LEASE ASSIGNMENT AND OPERATIONS TRANSFER AGREEMENT

     THIS  AGREEMENT  is  made  and entered into effective as of the 18th day of
September,  2002  (the  "Execution Date") by and between Regent Assisted Living,
Inc.,  an  Oregon corporation ("Tenant") and ESC III, L.P., a Washington limited
partnership  doing  business  in  Texas  as  Texas-ESC  III,  L.P. ("Assignee").

                                    RECITALS

     A.     Pursuant  to a Lease Agreement dated as of December 5, 1996, between
Texas  HCP  Holding,  L.P.,  as Landlord ("Landlord"), and Regent, as Tenant, as
amended  by  First  Amendment  to  Lease  dated  as  of March 4, 1997, by Second
Amendment  to  Lease dated as of September 20, 1009, by Third Amendment to Lease
dated  as  of December 26, 2000, by Fourth Amendment to Lease dated as of March,
2001  and  by  Fifth  Amendment  to  Lease,  dated  as  of November 1, 2002 (the
"Lease"),  a  true  and  correct  copy of which is attached hereto as Exhibit A,
Tenant leases from Landlord the assisted living facility located in San Antonio,
Texas  and  commonly  known  as  Hamilton  House,  5331 Hamilton-Wolfe Road, San
Antonio,  Texas  78229  (the  "Facility").

     B.     Tenant  and Assignee are interested in Tenant assigning the Lease to
Assignee  and  Assignee  assuming  the  Lease  from  Tenant.

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

1.     LEASE  ASSIGNMENT  AND  ASSUMPTION.

     (a)     Provided that all of the Conditions (as defined in Section 12) have
been satisfied by Tenant or Assignee, as applicable, as of the Transfer Date (as
defined below), Tenant does hereby sell, transfer, convey and assign to Assignee
and Assignee does hereby take, accept and assume from Tenant (i) all of Tenant's
right, title and interest in and to and obligations under the Lease and (ii) all
of  Tenant's  right,  title  and  interest,  if  any,  in  and to the trade name
"Hamilton  House,"  it  being understood and agreed, however, that Tenant is not
making any representations or warranties with respect to the nature or extent of
its  legal  rights,  if  any,  in  and  to  the  name  "Hamilton  House."

(b)     Assignee  agrees  to  proceed  with  all  due  diligence  to satisfy the
Conditions  by August 31, 2002 and, in connection therewith, Tenant agrees, upon
request  and at no cost to Tenant, to cooperate therein, including in Assignee's
licensure application process, including, but not limited to, providing Assignee
with  such documentation or information as may be in Tenant's possession and may
be  required  to  be  submitted  as  part  of  Assignee's  license  application.

          (c)     For purposes hereof, the Transfer Date shall be defined as the
date  on  which  operational  and  financial responsibility for the Facility are
transferred  to  Assignee  and the Lease is assigned to and assumed by Assignee;
provided, however, in the event any of the Conditions have not been satisfied or
waived  by  September  30,  2002,  then either Tenant or Assignee shall have the
right, but not the obligation, to declare this Agreement null and void and of no
further  force  and  effect.

     2.     EMPLOYEES.

     (a)     On  the  Transfer Date, Tenant shall terminate all of the employees
of  the  Facility  and  shall pay to them all wages, vacation, and paid time off
which  are  earned  and/or  accrued as of the Transfer Date.  Assignee agrees to
interview  each  of  the  employees  of  the Facility and, as appropriate in its
reasonable  discretion, to extend an offer of employment to those employees that
it  feels can meet its performance standards, which offer shall be on reasonable
comparable  terms  and  conditions  to  the current terms of their employment as
disclosed to Assignee by Tenant. All of the Facility employees hired by Assignee
shall  hereinafter  be  referred  to  as  the  "Retained  Employees."

     (b)     Tenant  shall  offer and provide, as appropriate, group health plan
continuation  coverage  pursuant  to the requirements of Section 601, et seq. of
ERISA  and  Section  4980B  of the Internal Revenue Code ("COBRA") to all of the
employees  of  the  Facility  to  whom  it  is  required to offer the same under
applicable  law.  Tenant  acknowledges  and agrees that Assignee is not assuming
any of Tenant's obligations to its employees under COBRA or otherwise.  Assignee
agrees to cooperate with Tenant in providing information concerning the Retained
Employees,  and the nature of the benefits offered to each Retained Employee. As
of the Transfer Date, all Retained Employees shall be eligible for participation
in a group health plan (as defined for purposes of Internal Revenue Code Section
4980B)  established  and  maintained  by Assignee for the general benefit of its
employees and their dependents; provided, however, if and to the extent Assignee
imposes a waiting period on the Retained Employees with respect to such coverage
Assignee  shall  reimburse  the  employees  for  any  costs  incurred by them in
exercising  their  rights  under  COBRA to continue coverage during such waiting
period  under  Tenant's  health  insurance  plan.

     3.     RESIDENT  DEPOSITS.

      Tenant represents and warrants to Assignee that it is holding the security
deposits  with  respect  to the residents of the Facility described in Exhibit C
and that it shall transfer the same to Assignee on the Transfer Date, along with
a  statement signed by each resident confirming the accuracy of the amount being
transferred  by  Tenant to Assignee on the Transfer Date, unless Assignee waives
the  requirement  for  such a statement based on the results of its own audit of
the  resident  security  deposits.

     4.     ACCOUNTS  RECEIVABLE.

     (a)     Within  ten  (10)  business days prior to the Transfer Date, Tenant
shall  provide  Assignee with a detailed listing of Tenant's accounts receivable
which  are  anticipated  to  be  outstanding  on  the  Transfer  Date.

     (b)     From  and  after  the  Transfer  Date,  Assignee  shall  assume
responsibility  for  the  billing  for  and collection of payments on account of
services  rendered or goods sold by it on and after the Transfer Date and Tenant
shall  retain all right, title and interest in and to and all responsibility for
the  collection  of  its accounts receivable for services rendered or goods sold
prior  to  the  Transfer  Date.

     (c)     Payments received by Assignee from and after the Transfer Date from
private  pay  residents  and  third  party  payors  shall be handled as follows:

(i)     If  such  payments  either  specifically  indicate on the check or on an
accompanying  remittance  advice,  or  if  Tenant  and Assignee agree, that they
relate  to  the  period  prior  to the Transfer Date, they shall be forwarded to
Tenant  by  Assignee,  along  with the applicable remittance advice (if separate
from  the form of payment), within five (5) business days after receipt thereof.

(ii)     If such payments indicate on the check or on an accompanying remittance
advice,  or  if  Tenant and Assignee agree, that they relate to the period on or
after  the  Transfer  Date  they  shall  be  retained  by  Assignee.

(iii)     If  such  payments  indicate  on  the  check  or  on  the accompanying
remittance  advice, or if Tenant and Assignee agree, that they relate to periods
for  which  both  parties  are entitled to payment/reimbursement under the terms
hereof, the portion thereof which relates to the period on and after the date on
which  the  Transfer Date shall be retained by Assignee and the balance shall be
remitted  to  Tenant  within  five  (5)  business  days  after  receipt thereof.

(iv)     If  such  payments  do not indicate on the check or on the accompanying
remittance  advice  and  if Tenant and Assignee cannot otherwise agree as to the
period  to  which  they relate, then any such payments received by Assignee will
first  be  applied  by  Assignee  to  reduce  the  resident's post-Transfer Date
balances,  with  any  excess  remitted  by  Assignee  to  Tenant  to  reduce the
resident's  pre-  Transfer  Date  balances.

     (d)     Tenant  shall  have  the  right during normal business hours and on
reasonable  notice  to  Assignee  to  inspect  Assignee's books and records with
respect  to  the accounts receivable received by it after the Transfer Date from
residents  with  balances  due  as  of  the  Transfer  Date.

     (e)     Nothing  herein  shall  be  deemed  to limit in any way Tenant's or
Assignee's  rights  and  remedies  to  recover accounts receivable due and owing
Tenant  or  Assignee  under  the  terms  of  this  Agreement.

     (f)     In  the  event  the  parties  mutually  determine  that any payment
hereunder  was  misapplied  by the parties, the party which erroneously received
said  payment  shall  remit  the same to the other within ten (10) business days
after  said  determination  is  made.

     5.     OPERATING  CONTRACTS.

     (a)     Tenant  shall  provide  to  Assignee  within five (5) business days
after  the  Execution  Date,  true  and correct copies of all contracts to which
Tenant  or  the  Facility  is  a  party  in connection with the operation of the
Facility,  including, but not limited to, service contracts and equipment leases
(the "Operating Contracts"). All of the Operating Contracts shall be assigned by
Tenant  to  Assignee  on  the  Transfer  Date  unless Assignee advises Tenant in
writing  within  five  (5)  business  days  after  its  receipt of the Operating
Contracts that it does not want to assume any or all of the Operating Contracts,
which  notice shall specify in reasonable detail those Operating Contracts which
Assignee  does  not  want  to  assume (the "Designated Operating Contracts"), in
which  case  the Designated Operating Contracts shall be terminated by Tenant as
of  the  Transfer  Date.

     (b)     Notwithstanding the foregoing, in the event after the Transfer Date
Tenant  identifies  one  or  more  contracts  that  should have been provided to
Assignee  prior  to  the  Transfer  Date  pursuant  to  this  Section  2(i) (the
"Additional  Operating Contracts"), Tenant shall promptly provide a copy thereof
to Assignee and Assignee shall have a period of five (5) business days after its
receipt  of  the Additional Operating Contracts to review the same and to advise
Tenant  whether  it is prepared to assume the same or whether it wants Tenant to
terminate  such  Additional  Operating Contract, it being understood and agreed,
that  in  the  case of any equipment leases included in the Additional Operating
Contracts,  the termination thereof will involve the removal of the equipment to
which  it  relates  from  the  Facility.

     (  c)     Notwithstanding  the  foregoing, Assignee acknowledges and agrees
that  the  Operating  Contracts  will  include a lease for a postage meter and a
copier  and  that  Assignee  shall  be  required to assume such leases as of the
Transfer  Date  (the  "Assumed  Equipment  Leases").

     6.     PRORATIONS.

     (a)     As  between  Assignee  and  Tenant,  revenues and expenses, utility
charges  for  the  billing  period  in  which the Transfer Date occurs, real and
personal  property  taxes,  certain  prepaid expenses and other related items of
revenue or expense attributable to the Facility shall be prorated between Tenant
and  Assignee as of the Transfer Date. In general, such prorations shall be made
so  that  as between Assignee and Tenant, Tenant shall be reimbursed for prepaid
expense  items to the extent that the same are attributable to periods after the
Transfer  Date  and  Tenant shall remain responsible for the payment as and when
due  of  unpaid expenses to the extent that the same are attributable to periods
prior to the Transfer Date. The intent of this provision shall be implemented by
Assignee  remitting  to  Tenant  any  invoices  which describe goods or services
provided  to  the  Facility  before  the  Transfer Date and by Assignee assuming
responsibility  for the payment of any invoices which describe goods or services
provided  to  the  Facility  on  and  after  the  Transfer  Date.

     (b)     All  such  prorations  shall  be  made  on the basis of actual days
elapsed  in  the relevant accounting or revenue period and shall be based on the
most  recent  information  available  to  Tenant.  Utility charges which are not
metered and read on the Transfer Date shall be estimated based on prior charges,
and  shall be re-prorated upon receipt of statements therefor as of the Transfer
Date.

     (c)     All  amounts which are subject to proration under the terms of this
Agreement  and which require adjustment after the Transfer Date shall be settled
within thirty (30) days after the Transfer Date or, in the event the information
necessary  for  such  adjustment  is  not  available within said thirty (30) day
period,  then  within ten (10) business days of receipt of information by either
party  necessary  to  settle  the  amounts  subject  to  proration.

     (d)     On  the  Transfer  Date,  Tenant shall have the right to remove any
petty  cash  (as  compared to resident funds) then being maintained by Tenant at
the  Facility.

     7.     ACCESS  TO  RECORDS.

     (a)     On  the  Transfer Date, Tenant shall deliver to Assignee all of the
records  of  the Facility which are necessary for the continued operation of the
Facility  by Assignee but specifically excluding any confidential or proprietary
materials  developed  by  or for Tenant, including, but not limited to, Tenant's
policy  and  procedure  manuals,  employee handbooks and financial records which
relate  to  its  operations  at  the Facility.   All of the records delivered by
Tenant  to  Assignee  pursuant to this Section 7(a) shall be intact and current.

     (b)     From and after the Transfer Date and for a period of five (5) years
thereafter,  Assignee  shall  retain and maintain in a safe and accessible place
the  books  and  records and supporting material of the Facility relating to the
period  prior  to and including the Transfer Date and shall allow Tenant and its
agents  and  representatives to have reasonable access to (upon reasonable prior
written  notice  and  during  normal business hours), and to make copies of such
books, records and materials to the extent reasonably necessary to enable Tenant
to,  among  other  things, investigate and defend malpractice, employee or other
claims,  to  file  or  defend third party billings and tax returns and to verify
accounts  receivable  collections  due  Tenant.

     (c)     Tenant  shall  be  entitled  to remove the originals of any records
delivered  to  Assignee,  for  purposes  of  litigation  involving a resident or
employee  to  whom  such  record relates, if an officer of or counsel for Tenant
certifies that such original must be produced in order to comply with applicable
law  or  the  order of a court of competent jurisdiction in connection with such
litigation.  Any  record  so  removed  shall  promptly  be  returned to Assignee
following  its use, and nothing herein shall be interpreted to prohibit Assignee
from  retaining  copies  of any such documents. In addition, Assignee shall have
the  right  to  make a copy of such records before allowing Tenant to remove the
originals  from  the  Facility.

     (d)     Assignee  agrees to maintain such books, records and other material
comprising  records of the Facility's operations prior to the Transfer Date that
have  been  received  by  Assignee  from Tenant or otherwise, including, but not
limited  to,  resident  records  and  records  of  resident funds, to the extent
required  by  law,  but  in  no  event  less than three (3) years, and shall, at
Tenant's  request,  allow  Tenant  a  reasonable  opportunity  to  remove  such
documents,  at Tenant's expense, at such time after such record retention period
as may be required by law as Assignee shall decide to dispose of such documents.

     8.     VEHICLE.

     Tenant  and  Assignee  acknowledge  and  agree  that the vehicles listed on
Exhibit  B are located at the Facility and shall be handled on the Transfer Date
in  the  manner  described  in  Exhibit  B.

     9.     COMPUTER  SYSTEMS  AND  TELECOMMUNICATIONS  EQUIPMENT.

     (a)     Tenant  shall  transfer and convey to Assignee on the Transfer Date
for  no  additional  consideration all of the computer hardware and transferable
software  owned  by  Tenant  and  located  at  and  used  in connection with the
operation of the Facility. Tenant shall remit to Assignee a bill of sale in form
and substance acceptable to parties conveying to Assignee all of Tenant's right,
title  and  interest in and to the computer hardware and software so conveyed to
Assignee.  Assignee  and  Tenant  acknowledge  and  agree  that the transferable
software  shall  not  include  the  AMSI  software which shall be and remain the
property  of  Tenant but which Tenant shall permit Assignee to use in connection
with  its  operation  of  the  Facility  at no additional cost to Assignee for a
period  of  sixty  (60)  days  after  the  Transfer  Date.

     (b)     Assignee  acknowledges  and  agrees  that  as  of the Transfer Date
Tenant  will  terminate  all rights of access to Tenant's corporate email system
and  website  from the computers at the Facility and, as such, the Facility will
no  longer  have  access  to  any  policies  or  procedures which may be used in
connection  with  the operation of the Facility and maintained on such corporate
email  system  or  website.

     (c)     Within  ten  (10)  business days prior to the Transfer Date, Tenant
shall  provide  Assignee with a detailed listing of all of the computer hardware
and  software  which  is  to  be  conveyed to Assignee pursuant to Section 9(a).

     (d)     Tenant  represents  and  warrants  that  it  owns  the phone system
currently  located at the Facility and that title thereto will be transferred to
Assignee  on  the Transfer Date.  Tenant agrees to execute a Bill of Sale on the
Transfer  Date  confirming the conveyance to Assignee of all of its right, title
and  interest  in  and  to  the  phone  system  located  at  the  Facility.

     10.     INDEMNITY.

     (a)     Assignee  agrees to indemnify, defend and hold harmless Tenant from
and  against  any  and all costs, liabilities and expenses, including reasonable
attorneys  fees,  which  it may incur as a result of (i) a breach by Assignee of
its obligations under this Agreement, (ii) the acts or omissions of the Assignee
under  the  Operating  Contracts  which  are assumed by Assignee pursuant to the
terms  of this Agreement, if any, including the Assumed Equipment Leases and the
Assumed  Vehicle  Lease  (as  defined in Exhibit B), from and after the Transfer
Date  and  under  the  Additional  Operating  Contracts  from  and  after  their
assumption by Assignee, if applicable and/or (iii) the operation of the Facility
from  and  after the Transfer Date; provided, however, that nothing herein shall
be  construed as imposing any liability on Assignee to indemnify, defend or hold
harmless  Tenant  with  respect to Tenant's own acts or omissions from and after
the  Transfer  Date.

     (b)     Tenant  agrees to indemnify, defend and hold harmless Assignee from
and  against  any  and all costs, liabilities and expenses, including reasonable
attorneys  fees, which it may incur as a result of (i) a breach by Tenant of its
obligations under this Agreement, (ii) the acts or omissions of the Tenant under
the  Operating  Contracts  prior  to  the Transfer Date and under the Designated
Operating  Contracts  and any Additional Operating Contracts which Assignee does
not  elect  to  assume  both  prior  to  and  after the Transfer Date, (iii) the
operation  of  the  Facility  prior to the Transfer Date and/or (iv) a breach by
Tenant  of its obligations under the Lease prior to the Transfer Date; provided,
however,  that  nothing  herein  shall be construed as imposing any liability on
Tenant to indemnify, defend or hold harmless Assignee with respect to Assignee's
own  acts  or omissions whether prior to or from and after the Transfer Date. On
the  Transfer  Date  Tenant  shall  provide  Assignee  with  a certificate which
evidences  the  existence  of  insurance  with  respect to the negligent acts or
omissions  of Tenant prior to the Transfer Date in connection with its operation
of the Facility.  Tenant shall cause such coverage to remain in effect until the
first  anniversary  of  the  Transfer  Date.

11.     INVENTORY.

     Between the Execution Date and the Transfer Date, Tenant shall maintain all
consumable  inventories  of  every  kind  and  nature  whatsoever  (specifically
including,  but  not limited to, all pharmacy supplies, medical supplies, office
supplies, other supplies and foodstuffs) owned by Tenant as of the Transfer Date
and  located  at  the  Facility  (the  "Inventory")  at  the  levels customarily
maintained by Tenant in connection with its operation of the Facility and on the
Transfer Date Tenant shall transfer and convey the Inventory to Assignee. Tenant
shall have no obligation to deliver the Inventory to any location other than the
Facility,  it  being understood and agreed that the presence of the Inventory at
the  Facility  on  the Transfer Date shall constitute delivery thereof. Assignee
shall pay any sales or use tax which may be payable with respect to the transfer
and conveyance of the Inventory to Assignee. Tenant shall execute a Bill of Sale
in  form  and  substance  acceptable  to  Tenant and Assignee which confirms the
conveyance  of  the  Inventory.

12.     CONDITIONS

     The  obligation  of  the parties to consummate the transaction provided for
herein  is  subject  to  the satisfaction or waiver of the following conditions,
with  the conditions set forth in clauses (a) through (d) being deemed to be the
"Initial  Conditions"  and  the  conditions  set forth in clauses (e) though (h)
being  deemed  to be the "Additional Conditions" and with the Initial Conditions
and  the  Additional  Conditions  being  collectively  referred  to  as  the
"Conditions:"

     (a)     The issuance to Assignee of a license to operate the Facility as of
the  Transfer  Date  or  the  receipt  by  Licensee of such assurances as may be
reasonably  acceptable  to  it that within a reasonable period of time after the
Transfer  Date  it  will be licensed to operate the Facility effective as of the
Transfer  Date.

(b)     The  receipt  of  the Landlord Consent duly executed by Landlord and the
satisfaction  of  any  conditions  to  the effectiveness thereof, which Landlord
Consent  shall  provide,  at  a  minimum, for the elimination of the termination
rights  granted  to  the  Landlord  under  the  Fifth  Amendment thereto and the
amendment  of  the  Lease,  if  and to the extent necessary to ensure that it is
treated  for  accounting  purposes as an operating, rather than a capital lease,
and  that  Assignee  and  the  Facility  are  in  compliance  with any financial
covenants  contained  therein.

(c)     The  satisfaction  by  Assignee  with  the  results of its due diligence
investigation  with  respect to the Facility, including, but not limited to, its
review  and  approval  of the structural and environmental condition of, and the
operating  systems, including electrical, plumbing and HVAC systems, within, the
Facility,  the title to the Facility, the zoning of the Facility, an ALTA survey
of  the Facility and the real property on which it is located, a pest inspection
report  with  respect  to  the  Facility.

(d)     The  receipt  of  Assignee  of  the  approval of its Board of Directors.

     On  or  before  September  13, 2002 (or earlier if possible) Assignee shall
advise  Tenant  in writing as to which, if any, of the foregoing, conditions has
not  been  satisfied and setting forth in reasonable detail the reasons therefor
(the  "Assignee Objection Notice").  Tenant shall have a period of five (5) days
after  receipt  of  the Assignee Objection Notice in which to respond and advise
Assignee  in  writing whether or not it will correct the items to which Assignee
has objected in the Objection Notice or, if applicable, give Assignee additional
time  to  resolve  the  matters  to  which Assignee has objected in the Assignee
Objection  Notice  (the "Tenant Response Notice").  Assignee shall have five (5)
days  after  receipt  of  the Tenant Response Notice to advise Tenant in writing
whether  or  not  it is prepared to proceed with the transaction or to terminate
the  transaction  (the  "Assignee  Response  Notice").  If  Assignee  elects  to
terminate  the  transaction,  then  Assignee  shall be entitled to the immediate
return  of  the  $100,000  Earnest  Money deposit previously paid by Assignee to
Tenant  under  the  terms  of  that Letter of Intent dated July 25, 2002 between
Assignee  and  Tenant  (the  "LOI").  If  Assignee  elects  to  proceed with the
transaction,  then the assignment and assumption provided for herein shall occur
five  (5)  business  days  after the delivery of the Assignee's Response Notice,
subject  to  the  satisfaction  of  the  following  Additional  Conditions:

(e)     It shall be a condition to the obligation of each of Tenant and Assignee
     to  consummate  the  transaction  provided for herein that, on the Transfer
Date,  the  representations  and  warranties of Tenant and Assignee set forth in
Section  13  hereof  shall  be  true  and  correct  in  all  material  respects.

     (f)     It  shall  be a condition to the obligation of Tenant to consummate
the  transaction  provided for herein that, on the Transfer Date, Assignee shall
deliver to Landlord its letter of credit or other security in form and substance
acceptable  to  Landlord  in  the  amount  of  $741,751.65 (the "LC Amount") and
Landlord  shall  return  to  Tenant  Tenant's  cash  deposit  in  the LC Amount.

     (g)     It  shall  be a condition to the obligation of Tenant to consummate
the  transaction  provided for herein that, on the Transfer Date, Assignee shall
pay  to  Tenant  the  sum  of  Three  Hundred  Eight Thousand and no/100 Dollars
($308,000)  as consideration for the assignment of the Lease to Assignee and the
transfer  to  Assignee  of  the  other  assets  described  herein (the "Transfer
Consideration").

(h)     The  execution  and  delivery  of  a  letter duly executed by Tenant and
Assignee  confirming (i) that, as of the Transfer Date, the Facility shall cease
to  be subject to the terms of the Management Agreement dated as of December 31,
2001  between  Tenant  and  Assignee  and  (ii)  the  waiver  by Assignee of any
termination  fees  which  would  otherwise be due thereunder as a result of such
termination.

13.     REPRESENTATIONS  AND  WARRANTIES.

(a)          Tenant makes the representations set forth in this Section 13, each
of  which  is  material  to  and  relied  upon  by  Assignee.
(b)          (a)     Tenant  is  a  duly  organized  and validly existing Oregon
corporation  and is duly qualified to do business in, and in good standing under
the  laws  of,  the  State  of  Texas.
(c)          (b)     Subject  to  securing  the Landlord Consent, Tenant has the
necessary  corporate  power  and  authority  to execute, deliver and perform its
obligations  and  to consummate the transactions contemplated by this Agreement.
(d)          (c)     Tenant  has  duly executed and delivered this Agreement and
this  Agreement  is a valid and legally binding obligation of Tenant enforceable
against Tenant in accordance with its terms, except as the enforceability may be
limited  by  applicable  bankruptcy laws, laws affecting the rights of creditors
and  general  principles  of  equity.
(e)          (d)     There  is  no  pending, or to the best knowledge of Tenant,
threatened  litigation,  arbitration  proceedings  or  governmental  proceedings
involving  Tenant  that  would  prevent  or  delay  the  consummation  of  the
transactions  contemplated  by  this  Agreement.
(f)          (e)     Subject  to  satisfaction  of  the  conditions set forth in
Section  12(b),  the  execution and delivery by Tenant of this Agreement and the
consummation by Tenant of the transactions contemplated by this Agreement do not
and  will  not violate the terms of Tenant's Articles of Incorporation or Bylaws
or  any instrument, document or agreement to which Tenant is a party or by which
Tenant  is  bound or result in a breach of any agreement, document or instrument
to  which  Tenant  is  a  party  or  by  which  Tenant  is  bound.
(g)          (f)     No  brokerage  fees or other commissions will be payable in
connection with the transactions contemplated by this Agreement by reason of any
act  or  agreement  of  Tenant.
(h)          (g)     Tenant is the holder of leasehold title to the Facility and
is the owner of the Inventory, the Lease and the Inventory are free and clear of
all  liens,  claims  and  encumbrances, other than any liens granted to Landlord
under  the  terms  of  the Lease. Rent due under the Lease has been paid through
August  31,  2002.  Tenant  has  not  established  any tax or other escrows with
Landlord  under  the  terms  of  the  Lease.
(i)          (h)     Tenant has not received written or verbal notice of (i) any
violation  of  any  local,  state  or  federal  law,  including any health care,
building,  zoning,  licensure or environmental law, with respect to the Facility
or  the operation thereof by Tenant, which has not been corrected as of the date
hereof,  (ii)  a default or Event of Default under the Lease, which has not been
cured  as  of  the  date  hereof or (iii) any pending or threatened condemnation
action  or  proceeding.
     Assignee  makes  the  representations set forth in this Section 13, each of
which  is  material  to  and  relied  upon  by  Tenant.
(a)     (a)     Assignee  is  duly  organized and existing under the laws of the
state  of  Washington and is duly qualified to do business in the State of Texas
and  is  in  good  standing  under  the  laws  thereof.
(b)     (b)     Subject  to  satisfaction  of  the  Conditions, Assignee has the
power  to  execute  and deliver and perform its obligations under this Agreement
and  to  consummate  the  transactions  contemplated  by  this  Agreement.
(j)          (c)     Assignee  has  duly  executed and delivered this Agreement.
This Agreement constitutes the valid and legally binding obligation of Assignee,
enforceable  against  it  in  accordance  with  its  terms,  except  as  the
enforceability  may be limited by applicable bankruptcy laws, laws affecting the
rights  of  creditors,  and  general  principles  of  equity.
(k)          (d)     There  is no pending, or to the best knowledge of Assignee,
threatened  litigation,  arbitration  proceedings  or  governmental  proceedings
involving  Assignee  that  will  prevent  or  delay  the  consummation  of  the
transactions  contemplated  by  this  Agreement.
(l)          (e)     No  brokerage  fees or other commissions will be payable in
connection with the transactions contemplated by this Agreement by reason of any
act  or  agreement  of  Assignee.
(m)          (f)     Subject  to  satisfaction  of  the  Conditions set forth in
Sections 12(b) and (d), the execution and delivery by Assignee of this Agreement
and  the  consummation  by  Assignee  of  the  transactions contemplated by this
Agreement  do  not  and  will  not  violate the terms of Tenant's Certificate of
Partnership or Partnership Agreement or any instrument, document or agreement to
which Assignee is a party or by which Assignee is bound or result in a breach of
any  agreement,  document or instrument to which Assignee is a party or by which
Assignee  is  bound.
14.     FURTHER  ASSURANCES.

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

15.     COUNTERPARTS.

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

     16.     ENTIRETY.

     This  Agreement  represents  the  entire and final agreement of the parties
hereto  with  respect  to  the  subject  matter  hereof and supersedes all prior
discussions,  negotiations  and writings with respect thereto including, but not
limited  to, the LOI except those provisions of the LOI captioned Earnest Money,
Non-Solicitation  and  Relationship  to Management Agreement, all of which shall
survive  until the consummation of the transaction provided for herein and shall
govern  the  rights and obligations of the parties hereto and identified therein
in  the  event the transaction provided for herein fails to occur for any reason
whatsoever.  This  Agreement may only be amended by written instrument signed by
the  parties  hereto.

     17.     CONSTRUCTION.

     Each  of  the  parties  has participated in the drafting and negotiation of
this  Agreement.  Accordingly,  in the event of a dispute among the parties with
respect  to  the interpretation or enforcement of the terms hereof, no provision
shall  be  construed so as to favor or disfavor any party hereto. In calculating
time  periods  under  this  Agreement,  whether  or  not  specified,  any period
involving  less than thirty days shall be calculated using business days and any
period  involving  thirty  days or more shall be calculated using calendar days.

     18.     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.

     19.     CAPTIONS.

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

     20.     GOVERNING  LAW.

     This  Agreement  shall  be governed by and construed in accordance with the
internal  laws  of  the  State  of  Texas.

     21.     NOTICES.

     All  notices  to  be  given  by either party to this Agreement to the other
party  hereto  shall  be  in  writing,  and  shall  be  (a) given in person, (b)
deposited  in  the United States mail, certified or registered, postage prepaid,
return  receipt  requested, or (c) sent by national overnight courier service or
by  facsimile  transmission  with  confirmed receipt, each addressed as follows:

     To  Assignee:          Emeritus  Corporation
                    3131  Elliott  Avenue
                    Suite  500
                    Seattle,  WA  98101
                    Attn:  William  Shorten
                    Phone:  206-298-2909
                    Fax:     206-301-4500

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

     To  Tenant:          Regent  Assisted  Living,  Inc.
                    Bank  of  America  Financial  Center
                    121  SW  Morrison
                    Suite  950
                    Portland,  OR  97201
                    Phone:          503-227-4000
                    Facsimile:     503-274-4685
                    Attn:          Walter  C.  Bowen,  President

     Any  such  notice  shall be deemed delivered when actually received or when
delivery  is  first refused regardless of the method of delivery used. Any party
to  whom notices are to be sent pursuant to this Agreement may from time to time
change its address for further communications thereunder by giving notice in the
manner  prescribed  herein  to  all  other parties hereto. Although either party
shall  have  the  right  to  change its address for notice purposes from time to
time,  any notice delivered pursuant to this Section 21 to the address set forth
in  this  Section  21  or to such other address as may be hereafter specified in
writing  in  accordance  with  this Section 21 shall be effective even if actual
delivery  cannot be made as a result of a change in the address of the recipient
of  such  notice  and  the  party  delivering the notice has not received actual
written  notice  in  accordance  with  the  provisions of this Section 21 of the
current  address  to  which  notices  are  to  be  sent.

     22.  PAYMENT  OF  EXPENSES.

     Each  party  hereto shall bear its own legal, accounting and other expenses
incurred  in  connection  with the preparation and negotiation of this Agreement
and  the consummation of the transaction contemplated hereby, whether or not the
transaction  is  consummated.  In  the  event  of  a dispute between 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.

                      [SIGNATURES APPEAR ON FOLLOWING PAGE]


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

ESC  III,  L.P.  doing  business  in  Texas  as  Texas-ESC  III,  L.P.

                         By:     ESC  GP  II,  Inc.
                         Its:     General  Partner

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


REGENT  ASSISTED  LIVING,  INC.

                              By:     /s/  Steven  L.  Gish
                                      ---------------------
                              Name:     Steven  L.  Gish
                              Its:     Treasurer



<PAGE>
                                LANDLORD CONSENT
                                   (ATTACHED)


<PAGE>
                                    EXHIBIT A
                                    THE LEASE
                                   (ATTACHED)



<PAGE>
                                    EXHIBIT B
                                  THE VEHICLES

The  following  vehicles  are  located  at  the  Facility:

Description  of  Van:  1997  Ford  Supreme  Senator,  VIN  1FDLE4050VHB22935

Description  of  Saturn:


Title  to  the  Van shall be conveyed by Tenant to Assignee on the Transfer Date
for  no  additional  consideration.

The Saturn is leased under that Lease Agreement dated ___________ between Tenant
and  ________________  (the  "Vehicle Lease").  On the Transfer Date, subject to
securing  any necessary consents or approvals, Assignee shall assume the Vehicle
Lease.


<PAGE>
                                    EXHIBIT C
                           RESIDENT SECURITY DEPOSITS