,  PA;  Latrobe,  PA;  Dover,  DE
18Purchase  Group  B:  El  Paso, TX (Palisades); San Antonio, TX; San Marcos, TX
19Purchase  Group  C:  Easley,  SC  (Countryside);  Easley,  SC  (Summit Place);
Hendersonville,  NC  (Heritage  Lodge);  Hendersonville,  NC  (Pine  Park);
Spartanburg,  SC
20For  purposes  of  determining  the  increase  (the  "Boise  Additional  Rent
Increase") in Allocated Additional Rent for any Lease Year immediately following
a  Lease  Year  in which an increase in Allocated   Minimum Rent with respect to
the  Facility  located  in Boise, Idaho pursuant to Section 3.1.1(b) occurs, the
following  shall  apply:
     (i)     First, Lessor shall calculate the Boise Additional Rent Increase on
the  aggregate  sum  of  Allocated  Minimum  Rent  and Allocated Additional Rent
payable  for the immediately preceding Lease Year, but excluding for purposes of
such calculation the amount of the Applicable Boise Minimum Rent Increase during
the  immediately  preceding  Lease  Year;
     (ii)     Second,  Lessor shall calculate the Boise Additional Rent Increase
with respect to only that portion of any Applicable Boise Minimum Rent Increases
during  the  last Lease Year, prorating the amount of each such Boise Additional
Rent  Increase  based  upon  the  number of days for which such Applicable Boise
Minimum Rent Increase was in effect during the immediately preceding Lease Year;
and
     (iii)     Lastly,  Lessor  shall  add  the  results of clauses (i) and (ii)
above,  and  the  sum thereof shall be deemed the Boise Additional Rent Increase
for  the  applicable  Lease  Year.
21 CPI Rent amounts are current as of August, 2002, and do not reflect increases
in  Allocated  Additional  Rent  as  set forth in Section 3.1.2(b) scheduled for
September  1,  2002.

<PAGE>

                                    EXHIBIT D
                                    ---------
                             INTERNAL RATE OF RETURN
                             -----------------------


                                       D-1


                               FACILITIES     IRR%
                               ----------     ----
Easley,  SC  (Countryside)
Easley,  SC  (Summit  Place)
Hendersonville,  NC  (Heritage  Lodge)
Hendersonville,  NC  (Pine  Park)
Spartanburg,  SC
                                        12.7%
                                        -----
Allentown,  PA
Dover,  DE
Latrobe,  PA
                                        12.95%
                                        ------
El  Paso,  TX  (Palisades)
San  Antonio,  TX  (Amber  Oaks)
San  Marcos,  TX
                                        13.8%
                                        -----

<PAGE>
                                    EXHIBIT E
                                    ---------
                           PROPERTY CONDITION REPORTS
                           --------------------------


                                       E-1

                     FACILITY     PROPERTY CONDITION REPORTS
                     --------     --------------------------
Allentown,  PA     The  Phase  I  Environmental  Assessment  prepared by Ecklund
--------------     -------------------------------------------------------------
Consultants,  Inc.  dated  June  30,  1995
------------------------------------------
Dover,  DE     The  Phase  I  Environmental  Assessment  prepared  by  Ecklund
----------     ---------------------------------------------------------------
Consultants,  Inc.  dated  June  30,  1995
------------------------------------------
Latrobe,  PA     The  Property Condition Report prepared by Ecklund Consultants,
------------     ---------------------------------------------------------------
Inc.  dated  6/13/95
--------------------
Easley,  SC  (Countryside Village)     The Phase I Environmental Site Assessment
----------------------------------     -----------------------------------------
dated  8/31/95  prepared  by  Environmental  Enterprise  Group,  Inc.
---------------------------------------------------------------------
Easley,  SC  (Summit  Place)     The Phase I Environmental Site Assessment dated
----------------------------     -----------------------------------------------
8/31/95  prepared  by  Environmental  Enterprise  Group,  Inc.
--------------------------------------------------------------
Fullerton,  CA     The  Phase  I  Environmental  Site  Assessment dated 11/25/94
--------------     -------------------------------------------------------------
prepared  by  Environmental  Enterprise  Group,  Inc.
-----------------------------------------------------
Hendersonville,  NC  (Heritage  Lodge)     The  Phase  I  Environmental  Site
--------------------------------------     ----------------------------------
Assessment  dated  8/31/95  prepared  by  Environmental  Enterprise  Group, Inc.
--------------------------------------------------------------------------------
Hendersonville,  NC  (Pine  Park)     The  Phase I Environmental Site Assessment
---------------------------------     ------------------------------------------
dated  8/31/95  prepared  by  Environmental  Enterprise  Group,  Inc.
---------------------------------------------------------------------
Spartanburg,  SC     The  Phase  I  Environmental  Site Assessment dated 8/31/95
----------------     -----------------------------------------------------------
prepared  by  Environmental  Enterprise  Group,  Inc.
-----------------------------------------------------
El  Paso,  TX  (Palisades)     The  Phase  I Environmental Site Assessment dated
--------------------------     -------------------------------------------------
3/17/97  prepared  by  VATC  Associates,  Inc.
----------------------------------------------
San Antonio, TX (Amber Oaks)     The Phase I Environmental Site Assessment dated
----------------------------     -----------------------------------------------
3/17/97  prepared  by  VATC  Associates,  Inc.
----------------------------------------------
San  Marcos,  TX     The  Phase  I  Environmental  Site Assessment dated 3/17/97
----------------     -----------------------------------------------------------
prepared  by  VATC  Associates,  Inc.
-------------------------------------
Everett,  WA     The  Phase  I  Environmental  Site  Assessment (Seabrook) dated
------------     ---------------------------------------------------------------
8/11/95
-------
Phoenix,  AZ     The  Phase  I Environmental Site Assessment (Olive Grove) dated
------------     ---------------------------------------------------------------
April  14/94
------------
Renton,  WA     The  Phase  I Environmental Site Assessment (Renton Villa) dated
-----------     ----------------------------------------------------------------
8/11/95
-------
Voorhees,  NJ     The  Phase I Environmental Site Assessment (Olive Grove) dated
-------------     --------------------------------------------------------------
April  14/94
------------
Biloxi,  MS     The  Phase  One  Environmental  Site  Assessment  dated 8/6/2001
-----------     ----------------------------------------------------------------
prepared  by  The  Breland  Group
---------------------------------
Auburn,  CA     The  Phase  One  Environmental  Site  Assessment dated 3/16/2001
-----------     ----------------------------------------------------------------
prepared  by  The  Breland  Group
---------------------------------

<PAGE>
                                       F-2

                                    EXHIBIT F
                                    ---------
                            LETTER OF CREDIT AMOUNTS
                            ------------------------


                                       F-1


                      FACILITY     LETTER OF CREDIT AMOUNT
                      --------     -----------------------
Allentown,  PA     One-half  of  the  sum  of  the  Allocated  Minimum Rent plus
--------------     -------------------------------------------------------------
Lessor's  reasonable  estimate  of  Allocated  Additional  Rent to be payable by
--------------------------------------------------------------------------------
Lessee  for  the  applicable  Lease  Year
-----------------------------------------
Boise,  ID     One-half  of  the  sum of Allocated Minimum Rent to be payable by
----------     -----------------------------------------------------------------
Lessee  for  the  applicable  Lease  Year
-----------------------------------------
Dover,  DE     One-half  of  the sum of the Allocated Minimum Rent plus Lessor's
----------     -----------------------------------------------------------------
reasonable estimate of Allocated Additional Rent to be payable by Lessee for the
--------------------------------------------------------------------------------
applicable  Lease  Year
-----------------------
Latrobe,  PA     One-half of the sum of the Allocated Minimum Rent plus Lessor's
------------     ---------------------------------------------------------------
reasonable estimate of Allocated Additional Rent to be payable by Lessee for the
--------------------------------------------------------------------------------
applicable  Lease  Year
-----------------------
Easley,  SC  (Countryside)     One-half of the sum of the Allocated Minimum Rent
--------------------------     -------------------------------------------------
plus  Lessor's reasonable estimate of Allocated Additional Rent to be payable by
--------------------------------------------------------------------------------
Lessee  for  the  applicable  Lease  Year
-----------------------------------------
Easley,  SC (Summit Place)     One-half of the sum of the Allocated Minimum Rent
--------------------------     -------------------------------------------------
plus  Lessor's reasonable estimate of Allocated Additional Rent to be payable by
--------------------------------------------------------------------------------
Lessee  for  the  applicable  Lease  Year
-----------------------------------------
Hendersonville,  NC  (Heritage  Lodge)     One-half  of the sum of the Allocated
--------------------------------------     -------------------------------------
Minimum  Rent  plus Lessor's reasonable estimate of Allocated Additional Rent to
--------------------------------------------------------------------------------
be  payable  by  Lessee  for  the  applicable  Lease  Year
----------------------------------------------------------
Hendersonville,  NC (Pine Park)     One-half of the sum of the Allocated Minimum
-------------------------------     --------------------------------------------
Rent  plus  Lessor's  reasonable  estimate  of  Allocated  Additional Rent to be
--------------------------------------------------------------------------------
payable  by  Lessee  for  the  applicable  Lease  Year
------------------------------------------------------
Spartanburg,  SC     One-half  of  the  sum  of  the Allocated Minimum Rent plus
----------------     -----------------------------------------------------------
Lessor's  reasonable  estimate  of  Allocated  Additional  Rent to be payable by
--------------------------------------------------------------------------------
Lessee  for  the  applicable  Lease  Year
-----------------------------------------
El  Paso,  TX (Palisades)     One-third of the sum of the Allocated Minimum Rent
-------------------------     --------------------------------------------------
plus  Lessor's reasonable estimate of Allocated Additional Rent to be payable by
--------------------------------------------------------------------------------
Lessee  for  the  applicable  Lease  Year
-----------------------------------------
San  Antonio,  TX (Amber Oaks)     One-third of the sum of the Allocated Minimum
------------------------------     ---------------------------------------------
Rent  plus  Lessor's  reasonable  estimate  of  Allocated  Additional Rent to be
--------------------------------------------------------------------------------
payable  by  Lessee  for  the  applicable  Lease  Year
------------------------------------------------------
San  Marcos,  TX     One-third  of  the  sum  of the Allocated Minimum Rent plus
----------------     -----------------------------------------------------------
Lessor's  reasonable  estimate  of  Allocated  Additional  Rent to be payable by
--------------------------------------------------------------------------------
Lessee  for  the  applicable  Lease  Year
-----------------------------------------
El  Paso,  TX  (Cambria)     One-half of the sum of Allocated Minimum Rent to be
------------------------     ---------------------------------------------------
payable  by  Lessee  for  the  applicable  Lease  Year
------------------------------------------------------
Odessa,  TX     One-half  of  the sum of Allocated Minimum Rent to be payable by
-----------     ----------------------------------------------------------------
Lessee  for  the  applicable  Lease  Year
-----------------------------------------
Walla  Walla, WA     One-half of the sum of Allocated Minimum Rent to be payable
----------------     -----------------------------------------------------------
by  Lessee  for  the  applicable  Lease  Year
---------------------------------------------
Everett,  WA     One-half of the sum of the Allocated Minimum Rent plus Lessor's
------------     ---------------------------------------------------------------
reasonable estimate of Allocated Additional Rent to be payable by Lessee for the
--------------------------------------------------------------------------------
applicable  Lease  Year
-----------------------
Phoenix,  AZ     One-half of the sum of the Allocated Minimum Rent plus Lessor's
------------     ---------------------------------------------------------------
reasonable estimate of Allocated Additional Rent to be payable by Lessee for the
--------------------------------------------------------------------------------
applicable  Lease  Year
-----------------------
Renton,  WA     One-half  of the sum of the Allocated Minimum Rent plus Lessor's
-----------     ----------------------------------------------------------------
reasonable estimate of Allocated Additional Rent to be payable by Lessee for the
--------------------------------------------------------------------------------
applicable  Lease  Year
-----------------------
Voorhees, NJ     One-half of the sum of the Allocated Minimum Rent plus Lessor's
------------     ---------------------------------------------------------------
reasonable estimate of Allocated Additional Rent to be payable by Lessee for the
--------------------------------------------------------------------------------
applicable  Lease  Year
-----------------------
San  Antonio,  TX  (Hamilton  House)     $741,751.65
------------------------------------     -----------


<PAGE>

                                    EXHIBIT G
                                    ---------
                       LETTER OF CREDIT REDUCTION FRACTION
                       -----------------------------------


                                       G-1


                       FACILITY     LOC REDUCTION FRACTION
                       --------     ----------------------
Allentown,  PA
Dover,  DE
Latrobe,  PA
Easley,  SC  (Countryside)
Easley,  SC  (Summit  Place)
Hendersonville,  NC  (Heritage  Lodge)
Hendersonville,  NC  (Pine  Park)
Spartanburg,  SC
Everett,  WA
Phoenix,  AZ
Renton,  WA
Voorhees,  NJ
                                    One-Half (1/2)
                                    --------------
El  Paso,  TX  (Palisades)
San  Antonio,  TX  (Amber  Oaks)
                        San Marcos, TX     One-Fourth ( )
                        --------------     --------------

<PAGE>

                                    EXHIBIT H
                                    ---------
                           RENT FOR THE EXTENDED TERM
                           --------------------------


                                       H-1


                         FACILITY     EXTENDED TERM RENT
                         --------     ------------------
Allentown,  PA
Dover,  DE
Latrobe,  PA
 Easley,  SC  (Countryside)
Easley,  SC  (Summit  Place)
Fullerton,  CA
Hendersonville,  NC  (Heritage  Lodge)
Hendersonville,  NC  (Pine  Park)
Spartanburg,  SC
Everett,  WA
Phoenix,  AZ
Renton,  WA
Voorhees,  NJ
El  Paso,  TX  (Palisades)
San  Antonio,  TX  (Amber  Oaks)
San  Marcos,  TX     Greater  of (a) the then current Fair Market Rental for the
----------------     -----------------------------------------------------------
Facility  and  (b)  one  hundred  three  percent  (103%) of the annual Allocated
--------------------------------------------------------------------------------
Minimum  Rent  and  Allocated Additional Rent payable for the last Lease Year of
--------------------------------------------------------------------------------
the  immediately  preceding  Fixed  Term  or  Extended  Term,  as  applicable.
------------------------------------------------------------------------------
Auburn,  CA
Biloxi,  MS     One-twelfth  (1/12) of the product of Allocated Minimum Rent and
-----------     ----------------------------------------------------------------
CPI  Rent  for  previous Lease Year times one hundred three and one-half percent
--------------------------------------------------------------------------------
(103.5%)
--------
Boise,  ID
El  Paso,  TX  (Cambria)
Odessa,  TX
Walla  Walla,  WA     Greater of (a) the then current Fair Market Rental for the
-----------------     ----------------------------------------------------------
Facility  and  (b)  one  hundred two and one-half percent (102.5%) of the annual
--------------------------------------------------------------------------------
Allocated  Minimum Rent and Allocated Additional Rent payable for the last Lease
--------------------------------------------------------------------------------
Year  of  the  immediately preceding Fixed Term or Extended Term, as applicable.
--------------------------------------------------------------------------------
San  Antonio,  TX (Hamilton House)     Greater of (i) Fair Market Rental for the
----------------------------------     -----------------------------------------
Facility and (ii) one hundred two percent (102%) of the annual Allocated Minimum
--------------------------------------------------------------------------------
Rent  payable for the last Lease Year of the immediately preceding Fixed Term or
--------------------------------------------------------------------------------
Extended  Term,  as  applicable.
--------------------------------


<PAGE>
                                       I-2

                                    EXHIBIT I
                                    ---------
                         CAPITAL REPAIR REQUIREMENT AND
                         ------------------------------
                        ORIGINAL LEASE COMMENCEMENT DATE
                        --------------------------------


                                       I-1

          ORIGINAL  LEASE
          FACILITY     CAPITAL REPAIR REQUIREMENT     COMMENCEMENT DATE
          --------     --------------------------     -----------------
Allentown,  PA     $150.00     October  23,  1995
--------------     -------     ------------------
Boise,  ID     $0.00     August  31,  1995
----------     -----     -----------------
Dover,  DE     $150.00     October  23,  1995
----------     -------     ------------------
Latrobe,  PA     $150.00     October  23,  1995
------------     -------     ------------------
Easley,  SC  (Countryside)     $150.00     February  1,  1996
--------------------------     -------     ------------------
Easley,  SC  (Summit  Place)     $150.00     February  1,  1996
----------------------------     -------     ------------------
Fullerton,  CA     $150.00     April  2,  1996
--------------     -------     ---------------
Hendersonville,  NC  (Heritage  Lodge)     $150.00     January  26,  1996
--------------------------------------     -------     ------------------
Hendersonville,  NC  (Pine  Park)     $150.00     January  26,  1996
---------------------------------     -------     ------------------
Spartanburg,  SC     $150.00     February  1,  1996
----------------     -------     ------------------
El  Paso,  TX  (Palisades)     $150.00     April  1,  1997
--------------------------     -------     ---------------
San  Antonio,  TX  (Amber  Oaks)     $150.00     April  1,  1997
--------------------------------     -------     ---------------
San  Marcos,  TX     $150.00     April  1,  1997
----------------     -------     ---------------
El  Paso,  TX  (Cambria)     $0.00     August  22,  1996
------------------------     -----     -----------------
Odessa,  TX     $0.00     September  17,  1996
-----------     -----     --------------------
Walla  Wall,  WA     $0.00     July  24,  1996
----------------     -----     ---------------
Everett,  WA     $150.00     December  29,  1995
------------     -------     -------------------
Phoenix,  AZ     $150.00     December  29,  1995
------------     -------     -------------------
Renton,  WA     $150.00     December  29,  1995
-----------     -------     -------------------
Voorhees,  NJ     $150.00     January  19,  1996
-------------     -------     ------------------
Biloxi,  MS     $0.00     September  5,  2001
-----------     -----     -------------------
Auburn,  CA     $0.00     September  5,  2001
-----------     -----     -------------------
San  Antonio,  TX  (Hamilton  House)     $0.00     October  14,  1997
------------------------------------     -----     ------------------


<PAGE>
------
                                        2


                                        1

                                    EXHIBIT J
                                    ---------
                                     FORM OF
                      IRREVOCABLE STANDBY LETTER OF CREDIT
Health  Care  Property  Investors,  Inc.,
Texas  HCP  Holding,  L.P.,  and
HCPI  Trust
4675  MacArthur  Court,  Suite  900
Newport  Beach,  California  92660


Date:  _______________               Letter  of  Credit  No.:  ___________
                              Expiration  Date:  ________________

GENTLEMEN:

We  hereby  establish  our  irrevocable  letter  of credit in your favor for the
account  of  __________________________ available by your draft(s) on us payable
at  sight  not  to  exceed  a  total  of
__________________________________________________________________
(_____________________)  when  accompanied  by  this  letter  of  credit and the
following  documents.
1)     A certificate purported to be executed by a representative of Health Care
Property  Investors,  Inc.  stating  that ______________________, as lessee, has
committed  an Event of Default under the lease dated __________________, between
Health Care Property Investors, Inc., as lessor, and __________________________,
as  lessee,  or  that  __________________________  or  an  affiliate  of
_____________________  has  committed an event of default under any other lease,
agreement or instrument with or in favor of Health Care Property Investors, Inc.
or  an  affiliate of Health Care Property Investors, Inc. and stating the amount
for  which  a  draw  under  this  letter  of  credit is made; (or) a certificate
purported  to be executed by a representative of Health Care Property Investors,
Inc.  stating  that  a  replacement letter of credit for this instrument has not
been  supplied  prior  to  thirty (30) days in advance of the expiration of this
instrument  for  the account of Health Care Property Investors, Inc.  As used in
this  paragraph,  "affiliate" shall not include any affiliates of Daniel R. Baty
("Baty")  which  but  for  their  relationship with Baty would not be considered
affiliates  of  _____________________.
2)     The  original letter of credit must accompany all drafts unless a partial
draw  is  presented,  in which case the original must accompany the final draft.
Partial drawings are permitted, with the letter of credit being reduced, without
amendment,  by  the  amount(s)  drawn  hereunder.
This  letter  of  credit  shall  expire  at  2:00  p.m.  at  the  office  of
____________________________  ________________________________________  on  the
expiration  date.
This  letter  of credit may be transferred or assigned by the beneficiary hereof
to  any  successor or assign of such beneficiary's interest in any such lease or
other  agreement  or  to any lender obtaining a lien or security interest in the
property  covered  by  any  such lease.  Each draft hereunder by any assignee or
successor  shall  be  accompanied  by  a copy of the fully executed documents or
judicial  orders  evidencing  such  encumbrance,  assignment  or  transfer.
Any  draft  drawn hereunder must bear the legend "Drawn under __________________
Letter  of  Credit  Number  _________  dated  _______________.  Except so far as
otherwise  expressly  stated,  this  letter of credit is subject to the "Uniform
Customs  and  Practice  for  Documentary  Credits (1993 Revision), International
Chamber  of  Commerce  Brochure  No.  500.  "  We  hereby agree with you and all
persons  negotiating  such  drafts  that  all  drafts  drawn  and  negotiated in
compliance  with  the  terms  of this letter of credit will be duly honored upon
presentment  and  delivery  of  the  documents  specified  above by certified or
registered mail to __________________ located at ____________________________ if
negotiated  not later that 2:00 pm on or before the expiration date shown above.
Very  truly  yours,



By

Its

<PAGE>
                                    EXHIBIT K
                                    ---------
                [Attach Pennsylvania Land Leases Form Amendments]

<PAGE>

                                       18


                                        1

                                    EXHIBIT L
                                    ---------
           AMENDED AND RESTATED CAPITAL RENOVATION PROJECT WORK LETTER
     THIS AMENDED AND RESTATED CAPITAL RENOVATION PROJECT WORK LETTER (the "Work
Letter")  is dated as of September 18, 2002, by and between HEALTH CARE PROPERTY
INVESTORS,  INC.,  a  Maryland  corporation,  HCPI TRUST, a Maryland real estate
trust,  and  TEXAS  HCP  HOLDING,  L.P.,  a  Delaware  limited  partnership
(collectively,  as  "Landlord"),  and  EMERITUS  CORPORATION,  a  Washington
corporation  and  ESC  III, L.P., a Washington limited partnership dba TEXAS-ESC
III,  L.P.  (collectively,  as  "Tenant").
                                    RECITALS
                                    --------
     A.     HCPI  and  Emeritus  entered  into  that  certain Capital Renovation
Project  Work  Letter dated as of July 30, 2001 (the "Original Work Letter") for
the  Capital  Renovation  Project  (as  hereinafter  defined).
B.     In  connection  with that certain Amended and Restated Master Lease dated
as  of  even  date  herewith  (the "Lease"), by and between Landlord and Tenant,
Landlord  and Tenant desire to amend and restate the Original Work Letter in its
entirety.  Capitalized terms used but not defined herein shall have the meanings
ascribed  to  them  in  the  Lease.
                                    AGREEMENT
                                    ---------
     1.     Definitions.  The  definitions  set  forth  in  this Section 1 shall
            -----------
apply  with respect to this Work Letter, the Capital Renovation Project, and the
Lease.  For  all  purposes  of  this  Work Letter, except as otherwise expressly
provided or unless the context otherwise requires, (i) the terms defined in this
Section 1 have the meanings assigned to them in this Section 1 and shall include
the  plural  as well as the singular; (ii) all references in this Work Letter to
designated  "Sections" and other subdivisions are to the designated Sections and
other  subdivisions  of  this Work Letter; (iii) the word "including" shall have
the  same  meaning  as  the  phrase  "including,  without limitation," and other
similar phrases; and (iv) the words "herein," "hereof" and "hereunder" and other
similar  words  refer  to  this Work Letter as a whole and not to any particular
Section  or  other  subdivision.
Amendment:  That certain Second Amendment to Lease dated as of July 30, 2001, by
---------
and  between  Landlord  and  Tenant.
Architect:   An  architect and/or engineer selected by Tenant in connection with
---------
the  design  and  construction of the Capital Renovation Project and approved by
Landlord,  which  approval shall not be unreasonably withheld or delayed so long
as  such architect is licensed in the State and has experience with the type and
scope  of  the  project  for  which  he/she  is  being  retained.
Capital  Renovation  Plans:  (i)  The  final  plans  and  specifications for the
--------------------------
construction/performance  of  the  Capital Renovation Project as prepared by the
------
Architect  and  approved  by  Landlord, which approval shall not be unreasonably
--
withheld  or  delayed,  and  (ii)  all amendments, modifications and supplements
--
thereto  which  do  not  require  the  approval  of  Landlord or which have been
--
approved  by Landlord subsequent to the approval of the plans and specifications
--
described  in  clause  (i).
Capital  Renovation  Project:  An  approximately  4,370  square  foot
----------------------------
addition/expansion  to  the  Facility as more particularly depicted on and to be
----------------
constructed/performed in accordance with the Capital Renovation Plans, including
--
(A)  the  fixtures  referred  to  in and/or shown thereon, (B) to the extent not
shown on the Capital Renovation Plans, additions to the parking facilities so as
to  provide  sufficient parking spaces to comply with all Legal Requirements and
as  otherwise necessary for the operation of the Facility (including the Capital
Renovation Project) for its Primary Intended Use, (iii) all Offsite Improvements
and  (iv)  any  and all site preparation, landscaping and drainage works and all
other  improvements  necessary  to comply with all Legal Requirements and/or for
the operation of the Facility (including the Capital Renovation Project) for its
Primary  Intended  Use.
     Boise  Capital  Renovation  Project Minimum Rent Reset Date:  As defined in
     -----------------------------------------------------------
the  Lease.
     Capital  Renovation Project Budget:  The budget attached hereto as Schedule
     ----------------------------------                                 --------
1,  together with (i) a detailed estimate report to be prepared by Tenant or its
General  Contractor  and  delivered  to and approved by Landlord (which approval
shall  not  be  unreasonably  withheld  or  delayed)  prior  to,  on or promptly
following  the  execution  and  delivery of this Work Letter, which report shall
also  provide  a  detailed cost breakdown of all hard construction costs for the
Capital  Renovation  Project  and  (ii) any other detailed budget information as
Landlord  may  reasonably  request  and approve from Tenant, including a further
breakdown  of  such hard construction costs to a level of detail that will allow
Landlord  to  determine  the  actual  cost  and  percentage  of  completion  of
construction  as  of  the  date  of  any  Request  for  Advance.
Capital  Renovation  Project  Costs:  All  the  costs  and  expenses incurred in
-----------------------------------
connection with (i) drafting, negotiating, and entering into the Amendment, this
------
Work  Letter  and the exhibits thereto and hereto and in reviewing all documents
and  instruments  required  thereby  or  hereby;  and  (ii)  the
construction/performance  of  the Capital Renovation Project, as contemplated by
the  Capital  Renovation  Project  Budget,  including  the  costs  of
constructing/performing  work  depicted  by  the  Capital  Renovation  Plans and
otherwise  in  accordance  with  applicable  provisions  of  this Work Letter, a
construction  administration fee pursuant to the terms and conditions of Section
2.3  of this Work Letter, costs for bonds, costs and fees for surveys, costs for
title  work  and  premiums for title insurance, environmental fees and expenses,
architect  fees, engineering costs, the cost of purchase and installation of any
fixtures  or  other  property included as part of the Capital Renovation Project
and all governmental licenses and fees.  Without limiting the foregoing, Capital
Renovation  Project  Costs shall include all amounts funded, advanced or accrued
by  Landlord  pursuant  to this Work Letter on account of the Capital Renovation
Project.
Completion  Date:  The date on which the construction/performance of the Capital
----------------
Renovation  Project  have  been  substantially  completed such that Landlord has
received  the  following:  (i)  a certificate of substantial completion from the
Architect  substantially in the form of American Institute of Architects ("AIA")
form  G704-2000,  (ii)  a  certificate  of occupancy or its equivalent issued in
accordance  with  all  Legal  Requirements  and  by the appropriate Governmental
Authority  having jurisdiction over the Property which permits the occupancy and
use  of  the improvements constructed as part of the Capital Renovation Project,
and  (iii)  all  other licenses, authorizations and permits, if any, required by
any  Governmental  Authority for the use and operation of the Capital Renovation
Project  as  part of the Facility for its Primary Intended Use.  For purposes of
this  Work  Letter,  "substantially  completed" shall mean that the improvements
being  constructed/performed  as  part of the Capital Renovation Project and all
other  work  which  Tenant  is  obligated to perform under this Work Letter with
respect to the Capital Renovation Project have been completed in accordance with
the  Capital  Renovation Plans and the applicable provisions of this Work Letter
and  the  Lease,  notwithstanding  the  fact  that Punch-List Items remain to be
performed.
Construction  Contracts:  The  contracts  between  Tenant  and  the  General
-----------------------
Contractor,  Tenant  and  the  Architect  and/or  Tenant or any other contractor
----------
(including  subcontractors)  relating  to rendering of services or furnishing of
-----
materials  in  connection  with  the  construction/performance  of  the  Capital
--
Renovation  Project,  contracts  between  the  General  Contractor  and  any
--
subcontractor  and  contracts  between any of the foregoing and any other Person
--
relating  to rendering of services or furnishing of materials in connection with
--
construction/performance  of  the  Capital  Renovation  Project.
Facility:  That  certain  assisted  living  facility  located  in  Boise, Idaho,
--------
commonly  known  as  "Summer  Wind."
------
General  Contractor:  The general contractor  selected by Tenant and approved by
-------------------
Landlord in connection with the construction/performance of any approved Capital
Additions,  including  the  Capital  Renovation  Project, which approval of such
general contractor shall not be unreasonably withheld or delayed so long as such
general  contractor  has  all  required State and local licenses and permits, is
bondable  and  has  sufficient  experience  with the size, type and scope of the
Capital  Renovation  Project.
Governmental  Authority:  The  United  States,  the  state,  county,  city  and
-----------------------
political  subdivisions  in  which  the  Property  is  located or which exercise
--------
jurisdiction  over  the  Property or the construction/performance of the Capital
------
Renovation Project, and any court administrator, agency, department, commission,
--
board,  bureau  or  instrumentality  of any of them which exercises jurisdiction
over  the  Property  or  the  construction/performance of the Capital Renovation
Project.
Tenant's  Affidavit:  A  sworn  affidavit  of  Tenant,  in  form  and  substance
-------------------
satisfactory  to  Landlord,  stating that to the best of Tenant's knowledge, all
--------
labor  and  material bills of every kind and character incurred by Tenant to the
--
date  of  such  affidavit in connection with the Capital Renovation Project have
been  paid  in  accordance  with  the  payment  provisions  of  the  applicable
Construction  Contracts except for the unpaid bills to be paid from the proceeds
of  the  current  Request  for  Advance,  and  that the builder's risk insurance
described  in  Section  2.4(d)(i)  contains  sufficient  coverage  for  the
construction/performance  of the Capital Renovation Project, including the value
of  materials  stored  off  the  Property.
Landlord's  Maximum  Cost:  The  sum  of  Four  Hundred  Thirteen Thousand Seven
-------------------------
Hundred  Twenty  Dollars  ($413,720.00).
------
Major  Subcontractors:  Subcontractors,  materialmen  and  other  vendors  with
---------------------
Construction  Contracts  in excess of Twenty-Five Thousand Dollars ($25,000.00).
------
Offsite  Improvements:  (i)  Any  streets,  roads,  walks,  curbs  and  the like
---------------------
(whether  or  not  ultimately  dedicated  for  public  use  and/or  maintenance)
-------
necessary  to  provide  access  to  public roads, streets and highways, (ii) any
-------
improvements  and  other  works  necessary  or  desirable  for  the provision of
----
utilities  to  the  Capital  Renovation Project and/or the existing Facility and
----
(iii)  any  other  improvements  on  property  other  than the Land that are (A)
---
required  by  Legal Requirements, (B) necessary for the construction/performance
---
of  the  Capital  Renovation  Project  in accordance with the Capital Renovation
Plans and the applicable provisions of the Lease or this Work Letter, and/or (C)
necessary  for  operation  of  the  Facility  (including  the Capital Renovation
Project)  for  its  Primary  Intended  Use.
Outside  Completion  Date:  October  31,  2002.
-------------------------
Punch  List  Items:  Minor  details  of  construction, mechanical adjustments or
------------------
decorations  which remain to be completed with respect to the Capital Renovation
----
Project  following the Completion Date and which do not (i) prevent the issuance
of  a certificate of occupancy (or the local equivalent thereof) for the Capital
Renovation  Project  and/or  (ii)  materially interfere with Tenant's use of the
Facility  (including  the  Capital  Renovation Project) for its Primary Intended
Use.
Remaining  Funds:  The  unadvanced  portion  of Landlord's Maximum Cost, if any.
----------------
Request  for Advance:  Certificates of Tenant and, to the extent applicable, the
--------------------
Architect,  in  each  case  on  the  appropriate  AIA  form, including form G702
together  with  attached  AIA  form  G703 (or equivalent, which AIA form G703 or
equivalent  shall  be  modified  to include columns for the original estimate of
scheduled  values  for  each line item, changes to the scheduled values for each
line  item  and  a  revised  scheduled  value  for each line item after any such
change)  and/or  such other form(s) as Landlord may hereafter reasonably request
which  shall:  (i)  set  forth  the Persons to whom money is owed and the amount
owed  each; (ii) certify among other things that such amounts represent payments
due  for  services actually rendered or materials actually acquired or furnished
in  connection  with  the  construction/performance  of  the  Capital Renovation
Project;  (iii)  state that the sum requested is Capital Renovation Project Cost
within  the  Capital  Renovation  Project  Budget for such item and that, in the
opinion of the Architect (if any) and Tenant, the Remaining Funds are sufficient
to  complete  the  Capital Renovation Project pursuant to the Capital Renovation
Plans  and  to  pay  for  all  labor,  material and other expenses in connection
therewith;  (iv)  be accompanied by copies of billing statements, fee schedules,
documentation  supporting  all  costs  to  date,  copies of all subcontracts not
previously submitted and vouchers or invoices from the Persons named therein, in
form  reasonably satisfactory to Landlord; (v) refer to an attached schedule, to
be  verified  by  the  Architect  (if  any)  or other reliable Person reasonably
acceptable  to  Landlord  prior to the advance being requested, identifying in a
manner  reasonably  satisfactory  to  Landlord  all materials not yet affixed or
incorporated  into the Capital Renovation Project but which have been covered by
certificates  submitted to date, including the current certificate; (vi) contain
a  statement,  to be verified by the Architect (if any) or other reliable Person
reasonably acceptable to Landlord prior to the advance being requested, that all
such  materials  not  yet  affixed  or  incorporated into the Capital Renovation
Project  have  been  stored  at  the  Property  or  at  one or more other bonded
locations  approved  by  Landlord  identified  therein (specifying the materials
located  at each location) under adequate safeguards to minimize the possibility
of  loss,  damage  or  commingling  with  other  materials or projects, and that
builder's  risk insurance coverage for such materials stored off the Property is
not  less  than the full insurable value of such materials then being stored off
the Property; and (vii) be accompanied by appropriate waivers of lien rights (to
the  extent  not  previously  received and approved by Landlord) with respect to
work  and  materials for which funds have already been advanced pursuant to this
Work  Letter,  or  which were performed or were supplied prior to July 30, 2001,
executed by the General Contractor (if any) and all contractors, subcontractors,
mechanics  and  materialmen  no  more  than  one  month  in arrears and who have
furnished  labor  or  material  to date and whose charges are or will be greater
than  Five  Thousand  Dollars  ($5,000.00)  and,  unless  Tenant  has provided a
statutory  payment bond in accordance with applicable Legal Requirements, by all
other  contractors,  subcontractors, mechanics and materialmen.  Notwithstanding
anything set forth herein to the contrary, the Request for Advance for the first
advance  of funds by Landlord hereunder and for each advance that is for an item
on the Capital Renovation Project Budget that is not a hard cost shall mean such
certificate  with  respect  thereto as Landlord may reasonably request.   To the
extent  that any payment, funding or accrual of Capital Renovation Project Costs
by  Landlord  hereunder  is  attributable  or  allocable  to  one or more of the
categories  comprising  the  Capital Renovation Project, Landlord shall allocate
such  Capital  Renovation  Project Costs among such categories as Landlord shall
reasonably  determine.
2.     Capital  Renovation  Project.  Without  limiting  any other obligation or
       ----------------------------
liability  of  Tenant under the Lease, the following shall apply with respect to
the  Capital  Renovation  Project  and  the construction/performance and funding
thereof:
     2.1     Obligations  of  Tenant.
             -----------------------
     (a)     Construction/Performance  of  Capital  Renovation  Project.  Tenant
             ----------------------------------------------------------
shall  be  responsible  to  arrange,  supervise,  coordinate  and  carry out all
services  necessary  for  the  construction,  performance  and completion of the
Capital  Renovation  Project in accordance with the Capital Renovation Plans and
the applicable provisions of this Work Letter, and Tenant undertakes and accepts
such  responsibility  with the understanding that all Capital Renovation Project
Costs  up to Landlord's Maximum Cost will be funded by Landlord to Tenant or its
designee  pursuant  to,  but subject to the applicable terms of, this Section 2.
Tenant  shall cause the Capital Renovation Project to be completed substantially
in  accordance  with  the  Capital  Renovation  Plans  and  the  terms  of  the
Construction  Contracts  for an amount not to exceed the Landlord's Maximum Cost
and  the  Completion  Date  to  occur by the Outside Completion Date (subject to
Unavoidable  Delays,  provided  that  Tenant delivers notice to Landlord of each
event  constituting an Unavoidable Delay within ten (10) days after such event).
If  and  to  the  extent  total  Capital  Renovation  Project  Costs  exceed the
Landlord's  Maximum  Cost, Tenant shall pay and shall not be reimbursed for such
excess.  If  total  Capital  Renovation  Project  Costs do not exceed Landlord's
Maximum  Cost,  Tenant  shall  not  be entitled to any portion of the difference
between  Landlord's  Maximum  Cost  and  total Capital Renovation Project Costs.
(b)     Duties  and  Responsibilities.  Without  limiting  Tenant's  obligations
        -----------------------------
under  the  Lease, the duties and responsibilities of Tenant with respect to the
Capital  Renovation  Project  shall  specifically  include  the  following:
     (i)     Subject  to  the other provisions of this Work Letter, to negotiate
and  enter  into  Construction  Contracts  and  other  agreements  necessary for
construction/performance  of  the  Capital Renovation Project in accordance with
the  Capital  Renovation  Plans,  which  such  contracts, by their terms, may be
assigned  by  Tenant  to  Landlord;
(ii)     To  establish operating procedures and a system of records and accounts
suitable  for  record  keeping  during  construction/performance satisfactory to
Landlord;
(iii)     To  administer  and  monitor  the  performance  under all Construction
Contracts  and  other agreements relating to the construction/performance of the
Capital  Renovation Project and the monthly reporting of the status of estimated
costs  of  completing  the  same  in  relation to the Capital Renovation Project
Budget  and  other  applicable  budgets;
(iv)     To  manage  and coordinate contractors, engineers, architects and other
consultants  and  monitor  their  compliance  with their respective contracts or
agreements;
(v)     To  monitor  and review and, when in the judgment of Tenant it is in the
best interest of Landlord, propose changes in the Capital Renovation Plans or in
any  budget  relating  to the construction/performance of the Capital Renovation
Project;
(vi)     To review and make a recommendation to Landlord with respect to payment
of  all  applications  for  payment  under  the Construction Contracts and other
agreements  relating  to  the construction/performance of the Capital Renovation
Project  and  make  payments  of  any  and  all bills, invoices or other matters
calling  for  payment  by  Tenant  or  Landlord or for the Landlord's account in
connection  with the construction/performance of the Capital Renovation Project,
all  in  accordance  with  the  provisions  of  this  Section  2;
(vii)     To  coordinate with the Architect and any inspecting engineer employed
by  Landlord in the performance of periodic inspections of the Property in order
to  confirm  that  the  materials furnished and work performed are in accordance
with  the  Capital  Renovation Plans and that the work on the Capital Renovation
Project  is  progressing  on  schedule;
(viii)     To  stop  the  work  and  cause  the  correction of any defect in the
materials  or  workmanship  furnished by any contractor or of any failure by any
contractor  to  perform  its  obligations under its Construction Contract and to
promptly  inform  Landlord  of  any  instances  of  faulty  materials  and/or
workmanship;
(ix)     To  make  available  to  Landlord,  upon request, the identities of and
copies of contracts with all subcontractors and any other Person supplying labor
or materials for the construction/performance of the Capital Renovation Project;
and
(x)     To  obtain  all  approvals  necessary  to  construct/perform the Capital
Renovation  Project  and  to  operate the Facility for its Primary Intended Use.
     (c)     Performance  of  Duties.  Tenant  agrees  that,  subject  to  the
             -----------------------
performance  by  Landlord  of its obligations under this Section 2, Tenant shall
act  with  prudence  and diligence in performing its duties and responsibilities
under  this  Work  Letter, with respect to the Capital Renovation Project and in
good  faith  in  the  best  interests  of  Landlord  and  the  Facility.
     2.2     Completion  Guarantee.
             ---------------------
     (a)     Construction and Cost Guarantee.  Tenant unconditionally guarantees
             -------------------------------
to  Landlord  (i) the construction/performance of the Capital Renovation Project
in  accordance  with  the  Capital  Renovation  Plans  and  all  covenants  and
obligations  of  Tenant  under  the  Lease  and this Work Letter, by the Outside
Completion  Date (subject only to the performance by Landlord of its obligations
under  this  Section  2  and  Unavoidable  Delays, provided that Tenant delivers
notice  to  Landlord  of each event constituting an Unavoidable Delay within ten
(10)  days  after  such  event) and (ii) the payment without demand, and without
right  to  reimbursement  therefor, of all development, construction and related
costs  of  the  Capital Renovation Project incurred for any reason whatsoever in
excess  of  the  Landlord's  Maximum  Cost.
     (b)     Failure  to  Construct.  Without limiting any other right or remedy
             ----------------------
of  Landlord  under  the  Lease,  if for any reason or under any contingency any
contractor  shall  default  under  a Construction Contract, fail to commence, or
abandon construction of, the Capital Renovation Project, or fail to complete the
Capital  Renovation  Project  within the maximum construction time in accordance
with  the  terms  of the Construction Contracts, then in any such event, without
the  need  of any demand by Landlord, Tenant shall assume all responsibility for
and  control  over  the  construction, performance and completion of the Capital
Renovation  Project  and  shall cause the Capital Renovation Project to be fully
completed  in  accordance  with  this  Work  Letter  on  or  before  the Outside
Completion  Date, other than Punch List Items.  Without limiting any other right
or  remedy  of Landlord under the Lease, if Tenant fails to complete the Capital
Renovation  Project in accordance with the Capital Renovation Plans prior to the
Outside Completion Date other than the Punch List Items, Landlord, at Landlord's
option,  shall  have  the  right  to  complete the Capital Renovation Project in
accordance  with  the  Capital Renovation Plans and expend such sums as Landlord
reasonably  deems proper in order so to complete the Capital Renovation Project.
The  amount of any and all expenditures made by Landlord pursuant to this clause
(b)  which,  when  combined with all Capital Renovation Project Costs previously
funded  by  Landlord,  are  in  excess  of  Landlord's  Maximum  Cost,  shall be
immediately  due  and  payable  by  Tenant  to Landlord as an Additional Charge,
together  with  interest  thereon  from the date of such expenditure to the date
paid  by  Tenant  at  the Overdue Rate (but in no event greater than the maximum
rate  of interest then permitted by law).  Said interest shall accrue on a daily
basis.  Upon  any  assumption  by  Landlord  of  the  obligation to complete the
Capital  Renovation Project as provided herein, Tenant shall forthwith surrender
and  deliver  to  Landlord,  or  Landlord's  designee, any funds which have been
received  from  Landlord but have not been disbursed by Tenant, and all records,
plans,  specifications,  permits  and  other  governmental  approvals,  purchase
agreements,  contracts,  receipts  for  deposits,  unpaid  bills  and  all other
records,  papers  and  documents  in  the  possession  of Tenant relating to the
Capital  Renovation  Project.
(c)     Completion  of Punch List Items.  All Punch List Items, other than those
        -------------------------------
reasonably  requiring  more  than  thirty  (30)  days  to  complete  due to long
scheduling  or  ordering  time  or  other reasonable factors, shall be completed
within  thirty  (30)  days after the Completion Date, but in no event later than
thirty  (30)  days  after  the  Outside  Completion  Date.  Any Punch List Items
reasonably  requiring more than thirty (30) days to complete shall be diligently
pursued  and  completed  as  promptly as practicable, but in no event later than
sixty  (60)  days  after  the  Outside  Completion  Date.
     2.3     Construction Administration Fee.  Landlord shall accrue in arrears,
             -------------------------------
from  and  after  July  30,  2001,  until  the  Completion  Date, a construction
administration  fee in the form of an allowance equal to $1,600.00 per month for
the  costs  associated  with  the  administration of the provisions of this Work
Letter  and  the  making  of  advances  hereunder.
     2.4     Other  Covenants  of  Tenant.
             ----------------------------
     (a)     Construction/Performance  of  the  Capital  Renovation  Project.
             ---------------------------------------------------------------
Construction/performance  of  Capital  Renovation  Project will be prosecuted by
Tenant in accordance with the Capital Renovation Plans in a good and workmanlike
manner  and  in accordance with sound building and engineering practices and all
applicable  Legal  Requirements  and  all  restrictive  covenants  affecting the
Property.  All  materials,  fixtures  or  articles  used  in  the
construction/performance of the Capital Renovation Project, or to be used in the
operation  thereof  shall  be  substantially  in  accordance  with  the  Capital
Renovation  Plans as approved by Landlord.  Tenant shall ensure that no asbestos
or asbestos-containing materials or other Hazardous Substances will be contained
in  the  completed  Capital  Renovation  Project.  Tenant  will  complete  the
construction/performance  of  the  Capital  Renovation  Project substantially in
accordance with the Capital Renovation Plans on or before the Outside Completion
Date  (subject  to  Unavoidable  Delays, provided that Tenant delivers notice to
Landlord  of  each  event constituting an Unavoidable Delay within ten (10) days
after  such  event),  free  and  clear of liens or claims for liens for material
supplied and for labor or services performed in connection with the construction
of  the  Capital  Renovation  Project (except for permitted contests pursuant to
Article  XIII  of  the  Lease).
     (b)     Legal  Requirements.   Tenant will cause all Legal Requirements and
             -------------------
all  restrictive  covenants  affecting  the  Leased Property to be complied with
promptly,  and  Landlord  will  be  furnished,  on  demand,  evidence  of  such
compliance.
     (c)     Change  Orders,  Defects.
             ------------------------
     (i)     Tenant  may,  without  obtaining  the  prior  written  approval  of
Landlord,  change  the  Capital  Renovation Plans, permit the Capital Renovation
Plans to be changed or permit construction/performance of the Capital Renovation
Project  other  than  in accordance with the Capital Renovation Plans; provided,
however,  that  if  (1)  any such change would (w) change the basic structure or
character of the Facility; (x) change the appearance of the Facility; (y) change
or  reduce  the quality of the basic building systems, including the mechanical,
electrical,  sprinkler,  plumbing,  life-safety,  heating,  air conditioning and
ventilation  systems within the Facility or (z) result in an item of the Capital
Renovation  Project  not  being  performed, (2) any single change in the Capital
Renovation  Plans  involves  an  amount  in  excess  of  Five  Thousand  Dollars
($5,000.00),  (3) any number of changes in the Capital Renovation Plans involves
in  the  aggregate an amount not in excess of Ten Thousand Dollars ($10,000.00),
or  (4)  any  such change in the Capital Renovation Plans results in the Capital
Renovation Project Costs exceeding the Landlord's Maximum Cost, then in any such
event  Tenant  must  obtain  the  prior  written  approval  of Landlord prior to
implementing  such  change,  which approval may be given or withheld in the sole
and  absolute  discretion  of  Landlord.
(ii)     Tenant will at its sole cost and expense and not as part of the Capital
Renovation  Project  Costs  correct  or  cause to be corrected any defect in the
Capital  Renovation  Project  or any departure from the Capital Renovation Plans
not  approved  by  Landlord  or  permitted  herein  without such approval or any
encroachment  by  any  part  of  the  Capital  Renovation Project on or over any
building  lines,  easements,  property lines or other restricted areas which any
survey  or  inspection  reflects.
     (d)     Construction  Insurance.  To  the  extent not already maintained or
             -----------------------
covered by Tenant pursuant to Article XIV of the Lease, Tenant will at all times
maintain  or  cause  to  be  maintained  the  following  insurance  during  the
construction/performance  of  the  Capital Renovation Project (including through
the  date  of  completion  of  the  Punch  List  Items):
     (i)     Builder's  risk  insurance covering the construction/performance of
the  Capital  Renovation  Project,  in  a  face amount of not less than the full
insurable  value  of  the  Capital  Renovation Project and materials supplied in
connection  therewith,  with  appropriate provisions made to include coverage of
materials  stored off the Property in an amount not less than the full insurable
value  of  such  materials  stored  off  the  Property  from  time  to  time.
(ii)     Errors  and  omissions insurance by any Architect in an amount at least
equal  to  Four  Hundred Thousand Dollars ($400,000) which can be applied to the
construction/performance  of the Capital Renovation Project, covering the entire
period of design and construction/performance of the Capital Renovation Project,
including  completion  of  the  Punch-List  Items.
All  such  insurance maintained or caused to be maintained by Tenant pursuant to
clauses  (i)  and  (ii)  of this clause (c) shall name Landlord as an additional
insured.  All insurance maintained or caused to be maintained by Tenant pursuant
to  clause  (i)  of  this clause (c) shall name Tenant, Landlord and any General
Contractor  or  other contractor, jointly, as loss payee.  In addition, all such
insurance to be maintained or caused to be maintained by Tenant shall otherwise,
to the extent applicable, comply with the provisions of and shall be in addition
to  the  insurance  specified  in  Article  XIV  of  the  Lease.
     (e)     [Intentionally  Omitted]
              ----------------------
(f)     Liens on Materials.  Tenant shall not at any time during the performance
        ------------------
of  the  work, make or cause to be made, or permit any General Contractor or any
other contractor to make, any contract for materials or equipment of any kind or
nature  whatsoever  to  be  incorporated in or to become a part of the Property,
title  to  which  is not good or which is subject to any lien or title retention
arrangement  other  than  inchoate  mechanic's  liens.  Tenant  will  deliver to
Landlord,  on  demand,  true copies of any contracts, bills of sale, statements,
receipted  vouchers,  or  agreements,  under  which  Tenant  claims title to any
materials,  fixtures,  or  articles  used in the construction/performance of the
Capital  Renovation  Project.
(g)     Storage  of  Materials.  Tenant  will  cause  all  materials acquired or
        ----------------------
furnished  in  connection  with  the  construction/performance  of  the  Capital
Renovation  Project,  but  not  affixed or incorporated into the Property, to be
stored at the Property or at bonded locations approved by Landlord, in each case
under  adequate safeguards to minimize the possibility of loss, theft, damage or
commingling  with other materials or projects. Tenant will employ suitable means
to  protect  from  theft  or  vandalism  the Property and all tools and building
materials  stored  on  the  Property.
(h)     Inspections.  Without  limiting  any  of  Landlord's  rights or remedies
        -----------
under  the Lease, at any time during regular business hours, Landlord and/or its
representatives  will  be  permitted  to  enter  upon the Property and any other
location  where materials for the Capital Renovation Project are being stored to
inspect  the  same  and all materials to be used in the construction/performance
thereof, and to examine all detailed plans and shop drawings which are or may be
kept  at  the  construction  site, provided that in so doing, Landlord shall not
unreasonably  interfere  with  the  construction/performance  of  the  Capital
Renovation  Project.  Upon  request,  Landlord will be furnished with reasonable
information  regarding  the  construction/performance  of the Capital Renovation
Project  from  Tenant,  any  Architect,  any  General  Contractor  and any other
contractors  or  subcontractors.
(i)     Notices.  Without  limiting  any  other  obligation  of Tenant under the
        -------
Lease,  Tenant will furnish Landlord with a copy of any (A) notice or claim made
by any Governmental Authority pertaining to the  Property, (B) any notice of any
termination,  late payment or other material aspect of any Construction Contract
involving  more  than Five Thousand Dollars ($5,000.00), together with a copy of
each  such  Construction  Contract  and  (C)  any  fire, casualty, notice of any
condemnation  or  other  event  materially  affecting  the  Leased  Property.
     (j)     Use  of  Funds,  Deficiency.
             ---------------------------
     (i)     Tenant  shall expend all the proceeds of each advance hereunder for
Capital Renovation Project Costs in amounts and for the purposes provided in the
Capital  Renovation  Project  Budget  and  for  no  other  purpose  whatsoever.
(ii)     Tenant will promptly advise Landlord if and when (1) Capital Renovation
Project  Costs  shall  exceed  or appear likely to exceed the Landlord's Maximum
Cost or (2) Capital Renovation Project Costs with respect to any particular item
in the Capital Renovation Project Budget shall exceed or appear likely to exceed
the amount specified for any such item in the Capital Renovation Project Budget,
and  shall give Landlord sufficiently detailed information with respect thereto.
(iii)     If,  in  the reasonable good faith judgment of Landlord, it appears at
any  time  or from time to time that the Remaining Funds will be insufficient to
complete  the  construction/performance  of  the  Capital  Renovation  Project
substantially  in  accordance with the Capital Renovation Plans on or before the
Outside  Completion Date (unless otherwise extended by reason of any Unavoidable
Delays  as  permitted  under  this  Work  Letter,  and  to  pay  for all Capital
Renovation  Project  Costs  incurred  in  connection  with  such
construction/performance,  or  if  any  other  expenses  are  required  for such
completion  which  were  not scheduled in the Capital Renovation Project Budget,
Landlord  may  request  that  Tenant  demonstrate  that  the Remaining Funds are
sufficient  for  such completion and payment.  If Tenant does not so demonstrate
to  Landlord's  reasonable satisfaction within five (5) Business Days of receipt
of  Landlord's  request  to  do  so,  then  Tenant  shall  make arrangements for
additional  monies  to  be made available as shall, in the reasonable good faith
judgment  of Landlord, when added to the Remaining Funds, be sufficient so as to
complete  and/or  pay for the construction/performance of the Capital Renovation
Project.  Such additional monies of Tenant shall be applied for payment of costs
prior  to  Landlord  advancing  any  additional  funds  under  this Work Letter.
     (k)     Documents  at  Completion.  Without limiting any provisions of this
             -------------------------
Work  Letter,  from  time  to  time  as  requested  by  Landlord  and as soon as
practicable  following  the  Completion Date, Tenant shall supply or cause to be
supplied to Landlord such reasonable documents and information pertaining to the
Capital  Renovation  Project and the construction, performance and/or completion
of  the  same  as  Landlord  shall  request.
(l)     Assignment  of  Construction  Contracts.  At  the  request  of Landlord,
        ---------------------------------------
Tenant  shall assign to Landlord each Construction Contract to which Tenant is a
party  utilizing  an  assignment  instrument in form and substance acceptable to
Landlord  and  shall  cause  each  other  party to such Construction Contract to
consent  to  such  assignment,  if  required  by  the  terms  thereof.
     2.5     Additional  Events of Default.  In addition to and without limiting
             -----------------------------
the "Events of Default" set forth in the Lease, any one or more of the following
shall  also  constitute  an  "Event  of  Default"  under  the  Lease:
     (a)     Tenant  fails  to perform any of the obligations to be performed by
Tenant  under  this  Work Letter with respect to the Capital Renovation Project,
and  such failure is not cured within thirty (30) days after notice thereof from
Landlord  or, if such failure cannot reasonably be cured within such thirty (30)
day  period,  such  longer  period  as reasonably may be required to remedy such
default  as  long  as Tenant has commenced such cure within such thirty (30) day
period,  thereafter  diligently prosecutes such cure and completes such cure not
later  than sixty (60) days after notice from Landlord but in any event prior to
the Outside Completion Date (subject to Unavoidable Delays, provided that Tenant
delivers  notice  to  Landlord  of  each event constituting an Unavoidable Delay
within  ten  (10)  days  after  such  event);  or
(b)     [Intentionally  Omitted]
         ----------------------
(c)     Tenant  uses  any monies advanced by Landlord under this Work Letter for
any  purpose  other  than  as allowed or contemplated under this Work Letter; or
(d)     Except  as  a  result  of  a casualty, Condemnation or other Unavoidable
Delay,  work  on  the  Capital  Renovation  Projects  ceases  for  thirty  (30)
consecutive  days  for  any  reason;  or
(e)     The  Completion Date does not occur by the Outside Completion Date, free
and  clear  of  mechanics',  materialmen's and other liens (except for permitted
contests  pursuant  to  Article  XIII  of  the  Lease);  or
(f)     Except for change orders allowed pursuant to the provisions of this Work
Letter,  Tenant modifies, amends or terminates any Construction Contract without
Landlord's  written  consent;  or
(g)     Any mechanics', materialmen's or other lien is filed or asserted against
the Property, or any part thereof, or any suit or other proceeding is instituted
to  enforce  or foreclose such a lien (except for permitted contests pursuant to
Article  XIII  of  the  Lease).
     2.6     Advances  of  Funds  by  Landlord.
             ---------------------------------
     (a)     Funding.  Subject  to  the satisfaction by Tenant of the conditions
             -------
set  forth  in  Section 2.6 of this Work Letter and the other provisions of this
Work  Letter, Landlord will advance to Tenant funds up to the Landlord's Maximum
Cost  (less  all  costs,  fees,  allowances  and  charges  of Landlord which are
included  within  Capital Renovation Project Costs) for the purpose of paying or
reimbursing  Tenant  for  the  payment  of the Capital Renovation Project Costs.
(b)     Limitation  of  Funding  Obligation.  Landlord shall not be obligated to
        -----------------------------------
advance  to  Tenant any sums (i) in excess of the Landlord's Maximum Cost or for
which  a  Request  for  Advance  is received more than sixty (60) days after the
Outside  Completion  Date,  (ii) when any of the conditions set forth in Section
2.6  of  this  Work  Letter  have  not  been  met  or  fulfilled.
(c)     Advances  of  Funds by Landlord.  Draw requests will be reviewed monthly
        -------------------------------
and  will  be based on the prorata share completion to date of each construction
line  item  listed  in  the  Capital Renovation Project Budget.  All advances of
funds  under  this  Work  Letter  shall be made by Landlord in accordance with a
Request  for Advance.  Each Request for Advance shall be honored within ten (10)
Business  Days  of  receipt  of the same delivered in accordance with the Notice
provisions of the Lease together with the information required therein, subject,
however,  to  the limitations herein.  In no event shall Landlord be required to
make  any  advance  for a particular line item which, when aggregated with prior
advances,  is  in  excess of the Capital Renovation Project Budget for such line
item  except to the extent amounts from contingency line items are unused and/or
to  the extent savings, in Landlord's reasonable good faith discretion, in other
budget  line  items  remain  unused.  Landlord shall issue checks payable to, or
otherwise  advance  funds  to,  Tenant,  the  payees designated in a Request for
Advance  or  jointly  to  Tenant  and  such payees, as Landlord shall reasonably
determine.  Advances  of  funds to such payees or jointly to Tenant and any such
payee  shall  constitute  an  advance  hereunder  as though advanced directly to
Tenant.
(d)     Holdbacks.  Any  advances  for costs and expenses of labor and materials
        ---------
connected  with  the  construction/performance of the Capital Renovation Project
shall be limited to Ninety Percent (90%) of such costs and expenses and shall be
made  in  accordance with the payment schedule of the Construction Contract with
any  General  Contractor  or  other  contractor.  The  final advance of proceeds
representing the Ten Percent (10%) retainage for any particular item will not be
made  until the last to occur of (i) the Completion Date, (ii) completion of all
Punch  List  Items  and (iii) the date Landlord receives, as applicable, (1) all
final  lien  releases  and waivers provided for herein, (2) an "As-Built" set of
plans  and  specifications  (if  reasonably requested by Landlord based upon the
nature  of  the  Capital  Renovation Project), (3) an ALTA "As-Built" survey (if
reasonably requested by Landlord based upon the nature of the Capital Renovation
Project),  and  (4) such other documents as Landlord may reasonably request.  In
no  event  shall  any portion of such retainage be paid if any mechanics' and/or
materialmen's  liens  or  other  encumbrances  have been filed and remain on the
Property  (except for permitted contests pursuant to Article XIII of the Lease).
     2.7     Conditions  to  Landlord  Obligations  to  Advance Funds.  Landlord
             --------------------------------------------------------
shall  not  be  obligated  to  make any advance of funds under this Work Letter,
including  the  first  advance,  unless and until the following conditions shall
have  been  satisfied  (with  proof  thereof  in  form and sufficiency as may be
reasonably  requested  by  Landlord):
(a)     Approvals/Entitlements.  To  the  extent  not  theretofore  received and
        ----------------------
approved by Landlord and to the extent of a material change not permitted herein
     without approval, Landlord shall have received and approved (i) the Capital
Renovation  Plans;  (ii)  the  Capital  Renovation  Project Budget(s); (iii) all
Construction  Contracts with any General Contractor, any Architect and any other
contractor  or material supplier that may be requested by Landlord; and (iv) all
authorizations  and  permits  required  by  any  Governmental  Authority for the
construction/performance  of  the Capital Renovation Project, including building
and  grading  permits,  a  foundation  letter  (if  applicable  to  the  Capital
Renovation  Project)  and  such other authorizations and permits as are required
for  the  use  and operation of the Facility for its Primary Intended Use, which
are  presently  procurable.
(b)     Utilities  and  Access.  To  the  extent  applicable  to  the  Capital
        ----------------------
Renovation  Project  as  reasonably  determined by Landlord, Landlord shall have
        -
received  evidence  satisfactory  to  Landlord  that  (i)  all  existing  public
utilities,  including telephone, water, sewage, electricity and gas are adequate
for  the  Facility;  and (ii) all existing means of ingress and egress, parking,
access  to public streets and drainage facilities are adequate for the Facility.
(c)     Soils  and  Other  Tests.  To  the  extent  applicable  to  the  Capital
        ------------------------
Renovation  Project  as  reasonably  determined by Landlord, Landlord shall have
received  and  approved  test  borings,  engineering reports and such other site
analysis  as  Landlord  may require, all of which must indicate that the soil is
adequate  for  the  proposed  construction/performance of the Capital Renovation
Project  in  accordance  with  the  Capital  Renovation  Plans.
(d)     Insurance.  Landlord  shall  have  received certificates with respect to
        ---------
the  insurance  required  to  be  carried by Tenant or other Persons pursuant to
Section  2.4  above,  together  with  evidence satisfactory to Landlord that the
premiums  therefor  have  been  paid  in  full.
(e)     [Intentionally  Omitted]
(f)     No  Default.  No  Event  of  Default shall have occurred under the Lease
        -----------
(including  this  Work Letter) and no event or condition shall exist which, with
notice  and/or lapse of time, or both, would constitute such an Event of Default
under  the  Lease  (including  this  Work  Letter).
(g)     Condemnation;  Casualty.  No Condemnation shall be pending or threatened
        -----------------------
and no casualty shall have occurred, in either case with respect to the Property
or  any  portion  thereof.
(h)     Other Documents and Assurances.  Landlord shall have received such other
        ------------------------------
documents  and assurances as Landlord shall have reasonably requested, including
any  endorsements  to  Landlord  existing policy of title insurance updating the
same  without any additional exception except as may be approved by Landlord and
increasing the policy limit thereof to an amount equal to the Capital Renovation
Project  Costs  funded  or  accrued  by  Landlord.
(i)     Request  for  Advance.  Landlord  shall have received and approved (A) a
        ---------------------
Request  for  Advance accompanied by all necessary documents and certificates as
set  forth  in  the definition thereof; (B) a Tenant's Affidavit; and (C) to the
extent applicable, a certificate from the Architect, or if no Architect, from an
officer  of  Tenant  or any other reliable Person acceptable to Landlord, to the
effect  that  in  such  Person's opinion (1) the construction/performance of the
Capital  Renovation  Project  theretofore  performed  is  in accordance with the
Capital Renovation Plans and (2) the amount requested is appropriate in light of
the  percentage  of  construction  completed  and  amount  of  stored  material.
(j)     Architect,  Contractor  Letters.  Landlord shall have received from each
        -------------------------------
of the Architect, General Contractor, and major subcontractors a letter, in form
and  substance  satisfactory  to Landlord, which, among other things, (i) states
that,  in  the  event  of  a  default  by  Tenant  under  the  contract with the
undersigned,  the  undersigned  agrees  to  perform  for  Landlord at Landlord's
request  under  the  terms  of the applicable Construction Contract, (ii) to the
best  knowledge  of  the  undersigned  certifies  to  Landlord  that the Capital
Renovation Plans comply with all Legal Requirements, and that the work performed
by  the undersigned has been completed in accordance with the Capital Renovation
Plans,  and  (iii)  confirms  such  other  matters consistent with the terms and
provisions  of  this  subsection  (j).
(k)     Proceedings.  Landlord  shall  have  reviewed and approved all corporate
        -----------
proceedings  to  be  taken  by  Tenant  and  Guarantor  in  connection  with the
transactions  contemplated  under  the  Lease,  as  amended by this Work Letter.
(l)     [Intentionally  Omitted]
(m)      [Intentionally  Omitted]
     2.8     Miscellaneous  Provisions Applicable to Capital Renovation Project.
             ------------------------------------------------------------------
     (a)     Ownership  of Capital Renovation Project.  At all times the Capital
             ----------------------------------------
Renovation  Project shall be owned entirely by Landlord subject to the leasehold
interest  of  Tenant  under  the  Lease  with  respect to the Capital Renovation
Project.  Upon  the  request  of Landlord, Tenant shall execute and/or cause any
Affiliate of Tenant to execute such documents as Landlord may reasonably request
evidencing  and  confirming  Landlord's  ownership  of  such  Capital Renovation
Project.
(b)     Advance  Not a Waiver.  No advance of funds under this Work Letter shall
        ---------------------
constitute  a  waiver  of any of the conditions to Landlord's obligation to make
further  advances  nor, if Tenant is unable to satisfy any such condition, shall
any  such  advance  have  the  effect  of  precluding  Landlord  from thereafter
declaring  such  inability  to  be  an  Event  of  Default  under  the  Lease.
(c)     Conditions  for  Benefit of Landlord.  All conditions to the obligations
        ------------------------------------
of  Landlord  hereunder  are  imposed  solely for the benefit of Landlord and no
other  Person  shall  have  standing to require satisfaction of such conditions.
(d)     Compliance  Responsibility.  Notwithstanding  the review and approval by
        --------------------------
Landlord  of  the  Capital  Renovation Plans or any other matter, Landlord shall
have  no  responsibility  for compliance by the Property, the Capital Renovation
Project  or  the construction/performance of the Capital Renovation Project with
Legal  Requirements,  sound  architectural  or  engineering  practices  or other
matters.
     (e)     Notices.  Any  Notices  with respect to Request for Advances and/or
             -------
change orders (only) shall be sent to Landlord in accordance with the provisions
for  notices  in  the  Lease.
     (f)     Attorneys'  Fees  and  Costs.  Subject  to  the  Landlord's funding
             ----------------------------
obligations  under  this  Work  Letter,  Tenant  shall  pay  to  Landlord all of
Landlord's  attorneys'  fees  and  other  costs  and  expenses  or  incurred  in
connection with (A) amendments or other modifications to any of the Construction
Contracts  or  the Capital Renovation Plans; and (B) any other matter related to
the  construction/performance  of  the  Capital  Renovation  Project.
(g)     Incorporation.  This  Work  Letter is incorporated into and shall form a
        -------------
part  of  the  Lease.


                            [Signatures on Next Page]

<PAGE>
IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused this Work Letter as of
September  18,  2002.

     "Landlord"
HEALTH  CARE  PROPERTY  INVESTORS,  INC.,  a  Maryland  corporation

By:  /s/  Arthur  G.  Sundby
     -----------------------
Name:  Arthur  G.  Sundby
Title:   Vice  President

TEXAS  HCP  HOLDING,  L.P.,  a  Delaware  limited  partnership

By:  /s/  Arthur  G.  Sundby
     -----------------------
Name:  Arthur  G.  Sundby
Title:   Vice  President

HCPI  TRUST,  a  Maryland  real  estate  trust

By:  /s/  Arthur  G.  Sundby
     -----------------------
Name:  Arthur  G.  Sundby
Title:   Vice  President





<PAGE>

     "Tenant"
EMERITUS  CORPORATION,
a  Washington  corporation

By:     /s/  Raymond  R.  Brandstrom
        ----------------------------
Name:  Raymond  R.  Brandstrom
Title:      CFO


     "Tenant"
ESC  III,  L.P.,  a  Washington  limited  partnership  dba  TEXAS-ESC  III, L.P.

By:     /s/  Raymond  R.  Brandstrom
        ----------------------------
Name:  Raymond  R.  Brandstrom
Title:      CFO












                                          75


                            Schedule 1 to Work Letter
                            -------------------------
                        Capital Renovation Project Budget
                        ---------------------------------
                                 [See Attached]

<PAGE>
                                    EXHIBIT M
                                    ---------
FACILITY  NAME     LOCATION
La  Villita     Phoenix,  AZ
-----------     ------------
Willow  Park     Boise,  ID
------------     ----------
Kingsley  Place  at  Oakwell     San  Antonio,  TX
----------------------------     -----------------
Kingsley  Place  at  Medical  Center     San  Antonio,  TX
------------------------------------     -----------------
Hollywood  Park     Hollywood,  TX
---------------     --------------
Northwest  Oaks     San  Antonio,  TX
---------------     -----------------
Cielo  Vista     El  Paso,  TX
------------     -------------
Arbor  Place  at  Silver  Lake     Everett,  WA
------------------------------     ------------