AGREEMENT TO PROVIDE MANAGEMENT
                      SERVICES TO ASSISTED LIVING FACILITY

     This  Agreement  made as of the 1st day of May, 2002, by and between HB-ESC
II,  LLC,  a  Washington  limited  liability  company  ("Licensee") and Emeritus
Corporation,  a  Washington  corporation  ("Manager").

     WHEREAS,  Licensee  is the lessee of the assisted living facility described
in  Exhibit A  (the "Facility") pursuant to the terms of a Lease Agreement dated
as  of  February  21,  1997  between  Health  Care  Property  Investors,  Inc.
("Landlord")  and  Integrated  Living  Communities  of  Lake  Charles,  L.L.C.
("Tenant"),  which  lease was assigned by Tenant to Licensee by Lease Assignment
and  Assumption  Agreement  dated  as  of  May  1,  2002  and  which  lease  was
concurrently  amended  by Lease Amendment dated as of May 1, 2002 (collectively,
the  "Lease").

     WHEREAS,  Licensee  wants  someone  to  manage  the Facility on its behalf;

     WHEREAS,  Manager  is  experienced  and  qualified in the field of assisted
living  facility  management  and has agreed to manage the Facility on behalf of
Licensee  pursuant  to  the  terms  and  conditions  set  forth  herein.

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

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

A.     Operational Policies and Forms.  Manager shall develop and implement such
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     operational policies and procedures as may be appropriate for the effective
operation  of  the  Facility,  including  but  not  limited  to all policies and
procedures  necessary  to  ensure  the  ongoing  licensure  of  the Facility and
compliance  with  the  terms  of  residency  agreements.

B.     Charges.  Manager  shall  establish  schedules  of  recommended  charges,
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including  all  special  charges  for  services rendered to the residents at the
Facility.

C.     Information.  Manager  shall  develop  any  informational  material, mass
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media  releases,  and  other related publicity materials, which are necessary or
appropriate  for  the operation of the Facility.  The cost of all such materials
shall  be commercially reasonable and be deemed to be an expense of the Facility
and  shall  be  payable  from  the Facility Checking Account (as defined below).

D.     Regulatory  Compliance. Manager shall use commercially reasonable efforts
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to  obtain and maintain all licenses, permits, qualifications and approvals from
any  applicable  governmental or regulatory authority that are necessary for the
operation  of  the  Facility  and shall manage the operations of the Facility in
compliance  with  all applicable laws and regulations and in accordance with all
licenses,  permits,  qualifications and approvals.  In order to ensure Manager's
compliance  with  its obligations under this Section I(D) Licensee shall provide
Manager  prior  to  the Commencement Date with a copy of any existing regulatory
agreements  or  orders  to  which  Licensee  is  a  party in connection with the
operation  of the Facility; provided, however, Manager shall not be deemed to be
in  default  of  its  obligations  under this Section I(D) in the event (i) of a
violation  of  any  applicable  law  or regulation which occurs during the first
thirty  (30)  days after the Commencement Date (the "Protected Period"), (ii) of
the  citation  of  any  deficiency  or  deficiencies  which do not result in the
threatened  revocation  of  the  licensure  or Medicaid certification of, or the
imposition  of  a  ban  on  admissions  at,  the  Facility  (which deficiency or
deficiencies  Manager  shall  cause  to be timely corrected in accordance with a
plan  of  correction  approved  by  the  applicable regulatory authority), (iii)
Manager  is  duly  contesting the application of any law to the operation of the
Facility  and  compliance  with  such  law is stayed during the period that such
contest is pending or (iv) compliance with law requires the expenditure of funds
     which  require  the  approval of Licensee and for which Licensee refuses or
fails  to  provide  such  approval.  Within 48 hours of receipt thereof, Manager
shall  provide  Licensee  with  copies  by  fax,  overnight mail, email or other
comparable  means  of expedited transmission of any written notice regarding the
licensure,  occupancy  or  operation  of the Facility which it receives from any
governmental  authority  having  jurisdiction  over  the Facility.  In addition,
Licensee  shall  have  the  right  to  approve,  which  approval  shall  not  be
unreasonably  withheld, any plan of correction developed by Manager with respect
to  any  survey  which  threatens  revocation  of  the  licensure  or  Medicaid
certification  of,  or  a  ban  on  admissions  at or the imposition of civil or
criminal  penalties against, the Facility and to approve the election by Manager
to  contest  the  application  of  any  law  to  the  operation of the Facility.

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

F.     Accounting.
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i.     Manager  shall,  at  its  expense,  provide  accounting  support  to  the
Facility.  Licensee  acknowledges  and agrees that such accounting support shall
not  include  the  preparation  of Licensee's financial statements or securities
filings.  In  addition, Manager shall reflect in the financial statement for the
Facility  any  accounting  adjustments provided to Manager by Licensee, provided
that  Manager  shall  have  no  liability  or responsibility with respect to the
appropriateness  of  accounting  adjustments  provided  to  Manager by Licensee.
Manager  shall  not  be  required to reflect in the financial statements for the
Facility  any  corporate  accounting adjustments provided to Manager by Licensee
until  such time as Manager fully understands the rationale for such adjustment.

ii.     All accounting procedures and systems utilized in providing said support
     shall  be  in  accordance  with  the  operating  capital  and cash programs
developed  by  Manager,  which  programs  shall  conform  to  generally accepted
accounting  principles ("GAAP") and shall not materially distort income or loss.

iii.     In  addition,  Manager  shall  prepare  timely  and file or cause to be
prepared  and  filed  timely all payroll tax returns, sales and use tax returns,
real  and personal property tax returns and local or state gross receipts and/or
business  and  occupation  tax  returns  at  Manager's sole cost and expense and
Manager shall cause to be paid timely all of the taxes reflected on such returns
     as  being due, which taxes shall be Facility Expenses and shall be paid out
of the Facility Checking Account. In the event that Manager fails to timely file
required  returns  or  reports  or  to timely pay taxes, Manager shall be solely
responsible  for  payment  of  any  resulting penalties and/or interest and such
penalties  and  interest  shall  not  be considered Facility Expenses, provided,
however,  that  Manager  shall  not  be  responsible  for  paying  any resulting
penalties  or  interest  if (i) Licensee receives the tax reports for such taxes
from  the  taxing  authority  and  Licensee  fails to furnish the tax reports to
Manager  within  a  reasonable period of time prior to the date on which the tax
reports  are due, or (ii) there are insufficient funds available in the Facility
Checking  Account  to pay the taxes when due and Licensee fails to comply with a
timely  request  by Manager to provide the necessary funds to pay the taxes when
due.  All other tax returns, including Licensee's local, state or federal income
or  informational tax returns and state corporate franchise tax returns shall be
prepared  by  Licensee  or  its  designee  and  the taxes and other payments due
thereunder  shall  be  the  sole  responsibility  of  Licensee.

iv.     Nothing herein shall preclude Manager from delegating to a third party a
     portion  of  the  accounting duties provided for in this Section; provided,
that  such  delegation shall not relieve Manager from ultimate liability for the
timely  and  complete  performance of the obligations provided for herein or for
the  expense thereof, it being understood that Manager shall bear the expense of
such  third  party to whom Manager delegates any such accounting duties that are
the  obligation  of Manager under this Section. Licensee acknowledges and agrees
that  in the event Manager retains one or more qualified third parties to review
the  real  and/or personal property tax returns or utility bills of the Facility
or  other  third  party  charges  in  an  effort  to effect cost savings for the
Facility, the fees and expenses of such third parties shall be Facility Expenses
and  shall  be  paid  out  of  the  Facility  Checking  Account.

G.     Reports.  Manager  shall  prepare  and provide to Licensee any reasonable
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operational information with respect to the Facility which may from time to time
     be  specifically requested by Licensee, including any information needed to
assist  Licensee in completing the tax returns for which it is responsible under
Section  I(F)  and  in  complying  with  the reporting requirements described in
Exhibit  B.  In addition, within thirty (30) days after the end of each calendar
month,  Manager  shall  provide  Licensee with an unaudited balance sheet of the
Facility, dated the last day of such month, and an unaudited statement of income
and  expenses  for  such  month  and for the fiscal year to date relating to the
operation  of  the  Facility showing trends, the variance between the actual and
budgeted  operating  results of the Facility for said month and with a rent roll
and  census report for the month indicating the number of units occupied and the
number  of  units  vacant.  Such  monthly  reports  shall  also show summary and
itemization  of  accounts  receivable  for the Facility and report of collection
action(s)  taken  and  status of any collection action(s).  Furthermore, Manager
shall  prepare  and  provide  to  Licensee such other reports and information as
Licensee  shall  reasonably request.  Upon request, Manager shall cooperate with
Licensee or Licensee's certified public accountant in the event Licensee elects,
or  is  required,  to  have  audited  annual  financial statements prepared. The
financial  statements  prepared  by Manager shall be prepared in accordance with
GAAP,  consistently  applied,  this  Agreement, and the procedures and practices
provided  for  in  this  Agreement.

H.     Bank  Accounts.  Manager shall open a new checking account in the name of
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Licensee  (the  "Facility  Checking  Account") and shall deposit in the Facility
Checking  Account  all  money  received during the term of this Agreement in the
course of the operation of the Facility; provided, however, that during the term
     hereof,  withdrawals  and payments from the Facility Checking Account shall
be made only on checks signed by a person or persons authorized by Manager.  The
Facility  Checking  Account  will  be  an  interest-bearing  account  if  an
interest-bearing account is available.  Licensee shall be given notice as to the
identity of said authorized signatories.  Withdrawals from the Facility Checking
Account  shall  be made first to pay the Management Fee (as that term is defined
in  Section VII, below), and, thereafter, to pay Facility Expenses in such order
of  priority  as  Manager  deems  appropriate  to  the  commercially  reasonable
operation  of  the  Facility; provided, however, if a lender providing financing
for  the facility requires the Management Fee to be subordinated to debt service
payments  then Manager will not pay the Management Fe unless and until such debt
service  has  been paid; and provided, further, that the Management Fee shall be
subordinated  on  a  current basis to any payments due to the Landlord under the
terms  of  the Lease.  In the event the cash receipts of the Facility are at any
time  insufficient  to  pay all of the Facility Expenses, Licensee shall, within
five  (5) days of Licensee's receipt of a written demand by Manager (accompanied
by  a  statement and information as to the basis for the demand), deposit in the
Facility  Checking  Account sufficient funds to satisfy the then working capital
needs  of the Facility. Licensee acknowledges and agrees that Manager shall only
be  required  to  pay the Facility Expenses if and to the extent there are funds
available  for  the  payment  thereof  in  the  Facility  Checking  Account.

I.     Personnel.  All  of  the on-site personnel of the Facility, including the
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community director, business manager and the "wellness director", if applicable,
     shall  be  the employees of Manager but the salaries, bonuses, commissions,
state  and federal payroll and social security tax obligations and benefits paid
to  or on behalf of such on-site employees shall be deemed to be included in the
Facility Expenses and thus shall be paid from the Facility Checking Account. All
matters  pertaining  to the employment, supervision, compensation, promotion and
discharge  of  such employees are the responsibility of Manager, which is in all
respects  the  employer  of such employees.  Manager shall fully comply with all
federal,  state,  county,  municipal  and  other  governmental laws, ordinances,
regulations  and  orders  having  to  do  with  anti-discrimination,  workmen's
compensation,  employer's  liability  insurance,  social  security, unemployment
insurance,  hours of labor, wages, working conditions, immigration and all other
employer-employee  related  subjects  (including  without  limitation,  tax
withholding  and  information  reporting requirements) and shall not do any act,
nor knowingly permit any act to be done that would constitute a violation of any
or all of such laws, ordinances, regulations or orders.  Manager shall indemnify
and  hold  Licensee  harmless  from  and  against any and all claims, penalties,
liabilities  and expenses of whatsoever kind and nature which may be asserted by
any governmental body or by any person claiming to be aggrieved by reason of any
act  or failure to act by Manager in accordance with or in violation of any said
laws,  ordinances,  regulations or orders, so long as such act or failure to act
is  not caused or directed by Licensee.  All personnel responsible for providing
services  pursuant  to  the terms of this Agreement shall be direct employees of
Manager  and  Manager  shall,  for  purposes of such employment relationship, be
acting as an independent contractor and not as an agent or employee of Licensee.
Unbudgeted  costs  and expenses of employees or consultants that are not on-site
Facility  personnel  shall  be  treated as Facility Expenses only if approved in
writing  in  advance  by  the Licensee, which approval shall not be unreasonably
withheld.  If  Licensee terminates this Agreement, Licensee shall have the right
(but  not  the  obligation)  to  offer  to  hire  any one or more of the on-site
employees  of  Manager.

J.     Supplies  and Equipment:  Manager shall purchase supplies and non-capital
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equipment  needed  to operate the Facility within the budgetary limits set forth
in  the  annual operating budget.  In purchasing said supplies and equipment, if
possible  without  Manager  incurring  personal  liability  for the cost of such
supplies  and  equipment,  Manager shall take advantage of any national or group
purchasing  agreements  to  which  Manager  may  be  a  party.

K.     Legal  Proceedings.  Unless  otherwise  directed by the Licensee, Manager
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shall,  through  its legal counsel (whose identity and rates shall be subject to
Licensee's  approval),  coordinate  all  legal  matters  and  proceedings  with
Licensee's  counsel  and,  subject to the direction and/or approval of Licensee,
shall  take  any and all appropriate steps to protect and/or litigate to a final
decision  in  an  appropriate  court  or  forum  any  violation,  order, rule or
regulation  affecting  the  Facility  and  its  operations  or  any claim, loss,
violation  or cause of action relating to the Facility. Manager shall not settle
any  litigation  without the prior approval of Licensee.  Manager shall promptly
notify  Licensee  in  writing  of any written demand letters received by Manager
which threaten litigation related to the Facility or any legal or administrative
     proceedings  that  are  filed  involving  the  Facility.  All  of the costs
reasonably  incurred  in  such  litigation shall be deemed Facility Expenses and
shall  be reimbursed to Licensee from the funds in the Facility Checking Account
if  previously  paid by Licensee or shall be paid from the funds in the Facility
Checking  Account  if  not previously paid by Licensee.  Nothing herein shall be
construed  as  precluding Licensee from seeking to recover from Manager the fees
and  expenses  described in this Section I(K) to the extent Manager is otherwise
liable  therefore  under  the  default  or  indemnification  provisions  of this
Agreement;  however,  it  is  understood that no expenses shall be paid from the
Facility  Checking  Account  for any litigation commenced by the Manager against
the  Licensee.

L.     Budgets:  The  Facility  shall  be operated on a fiscal year of January 1
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through  December  31.  Licensee and Manager shall agree before the Commencement
Date  (as hereinafter defined) on a preliminary initial operating budget for the
period  from  the  Commencement  Date  through December 31, 2002 and shall agree
within  sixty  (60) days after the Commencement Date on a detailed operating and
capital  budget  for  the  period from the date of such approved budgets through
December 31, 2002. On or before December 31 of each calendar year, Manager shall
     prepare  and submit to Licensee for its review and approval, which approval
shall  not  be  unreasonably  withheld,  an  annual  operating budget, an annual
capital expenditure budget, and an annual cash flow projection for the Facility.
The  annual  operating  budget  and capital expenditure budget shall be prepared
using  the  format  set  forth in Exhibit C.  In the event a budget has not been
agreed  upon  by  the beginning of the fiscal year, the operating results of the
prior fiscal year shall serve as the budget for the following fiscal year unless
and  until  the  new  budget  is  agreed  upon.

M.     Collection  of  Accounts:  Manager shall issue bills and collect accounts
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and monies owed for goods and services furnished by the Facility during the term
     of  this  Agreement, including, but not limited to, enforcing the rights of
Licensee  and  the Facility as creditor under any contract or in connection with
the  rendering  of any services; provided, however, that any expenses reasonably
incurred  by  Manager  in so doing shall be Facility Expenses and payable out of
the  Facility  Checking Account.  In addition, upon request by Licensee, Manager
shall  issue  bills  and collect accounts and monies owed for goods and services
furnished  by  the  Facility  prior to the Commencement Date; provided, however,
regardless  of any standard of performance set forth in this Agreement, Licensee
acknowledges  and  agrees  that  there can be no assurances that Manager will be
able  to  collect  any  or  all  of  such  accounts  receivable.

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

O.     Compliance  With  the  Lease.  Manager  shall  operate  the  Facility  in
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compliance  with  the  requirements  of the Lease and shall use its commercially
reasonable  efforts  to assist Owner in complying with its obligations under the
Lease.

P.     Manager's  and  Licensee's Representative.  Manager hereby appoints Frank
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Ruffo  (the  "Manager's  Representative") as the person employed by Manager with
whom  Licensee  shall  interact  and  upon  whose  decisions  Licensee  shall be
authorized  to  rely, and Licensee hereby appoints Ruth Verhoff (the "Licensee's
Representative")  as  the  person  employed  by Licensee with whom Manager shall
interact  and  upon  whose  decisions  Manager shall be authorized to rely, with
respect  to  the  performance by Manager of its duties hereunder.  Manager shall
have  the  right  from time to time during the term of this Agreement to replace
the  Manager's  Representative  upon  written notice to Licensee designating the
replacement Manager's Representative and Licensee shall have the right from time
     to  time  during  the  term  of  this  Agreement  to replace the Licensee's
Representative  upon  written  notice  to  Manager  designating  the replacement
Licensee's  Representative.  Nothing  herein  shall be construed as imposing any
personal  liability on the Manager's Representative or Licensee's Representative
with  respect  to  the  acts  or omissions of Manager or Licensee, respectively,
under  this  Agreement.

II.     Insurance.  Manager,  as agent for the Licensee and at the sole cost and
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expense  of  Licensee,  shall  obtain  and  keep  in force adequate insurance as
outlined  below:

          A.  All  Risk,  or  other  broad  form  coverage  property  insurance,
insuring  full  replacement value. Such insurance shall also include, but not be
limited  to,  business  interruption and extra expense coverage, for a period of
not  less  than six months. Manager shall also maintain flood hazard coverage at
an  amount  equal  to  full  replacement  cost  of  the  Facility.

          B.  Commercial  general  liability  insurance, against any third party
claims  for bodily injury or property damage.  Such insurance shall also include
coverage  for  contractual liability as respects this Agreement.  Limits of such
coverage  should  not  be less than $1,000,000 per occurrence, with a minimum of
$2,000,000  per  location  aggregate.

          C.    Professional  Liability  Insurance  with limits of such coverage
that  are  not less than $1,000,000 per occurrence, with a minimum of $2,000,000
per  location  aggregate.

          D.    Business  Auto  Liability  for  third  party  bodily  injury  or
property  damage for facility vehicles including owned, hired and non-owned auto
liability  for  $1,000,000 combined single limit.  Coverage shall be extended to
cover  physical  damage  to  facility  vehicles.

E.      Umbrella/Excess  Commercial  General Liability and Professional Services
Liability  in  the  amount  of  $10,000,000  per  occurrence.

          F.  Workers'  Compensation  coverage  with  statutory  limits  and
Employers'  Liability  insurance  coverage with minimum limits of $1,000,000 per
occurrence.

          G.    Crime insurance to cover employee dishonesty, theft of money and
security  loss  in  limits  of  not  less  than  $1,000,000

          H.     Such other or different insurance as Licensee may, from time to
time,  advise Manager is required by the terms of the Lease provided the same is
available  on  commercially  reasonable  terms.

For  all  such  insurance as deemed necessary above, it is agreed and understood
that  Manager  shall continuously maintain the same at the sole cost and expense
of  Licensee,  and  that  all  premiums,  deductibles  and uninsured losses with
respect  to such policies shall be deemed to be Facility Expenses. Manager shall
provide  Licensee  with  evidence  of  all  insurance,  naming  Licensee  as  an
additional  insured  on  policies  B,  C,  D,  and  E  above, and subject to the
requirements  of a lender or Landlord, such lender and Landlord as loss payee as
respect  the  property  policies.  Such  evidence  of  insurance  shall give the
Licensee  at least thirty (30) days prior notice of cancellation or any material
change  to  policies.

Manager  shall also assist Licensee to procure such other insurance coverages as
may  be  required  by a lender for the Facility. Manager shall, at its sole cost
and expense, maintain commercial general liability insurance for its operations.
Manager  agrees  to  furnish  Licensee  with  evidence of such insurance or with
duplicate  copies  of  such  policies.

III.     Proprietary  Interest.  The  systems,  methods, procedures and controls
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employed  by  Manager  and  any written materials, computer software or policies
developed  by Manager to document the same are to remain the property of Manager
and  are  not,  at  any  time  during or after the term of this Agreement, to be
utilized,  distributed,  copied  or  otherwise employed or acquired by Licensee,
except  as  authorized  by  Manager,  provided,  however,  that  upon request of
Licensee  Manager  shall  negotiate  in good faith the terms and conditions upon
which  Licensee  may  be  permitted  by  Manager  to  use, without payment, such
systems,  methods,  procedures, controls, materials, software or brochures for a
limited  transitional  period following the termination of this Agreement, which
terms and conditions shall be satisfactory to both Manager and Licensee in their
     respective  discretion.  However,  in  the  event  of a termination of this
Agreement,  for  a  period  of  thirty (30) days after such termination Licensee
shall  be  permitted  to  use  systems,  methods,  software as may be reasonably
necessary  for  Licensee to generate records and reports with data from the Term
(as  defined  below)  of  this  Agreement.

IV.     Term  of  Agreement;  Termination  by  Either  Party.  The  term of this
        ----------------------------------------------------
Agreement  (the  "Term")  shall  commence on the date on which Licensee acquires
leasehold  title  to the Facility (the "Commencement Date").  This Agreement may
be  terminated by either Licensee or Manager, with or without cause, at any time
upon  giving (i) at least ninety (90) days' written notice to the other party if
the  notice  to  terminate  ("Termination Notice") is being delivered within the
first  twelve month period following the Commencement Date; (ii); at least sixty
(60)  days' written notice to the other party if the Termination Notice is being
delivered  within the second twelve month period following the Commencement Date
and  (iii)  at  least thirty (30) days' written notice to the other party if the
Termination Notice is being delivered more than twenty-four months following the
     Commencement  Date.  This  Agreement shall also terminate in the event that
the  Facility  is  sold by Licensee during the period of this Agreement; or upon
the  destruction  of  or substantial damage to the Facility by any cause, or the
taking  of  all  or  a substantial portion of the Facility by eminent domain, in
either  case  making  it  impossible or impractical to continue operation of the
Facility.  Within  thirty  (30)  days  after  the termination of this Agreement,
Manager  shall  deliver  to  Licensee  any  balance of moneys due Licensee or of
deposits,  or  both,  which  were  held by Manager with respect to the Facility,
including,  without limitation, the balance of the Facility Checking Account, as
well  as  a  final accounting reflecting the balance of income and expenses with
respect  to  the  Facility  as of the date of termination or withdrawal, and all
records, contracts, leases, receipts for deposits, and other papers or documents
which  pertain  to  the  Facility.  If  there  shall  be additional sums due and
payable  to Manager, Licensee shall promptly pay such sums to Manager as part of
the  final  reconciliation  process.

V.     Licensee's  Inspection: During the term of this Agreement, Licensee shall
       ----------------------
have  the  right,  upon  not  less  than  twenty-four (24) hours prior notice to
Manager  and  at  reasonable  times during normal business hours, to inspect the
Facility  and  to  inspect  and/or audit all books and records pertaining to the
operation  thereof.

VI.     Operation  of  the  Facility:
        ----------------------------

A.     Standard  of  Performance:  In  performing  its  obligations  under  this
       -------------------------
Agreement,  Manager  shall  manage  the  Facility  as a licensed assisted living
facility  (i)  to the standard and in the same manner as management services are
provided  by  other  qualified and licensed third party professional health care
facility  managers  of  facilities  comparable  to  the  Facility,  and  (ii) in
accordance  with the terms of this Agreement, including, but not limited to, the
limitations  set  forth  herein  on  operating and capital expenditures, and the
policies  adopted  by,  and  resources  available  to,  the  Facility.

B.     Force  Majeure:  Manager  will  not  be deemed to be in violation of this
       --------------
Management  Agreement  if it is prevented from performing any of its obligations
hereunder  for  any  reason  beyond  its control, including, without limitation,
strikes,  shortages,  acts  of  terrorism,  war, acts of God, lack of Licensee's
financial  resources,  unreasonable  interference  by  Licensee  with  Manager's
performance  of  its  duties  hereunder,  or  any statute, regulation or rule of
federal,  state  or  local  government  or  agency  thereof.

VII.     Withdrawal  of  Funds  by  Licensee;  Minimum  Bank  Balance.
         -------------------------------------------------------------

A.     Withdrawal  by  Licensee.  From  time  to time, Licensee may withdraw the
       ------------------------
then-accumulated  operating  cash  surplus  (as  determined by Manager) from the
Facility  Checking  Account.

B.     Minimum  Cash Balance.  Licensee shall fund the Facility Checking Account
       ---------------------
with an initial amount equal to $25,000.00 and thereafter Licensee shall provide
     the  working  capital  required  by  Section  I(H)  of  this  Agreement

VIII.     Management  Fee:  In  consideration  for the provision of the services
          ---------------
contemplated  in  this  Agreement,  Manager  shall  receive  a  management  fee
("Management  Fee")  equal  to  the  five  percent  (5%)  of  the gross revenues
generated  for  the  prior  month  by the Facility.  The Management Fee shall be
payable  on  or  before  the  10th  day  of  each  month.  For  purposes of this
Agreement,  "gross revenues" mean all revenues generated by the operation of the
Facility,  but shall not include proceeds from the sale of Facility equipment or
the  Facility, any insurance or condemnation proceeds or any other proceeds from
a  capital  event.  If the services of Manager commence or terminate, other than
on  the  first  day  of the month, the revenues upon which the fee is calculated
shall  be  prorated  in  proportion to the number of days for which services are
actually rendered.  The Management Fee provided for herein shall be disbursed by
     Manager  to itself out of the Facility Checking Account as provided in this
Agreement.

IX.     Assignment:  Except as otherwise provided in Section I.F. with regard to
        ----------
     the  delegation  of certain duties, this Agreement shall not be assigned by
either  party  without  the  prior  written  consent  of  the  other  party.

X.     Notices:  All  notices  required or permitted hereunder shall be given in
       -------
writing  by  hand delivery, by registered or certified mail, postage prepaid, by
overnight delivery or by facsimile transmission (with receipt confirmed with the
     recipient).  Notice  shall  be  delivered  or  mailed to the parties at the
following  addresses  or at such other places as either party shall designate in
writing.  All  notices  shall  be deemed duly given when delivery is received or
refused  by  a  party  if delivered by hand, three (3) business days after being
deposited  in  the  mails  if  sent by registered or certified mail, on the next
business  day if sent by overnight delivery and on confirmed receipt, if sent by
facsimile  transmission.

          To  Manager:     Emeritus  Corporation
                    3131  Elliott  Avenue
                    Suite  500
                    Seattle,  WA  98121
                    Facsimile:     206-301-4500
                    Attn:  Frank  Ruffo

          To  Licensee:     HB-ESC  I,  LLC
                    2025  First  Avenue
                    Suite  890
                    Seattle,  WA  98121
                    Facsimile:     206-728-9327
                    Attn:     Ruth  Verhoff

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

XII.      Indemnification.  Manager  shall  indemnify,  defend and hold harmless
          ---------------
Licensee  and  its Licensees, directors, officers and employees from any and all
third  party  claims,  demands,  causes  of  action,  losses,  damages,  fines,
penalties, liabilities, costs and expenses, including reasonable attorneys' fees
     and  court  costs  sustained  or incurred by or asserted against any one or
more  of  them by reason of or arising out of Uncovered Manager Actions. As used
in  this  Section XII, "Uncovered Manager Actions" means (a) Manager's breach of
the  duties and obligations required to be performed by Manager pursuant to this
Agreement,  (b)  acts  by Manager outside the scope of Manager's authority under
this  Agreement,  or  (c) the negligence or willful misconduct of Manager or its
agents  or  employees.   Licensee  agrees to indemnify, defend and hold harmless
Manager and its shareholders, directors, officers and employees from any and all
third  party  claims,  demands,  causes  of  action,  losses,  damages,  fines,
penalties,  liabilities, costs and expenses, including attorneys' fees and court
costs  (except to the extent covered by insurance carried by Manager or required
to be carried by Manager pursuant to this Agreement) sustained or incurred by or
asserted  against  any one or more of them relating to the Facility that results
from  the  negligence  or  willful  misconduct  of  Licensee  in  performing its
obligations  under  the  Agreement  or  from  a  breach of this Agreement by the
Licensee.  THE  INDEMNITIES  BY  LICENSEE  AND  MANAGER  IN  THIS  SECTION  XII
SPECIFICALLY  APPLY TO NEGLIGENCE AND EVENTS FOR WHICH THERE IS STRICT LIABILITY
BY  THE  INDEMNIFIED PERSONS, TO THE EXTENT THE RESULTING CLAIM, DEMAND CAUSE OF
ACTION,  LOSS,  DAMAGE,  FINE  PENALTY, LIABILITY, COST OR EXPENSE IS WITHIN THE
SCOPE OF THE INDEMNITY. Notwithstanding any other provision of this Agreement to
the contrary, each party's obligation to indemnify, defend and hold harmless the
other  party  shall  survive  the  termination  of  the  Term and this Agreement

XIII.      Entire  Agreement:  This  Agreement  contains  the  entire  agreement
          ------------------
between  the  parties  relating  to  the  operation of the Facility and shall be
binding  upon  and  inure  to the benefit of their successors and assigns.  This
Agreement  may not be modified or amended except by written instrument signed by
both  of  the  parties  hereto.  Furthermore,  this  Agreement may be amended to
accommodate  the requirements of a lender for the Facility and the Manager shall
execute  such documents as such lender may reasonably require in connection with
its  lending in connection with the Facility; provided, however, it shall not be
reasonable for Licensee's lender to require (i) Manager to reduce the Management
     Fee  set  forth  in  Section  VIII, (ii) Licensee or Manager to limit their
termination  rights as set forth in Section IV or (iii) a material limitation of
the  rights  granted  to  Licensee  or  Manager  or  a  material increase in the
obligations  imposed  on  Manager  hereunder.

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

XV.     Attorney's  Fees:  In the event either party brings an action to enforce
        ----------------
this Agreement, the prevailing party in such action shall be entitled to recover
     from  the  other  all  costs  incurred  in  connection therewith, including
reasonable  attorney's  fees.

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

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

XVIII.      Authorization  for Agreement:  The execution and performance of this
            ----------------------------
Agreement  by  Licensee  and  Manager have been duly authorized by all necessary
laws,  resolutions or corporate action, and this Agreement constitutes the valid
and enforceable obligations of Licensee and Manager in accordance with its terms
     except  as  such enforceability may be limited by creditors rights laws and
general  principles  of  equity.

XIX.      Counterparts:  This  Amendment  may  be  executed  in  any  number  of
         -------------
counterparts  and  by different parties hereto in separate counterparts, each of
which  when  so executed shall be deemed to be an original and all of which when
taken  together  shall  constitute  one and the same amendment.  Delivery of any
executed counterpart of a signature page to this Amendment by facsimile shall be
     effective  as  delivery  of  an  executed  original  counterpart  of  this
Amendment.

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

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

<PAGE>

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



HB-ESC  II,  LLC


                    By:     /s/    Daniel  R.  Baty_________________________
                                                   -------------------------
                         Daniel  R.  Baty
                    Its:     Manager


                    EMERITUS  CORPORATION



                    By:     /s/    Daniel  R.  Baty_________________________
                                                   -------------------------
                         Daniel  R.  Baty
                         Its:  Chief  Executive  Officer_



<PAGE>
                                    EXHIBIT A

                             DESCRIPTION OF FACILITY


Kingsley  Place  at  Lake  Charles
2420  Country  Club  Road
Lake  Charles,  LA  70605
96  assisted  living  units


<PAGE>
                                    EXHIBIT B
                             REPORTING REQUIREMENTS


<PAGE>
                                    EXHIBIT C
                                 FORM OF BUDGET

<PAGE>