ASSIGNMENT AND ASSUMPTION OF LEASES


     THIS  ASSIGNMENT  AND ASSUMPTION OF LEASES (this "Agreement") is made as of
December  31,  2003  (the  "Effective  Date"),  by  and  among HB-ESC II, LLC, a
Washington  limited  liability  company  ("Assignor"),  EMERITUS  CORPORATION, a
Washington  corporation,  doing business in Louisiana as Emeritus Corporation of
Washington  ("Assignee"),  and  DANIEL  R.  BATY,  an  individual ("Guarantor").
                                    RECITALS
     A.     Assignor  is  the  "Lessee" under those certain leases identified on
Exhibit A attached hereto and incorporated herein by this reference (as the same
  -------
have  been  or  may hereafter be modified, amended, or supplemented from time to
time  in  accordance  with  the  respective  terms  thereof,  collectively,  the
"Leases").  Exhibit  A  also  identifies  (i)  the original and current "Lessee"
            ----------
under each Lease, (ii) the original and current "Lessor" under each Lease, (iii)
the  City  and  State  in  which  each  facility  is  located (collectively, the
facilities  covered  by  the Leases are referred to herein as the "Facilities"),
and  (iv)  the  date  of  each  Lease  for  identification  purposes.  The land,
improvements,  related  rights  and  personal  property  (if any) covered by the
Leases  may  sometimes  be  referred  to  herein,  collectively,  as the "Leased
Property."
B.     Guarantor  has  guaranteed  the  obligations  of Lessee under each of the
Leases  pursuant to those certain written guaranties dated as of May 1, 2002, in
favor  of  the  "Lessor"  under  the  Leases (as the same may have been amended,
modified,  supplemented  or  reaffirmed  from  time  to  time, collectively, the
"Guaranties").
C.     Assignor desires to assign all of its right, title and interest in and to
the  Leases  to  Assignee  and  Assignee  desires  to  assume all of the duties,
covenants, obligations and liabilities of Assignor under the Leases, but only to
the extent such duties, covenants, obligations and liabilities arise on or after
the  Effective  Date.
D.     Pursuant to Section 5 of the First Amendment to the Leases, identified on
Exhibit  A,  Assignor  is permitted to assign the Leases to Assignee as provided
----------
therein.
--
E.     Guarantor  has  agreed  to  consent  to  the  assignment, to reaffirm the
Guaranties  as  to  the  obligations  of Assignor, and to expressly guaranty the
obligations  of  Assignee  under  the  Leases.
                                    AGREEMENT
     NOW,  THEREFORE,  in  consideration  of  the  mutual covenants and promises
contained  herein and for other good and valuable consideration, the receipt and
sufficiency  of  which are hereby confirmed and acknowledged, the parties hereto
agree  as  follows:
1.     Assignment and Assumption of Leases.  Effective as of the Effective Date,
       -----------------------------------
     Assignor  hereby  unconditionally  assigns and transfers to Assignee all of
its  right,  title  and  interest  under  the  Leases  and  Assignee  hereby
unconditionally  assumes  and  agrees  to  keep,  perform and observe all of the
covenants, conditions, duties, obligations and liabilities of the "Lessee" under
each  of  the  Leases.
2.
<PAGE>
Consent  and  Reaffirmation  of  Guarantor.
------------------------------------------
     Guarantor consents to the assignment by Assignor to Assignee as provided in
Section  1  above.  Guarantor  acknowledges and agrees that the Guaranties shall
continue  in  full  force  and  effect as to the obligations of Lessee under the
Leases, including both the obligations of Assignor as Lessee and the obligations
of  Assignee  as  Lessee  thereunder.  Assignor  and  Assignee are authorized to
provide  Lessor  with  a  copy of this Agreement, and, at the request of Lessor,
Guarantor  agrees  to sign and deliver to Lessor a separate reaffirmation of the
Guaranties.
3.     Miscellaneous  Provisions.
       -------------------------
(a)     Successors  and  Assigns.  Subject  to  the  restrictions  and  other
        ------------------------
limitations  expressly set forth herein and in the Leases, the terms, covenants,
        -
and  conditions  hereof  shall  inure  to the benefit of and be binding upon the
respective  parties  hereto,  their  successors,  and  permitted  assigns.
(b)     Notices.  Notices  to  the parties to this Agreement shall be in writing
        -------
and  sent  and  deemed  effective  in the manner and at the time provided in the
Leases.  Notices shall be given to the addresses set forth below or to any other
address  designated  in  writing  by  the  appropriate  party:

     If  to  Assignor:     HB-ESC  II,  LLC
     ----------------
          c/o  Columbia  Pacific  Management,  Inc.
     600  University  Street,  Suite  2500
     Seattle,  Washington  98101
          Fax:  (206)  728-9327
     Attn:  Kathy  Mackey

If  to  Assignee:     Emeritus  Corporation
----------------
                         3131  Elliott  Avenue,  Suite  500
     Seattle,  WA  98121-1031
Facsimile:  (206)  301-4500
          Attn:  Raymond  Brandstrom

If  to  Guarantor:     Daniel  R.  Baty
-----------------
600  University  Street,  Suite  2500
          Seattle,  Washington  98121

A  copy  of  all  notices  shall  be  sent  to:
     The  Nathanson  Group,  PLLC
     1520  Fourth  Ave.,  Sixth  Floor
     Seattle,  Washington  98101
     Fax:  (206)  623-1738
     Attn:  Randi  S.  Nathanson,  Esq.

(c)     Counterparts.  This  Agreement  may  be  executed  in  any  number  of
        ------------
counterparts  and  by  different  parties  to  this  Agreement  in  separate
        -
counterparts,  each  of which when so executed shall be deemed to be an original
        -
and  all  of  which  taken together shall constitute one and the same Agreement.
Delivery  of  an  executed counterpart of a signature page to this Agreement via
telephone facsimile transmission shall be as effective as delivery of a manually
     executed  counterpart  of  this Agreement.  Subject to the other provisions
hereof,  this  Agreement  shall  become  effective  when each of the parties has
received  a  counterpart of this Agreement executed by the other parties to this
Agreement  or  a  copy  of  such  executed  Agreement  signed  in  counterparts.
(d)     Attorneys'  Fees.  In  any dispute or action between the parties arising
        ----------------
out  of  this  Agreement,  the  prevailing  party  shall be entitled to have and
recover from the losing party such amount as the court may adjudge reasonable as
attorneys'  fees  and expenses together with costs of litigation incurred by the
prevailing  party,  in  addition  to  all  other  amounts  provided  at  law.
(e)     Amendment.  Any  alteration,  change  or  modification  of  or  to  this
        ---------
Agreement,  in  order  to  become effective, must be made in writing and in each
instance  signed  on  behalf  of  each  party  to  be  charged.
(f)     Severability.  If  any  term,  provision,  condition or covenant of this
        ------------
Agreement or its application to any party or circumstances shall be held, to any
extent,  invalid  or  unenforceable,  the  remainder  of  this Agreement, or the
application  of  the  term,  provision,  condition  or  covenant  to  persons or
circumstances  other  than  those  as  to  whom  or  which it is held invalid or
unenforceable,  shall not be affected, and shall be valid and enforceable to the
fullest  extent  permitted  by  law.
(g)     Integration.  This  Agreement  contains  the entire understandings among
        ------------
the  parties  relating  to  the  matters  set  forth  herein.  All  prior  or
contemporaneous  agreements, understandings, representations and statements with
respect  to  the  subject  matters  hereof,  whether direct or indirect, oral or
written,  are  merged  into and superseded by this Agreement, and shall be of no
further  force  or  effect.
(h)     Cooperation of Parties.  Each party agrees to sign any other and further
        ----------------------
instruments  and  documents  and  take  such  other actions as may be reasonably
necessary or proper in order to accomplish the intent of this Agreement, so long
as  the  terms  thereof  are  fully consistent with the terms of this Agreement.
(i)     Governing  Law.  This Agreement shall be construed under the laws of the
        --------------
State  of  Washington.




                            [Signature Page Follows]

<PAGE>
             [Signature Page to Assignment and Assumption of Leases]

     IN  WITNESS  WHEREOF,  the  parties hereto have entered into this Agreement
effective  as  of  the  date  first  above  written.

     HB-ESC  II,  LLC,
     a  Washington  limited  liability  company


     By:  /s/  Daniel  R.  Baty
ASSIGNOR:      Daniel  R.  Baty,  Manager


     EMERITUS CORPORATION, a Washington corporation, doing business in Louisiana
as  Emeritus  Corporation  of  Washington


     By:  /s/  William M. Shorten
ASSIGNEE:      William M. Shorten
Its:  Director of Real Estate Finance




GUARANTOR: /s/  DANIEL  R.  BATY
                DANIEL  R.  BATY

<PAGE>

                                    EXHIBIT A


               LESSEE     LESSOR     CITY/STATE     DATE OF LEASE
                                     ----------     -------------

               February  21,  1997
HB-ESC  II,  LLC,  successor  to  Integrated  Living  Communities of Alexandria,
      L.L.C., successor to Integrated Living Communities of Alexandria, Inc.
                            First Amendment (5/1/02)
                               HCPI     Alexandria, LA
                               ----     --------------

HB-ESC II, LLC, successor to Integrated Living Communities of Lafayette, L.L.C.,
successor  to  Integrated  Living  Communities  of  Lafayette,  Inc.
February  21,  1997
                                    First Amendment (5/1/02)
                                HCPI     Lafayette, LA
                                ----     -------------

HB-ESC  II,  LLC,  successor  to  Integrated Living Communities of Lake Charles,
L.L.C.,  successor  to  Integrated  Living  Communities  of  Lake  Charles, Inc.
February  21,  1997
                                    First Amendment (5/1/02)
                              HCPI     Lake Charles, LA
                              ----     ----------------