PURCHASE  AND  SALE  AGREEMENT

     THIS  AGREEMENT  is made and entered into as of the 27th day of March, 2002
(the  "Effective  Date"), by and between ALCO XII, L.L.C., a Mississippi limited
liability  company ("Seller") and Emeritus Corporation, a Washington corporation
("Purchaser").

     RECITALS

     A.     Seller  is  the  owner  of  that  certain  parcel  of  real property
described  in  Exhibit  A  attached  hereto  (the  "Real  Property")  and  the
               ----------
improvements  thereon  that  constitute  the  83  unit  assisted living facility
commonly  known  as  Loyalton  of  Hattiesburg  located  at 103 Fox Chase Street
Hattiesburg,  Mississippi  39402  (the "Facility") and certain of the furniture,
fixtures  and  equipment therein.  The Facility is currently leased to Purchaser
pursuant  to that Lease dated June 10, 1998 by and between Seller and Purchaser,
as  amended  by  that certain First Amendment to Lease dated as of March 1, 2001
(the  lease,  as  amended,  is  hereinafter  referred  to  as  the  "Lease").

     B.     Purchaser  is interested in purchasing from Seller the Real Property
and  Facility  and  furniture, fixtures and equipment therein which are owned by
Seller  and  Seller is willing to sell the same from Seller (the "Transaction").

     C.     Seller acknowledges and agrees that it has been advised by Purchaser
that it intends to finance the Transaction with the proceeds of a sale/leaseback
transaction  with  HCRI  Mississippi  Properties,  Inc. ("HCRI") and Health Care
REIT,  Inc.  (the  "HCRI  Transaction").

     D.     Seller  and  Purchaser  are  interested in documenting the terms and
conditions  of  such  sale  and  purchase.

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

                                    AGREEMENT

     1.     On  the  terms and conditions set forth herein, Seller shall sell to
Purchaser  and  Purchaser  shall  purchase  from  Seller  the  following:

     (a)     REAL  PROPERTY  AND  FACILITY.  All  of  Seller's  right, title and
interest  in  and  to  the  Real  Property  and  the  Facility together with all
tenements,  hereditaments,  rights,  privileges,  interests,  easements  and
appurtenances  now  or  hereafter belonging or in any way pertaining to the Real
Property  and/or  the  Facility.

     (b)     PERSONAL  PROPERTY.  All  of  Seller's right, title and interest in
and  to  any  and  all  equipment,  furniture,  fixtures,  appliances,  tools,
instruments,  and  other  tangible  personal  property owned by Seller as of the
Closing  Date  (as hereinafter defined) and located at and/or used in connection
with  the  operation  of  the  Facility  (the  "Personal  Property").

     (c)     BED  RIGHTS.  All of Seller's right, title and interest, if any, in
and  to  the  83  units  which  are currently operated at the Facility (the "Bed
Rights").

     (d)     MISCELLANEOUS PROPERTY.  All of Seller's right, title and interest,
if  any,  in and to the following: all plans, drawings, surveys, applications to
governmental  authorities  regarding  the  Facility  or  any development thereof
(collectively,  the  "Plans");  all  transferrable  certificates  of  occupancy,
permits,  licenses,  authorization  or  approvals  relating  to  the  Facility
(collectively,  the  "Permits");  all  leases  and  agreements, if any, to which
Seller  is  a  party  relating to the Facility (collectively, the "Leases"); all
general  intangibles,  intellectual  property  and  other intangible property or
rights  relating to the Facility, including without limitation the rights to all
telephone  numbers,  fictitious  names, logos and trade marks used in connection
with  the ownership or operations of the Facility (collectively, the "Intangible
Property").  The  Plans,  Permits,  Leases  and  Intangible Property hereinafter
shall  sometimes  be  referred  to collectively as the "Miscellaneous Property."

     Purchaser  acknowledges  and  agrees that Seller is not the operator of the
Facility  and  accordingly  that  Seller is only conveying those rights, if any,
which  Seller  has in the Bed Rights and the Miscellaneous Property and that, in
fact,  Seller  may  not  have  any  rights  in  either  the  Bed  Rights  or the
Miscellaneous  Property,  and  notwithstanding  any  provision  herein  to  the
contrary,  Seller  makes  no  representation  or  warranty  with  respect to the
ownership  of  the  Bed  Rights  or  Miscellaneous  Property

     Hereinafter  the  Real  Property,  the  Facility,  the  Personal  Property,
Seller's rights, if any, in and to the Bed Rights and the Miscellaneous Property
shall  sometimes  be  collectively  referred  to  as  "Seller's  Assets."

      Nothing  herein  shall be construed as imposing any liability on Purchaser
with  respect  to the ownership of the Seller's Assets prior to the Closing Date
(as hereinafter defined) except to the extent Purchaser has already assumed such
liability  under  the  terms  of  the  Lease.

     2.  PURCHASE  PRICE.

     The  purchase  price  ("Purchase  Price") payable by Purchaser for Seller's
Assets shall be Six Million Four Hundred Twenty Five Thousand and no/100 Dollars
($6,425,000.00)  and  shall  be  paid  by wire transfer of immediately available
funds  at  Closing.  The  Purchase  Price  provided for herein assumes a pay-off
amount for the loan in favor of Medical Office Properties, Inc., as successor in
interest  to  Health  Care  Financial  Partners,  of $6,240,000.00 (the "Pay-Off
Amount").  The  Purchase Price shall increase or decrease on a dollar for dollar
basis  to  the  extent  the  actual  Pay-Off Amount is greater than or less than
$6,240,000.00.

     3.  CLOSING.

     (a)     THE  CLOSING  DATE.  Provided that all of the conditions to closing
set  forth herein have been satisfied or waived, the Closing of the purchase and
sale  under  this  Agreement (the "Closing") shall take place on March 29, 2002.
The  date  upon  which  the Closing actually occurs is referred to herein as the
Closing  Date.

     (b)     THE  CLOSING  PROCESS.  Closing  shall  occur  through  escrow  and
accordingly, at or prior to the Closing Date, Purchaser and Seller shall deposit
in escrow with the Escrow Agent all documents and monies necessary to close this
transaction  as  herein provided.  Closing of escrow shall also mean and include
the  recording of the deed in the county where the Facility is located.  Time is
of  the  essence  of this Agreement.  Closing shall occur in accordance with the
procedures  and  instructions  given by Seller and Purchaser to the Escrow Agent
prior  to  Closing.

     4.  CONVEYANCES/DELIVERIES  AT  CLOSING.

     (a)     CONVEYANCES.  At  Closing, Seller shall deliver the Seller's Assets
to  Purchaser  free  and  clear  of  all liens and encumbrances other than those
described  in  Exhibit  B  (the  "Permitted  Encumbrances").

     (b)     SELLER'S  CLOSING DELIVERIES.  At Closing, Seller shall deliver the
following
documents to Escrow Agent for recording and/or delivery to Purchaser or HCRI the
following:

     (i)     A  deed  with  respect  to  the Real Property and the Facility (the
"Deed"),  in  the  form  attached  hereto  as  Exhibit  C;
                                               ----------

     (ii)     Bills  of  Sale  and  Assignment  Agreement  with  respect  to the
Personal  Property,  the Bed Rights and the Miscellaneous Property, in the forms
attached  hereto  as  Exhibit  D;
                      -----------

     (iii)     An affidavit executed by Seller under penalty of perjury, stating
Seller's  United  States taxpayer identification number and that Seller is not a
foreign  person,  in  accordance  with  the  Internal  Revenue  Code,  Section
1445(b)(2),  in  the  form  attached  hereto  as  Exhibit  E;
                                                  ----------

     (v)     A  Lease  Termination  Agreement  with respect to the Lease, in the
form  attached  hereto  as  Exhibit  F  (the  "LTA").
                            ----------

       Seller acknowledges and agrees that it has been advised by Purchaser that
it intends to finance the Transaction with the proceeds of the HCRI Transaction.
Accordingly,  Purchaser  will  have the right to designate HCRI to take title to
certain  of  the  Seller's Assets and that certain of the documents described in
this Section 4(a) will run in favor of Purchaser and certain in favor of HCRI as
Purchaser's  designee.

     (b)     PURCHASER'S DELIVERIES. At Closing Purchaser shall deliver or cause
to  be  delivered  to  Escrow  Agent  for  recording  and/or delivery to Seller:

     (i)     The  cash  due  at  Closing  pursuant  to  Section  2;

     (ii)     The  LTA.

     5.  CLOSING  COSTS  AND  PRORATIONS.

     At  or  prior  to  Closing,  as  appropriate, Seller and Purchaser shall be
responsible  for  the  following costs and expenses of and prorations related to
the  transaction:

     (a)     EXCISE  TAXES; SALES TAX. Seller shall pay all state, county, local
and  any  other  excise,  documentary,  transfer or any other such taxes due and
payable  as  a  result  of the conveyance of the Real Property and the Facility.
Purchaser shall pay any sales tax due and payable as a result of the sale of the
Personal  Property.

     (b)     RECORDING FEES/ESCROW FEES.  Seller shall pay the cost of recording
the Deed and any documents necessary to deliver title to Purchaser in accordance
with  the  terms of this Agreement.  Purchaser shall pay all escrow fees due and
payable  to  Escrow  Agent.

     (c)     TITLE INSURANCE. Purchaser shall pay the cost of the premium for an
extended  coverage  title  insurance policy in the amount of the Purchase Price.
Purchaser  shall pay for the cost of the survey required in order to secure such
extended  coverage.

     (d)     PROPERTY TAXES.  Purchaser shall pay all real and personal property
taxes  due  at  Closing or thereafter coming due, whether the same relate to the
period  prior  to  or after the Closing Date.  In consideration therefor, Seller
shall  deliver  to  Purchaser any tax escrow payments being held by Seller as of
the  Closing  Date.

     (e)     RENT  AND  OTHER PRORATIONS. Any rent due under the Lease which has
been  paid  by  Purchaser prior to Closing for the month in which Closing occurs
shall be prorated as of the Closing Date. Purchaser acknowledges and agrees that
the  Facility  is currently leased to Purchaser under the terms of the Lease and
that,  except  for  the rent payable to Seller under the Lease, Purchaser is and
will  continue  after  Closing  to be responsible for all costs and expenses and
entitled  to  all  revenues  associated  with the ownership and operation of the
Facility  and accordingly that as between Seller and Purchaser there shall be no
prorations  at  Closing  for  any  such  costs  or  expenses  or  revenues.

     6.  REPRESENTATIONS  AND  WARRANTIES  OF  SELLER.

     Seller  hereby  warrants  and  represents  to  Purchaser  that:

     (a)     AUTHORITY.  Seller  has  full  power  and  authority to execute and
deliver  this  Agreement  and  all  related  documents  and  to  carry  out  the
transactions  contemplated  herein.  This  Agreement  is  valid,  binding  and
enforceable  against  Seller  in  accordance  with  its  terms,  except  as such
applicable  bankruptcy,  insolvency,  reorganization, moratorium or similar laws
and general principles of equity may limit enforceability. The execution of this
Agreement  and  the  consummation of the transactions contemplated herein do not
result in a breach of the terms and conditions of nor constitute a default under
or  violation  of  Seller's Operating Agreement or of any law, regulation, court
order,  mortgage,  note,  bond,  indenture,  agreement,  license (other than the
assisted  living  facility  license in effect with respect to the Facility as to
which  no  representation  or  warranty  is  made  by  Seller),  Permit or other
instrument  or  obligation  to which Seller is now a party or by which Seller or
any  of  the  assets  of  Seller  may  be  bound  or  affected.

     (b)     NECESSARY  ACTION.  Prior to execution of this Agreement Seller has
obtained  all consents and approvals necessary for it to lawfully enter into and
carry  out  the  terms  of  this  Agreement.

     (c)     LITIGATION.  Seller  has  no  knowledge that there are any actions,
suits,  investigations  or  proceedings  pending  or threatened by or before any
court,  administrative  agency or other governmental authority or any arbitrator
against  or  relating  to  Seller  with respect to its ownership of the Seller's
Assets.   Seller  has  no knowledge that the transaction contemplated herein has
been  challenged by any governmental agency or any other person, nor does Seller
know  or  have  reasonable  grounds  to know, of any basis for any such actions,
suits  or  proceedings.

     (d)     STATUS  OF  SELLER.  Seller  is  a  limited  liability company duly
organized,  validly existing and in good standing under the laws of the State of
Mississippi.

(E)     SELLER'S  COSTS.  Seller represents and warrants that the Purchase Price
will be applied by Seller to pay the following costs incurred in connection with
Seller's  ownership  and  development  of  the  Seller's  Assets:

Payoff of 1st mortgage held by Medical Office Properties, Inc.     $6,240,000.00
Payoff  of  unsecured  loan  in  the original principal amount of $125,000.00 in
favor  of  First  Citizens  Bank  and  to  repay  investors
$125,000.00

Legal  Fees                                        $50,000.00
Other  Miscellaneous  Costs  and  Expenses                         $10,000.00

     7.  REPRESENTATIONS  AND  WARRANTIES  OF  PURCHASER.

     Purchaser  hereby  warrants  and  represents  to  Seller  that:

     (a)     AUTHORITY.  Purchaser  has  full power and authority to execute and
to  deliver  this  Agreement  and  all  related  documents  and to carry out the
transactions  contemplated  herein and the same do not result in a breach of the
terms  and conditions of nor constitute a default under or violation of any law,
regulation,  court order, mortgage, note, bond, indenture, agreement, license or
other  instrument  or  obligation  to  which  Purchaser  is  a party or by which
Purchaser  or  any  of  its  assets may be bound or affected.  This Agreement is
valid,  binding  and  enforceable  as  against  Purchaser in accordance with its
terms,  except  as  such  enforceability  may be limited by applicable creditors
rights,  laws  or  principles  of  equity.

     (b)     NECESSARY  ACTION.  Prior  to  the  execution  of  this  Agreement,
Purchaser  has obtained all consents necessary for it to lawfully enter into and
carry  out  the  terms  of  this  Agreement.

     (c)      LITIGATION.  There  is  no  litigation,  investigation  or  other
proceeding  pending  or  threatened  against  or  relating  to  Purchaser,  its
properties  or  business  which  is  material  to this Agreement, or which would
prevent  Purchaser  from  performing  its  obligations  hereunder.

     (d)     LEASE.  Purchaser has paid all Additional Charges, Impositions, and
other  charges  when  and  as  they  become  due  under  the  Lease.

     (e)     STATUS  OF  PURCHASER.  Purchaser  is a Washington corporation duly
organized,  validly existing and in good standing under the laws of the State of
Mississippi.

     8.  CONDITIONS  TO  CLOSING.

     (a)     PURCHASER'S  CONDITIONS  TO  CLOSING.  Purchaser's  obligation  to
purchase  Seller's  Assets hereunder is subject to the following conditions, any
one  or  all  of  which  may  be  waived  by  the  Purchaser:

     (i)     TITLE  INSURANCE.  Land America Title Company (the "Title Company")
shall  issue  with  respect  to  the Property as of the Closing Date, an owner's
policy  of  title  insurance  to  HCRI  in the full amount of the portion of the
purchase  price  being  provided by HCRI under the terms of the HCRI Transaction
(the  "Owner's  Title  Policy"), with extended coverage without survey exception
and  subject  to  no  exceptions  other  than  the  Permitted  Exceptions.

     (ii)     SURVEY.  Purchaser  shall  have  received  an  ALTA  survey of the
property  showing  no encroachments not acceptable to Purchaser and certified to
Purchaser,  HCRI  and  the  Title  Company.

     (iii)     NO  DEFAULT.  Seller  shall not be in default, where said default
cannot  be  cured  by  the  Closing Date, under any mortgage, contract, lease or
other  agreement  affecting  or  relating  to  the  Seller's  assets.

(iv)     SELLER'S  PERFORMANCE.  At  Closing  Seller shall have performed all of
its  obligations  under  this  Agreement that are to be performed prior to or at
Closing, including delivery of all of the documents and instruments described in
Section  4(a),  to  the  extent  the  same  have not been waived by Purchaser in
accordance  with  the  terms  hereof.

(v)     SELLER'S  REPRESENTATIONS  AND  WARRANTIES.  At  Closing  Seller's
representations  and warranties contained in this Agreement shall be true in all
material  respects  at  and  as  of  the  date  of  Closing  as  though  such
representations and warranties were then again made; provided, however, it shall
not  be  a failure of a condition to Purchaser's obligation to close if Seller's
representations and warranties are not true as a result of the acts or omissions
of  Purchaser  as  Tenant  under  the  Lease.

(vi)     CLOSING  OF  THE HCRI TRANSACTION.  The closing of the HCRI Transaction
shall have occurred or be prepared to occur concurrently with the Closing of the
Transaction.

(vii)     RELEASE  FROM  SPAULDING.  Seller  shall  have  received  a waiver and
release  from  Craig  Spaulding in substantial conformance with the Confirmation
and Release attached hereto as Exhibit H, pursuant to which Spaulding waives and
releases  any  and  all rights, claims, or actions against Seller, its managers,
members, and employees, in connection with or in any way related to the Facility
or  the  development  thereof.

(b)     SELLER'S  CONDITIONS  TO  CLOSING.  Seller's obligation to sell Seller's
Assets  hereunder  is  subject  to  the  fulfillment  of  each  of the following
conditions,  any  one  or  all  of  which  may  be  waived by Seller in writing:

(i)     PURCHASER'S  REPRESENTATIONS  AND  WARRANTIES.  At  Closing, Purchaser's
representations  and warranties contained in this Agreement shall be true in all
material  respects  at  and  as  of  the  date  of  Closing  as  though  such
representations  and  warranties  were  then  again  made.

(ii)      PURCHASER'S  PERFORMANCE.  At  Closing, Purchaser shall have performed
its  obligations  under  this  Agreement that are to be performed prior to or at
Closing, including delivery of all of the documents and instruments described in
Section  4(b),  to  the  extent  the  same  have  not  been  waived by Seller in
accordance  with  the  terms  hereof.

(iii)     RELEASE  FROM  SPAULDING.  Seller  shall  have  received  a waiver and
release  from  Craig  Spaulding in substantial conformance with the Confirmation
and Release attached hereto as Exhibit H, pursuant to which Spaulding waives and
releases  any  and  all rights, claims, or actions against Seller, its managers,
members, and employees, in connection with or in any way related to the Facility
or  the  development  thereof.

9.  INDEMNIFICATION

(a)     BY  SELLER.  Subject  to the limitations set forth in Section 12(j), but
as a covenant and obligation that shall survive Closing, Seller shall indemnify,
defend  and  hold  Purchaser  harmless  from  and  against:

 (i)     BREACH  OF REPRESENTATIONS AND WARRANTIES.  Any and all damage, loss or
liability  resulting  from  a material breach of any representation, warranty or
covenant  of  Seller in this Agreement or nonfulfillment of any agreement on the
part of Seller under this Agreement or from any material misrepresentation in or
material  omission  from  any certificate furnished or to be furnished by Seller
hereunder;  and

(ii)     FEES  AND  EXPENSES.  Any and all actions, suits, proceedings, demands,
assessments,  judgements, costs and legal and other expenses, including, but not
limited  to,  any  and  all  attorneys'  fees  incident to any of the foregoing.

(a)     BY  PURCHASER.  Subject  to  the limitations set forth in Section 12(j),
but  as  a  covenant  and obligation that shall survive Closing, Purchaser shall
indemnify,  defend  and  hold  Seller  harmless  from  and  against:

(i)     BREACH  OF  REPRESENTATIONS AND WARRANTIES.  Any and all damage, loss or
liability  resulting  from  a material breach of any representation, warranty or
covenant  of  Purchaser  in this Agreement or nonfulfillment of any agreement on
the  part  of Purchaser under this Agreement or from any misrepresentation in or
omission  from  any  certificate  furnished  or  to  be  furnished  by Purchaser
hereunder;  and

(ii)     FEES  AND  EXPENSES.  Any and all actions, suits, proceedings, demands,
assessments,  judgements, costs and legal and other expenses, including, but not
limited  to,  any  and  all  attorneys'  fees  incident to any of the foregoing.

10.  DEFAULT  AND  TERMINATION.

(a)     GROUNDS  FOR  TERMINATION.  This  Agreement  may  be  terminated and the
transaction  contemplated  herein  abandoned  at  any  time  prior  to  Closing:

(i)     By  mutual  written  agreement  of  the  parties;

(ii)     By  Seller,  if  any  of the conditions set forth in Section 8(b) shall
have  become incapable of fulfillment prior to the Closing Date, or such earlier
date  as  may  be specifically provided for the performance thereof (as the same
may  be  extended)  through  no fault of Seller and the same shall not have been
waived  by  Seller;

(iii)     By Purchaser, if any of the conditions set forth in Section 8(a) shall
have  become incapable of fulfillment prior to the Closing Date, or such earlier
date  as  may  be specifically provided for the performance thereof (as the same
may  be extended) through no fault of Purchaser and the same shall not have been
waived  by  Purchaser;  or

(iv)     By  either Seller or Purchaser in the event of a material breach by the
other  party  of  its  obligations  hereunder.

     (v)       By  Purchaser  in  the  event  that  prior  to the Closing Date a
material  portion of the Seller's Assets shall have been damaged or destroyed by
fire  or  other casualty, or shall have been taken or condemned by any public or
quasi-public  authority under the power of eminent domain; provided, however, in
the  event  Purchaser  does  not  elect  to  terminate  pursuant to this Section
10(a)(v), then Seller shall assign to Purchaser its interest in any insurance or
condemnation  proceeds  relating  to  the  Seller's  Assets.

(b)     SELLER'S  REMEDIES UPON TERMINATION.  In the event of the termination of
this  Agreement  by  Seller  under  Sections  10(a)(i)  or  10(a)(ii),  provided
Purchaser is not then in breach of its obligations under this Agreement, neither
party  shall have any further rights or remedies hereunder.  In the event of the
termination  of  this  Agreement by Seller under Sections 10(a)(ii) or (iv) as a
result  of  a  material breach by Purchaser of its obligations hereunder, Seller
shall  have  the  following  rights  and  remedies:  (i)  sue for damages, which
include,  but are not limited to, lost profits and consequential damages or (ii)
seek  specific  performance  of  Purchaser's  obligations  hereunder;  provided,
however,  as  set forth more fully in Section 8(a)(vi) hereof the closing of the
HCRI  Transaction  shall be a condition to Purchaser's obligations hereunder and
accordingly Purchaser shall not be in breach of its obligations hereunder in the
event  of  the  failure  of  the  closing of the HCRI Transaction for any reason
whatsoever.

(c)     PURCHASER'S  REMEDIES  UPON TERMINATION. In the event of the termination
of  this Agreement by Purchaser under Sections 10(a)(i) or 10(a)(iii) other than
as  a  result  of  a breach by Seller of its obligations under this Agreement or
under  Section 10(a)(v), neither party shall have any further rights or remedies
hereunder.  In  the  event  of  the termination of this Agreement under Sections
9(a)(iii) or (iv)  as a result of a material breach by Seller of its obligations
hereunder,  Purchaser  shall  have  the  right  to  seek specific performance of
Seller's  obligations  hereunder.

(d)     EXPENSES.  In  the  event  the  transaction contemplated hereby does not
close for any reason other than a breach by Seller or Purchaser, Purchaser shall
pay  all  escrow  cancellation  fees  and  title  charges.  In  the  event  the
transaction contemplated hereby does not close as a result of a breach by either
party,  the breaching part shall be responsible for all escrow cancellation fees
and  title  charges.

(e)     LEASE.  In  the  event  the  Transaction  does  not close for any reason
whatsoever, the rights and obligations of the Seller and the Purchaser under the
Lease  remain  unaffected.

     11.  BROKER.

     Each  party  represents  and warrants to the other that it has not retained
the services of any broker or finder in connection with the Transaction and each
agrees to pay any commission or finder's fee which may be due on account of this
Agreement  to any other broker or finder allegedly employed by it and each party
agrees to indemnify the other party against any claim for any commission made by
any  broker  allegedly  employed  by  it.

     12.  MISCELLANEOUS.

     (a)      Any  notice,  request  or  other  communication to be given by any
party hereunder shall be in writing and shall be sent by registered or certified
mail,  postage  prepaid, by overnight courier guaranteeing overnight delivery or
by  facsimile  transmission  (if  confirmed  verbally  or  in writing by mail as
aforesaid),  to  the  following  address:

To  Seller:          ALCO  XII,  L.L.C.,
               46  3rd  Street  NW
          Hickory,  North  Carolina
          Attn:  Charlie  Treftzger
          Telephone:  828-322-5535
          Facsimile:  828-322-3897

with  a  copy  to:          Bell,  Davis  &  Pitt,  PA
               Post  Office  Box  21029
               Winston-Salem,  NC  27120-1029
               Attn:  John  Cocklereece
               Telephone:336-722-3700
               Facsimile:  335-722-6558

To  Purchaser:          Emeritus  Corporation
               3131  Elliott  Avenue,  Suite  500
               Seattle,  WA  98121
               Attn:  Raymond  R.  Brandstrom
               Telephone:  206-301-4511
               Facsimile:  206-301-4500

with  a  copy  to:          The  Nathanson  Group  PLLC
               1520  Fourth  Avenue,  Sixth  Floor
               Seattle,  WA  98101
               Attn:  Randi  S.  Nathanson
               Telephone:  206-623-6239
               Facsimile:  206-623-1738

Notice  shall be deemed given three (3) business days after deposit in the mail,
on the next day if sent by overnight courier and on receipt if sent by facsimile
(and  confirmed  verbally  or  by  mail  as  aforesaid).

     (b)     This  Agreement  may  not  be  amended  or  modified in any respect
whatsoever  except  by instrument in writing signed by the parties hereto.  This
Agreement  constitutes  the  entire  agreement  between  the parties hereto with
respect  to  the  purchase  and sale of Seller's Assets and supersedes all prior
negotiations,  discussions, writings and agreements between them with respect to
the  purchase  and  sale  of  Seller's  Assets.

     (c)     The  captions  of  this  Agreement are for convenience of reference
only  and  shall  not  define  or  limit  any of the terms or provisions hereof.

     (d)     Time  is  of  the essence of this Agreement and of all of the terms
and  provisions  of  this  Agreement.

     (e)     In  the  event  of  litigation  or  other proceedings involving the
parties to this Agreement to enforce any provision of this Agreement, to enforce
any remedy available upon default under this Agreement, or seeking a declaration
of  the  rights of either party under this Agreement, the prevailing party shall
be  entitled  to recover from the other any and all attorneys' fees and costs as
may  be  actually  incurred,  including  its  costs  and  fees  on  appeal.
     (f)     Should  any  one  or  more  of  the provisions of this Agreement be
determined  to  be  invalid,  unlawful  or  unenforceable  in  any  respect, the
validity,  legality  and enforceability of the remaining provisions hereof shall
not  in  any  way  be  affected  or  impaired  thereby.

     (g)     This  Agreement  may  be  executed  and  delivered in any number of
counterparts  and  via facsimile which shall together constitute but one and the
same  instrument.

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

     (I)     NOTWITHSTANDING  ANY  PROVISION  HEREIN  TO THE CONTRARY, PURCHASER
ACKNOWLEDGES  THAT  THE  SELLER'S  ASSETS ARE BEING SOLD IN THEIR AS IS WHERE IS
WITH  ALL  FAULTS  CONDITION  AND  THAT  EXCEPT  AS  EXPRESSLY SET FORTH IN THIS
AGREEMENT  AND THE DEED, SELLER MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND,
EXPRESS  OR  IMPLIED,  WITH  RESPECT  TO (A) THE DESIGN, CONSTRUCTION, LOCATION,
SIZE, CHARACTER, PHYSICAL CONDITION OR STATE OF REPAIR OF THE SELLER'S ASSETS OR
ANY  PORTION  THEREOF;  (B) THE TOPOGRAPHY, DRAINAGE OR CONDITION OF THE SURFACE
AND  SUBSURFACE SOILS OF OR ON THE REAL PROPERTY, (C) THE PRESENCE OR ABSENCE OF
HAZARDOUS  WASTE  OR  HAZARDOUS  SUBSTANCES  ON OR FROM THE REAL PROPERTY OR THE
FACILITY;  (D)  THE  MERCHANTABILITY, HABITABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE  OF  THE SELLER'S ASSETS, (E) THE PAST OR FUTURE TAXES OR ASSESSMENTS OF
THE  SELLER'S  ASSETS,  (F) THE CONDITION OF TITLE TO THE SELLER'S ASSETS OR (G)
THE  COMPLIANCE  OF  THE  SELLER'S  ASSETS  WITH  ANY  APPLICABLE  GOVERNMENTAL
REQUIREMENT  OR  ANY OTHER REPRESENTATION OR WARRANTY NOT EXPRESSLY SET FORTH IN
THIS  AGREEMENT.  BY  EXECUTION  OF  THIS  AGREEMENT,  PURCHASER  REPRESENTS AND
WARRANTS  TO  SELLER  THAT  PURCHASER  HAS MANAGED THE FACILITY AND HAS BEEN THE
TENANT  UNDER  THE  LEASE  AND  IS  AN  EXPERIENCED,  SOPHISTICATED PURCHASER OF
COMMERCIAL REAL ESTATE, WITH KNOWLEDGE AND EXPERIENCE SUFFICIENT TO ENABLE IT TO
EVALUATE  THE  MERITS  AND  RISKS  OF  THE  SALE,  AND THAT IT IS REPRESENTED BY
KNOWLEDGEABLE  AND EXPERIENCED LEGAL COUNSEL OF ITS OWN CHOOSING AND AGREES THAT
NEITHER SELLER NOR ITS AGENTS OR REPRESENTATIVES HAS MADE AND THAT PURCHASER HAS
NOT  RELIED  UPON  ANY  REPRESENTATION  OR  WARRANTY  OF  ANY  KIND WHICH IS NOT
EXPRESSLY  SET  FORTH IN THIS AGREEMENT AND THE DEED IN CONNECTION WITH THE SALE
OF  THE  SELLER'S  ASSETS OR PURCHASER'S ACTUAL PURCHASE THEREOF PURSUANT TO THE
TERMS  OF  THIS AGREEMENT, IT BEING UNDERSTOOD AND AGREED THAT ANY SUCH PURCHASE
WILL  BE  BASED  SOLELY  UPON  PURCHASER'S  OWN  DUE  DILIGENCE  REVIEW  AND THE
REPRESENTATIONS  AND WARRANTIES SPECIFICALLY SET FORTH IN THIS AGREEMENT AND THE
DEED.

                           __________________________
                              PURCHASER'S INITIALS

     (j)     All  covenants,  indemnities,  warranties  and  representations  of
Seller and Purchaser set forth in this Purchase and Sale Agreement shall survive
the  date  of Closing for a period of one (1) year.  All covenants, indemnities,
warranties  and  representations  of  Seller  and  Purchaser  set  forth  in the
documents  executed  herewith  shall  survive for such period as stated therein.

     (k)     Each  of  Seller and Purchaser agrees upon the request of the other
party  from time to time to execute and deliver such further documents and/or to
take  such  other  action  as  may  be  reasonably requested to more effectively
consummate  the  Transaction, including executing such documents and taking such
action  as  Purchaser  may  reasonably  request  to  put Purchaser in ownership,
possession  and  control  of  the Seller's Assets, provided that any such action
taken  by  either Seller or Purchaser at the request of the other party shall be
at  no  additional  cost  or  expense  to  the  non-requesting  party.

<PAGE>



<PAGE>

     IN  WITNESS  WHEREOF,  the  parties hereby execute this Agreement as of the
Effective  Date.

SELLER:                         ALCO  XII,  L.L.C.,
                              a  Mississippi  limited  liability  company

                              By:     /s/    Charlie  Treftzger________
                                   Charlie  Treftzger
                              Its:     _____________________

PURCHASER:                         EMERITUS  CORPORATION,
                              a  Washington  corporation

                              By:     /s/    Raymond  R.  Brandstrom__
                                   Raymond  R.  Brandstrom
                              Its:     _________________________

<PAGE>
                                    EXHIBIT A
                                LEGAL DESCRIPTION

Part  of  Block  1  of  the  Westphalia  Subdivision;  part  of  Lot  9  of  the
Foote-McInnis Subdivision; and part of Blocks 1 and 2 and the vacated Washington
and  Johnson  Streets  and Ellene Avenue of the A. Foote Subdivision; all of the
above property being a part of the Northwest Quarter of the Southwest Quarter of
Section 17, Township 4 North, Range 13 West, in the City of Hattiesburg, Forrest
County,  Mississippi.

     And  all  of  the  above  property  being  more  particularly  described as
commencing at the Northeast Corner of Lot 1, Block 1 of the A. Foote Subdivision
and  thence run South 89 degrees 48 minutes 12 seconds West along the South line
of  McInnis  Street  for 380.00 feet to the Point of Beginning, thence run South
for 222.27 feet to the intersection with the North line of a proposed new street
(Fox  Chase),  thence  run  Southwesterly  along the proposed North line of said
street  and along an arc to the right whose radius is 61.00 feet and whose chord
bearing  is South 67 degrees 20 minutes 53 seconds West and whose chord distance
is  46.99  feet for a distance of 48.23 feet, thence run Southwesterly along the
proposed  North line of said street and along an arc to the left whose radius is
195.00  feet  and  whose chord bearing is South 59 degrees 56 minutes 45 seconds
West  and  whose  chord  distance  is 102.58 feet for a distance of 103.80 feet,
thence  run  West and along the north line of said street for 290.35 feet to the
centerline  of  a small creek, thence run North 58 degrees 47 minutes 52 seconds
West  along  the  centerline  of  said  creek for 3.12 feet, thence run North 48
degrees 08 minutes 39 seconds West along the centerline of said creek for 128.12
feet,  thence  run  North  51  degrees  24  minutes  34  seconds  West along the
centerline  of said creek for 92.26 feet, thence run North 23 degrees 36 minutes
20  seconds  West  along the centerline of said creek for 73.84 feet, thence run
North  51  degrees 49 minutes 23 seconds West along the centerline of said creek
for 32.23 feet, thence run North 25 degrees 13 minutes 50 seconds West along the
centerline  of said creek for 63.22 feet to the intersection with the South line
of  McInnis Street, thence run North 89 degrees 48 minutes 12 seconds East along
the  South line of McInnis Street for 674.57 feet to the Point of Beginning, and
containing  3.69  acres,  more  or  less; and to be known as all of Lot 2 of the
Hattiesburg  Retirement  Residences  Subdivision.


<PAGE>
                                    EXHIBIT B
                             PERMITTED ENCUMBRANCES

1.     2002  ad  valorem  taxes  for Forrest County, Mississippi, which became a
lien  upon  the above-described property on January 1, 2002, but are not yet due
and  payable; and taxes, special assessments, and other governmental charges not
shown  as  existing  liens  by  the  public  records.

2.     Rights  of  parties  in  possession,  deficiency  in  quantity  of  land,
discrepancies  or  encroachments,  boundary  line disputes, roadways, unrecorded
servitudes  or  easements,  and  any  matters  not  of record, including lack of
access,  which  would be disclosed by an accurate survey and physical inspection
of  the  subject  property.

3.     Title  to  all minerals within and underlying the premises, together with
all  mining rights and other rights, privileges and immunities relating thereto.

4.     No  insurance  is  afforded  as  to  the  amount  of acreage described in
Schedule  A.



<PAGE>
                                    EXHIBIT C
INDEX  INSTRUCTIONS:  Lot 2, Hattiesburg Retirement Residences Subdivision, also
--------------------------------------------------------------------------------
index  in  NW  SW  ,  Section  17,  T4N,  R13W,  Forrest  County,  MS
---------------------------------------------------------------------


                                  FORM OF DEED

STATE  OF  MISSISSIPPI
----------------------
     COUNTY  OF  FORREST
     -------------------

          WARRANTY  DEED
          --------------

          For  and  in  consideration of Ten and No/100 Dollars ($10.00) cash in
hand  paid  and  other  good  and  valuable  considerations,  the  receipt  and
sufficiency  of  which  is  hereby acknowledged, ALCO XII, L.L.C., a Mississippi
limited  liability  company,  does  hereby  bargain,  sell, convey, and warrant,
subject  to  the  exceptions  and  reservations hereinafter set forth, unto HCRI
MISSISSIPPI PROPERTIES, INC., a Mississippi corporation, the real property lying
and  being  situated  in  the  City  of Hattiesburg, County of Forrest, State of
Mississippi,  to-wit:
     Part  of  Block  1  of  the  Westphalia  Subdivision;  part of Lot 9 of the
Foote-McInnis Subdivision; and part of Blocks 1 and 2 and the vacated Washington
and  Johnson  Streets  and Ellene Avenue of the A. Foote Subdivision; all of the
above property being a part of the Northwest Quarter of the Southwest Quarter of
Section 17, Township 4 North, Range 13 West, in the City of Hattiesburg, Forrest
County,  Mississippi.

     And  all  of  the  above  property  being  more  particularly  described as
commencing at the Northeast Corner of Lot 1, Block 1 of the A. Foote Subdivision
and  thence run South 89 degrees 48 minutes 12 seconds West along the South line
of  McInnis  Street  for 380.00 feet to the Point of Beginning, thence run South
for 222.27 feet to the intersection with the North line of a proposed new street
(Fox  Chase),  thence  run  Southwesterly  along the proposed North line of said
street  and along an arc to the right whose radius is 61.00 feet and whose chord
bearing  is South 67 degrees 20 minutes 53 seconds West and whose chord distance
is  46.99  feet for a distance of 48.23 feet, thence run Southwesterly along the
proposed  North line of said street and along an arc to the left whose radius is
195.00  feet  and  whose chord bearing is South 59 degrees 56 minutes 45 seconds
West  and  whose  chord  distance  is 102.58 feet for a distance of 103.80 feet,
thence  run  West and along the north line of said street for 290.35 feet to the
centerline  of  a small creek, thence run North 58 degrees 47 minutes 52 seconds
West  along  the  centerline  of  said  creek for 3.12 feet, thence run North 48
degrees 08 minutes 39 seconds West along the centerline of said creek for 128.12
feet,  thence  run  North  51  degrees  24  minutes  34  seconds  West along the
centerline  of said creek for 92.26 feet, thence run North 23 degrees 36 minutes
20  seconds  West  along the centerline of said creek for 73.84 feet, thence run
North  51  degrees 49 minutes 23 seconds West along the centerline of said creek
for 32.23 feet, thence run North 25 degrees 13 minutes 50 seconds West along the
centerline  of said creek for 63.22 feet to the intersection with the South line
of  McInnis Street, thence run North 89 degrees 48 minutes 12 seconds East along
the  South line of McInnis Street for 674.57 feet to the Point of Beginning, and
containing  3.69  acres,  more  or  less; and to be known as all of Lot 2 of the
Hattiesburg  Retirement  Residences  Subdivision.

     LESS  AND  EXCEPT  all of the oil, gas, and other minerals of like kind and
character  in,  on,  and  under  the  above-described  property.

          This  conveyance is also hereby made specifically subject to all valid
and  subsisting oil, gas and mineral leases, as well as subject to all valid and
subsisting  oil,  gas,  mineral  and/or  royalty  conveyances, exceptions and/or
reservations  now  of  record  in  Forrest  County,  Mississippi,  affecting the
above-described  lands, or any part or parcels thereof and the matters described
in  Exhibit  A  hereto.  [NOTE;  INSTEAD OF ACCEPTING YOUR CHANGES HERE, WE WILL
JUST  ATTACH  EXHIBIT  A  AS  THE  PERMITTED  EXCEPTIONS]


                               [GRAPHIC  OMITED]


          WITNESS  MY  SIGNATURE  this  the ______ day of _______________, 2002.

                         ALCO  XII,  L.L.C.,
                         a  Mississippi  limited  liability  company

     By:     _______________________
          Its:     _______________________

STATE  OF  ____________
COUNTY  OF  __________
     Personally  appeared  before  me,  the undersigned authority in and for the
said  county  and  state,  on this ______ day of ______________, 2002, within my
jurisdiction,  the  within  named,  _____________________,  the
______________________  of  ALCO  XII,  L.L.C.,  a Mississippi limited liability
company, who acknowledged that he signed, executed,  and delivered the above and
foregoing Warranty Deed on the day and year therein stated, for and on behalf of
said  company,  as  its  act  and  deed,  after having been authorized so to do.

     Given  under  my  hand  and  official  seal  on  this  the  ____  day  of
________________,  2002.



Notary  Public
GRANTEE'S  ADDRESS:     GRANTOR'S  ADDRESS:
HCRI  Mississippi  Properties,  Inc.               ALCO  XII,  L.L.C.
One  SeaGate,  Suite  1500                    46  Third  Street  NW
P.O.  Box  1475                         Hickory,  North  Carolina
Toledo,  Ohio  43603-1475

PHONE:  419-247-2800                    PHONE:


This  deed  prepared  by:                    AFTER  RECORDATION  RETURN
                              ORIGINAL  DEED  TO:

Randi  S.  Nathanson,  Esq.                    Oksana  Ludd,  Esq.
The  Nathanson  Group  PLLC               Shumaker,  Loop  &  Kendrick,  LLP
1520  Fourth  Avenue                    1000  Jackson  Street
Sixth  Floor                         Toledo,  Ohio  43624
Seattle,  WA  98101




                                    EXHIBIT A
                              PERMITTED EXCEPTIONS

1.     2002  ad  valorem  taxes  for Forrest County, Mississippi, which became a
lien  upon  the above-described property on January 1, 2002, but are not yet due
and  payable; and taxes, special assessments, and other governmental charges not
shown  as  existing  liens  by  the  public  records.

2.     Rights  of  parties  in  possession,  deficiency  in  quantity  of  land,
discrepancies  or  encroachments,  boundary  line disputes, roadways, unrecorded
servitudes  or  easements,  and  any  matters  not  of record, including lack of
access,  which  would be disclosed by an accurate survey and physical inspection
of  the  subject  property.

3.     Title  to  all minerals within and underlying the premises, together with
all  mining rights and other rights, privileges and immunities relating thereto.

4.     No  insurance  is  afforded  as  to  the  amount  of acreage described in
Schedule  A.



<PAGE>


                                    EXHIBIT D
                              FORM OF BILL OF SALE

     In  consideration  of  Ten  Dollars  ($10.00)  and  other good and valuable
consideration,  the  receipt  and  sufficiency of which are hereby acknowledged,
ALCO  XII, L.L.C., a Mississippi limited liability company (the "Seller") hereby
grants,  bargains,  sells, conveys and transfers to HCRI Mississippi Properties,
Inc.  (the  "Purchaser"),  the  following:

     (a)     PERSONAL  PROPERTY.  All  of  Seller's right, title and interest in
and  to  any  and  all  equipment,  furniture,  fixtures,  appliances,  tools,
instruments,  and  other  tangible  personal  property owned by Seller as of the
effective  date  and  located  at the assisted living facility commonly known as
Loyalton  of  Hattiesburg,  103 Fox Chase Street, Hattiesburg, Mississippi 39402
(the  "Facility")  (the  "Personal  Property").

     (b)     BED  RIGHTS.  All of Seller's right, title and interest, if any, in
and  to  the  83  units  which  are currently operated at the Facility (the "Bed
Rights").

     (c)     MISCELLANEOUS PROPERTY.  All of Seller's right, title and interest,
if  any,  in and to the following: all plans, drawings, surveys, applications to
governmental  authorities  regarding  the  Facility  or  any development thereof
(collectively,  the  "Plans").

     TO  HAVE AND TO HOLD, all and singular, the above-described property hereby
sold,  assigned,  transferred  and  conveyed  to  Purchaser,  its successors and
assigns,  to  and  for  its  own  use  and  benefit.

Seller  hereby  represents and warrants to Purchaser that Seller is the owner of
the above-described property, that Seller has full right, power and authority to
sell  the  same  and  to  make  this  Bill of Sale, and that the above-described
property  is  free  and  clear  of  all  liens  and  encumbrances

Dated  this  ___  day  of  March,  2002.

                         ALCO  XII,  L.L.C.,
                         a  Mississippi  limited  liability  company

                         By     ___________________________
                         Name:     ___________________________
                         Its:     ___________________________


<PAGE>

exhibit  10.65.2.doc


<PAGE>
                                    Exhibit A
Part  of  Block  1  of  the  Westphalia  Subdivision;  part  of  Lot  9  of  the
Foote-McInnis Subdivision; and part of Blocks 1 and 2 and the vacated Washington
and  Johnson  Streets  and Ellene Avenue of the A. Foote Subdivision; all of the
above property being a part of the Northwest Quarter of the Southwest Quarter of
Section 17, Township 4 North, Range 13 West, in the City of Hattiesburg, Forrest
County,  Mississippi.

And all of the above property being more particularly described as commencing at
the  Northeast  Corner  of Lot 1, Block 1 of the A. Foote Subdivision and thence
run  South 89 degrees 48 minutes 12 seconds West along the South line of McInnis
Street  for  380.00  feet to the Point of Beginning, thence run South for 222.27
feet  to  the  intersection  with  the  North line of a proposed new street (Fox
Chase),  thence  run  Southwesterly along the proposed North line of said street
and along an arc to the right whose radius is 61.00 feet and whose chord bearing
is South 67 degrees 20 minutes 53 seconds West and whose chord distance is 46.99
feet  for  a distance of 48.23 feet, thence run Southwesterly along the proposed
North  line  of  said street and along an arc to the left whose radius is 195.00
feet  and whose chord bearing is South 59 degrees 56 minutes 45 seconds West and
whose  chord  distance  is 102.58 feet for a distance of 103.80 feet, thence run
West  and  along the north line of said street for 290.35 feet to the centerline
of  a  small creek, thence run North 58 degrees 47 minutes 52 seconds West along
the  centerline  of  said  creek  for  3.12 feet, thence run North 48 degrees 08
minutes  39  seconds  West  along  the centerline of said creek for 128.12 feet,
thence  run  North 51 degrees 24 minutes 34 seconds West along the centerline of
said  creek  for  92.26  feet, thence run North 23 degrees 36 minutes 20 seconds
West  along  the  centerline  of  said creek for 73.84 feet, thence run North 51
degrees  49 minutes 23 seconds West along the centerline of said creek for 32.23
feet,  thence  run  North  25  degrees  13  minutes  50  seconds  West along the
centerline  of said creek for 63.22 feet to the intersection with the South line
of  McInnis Street, thence run North 89 degrees 48 minutes 12 seconds East along
the  South line of McInnis Street for 674.57 feet to the Point of Beginning, and
containing  3.69  acres,  more  or  less; and to be known as all of Lot 2 of the
Hattiesburg  Retirement  Residences  Subdivision.



<PAGE>
                              FORM OF BILL OF SALE

     In  consideration  of  Ten  Dollars  ($10.00)  and  other good and valuable
consideration,  the  receipt  and  sufficiency of which are hereby acknowledged,
ALCO  XII, L.L.C., a Mississippi limited liability company (the "Seller") hereby
grants,  bargains,  sells,  conveys  and  transfers  to  Emeritus  Corporation
("Emeritus")  all  of  Seller's right, title and interest, if any, in and to the
following:  all  transferrable  certificates  of  occupancy,  permits, licenses,
authorization  or  approvals  relating  to  the  Facility  (collectively,  the
"Permits");  all  leases  and  agreements,  if  any,  to which Seller is a party
relating  to the Facility (collectively, the "Leases"); all general intangibles,
intellectual  property  and  other intangible property or rights relating to the
Facility,  including  without  limitation  the  rights to all telephone numbers,
fictitious names, logos and trade marks used in connection with the ownership or
operations  of  the  Facility  (collectively,  the  "Intangible  Property").

            TO  HAVE AND TO HOLD, all and singular, the above-described property
hereby  sold, assigned, transferred and conveyed to Emeritus, its successors and
assigns,  to  and  for  its  own  use  and  benefit.

     Seller  hereby  represents  and  warrants  to Emeritus that has full right,
power  and  authority  to  make  this Bill of Sale, and that the above-described
property,  to  the  extent  owned  by Seller, is free and clear of all liens and
encumbrances.

Dated  this  ___  day  of  March,  2002.

                         ALCO  XII,  L.L.C.,
                         a  Mississippi  limited  liability  company

                         By     ___________________________
                         Name:     ___________________________
                         Its:     ___________________________

<PAGE>
                                    EXHIBIT A

Part  of  Block  1  of  the  Westphalia  Subdivision;  part  of  Lot  9  of  the
Foote-McInnis Subdivision; and part of Blocks 1 and 2 and the vacated Washington
and  Johnson  Streets  and Ellene Avenue of the A. Foote Subdivision; all of the
above property being a part of the Northwest Quarter of the Southwest Quarter of
Section 17, Township 4 North, Range 13 West, in the City of Hattiesburg, Forrest
County,  Mississippi.

And all of the above property being more particularly described as commencing at
the  Northeast  Corner  of Lot 1, Block 1 of the A. Foote Subdivision and thence
run  South 89 degrees 48 minutes 12 seconds West along the South line of McInnis
Street  for  380.00  feet to the Point of Beginning, thence run South for 222.27
feet  to  the  intersection  with  the  North line of a proposed new street (Fox
Chase),  thence  run  Southwesterly along the proposed North line of said street
and along an arc to the right whose radius is 61.00 feet and whose chord bearing
is South 67 degrees 20 minutes 53 seconds West and whose chord distance is 46.99
feet  for  a distance of 48.23 feet, thence run Southwesterly along the proposed
North  line  of  said street and along an arc to the left whose radius is 195.00
feet  and whose chord bearing is South 59 degrees 56 minutes 45 seconds West and
whose  chord  distance  is 102.58 feet for a distance of 103.80 feet, thence run
West  and  along the north line of said street for 290.35 feet to the centerline
of  a  small creek, thence run North 58 degrees 47 minutes 52 seconds West along
the  centerline  of  said  creek  for  3.12 feet, thence run North 48 degrees 08
minutes  39  seconds  West  along  the centerline of said creek for 128.12 feet,
thence  run  North 51 degrees 24 minutes 34 seconds West along the centerline of
said  creek  for  92.26  feet, thence run North 23 degrees 36 minutes 20 seconds
West  along  the  centerline  of  said creek for 73.84 feet, thence run North 51
degrees  49 minutes 23 seconds West along the centerline of said creek for 32.23
feet,  thence  run  North  25  degrees  13  minutes  50  seconds  West along the
centerline  of said creek for 63.22 feet to the intersection with the South line
of  McInnis Street, thence run North 89 degrees 48 minutes 12 seconds East along
the  South line of McInnis Street for 674.57 feet to the Point of Beginning, and
containing  3.69  acres,  more  or  less; and to be known as all of Lot 2 of the
Hattiesburg  Retirement  Residences  Subdivision.


<PAGE>
                                    EXHIBIT E

<PAGE>

                  FORM OF AFFIDAVIT REGARDING NONFOREIGN STATUS

     Section  1445  of  the  Internal Revenue Code of 1986 (the "Code") provides
that  a  transferee  of  a  U.S. real property interest must withhold tax if the
transferor  is a foreign person.  The undersigned hereby makes this affidavit on
behalf  of  ALCO  XII,  L.L.C.,  a  Mississippi  limited  liability company (the
"Transferor"),  in  connection with the transfer to HCRI Mississippi Properties,
Inc.,  a  Mississippi  corporation  (the "Transferee"), of certain real property
located  in  Forrest  County,  Mississippi,  as  more  particularly described in
Exhibit  A  attached  hereto  (the  "Property").
      ----

1.     Transferor  is  not  a  foreign corporation, foreign partnership, foreign
trust,  or foreign estate, as those terms are defined in the Code and the Income
Tax  Regulations  promulgated  thereunder;

2.     Transferor's  U.S.  employer  identification  number  is  56-2087401.

          3.     Transferor's  address  is  ALCO  XII,  L.L.C.,
               46  3rd  Street  NW
          Hickory,  North  Carolina
          Attn:  Charlie  Treftzger  _______________________________.

4.     Transferor  understands  that  this  Affidavit  may  be  disclosed to the
Internal  Revenue  Service  by Transferee and that any false statement contained
herein  could  be  punished  by  fine,  imprisonment,  or  both;  and

5.     Transferor  understands  that  Transferee is relying on this Affidavit in
determining  whether  withholding  is or will be required in connection with its
purchase  of  the  Property  and  may  face liabilities if any statement in this
Affidavit  is  false.

Under penalty of perjury, the undersigned declares that he/she has examined this
Affidavit  and to the best of his/her knowledge and belief, it is true, correct,
and  complete, and the undersigned further declares that he/she has authority to
sign  this  document  on  behalf  of  Transferor.

                    ALCO  XII,  L.L.C.,
                              a  Mississippi  limited  liability  company

                         By:     _____________________
                         Its:     _____________________
                          Date:     _____________________

<PAGE>
                                    EXHIBIT A

Part  of  Block  1  of  the  Westphalia     Subdivision;  part  of  Lot 9 of the
Foote-McInnis Subdivision; and part of Blocks 1 and 2 and the vacated Washington
and  Johnson  Streets  and Ellene Avenue of the A. Foote Subdivision; all of the
above property being a part of the Northwest Quarter of the Southwest Quarter of
Section 17, Township 4 North, Range 13 West, in the City of Hattiesburg, Forrest
County,  Mississippi.

And all of the above property being more particularly described as commencing at
the  Northeast  Corner  of Lot 1, Block 1 of the A. Foote Subdivision and thence
run  South 89 degrees 48 minutes 12 seconds West along the South line of McInnis
Street  for  380.00  feet to the Point of Beginning, thence run South for 222.27
feet  to  the  intersection  with  the  North line of a proposed new street (Fox
Chase),  thence  run  Southwesterly along the proposed North line of said street
and along an arc to the right whose radius is 61.00 feet and whose chord bearing
is South 67 degrees 20 minutes 53 seconds West and whose chord distance is 46.99
feet  for  a distance of 48.23 feet, thence run Southwesterly along the proposed
North  line  of  said street and along an arc to the left whose radius is 195.00
feet  and whose chord bearing is South 59 degrees 56 minutes 45 seconds West and
whose  chord  distance  is 102.58 feet for a distance of 103.80 feet, thence run
West  and  along the north line of said street for 290.35 feet to the centerline
of  a  small creek, thence run North 58 degrees 47 minutes 52 seconds West along
the  centerline  of  said  creek  for  3.12 feet, thence run North 48 degrees 08
minutes  39  seconds  West  along  the centerline of said creek for 128.12 feet,
thence  run  North 51 degrees 24 minutes 34 seconds West along the centerline of
said  creek  for  92.26  feet, thence run North 23 degrees 36 minutes 20 seconds
West  along  the  centerline  of  said creek for 73.84 feet, thence run North 51
degrees  49 minutes 23 seconds West along the centerline of said creek for 32.23
feet,  thence  run  North  25  degrees  13  minutes  50  seconds  West along the
centerline  of said creek for 63.22 feet to the intersection with the South line
of  McInnis Street, thence run North 89 degrees 48 minutes 12 seconds East along
the  South line of McInnis Street for 674.57 feet to the Point of Beginning, and
containing  3.69  acres,  more  or  less; and to be known as all of Lot 2 of the
Hattiesburg  Retirement  Residences  Subdivision.



<PAGE>

<PAGE>
                                    EXHIBIT G
                       FORM OF LEASE TERMINATION AGREEMENT


     This  Agreement  is  made and entered into as of the ___ day of __________,
2002  and  shall be effective as of the Effective Date (as defined below) by and
between  ALCO  XII, L.L.C., a Mississippi limited liability company ("Landlord")
and  Emeritus  Corporation,  a  Washington  corporation  ("Tenant").

                                    RECITALS

     A.     Landlord  is  the  owner of the real property described in Exhibit A
(the  "Real  Property") and the improvements thereon and the furniture, fixtures
and  equipment  therein  that  are  currently  operated  by  Tenant as an 83 bed
assisted  living  facility  known  as  Loyalton of Hattiesburg located at103 Fox
Chase  Street  Hattiesburg,  Mississippi  39402  (the  "Facility").

     B.     Landlord is the lessor under that certain Lease Agreement dated June
10,  1998  pursuant  to which Landlord leases the Real Property and the Facility
to  Tenant.

     D.     Under  the  terms of the Purchase and Sale Agreement dated March___,
2002  Landlord  agreed that Landlord would, concurrently with the closing of the
transaction  provided  for  therein  (the  "Closing")  terminate  the  Lease.

     E.     The  Closing  is  occurring  concurrently  herewith and Landlord and
Tenant  are  desirous  of  documenting the terms and conditions under which said
termination  will  occur.

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

                                    AGREEMENT

     1.     Termination.  As  of  the  Effective  Date, all of Landlord's right,
            ------------
title  and  interest  in and to and all of Tenant's right, title and interest in
and  to  and  obligations  under,  the Lease shall be and hereby are terminated,
subject  in  each  case  to  the  limitations  set  forth  herein.

     2.     Release.  Tenant  and  Landlord acknowledge and agree that as of the
            -------
Effective  Date,  Landlord  and Tenant each shall be and hereby is released from
any  further obligations under the Lease; provided, however, that nothing herein
shall  be  construed  as  a release by Landlord of Tenant with respect to any of
Tenant's  obligations  under  Sections  2.3  and  3.1 of the Lease, it being the
intent  of  the  parties  that  Tenant  pay  when due all Additional Charges and
Impositions,  even if such Additional charges and Impositions arose prior to the
date hereof but are not yet due as of the date hereof , and it further being the
intent  of  the  parties  that Tenant pay obligations related to the Facility as
provided  under  any  other  provisions  the  Lease  which relate to the acts or
omissions of Tenant occurring prior to the Effective Date hereof or of Tenant by
Landlord  with respect to Landlord's obligation to return to Tenant any security
deposit  being  held  by  Landlord  under  the  terms  of  the  Lease,  which,
notwithstanding  anything  to  the  contrary  contained  in  the Lease, shall be
returned  to  Tenant  by  Landlord  on  the  Effective  Date  .

     3.     Governing  Law/Amendment.  This  Agreement  shall be governed by and
            ------------------------
construed in accordance with the laws of the State of Mississippi and may not be
amended  or  modified except by written instrument signed by the parties hereto.

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

     5.     Entirety.  This  Agreement and any documents executed in furtherance
            --------
hereof  or in conjunction herewith represent the entire agreement of the parties
with  respect  to  the  subject  matter  hereof.

     6.     Notices.  Any  notice, request or other communication to be given by
            -------
either  party hereunder shall be in writing and shall be sent to the parties and
in  the  manner  and  at  the  addresses  specified  in  the  Lease.

     7.     Severability.  Should  any  one  or more of the provisions hereof be
            ------------
deemed  to  be  invalid or unenforceable said determination shall not affect the
validity  or  enforceability  of  the  remaining  terms  hereof.

     8.     Captions.  The  captions  in  this  Agreement have been inserted for
            --------
convenience  of  reference only and shall not be construed to define or to limit
any  of  the  terms  or  conditions  hereof.

     9.     Counterparts.  This  Agreement  may  be  executed  in  two  or  more
            ------------
counterparts, each of which  shall be deemed to be a duplicate original, but all
of  which  together  shall  constitute  one  and  the  same  instrument.

     10.     Effective  Date.  This  Agreement  shall  be  conditioned upon, and
             ---------------
effective  as  of the date of Closing (the "Effective Date").  In the event that
Closing  does  not occur for any reason whatsoever, this Agreement shall be null
and void ab initio and the rights and obligations of the parties under the Lease
shall  remain  unaffected.

     11.     Release  of  Liens. Landlord does hereby acknowledge and agree that
             ------------------
any  and  all  liens  granted  to  it  under the terms of the Lease shall be and
hereby  are  terminated  and  released  effective  as  of  the  Effective  Date.



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

LANDLORD:                         ALCO  XII,  L.L.C.,
                              a  Mississippi  limited  liability  company

                         By:     ___________________________
                         Its:     ___________________________


TENANT:                         EMERITUS  CORPORATION,
                              a  Washington  corporation

                              By:     ___________________________
                              Its:     ___________________________


<PAGE>
                                    Exhibit A

     Part  of  Block  1  of  the  Westphalia  Subdivision;  part of Lot 9 of the
Foote-McInnis Subdivision; and part of Blocks 1 and 2 and the vacated Washington
and  Johnson  Streets  and Ellene Avenue of the A. Foote Subdivision; all of the
above property being a part of the Northwest Quarter of the Southwest Quarter of
Section 17, Township 4 North, Range 13 West, in the City of Hattiesburg, Forrest
County,  Mississippi.

     And  all  of  the  above  property  being  more  particularly  described as
commencing at the Northeast Corner of Lot 1, Block 1 of the A. Foote Subdivision
and  thence run South 89 degrees 48 minutes 12 seconds West along the South line
of  McInnis  Street  for 380.00 feet to the Point of Beginning, thence run South
for 222.27 feet to the intersection with the North line of a proposed new street
(Fox  Chase),  thence  run  Southwesterly  along the proposed North line of said
street  and along an arc to the right whose radius is 61.00 feet and whose chord
bearing  is South 67 degrees 20 minutes 53 seconds West and whose chord distance
is  46.99  feet for a distance of 48.23 feet, thence run Southwesterly along the
proposed  North line of said street and along an arc to the left whose radius is
195.00  feet  and  whose chord bearing is South 59 degrees 56 minutes 45 seconds
West  and  whose  chord  distance  is 102.58 feet for a distance of 103.80 feet,
thence  run  West and along the north line of said street for 290.35 feet to the
centerline  of  a small creek, thence run North 58 degrees 47 minutes 52 seconds
West  along  the  centerline  of  said  creek for 3.12 feet, thence run North 48
degrees 08 minutes 39 seconds West along the centerline of said creek for 128.12
feet,  thence  run  North  51  degrees  24  minutes  34  seconds  West along the
centerline  of said creek for 92.26 feet, thence run North 23 degrees 36 minutes
20  seconds  West  along the centerline of said creek for 73.84 feet, thence run
North  51  degrees 49 minutes 23 seconds West along the centerline of said creek
for 32.23 feet, thence run North 25 degrees 13 minutes 50 seconds West along the
centerline  of said creek for 63.22 feet to the intersection with the South line
of  McInnis Street, thence run North 89 degrees 48 minutes 12 seconds East along
the  South line of McInnis Street for 674.57 feet to the Point of Beginning, and
containing  3.69  acres,  more  or  less; and to be known as all of Lot 2 of the
Hattiesburg  Retirement  Residences  Subdivision.

211453


<PAGE>
                                    EXHIBIT H
                   FORM OF CONFIRMATION AND RELEASE AGREEMENT
                            CONFIRMATION AND RELEASE
                            ------------------------

THIS  CONFIRMATION  AND RELEASE (this "Release") is made as of this _____ day of
March,  2002  by  and  between ALCO XII, L.L.C., a Mississippi limited liability
company  ("ALCO")  and  Craig  Spaulding  (ASpaulding@).

WHEREAS,  ALCO  and Spaulding are parties to that certain Letter Agreement dated
February  28,  2001  ("Letter  Agreement") with respect to that certain facility
known  as  Loyalton of Hattiesburg located at 103 Fox Chase Street, Hattiesburg,
Mississippi  (the  "Facility").
WHEREAS,  ALCO  and Emeritus Corporation, a Washington corporation ("Emeritus"),
have  entered  into  a  Purchase  and Sale Agreement dated as of March ___, 2002
whereby  ALCO  intends  to  sell  the  Facility  to Emeritus or its designee and
Emeritus  intends  to purchase or to cause its designee to purchase the Facility
from  ALCO  (the  "Transaction").
WHEREAS,  the Letter Agreement provides that Spaulding is entitled to a deferred
development fee in an amount not to exceed $125,000 (the "Development Fee") upon
the  sale  of  the  Facility  if  and  to  the extent ALCO receives "Excess Cash
Proceeds"  from  the  Transaction.
     WHEREAS,  ALCO has demonstrated to the satisfaction of Spaulding that there
will be no Excess Cash Proceeds resulting from the Transaction and has requested
that  Spaulding  confirm  that he has no right to be paid the Development Fee in
connection  with  the Transaction and that he is releasing ALCO from any and all
liability  with  respect  thereto.
     WHEREAS,  Spaulding  has  agreed  to  provide  ALCO  with  the  requested
confirmation  and  release.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration,  the  receipt  and  sufficiency of which are hereby acknowledged,
intending  to  be  legally  bound,  Spaulding  hereby  agrees  as  follows:
     1.  Spaulding  for  himself  and  his successors, legal representatives and
assigns  and  all  persons  claiming  by,  through  or  under  him,  does hereby
acknowledge  and  agree  that  he  has no right, title or interest in and to the
Development  Fee  in  connection  with  the  Transaction and does hereby remise,
release, acquit and forever discharge ALCO and its officers, directors, members,
managers,  employees, attorneys, agents, affiliates, subsidiaries, successors in
interest  and assigns of, from and against any and all manner of actions, causes
of  actions,  choses in action, suits, debts, dues, sums of money, compensation,
accounts,  rentals,  commissions,  reckonings,  bonds,  bills,  specialties,
covenants,  rights,  contracts,  controversies,  agreements,  promises,  costs,
damages,  judgments, executions, claims and demands whatsoever (regardless of by
whom  raised) in law or in equity, which Spaulding now has, ever had or may ever
have  with  respect to the payment of the Development Fee on account of, arising
out  of, or in connection with the development, leasing or sale of the Facility.
     2.  This Agreement represents the entire and final Agreement of the parties
hereto  with  respect  to  the  subject  matter hereof and may not be amended or
modified  except  by  written  instrument  signed  by  the parties hereto.  This
Agreement  supersedes  all  prior negotiations, writings or agreements among the
parties  hereto  with  respect  to  the  subject  matter  hereof.

     3.  This  Agreement may be executed in counterparts, each of which shall be
deemed  to  be an original, but all of which taken together shall constitute but
one and the same instrument.  The delivery of a facsimile copy of this Agreement
will  be deemed to be acceptable delivery of an executed copy of this Agreement.

     4.  Each  of  the  parties  hereto  acknowledges  and  agrees  that  it has
participated  in  the  drafting  and  negotiation  hereof.  Further,  Spaulding
acknowledges  and  agrees  that  he  fully  understands the terms and conditions
hereof  and  is signing the same knowingly and voluntarily.  Accordingly, in the
event  of  a dispute among the parties hereto with respect to the interpretation
or  enforcement  of  the  terms  hereof no provision shall be construed so as to
favor  or  disfavor  either  party  hereto.

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

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



                         ALCO  XII,  L.L.C.
                         a  Mississippi  limited  liability  company

                         By:     ___________________________
                         Its:     ___________________________



                         ________________________________
                         CRAIG  SPAULDING