ASSIGNMENT, AMENDMENT AND RESTATEMENT OF LEASE AGREEMENT
               --------------------------------------------------------


     This Assignment, Amendment and Restatement of Lease Agreement is made as of
December  31,  2003  by  and  between  ALS  FINANCING,  INC.,  ("ALS"), EMERITUS
PROPERTIES  XVI,  INC.  ("EMERITUS  XVI")  and  ALTERRA  HEALTHCARE  CORPORATION
("Alterra").

     W  I  T  N  E  S  S  E  T  H
     -  -  -  -  -  -  -  -  -  -

     WHEREAS,  ALS  and  Alterra  are  parties  to  that certain Lease Agreement
(Sterling  House  of  Broadmoor) which commenced as of the date of issuance of a
Personal  Care  Boarding  Home License to Alternative Living Services, Inc., now
known  as  Alterra  Healthcare  Corporation  (the "Original Lease"), pursuant to
which  Alterra  leases  from  ALS  that certain assisted living or dementia care
facility  commonly known as Sterling House of Broadmoor (the "Leased Premises").

     WHEREAS,  simultaneously  herewith ALS is conveying its fee interest in the
Leased  Premises  to  Emeritus  XVI  pursuant  to  that  certain  Conveyance and
Operations  Transfer  Agreement  of  even date herewith among the parties hereto
(the  "Conveyance  and  Operations  Transfer  Agreement");

     WHEREAS,  in  connection  with  the transaction which is the subject of the
Conveyance  and  Operations  Transfer  Agreement (the "Conveyance Transaction"),
Emeritus  XVI  is assuming the obligations of ALS under certain of the documents
evidencing  a  loan in the original principal amount of $25,000,000 (the "Loan")
in  favor  of  LaSalle  Bank  National  Association,  formerly  known as LaSalle
National  Bank,  as  Trustee  for  GMAC  Commercial  Mortgage  Pass  Through
Certificates,  Series  1998-C2  (the  "Lender");

     WHEREAS,  Alterra  has  been required by the terms of the Original Lease to
operate  the  Leased  Premises  in compliance with the terms of the Loan and the
documents  executed by Landlord in connection therewith or as security therefore
(the  "Loan  Documents");

     WHEREAS,  Emeritus XVI was unable to secure a license to operate the Leased
Premises  from  the  State  of  Colorado  prior to the closing of the Conveyance
Transaction  but in order to avoid a delay in the consummation of the Conveyance
Transaction  ,  Emeritus  XVI  agreed  to  acquire  title to the Leased Premises
subject  to  the  leasehold rights and obligations of Alterra under the Original
Lease,  as  hereby  amended  and  restated;

     WHEREAS,  in  order  to effect the foregoing agreement of Emeritus XVI, ALS
has  agreed  to  assign  to Emeritus XVI all of its right, title and interest in
and  to  the  Original  Lease;  and

     WHEREAS,  Emeritus XVI and Alterra desire to amend and restate the Original
Lease  in  its  entirety  as  herein  provided;

     NOW,  THEREFORE,  for and in consideration of the foregoing, the sum of Ten
and  No/100  Dollars  ($10.00)  and  other  good and valuable consideration, the
receipt  and  sufficiency  of  which are hereby acknowledged, the parties hereto
hereby  agree  as  follows:

                                I.     ASSIGNMENT
                                       ----------
     ALS hereby assigns, transfers and conveys to Emeritus XVI, and Emeritus XVI
hereby takes and assumes from ALS, all of ALS's right, title and interest in and
to  the  Original Lease, free and clear of all liens and encumbrances except for
the  Permitted  Liens  (as  defined  in  the  Conveyance and Operations Transfer
Agreement).

               II.     AMENDMENT AND RESTATEMENT OF ORIGINAL LEASE
                       -------------------------------------------
     Emeritus  XVI  (hereinafter  referred  to  as  "Landlord")  and  Alterra
(hereinafter  referred  to  as "Tenant") agree that the Original Lease is hereby
amended and restated in its entirety as follows (as so amended and restated, the
"Lease"):
1.     LEASE.  Landlord  hereby  rents  and  leases to Tenant, and Tenant hereby
       -----
rents  and  leases  from  Landlord, the Leased Premises, upon and subject to the
terms  and  conditions  set  forth  below.
2.     TERM.  The  term  of  this  Lease  and  Tenant's  obligation  to pay rent
       ----
hereunder  shall  commence  on at 12:01 AM on January 1, 2004 (the "Commencement
Date")  and  shall,  unless  sooner terminated as herein provided, expire on the
earlier  of (i) the date of issuance of a Personal Care Boarding Home license to
Landlord  or  (ii) January 31, 2004, provided that such date may be extended for
any  period that Landlord is diligently and in good faith pursuing issuance of a
Personal  Care Boarding Home license for itself or its designee, but in no event
later  than  March  31,  2004  (the  "Term").  Upon a termination of this Lease,
Tenant  shall  transfer  operational and financial responsibility for the Leased
Premises  to  Landlord  or  its  designee  in  accordance  with the terms of the
Conveyance  and  Operations  Transfer  Agreement.
3.     RENT;  LATE  CHARGES.
       --------------------
     During  the  Term,  Tenant  shall pay to Landlord as rent ("Rent"), all net
cash  flow  (calculated  using  the  methodology of the calculation set forth in
Exhibit  B  hereto)  from  the  Leased  Premises  after  payment to Tenant of an
operations fee equal to 7% of Resident Service Fee Revenues (determined as shown
in  Exhibit  B) from the Leased Premises.  The Rent for each month shall be paid
to  Landlord when available, but in no event later than the twentieth day of the
following  month, such that, for example, the Rent for the month of January 2004
shall  be  paid to Landlord when available, but no later than February 20, 2004.
In  consideration  for  Landlord's  agreement to accept the net cash flow as the
Rent  due  hereunder,  Tenant  agrees  that it shall operate the Facility at all
times during the Term in a manner consistent with its past practices as the same
may  be modified from time to time during the Term with the consent of Landlord.
4.     FIRE,  LIABILITY AND EXTENDED COVERAGE INSURANCE BY TENANT.  Tenant shall
       ----------------------------------------------------------
maintain  in  effect  professional liability and worker's compensation insurance
for  the  Leased  Premises  as  in  effect on December 31, 2003.  Such policy or
policies  shall  name  Landlord  as  an additional insured thereunder.  Landlord
shall  maintain  in effect, comprehensive liability insurance coverage, casualty
and  other policies of insurance (other than professional liability and worker's
compensation insurance) covering the Leased Premises in such amounts and of such
     types  and  with the carriers described in Exhibit ___ hereto.  Such policy
or policies will name Tenant as additional insured thereunder.  Each of Landlord
and  Tenant shall deliver to the other certificates of insurance evidencing such
coverage  prior to the commencement of this Lease and thereafter at least thirty
(30)  days  prior  to  the  expiration  thereof.
5.     TAXES.  Landlord  shall  pay  directly  to  the  taxing  authority  or to
       -----
Landlord's  Mortgagee  (and  if  required  by  Landlord's  Mortgagee,  estimated
payments  in  advance)  all  taxes  on  the  Leased  Premises for any tax period
included in each lease year or portions thereof (on a prorated basis) during the
Term  of  this  Lease.
     As  used  herein,  the  term  "taxes"  shall  mean  all  real estate taxes,
assessments,  and  other  governmental  impositions  or  charges  of every kind,
including  all costs and fees (including legal fees and appraisal fees) incurred
by  Landlord  in  contesting  same  or  in  negotiating  with  the  appropriate
governmental  authorities  regarding  same  but  specifically excluding Tenant's
income  or  gross  receipt  taxes  and  any  taxes  due with respect to Tenant's
operations at the Leased Property including any employment related taxes.  If at
any  time during the term of this Lease, the present method of taxation shall be
changed  so  that  in  lieu  of the whole or any part of any taxes, assessments,
levies  or  charges  levied,  assessed  or  imposed  on  real  estate  and  the
improvements  thereon  there  shall be levied, assessed or imposed on Landlord a
capital  levy  or  other  tax  directly  on  rents  received  or a franchise tax
assessment,  levy or charge measured by or based, in whole or in part, upon such
rents  for the present or any future building or buildings on the Property, then
all  such taxes, assessments, levies or charges, or the part thereof so measured
or  based  on such rents, shall be deemed to be included within the term "taxes"
for  the  purposes  hereof.
6.     UTILITY  SERVICES  AND  TRASH COLLECTION.  Tenant shall pay from revenues
       ----------------------------------------
from  the Leased Premises or from funds provided by Landlord pursuant to Section
7(e) hereof (i) all costs of utility services throughout the term of this Lease,
     including  but  not limited to, all charges for gas, water, sanitary sewer,
telephone, electricity, cable and any other services used in the Leased Premises
and  (ii)  all  charges  for trash collection service or other sanitary services
rendered  to  the  Leased  Premises  or  used by Tenant in connection therewith.
7.     PURPOSE  AND  USE.
       -----------------
     (a)     The  Leased  Premises  are  leased for the purpose of, and shall be
used  by  Tenant  only  for the operation of an assisted living facility with 37
units  and  for  no other use or purpose.  The Leased Premises shall not be used
for  any  illegal purposes nor in any manner creating a nuisance or trespass nor
in any manner which shall result in the cancellation of insurance for the Leased
Premises  or  in any increase in the rates for any such insurance.  Tenant shall
comply  in  all  material  respects  with  all governmental laws, ordinances and
regulations  applicable  to  the  use of the Leased Premises, and shall promptly
comply  with  all  governmental  orders  and  directives  for  the  correction,
prevention  and  abatement  of  any violation of any applicable law in, upon, or
connected  with  the Leased Premises, all from revenues from the Leased Premises
or  from funds provided by Landlord pursuant to Section 7(e) hereof with respect
to the maintenance of the Leased Premises and at the sole expense of Tenant with
respect  to operation of the Leased Premises.  Tenant will not permit the Leased
Premises  to  be  used  for  any  purpose  which would jeopardize the applicable
licensure  category  or  render  the  insurance  thereon  void  or  increase the
insurance  premiums  payable  with  respect  thereto.
(b)     Tenant  hereby agrees that as a material inducement to Landlord entering
into  this  Lease,  Tenant  covenants  that Tenant shall not cause or permit any
"hazardous  substance"  (as  hereinafter defined) to be placed, held, located or
disposed of in, on or at the Leased Premises or any part thereof and neither the
Leased Premises nor any part thereof shall ever be used by Tenant as a dump site
or  a storage site (whether permanent or temporary) for any hazardous substances
during  the  Term  of  this  Lease.
(c)     Tenant  hereby agrees to indemnify Landlord and Landlord's Mortgagee and
hold  Landlord  and  Landlord's  Mortgagee  harmless  from and again any and all
losses,  liabilities,  including  strict liability, damages, injuries, expenses,
including  reasonable  attorney;  fees,  cost  of any settlement or judgment and
claims  of  any  and  every  kind  whatsoever  paid, incurred or suffered by, or
asserted  against  Landlord  or  Landlord's Mortgagee by any person or entity or
governmental  agency for, with respect to, or as a direct or indirect result of,
the  presence  on or under or the escape, seepage, leakage, spillage, discharge,
emission,  discharging  or  releasing  from the Leased Premises of any hazardous
substance,  including  without  limitation,  any  losses, liabilities, including
strict  liability,  damages,  injuries, expenses, including reasonable attorneys
fees, cost of any settlement or judgment or claims asserted or arising under the
Comprehensive  Environmental  Response,  Compensation  and Liability Act, any so
called  federal,  state  or  local  "super  funds" or "super lien" laws or other
statute, ordinance, code, rule, regulation , order or decree regulating relating
to  or  imposing  liability,  including strict liability, or standard of conduct
covering  any hazardous substance; provided, however, the foregoing indemnity is
limited  (i)  to  matter  arising solely from Tenant's violation of the covenant
contain  in  Section  7(b) and (ii) to the extent the same can be satisfied from
the  revenues  of  the  Leased  Property.
(d)     For  purposes of this lease, hazardous substances shall mean and include
those  elements  or  compounds  which  are  contained  in  the list of hazardous
substances  adopted  by  the  United States Environmental Protection Agency (the
"EPA")  or  the  list  of  toxic pollutants designated by Congress or the EPS or
which  are  defined as hazardous, toxic, pollutant, infectious or radioactive by
any  other  federal  ,  state  or  local  statute,  law,  ordinance, code, rule,
regulation,  order or decree regulating, regulating to, or imposing liability or
standards  of  conduct  concerning,  any  hazardous,  toxic  or dangerous waste,
substance  or  material,  as  now  or  at  anytime  hereafter  in  effect.
(e)     In  the  event  at any time during the Term the revenues of the Facility
are  not sufficient to cover the costs incurred or anticipated to be incurred by
Tenant  in  connection  with the operation and maintenance thereof, Tenant shall
have  the right to request that Landlord provide Tenant with the funds necessary
to  cover such expenses (a "Funding Request").  Each Funding Request shall be in
writing  and  shall set forth in reasonable detail the amount and purpose of the
funds  requested.  Landlord  shall  have a period of ten (10) days to review and
respond to any Funding Request; provided, however, Landlord's failure to provide
the funds included in a Funding Request within such ten (10) day period shall be
deemed  to  be  an  election  by  Landlord  not  to  provide  such  funds.
8.     ACCEPTANCE  OF PREMISES.  Tenant acknowledges and agrees that it has been
       -----------------------
operating  the  Leased  Premises  under  the  terms  of  the  Original Lease and
accordingly  that  Tenant is fully aware of the physical condition of the Leased
Premises and accepts the Leased Premises (including all buildings, improvements,
     equipment and systems situated therein) "AS IS" in their present condition,
as  fully suitable for the purposes for which the same are leased by Landlord to
Tenant.
9.     INDEMNIFICATION.  Tenant  hereby  agrees  to  indemnify and hold Landlord
       ---------------
harmless  from  any  and  all  claims,  damages, action, causes of action, loss,
liabilities or expenses (including reasonable attorneys fees) arising out of (a)
Tenant's use or occupancy of the Leased Premises, (b) any and all claims arising
from  any  breach  or  default  in  the  performance of any obligation of Tenant
hereunder  or  (c)  any  act,  omission  or  negligence  or  Tenant, its agents,
employees,  invitees  and others claiming by, through or under Tenant; provided,
however,  that  Tenant's  liability  under  this  Section  9 shall be limited to
amounts  payable  from  the  revenues  of  the  Leased  Premises.
10.     MAINTENANCE  BY  TENANT.  Tenant, from revenues from the Leased Premises
        -----------------------
or  from the funds provided by Landlord pursuant to Section 7(e), shall maintain
in good repair and condition the Leased Premises, normal wear and tear excepted.
In  furtherance and not in limitation of the foregoing, Tenant shall maintain in
good  repair  and  condition  thereof  any  and all portions of the HVAC systems
located  inside  and  outside  the  Leased  Premises.  Should  Tenant neglect to
perform any of its obligations as set forth hereinabove, at all times throughout
the term of the Lease, Landlord shall have the right (but not the obligation) to
cause  any  such  obligation  to  be  accomplished,  and  all  costs incurred in
connection  therewith  shall  be  paid  by  Landlord.
11.     ALTERATIONS;  CAPITAL  EXPENDITURES.  Tenant  shall  not  make  any
        -----------------------------------
alterations,  additions or improvements to the Leased Premises without the prior
        --
written  consent  of Landlord, except that Landlord's prior consent shall not be
required  for  any  capital expenditure of less than $5,000 and for which Tenant
determines  there  are  sufficient  Facility revenues to cover the cost thereof.
All  alterations,  additions or improvements made by Tenant shall be paid for by
Landlord or from revenues from the Leased Premises, shall be performed in a good
workmanlike  manner,  shall  be  lien  free,  and  shall  become the property of
Landlord  at  the  time  of  the  installation thereof.  Tenant acknowledges and
agrees  that  Landlord  has  advised  Tenant  that  under  the terms of the Loan
Documents,  Landlord  is  required to complete certain repairs or renovations to
the  Facility prior to December 31, 2004.  Accordingly, in the event the Term of
this  Lease  extends  beyond January 31, 2004, Tenant shall upon request provide
Landlord  with  access  to  the Facility in order to enable Landlord to commence
such  repairs  and  renovations.
12.     ASSIGNMENT  AND  SUBLETTING.  Tenant shall not convey, pledge, mortgage,
        ---------------------------
encumber  or  assign  this  Lease or any interest hereunder, sublease the Leased
Premises  or  any  part thereof, or permit the use of the Leased Premises or any
portion  thereof  by  any party other than Tenant, the residents of the Facility
and  the  parties  to  the  commercial  leases, if any, described in Exhibit ___
hereto.
13.     DAMAGE  BY  CASUALTY.
        --------------------
A.     Tenant  shall give written notice to Landlord of any damage caused to the
Leased  Premises  by fire or other casualty as soon as reasonably possible after
learning  of  such  damage.
B.     In  the  event  that the Leased Premises shall be damaged or destroyed by
fire  or  other casualty, then Landlord may elect either to terminate this Lease
as hereinafter provided or to proceed to rebuild and repair the Leased Premises.
If  Landlord  elects to terminate this Lease, Landlord shall give written notice
of such election to Tenant within three (3) business days after receiving notice
of  such casualty.  If Landlord does not elect to terminate this Lease, Landlord
shall proceed with reasonable diligence and to the extent insurance proceeds are
available  to  Landlord  to  rebuild  and  repair  the Leased Premises as herein
provided.
C.     Landlord's obligation to rebuild and repair under this Paragraph 12 shall
in  all  event  be limited to restoring the Leased Premises to substantially the
same  condition which existed prior to the casualty and shall be further limited
to  the  extent  of  the  insurance  proceeds  available  to  Landlord  for such
restoration.
D.     The  Rent due from Tenant to Landlord shall not be abated during any such
period  of  repair  or  restoration.
14.     CONDEMNATION.
        ------------
A.     Total  Taking.  If,  at  any time during the term of this Lease, title to
       -------------
the  entire  Leased  Premises  should  become vested in a public or quasi-public
authority  by  virtue  of  the  exercise  of  expropriation,  appropriation,
condemnation  or  other  power  in the nature of eminent domain, or by voluntary
transfer  from  the  owner of the Leased Premises under threat of such a taking,
then  this  Lease shall terminate as of the time of such vesting of title, after
which  neither  party  shall  be  further  obligated  to  the  other  except for
occurrences  antedating such taking.  The same results shall follow if less than
the entire Leased Premises shall be thus taken, or transferred in lieu of such a
     taking,  but  only  if  it  would  be  commercially  impractical for Tenant
reasonably  to  conduct  the  permitted  use  therein.
B.     Partial  Taking.  Should  there  be  such a partial taking or transfer in
       ---------------
lieu  thereof, but not to such an extent as to make such continued occupancy and
operation  by Tenant commercially impractical, then this Lease shall continue on
all  of  its  same  terms  and  conditions.
C.     Right  to Proceeds.  In the event of any such taking or transfer, whether
       ------------------
of  the entire Leased Premises, or a portion thereof, it is expressly agreed and
understood  that  all  sums awarded, allowed or received in connection therewith
shall  belong  to Landlord, and any rights otherwise vested in Tenant are hereby
assigned  to Landlord, and Tenant shall have no interest in or claim to any such
sums  or any portion thereof, whether the same be for the taking of the property
or  for  damages,  or  otherwise.
15.     RE-ENTRY  DURING  TERM.  Landlord,  its agents, officers or assigns, and
        ----------------------
Landlord's  Mortgagee,  shall  have the right to enter the Leased Premises, upon
reasonable  prior  notice  and  during  normal  working hours, other than during
emergencies  in  which case no notice shall be required and such entry may occur
at  any  time deemed necessary by Landlord, throughout the Term of the Lease for
the following purposes: (A) inspecting the general condition and state of repair
     of  the Leased Premises; (B) showing the Leased Premises to any prospective
purchaser;  (C)  taking  any  emergency action which Landlord deems necessary to
protect  the  Leased Premises; (D) inspecting the Leased Premises as required by
governmental  agencies  or  insurance companies; or (E) for any other reasonable
purposes.
16.     DISPLAY  PRIOR  TO  TERMINATION.  Landlord,  its  officers,  agents  or
        -------------------------------
assigns,  shall  have  the  right  to  erect  on  or about the Leased Premises a
customary  sign  advertising  the  Property  for  lease  or  for sale; and shall
likewise  have  the  right  to  enter  the Leased Premises upon reasonable prior
notice  during  normal  working  hours  for  the  purpose  of showing the Leased
Premises  to  prospective  lessees.
17.     DEFAULTS  BY  TENANT:  LANDLORD'S  ALTERNATIVES.
        -----------------------------------------------
A.     In  the  event  of  any failure of Tenant to pay any rental due hereunder
within  five  (5)  days after the same shall be due, or any failure of Tenant to
perform  any  of  the  other  terms,  conditions, obligations or covenants to be
observed  or  performed  by Tenant pursuant to this Lease, within three (3) days
following  written  notice  to  Tenant  of its failure to do so, or in the event
Tenant  shall  become bankrupt or insolvent or file or have filed against it any
debtor  or  bankruptcy  proceeding pursuant to any statute, either of the United
States  or  of  any state, or for the reorganization or for the appointment of a
receiver  or  trustee of all or a portion of its property, or if Tenant makes an
assignment  for the benefit of creditors, or petitions for or enters into a plan
of  arrangement,  or  if Tenant shall abandon the Leased Premises or suffer this
Lease  to  be  seized  or  otherwise taken under any writ of execution, then, in
addition  to  any  other rights or remedies it may have, Landlord shall have the
option  to  exercise  any one or more of the following remedies, it being agreed
that  pursuit of any remedy provided in this Lease shall not preclude pursuit of
any other remedy or remedies herein provided or provided by law, and that any of
     such  remedies  may  be  pursued  regardless  of whether or not the default
continues  to  exist  and  whether  or not Landlord accepts or has accepted rent
subsequent  to  the  occurrence  of  such  default:
(1)     Terminate  this  Lease  by three days prior written notice to Tenant, in
which  event  Tenant shall thereupon surrender possession of the Leased Premises
to Landlord and Landlord may re-enter and repossess the Leased Premises; and, in
     connection  therewith,  Landlord  may  use  such force as may be necessary,
without  being  guilty  of  trespass,  forcible  entry,  detainer or other tort.
(2)     With  or  without  terminating  this  Lease,  and  upon three days prior
written  notice  to  Tenant,  Landlord, at its option, may enter upon the Leased
Premises,  change  the locks, and attempt to re-let the Leased Premises, without
advertisement,  by  private  negotiations and for any term and rental rate which
Landlord  in  its  sole  discretion  determines.
(3)     Pursue  any  and  all  other  rights  and  remedies  available under the
Conveyance  and  Operations  Transfer  Agreement.
B.     In  the  event  of  the termination of this Lease or of Tenant's right to
possession  of  the  Leased  Premises  pursuant to this Section 16, Tenant shall
transfer  operational  and  financial  responsibility for the Leased Premises to
Landlord or its designee in accordance with the provisions of the Conveyance and
     Operations  Transfer  Agreement.
18.     NOTICE.  Any  notice,  demand,  request  or  other  act  which  shall be
        ------
required or permitted under this Lease must be in writing and shall be deemed to
     have  been  furnished  when delivered by hand, facsimile, overnight mail or
deposited,  postage  prepaid  in  the U.S. Mail, certified or registered, return
receipt  requested,  and  addressed  to the address set forth below and shall be
deemed  given  upon  the  actual  receipt  or  refusal  of  receipt  thereof:
          LANDLORD:          Emeritus  Properties  XVI,  Inc.
                         c/o  Emeritus  Corporation
                         3131  Elliott  Avenue,  Suite  500
                         Seattle,  WA  98121-1031
                         Attn:  Bill  Shorten,  Director  of  Real  Estate
                         Telephone:  (206)  298-2909
                         Facsimile:   (206)  301-4500

          TENANT:          Alterra  Healthcare  Corporation
                         10000  Innovation  Drive
                         Milwaukee  WI  53226
                         Attn:  Kristin  Ferge,  Chief  Financial  Officer
                         Telephone:  (414)  918-5506
                         Facsimile:   (414)  918-5055
or  such  other  address  as  either Landlord or Tenant shall have designated by
written  notice  to  the  other  party.
19.     TITLES.  Notations  or  titles appearing in this instrument are provided
        ------
merely  for  ease of reference, and the parties hereto expressly acknowledge and
agree  that  such  notations  and titles do not constitute a part of this Lease,
have  no legal effect whatsoever in determining the rights or obligations of the
parties,  and  shall  have no bearing upon the meaning or interpretation of this
agreement  or  any  portion  of  it.
20.     NON-WAIVER.  The  failure by Landlord, whether once or more, to act upon
        ----------
a  specific breach of any term, covenant or condition herein contained shall not
be  deemed  to  be  a  waiver  of  such  term, covenant, or condition nor of any
subsequent  breach  of  the same or any other term, covenant or condition herein
contained.  Any subsequent acceptance of rent hereunder by Landlord shall not be
deemed to be a waiver of any preceding breach by Tenant of any term, covenant or
condition  of  this  Lease  other  than  the failure of Tenant timely to pay the
particular  rental  so  accepted,  regardless  of  Landlord's  knowledge of such
preceding  breach  at the time of acceptance of such rent.  No covenant, term or
condition  of  this Lease shall be deemed to have been waived by Landlord unless
such  waiver  shall  be  specifically  expressed  in  writing  by  Landlord.
21.     SEVERABILITY:  ENTIRE  AGREEMENT.
        --------------------------------
A.     If  any  term,  covenant  or  condition  of this Lease or the application
thereof  to  any  person  or  circumstance  shall,  to any extent, be invalid or
unenforceable,  the  remainder  of  this Lease, or the application of such term,
covenant,  or condition to persons or circumstances other than those which or to
which  such may be held invalid or unenforceable, shall not be affected thereby,
and  each  term,  covenant  or  condition  of  this  Lease  shall  be  valid and
enforceable  to  the  fullest  extent  permitted  by  law.
B.     Except for any exhibits, attachments, plats, or other documents as may be
     affixed  hereto,  made  a part hereof, and properly identified herewith and
except  as  amended by the Subordination and Attornment Agreement dated July 30,
1998,  which  has  been  assumed  by  Landlord  pursuant  to the terms of a Loan
Assumption  Agreement  of  even  date  herewith  among Landlord, Tenant, ALS and
Lender,  this  Lease  constitutes  the  entire contract between the parties, and
shall  not  be  otherwise  affected  by  any other purported undertaking whether
written  or  oral.
22.     TIME  OF  ESSENCE.  Time  is  of  the  essence  of  this  Lease.
        -----------------
23.     TERMINATION  OF  LEASE.  Landlord  may terminate this Lease on three (3)
        ----------------------
business  days' prior written notice to Tenant.  Tenant may terminate this Lease
upon  any failure of Landlord to fund a Funding Request pursuant to Section 7(e)
hereof.
24.     ATTORNMENT:  SUBORDINATION.
        --------------------------
A.     Tenant  accepts  this  Lease subject and subordinate to any Ground Lease,
Mortgage,  Deed  of  Trust,  Deed  to  Secure Debt or any other hypothecation or
security  now  or hereafter placed upon the Leased Premises (any such instrument
hereinafter  called  a  "Mortgage")  and  to  any  and  all advances made on the
security  thereof  and  to  all  renewals,  modifications,  consolidations,
replacements  and  extensions  thereof.  If  any  holder  of  a Mortgage (herein
"Landlord's  Mortgagee") shall elect to have this Lease prior to the lien of its
Mortgage,  and  shall give written notice thereof to Tenant, this Lease shall be
deemed  prior  to such Mortgage, whether this Lease is dated prior or subsequent
to  the  date  of  said  Mortgage,  or  the  date  of  recording  thereof.
B.     Although  the  provisions  of  this  Section  28 shall be self-operative,
Tenant  agrees, upon request of Landlord or Landlord's Mortgagee, to execute any
documents  required  to effectuate any attornment, subordination or to make this
Lease  prior  to  the  lien  of  any Mortgage.  Tenant's failure to execute such
documents  within ten (10) days after written demand shall constitute a material
default  by  Tenant  hereunder, or, at Landlord's option, Landlord shall execute
such  documents  on  behalf  of  Tenant  as  Tenant's  attorney-in-fact.
C.     Tenant  does  hereby make, constitute and irrevocably appoint Landlord as
Tenant's attorney-in-fact and in Tenant's name, place and stead, to execute such
documents  in  accordance  with  this  Section  28, such power of attorney being
coupled  with  an  interest.
D.     If  by  reason  of a default under the Mortgage upon the Leased Premises,
the  interest  of Landlord in the Leased Premises is terminated, the Tenant will
attorn  to Landlord's Mortgagee at Landlord's Mortgagee's sole option (or to any
person  or  entity  to which the Leased Premises is conveyed by such holder) and
will  recognize  such  holder,  person or entity as Tenant's landlord under this
Lease.  Tenant further waives the provision of any statute or rule of law now or
hereafter  in  effect  which  may  give  or  purport to give Tenant any right of
election  to  terminate  this  Lease  or  to  surrender possession of the Leased
Premises  in  the  event  any  proceeding  is brought by Landlord's Mortgagee to
terminate  the  interest of the Landlord in the Leased Premises, and agrees that
this  Lease  shall  not  be  affected  in any way whatsoever by such proceeding.
25.     LENDER'S  RIGHT  TO  CURE  DEFAULT.  If the Landlord defaults under this
        ----------------------------------
Lease,  Tenant,  before  taking  advantage  of any rights or remedies granted to
Tenant  or  by  law,  shall  notify  in  writing, certified mail, return receipt
requested, any Landlord's Mortgagee which holds a Mortgage and who has requested
     Tenant so to do and given Tenant its mailing address and Tenant shall allow
Landlord's  Mortgagee,  at  Landlord's  Mortgagee's  sole  option, ten (10) days
following  receipt  of  such  notice  (plus  any  additional  time  that  may be
reasonably  necessary)  within  which  to  cure such default.  The time given to
Landlord's  Mortgagee to cure Landlord's default shall not run concurrently with
any  time granted to Landlord to cure such default, but shall run from the later
of Landlord's Mortgagee's receipt of notice from Tenant of Landlord's default or
the  expiration  of  the  time  period,  if  any, given to Landlord to cure such
default.  Landlord's  Mortgagee  may,  but  shall not be obligated to, cure such
default,  and  Tenant  shall  accept  any  such  cure  by  Landlord's Mortgagee.
26.     COUNTERPARTS.  This  Agreement  may  be  executed  in  one  or  more
        ------------
counterparts  and all such counterparts taken together shall constitute a single
        ---
original  agreement.
27.     HOLDING  OVER.  If  Tenant  remains in possession of the Leased Premises
after  expiration  of  the  Term  with  Landlord's  acquiescence and without any
express  agreement  of the parties, Tenant shall be a tenant from month to month
at  a  rental  rate  equal  to  double  the  then current rental rate subject to
Landlord's right to terminate said tenancy upon thirty (30) days written notice;
and  there  shall  be  no  renewal  of  this  Lease  by  operation  of  law.
28.     RIGHTS  CUMULATIVE.  All  rights,  powers  and  privileges  conferred
        ------------------
hereunder  upon  the  parties  hereto shall be cumulative but not restrictive to
those  given  by  law.
29.     GOVERNING  LAW.  The  laws of the State in which the Leased Premises are
        --------------
located  shall  govern the interpretation, validity, performance and enforcement
of  this  Lease.
30.     TENANT  REPRESENTATION.  If  Tenant  signs  as  an  entity,  each person
        ----------------------
executing  this  Lease on behalf of Tenant does hereby covenant and warrant that
Tenant  is  a  duly  authorized  and  existing  entity,  that  Tenant has and is
qualified  to  do  business in the State in which the Leased Premises is located
and  that  the  entity has full right and authority to enter into this Lease and
that  each  person  signing  on  behalf  of  such entity is authorized to do so.
31.     RIGHT TO TRANSFER.  Nothing herein shall in any way prohibit or restrict
        -----------------
Landlord from conveying all or a portion of its right, title and interest in the
Leased  Premises  and  to  this  Lease  to  a  third party or to an affiliate of
Landlord.  Upon  any  transfer of Landlord's interest in the Leased Premises and
in  this  Lease to a third party or affiliate of Landlord, such transferee shall
become  "Landlord"  hereunder  and the transferor Landlord shall have no further
obligations  hereunder.

<PAGE>
                                       11

     IN  WITNESS  WHEREOF,  the parties herein have hereunto set their hands and
seals,  the  day  and  year  first  above  written.

                         ALS  FINANCING,  INC.


                         By:  /s/ Mark W. Ohlendorf
                         Name:    Mark W. Ohlendorf
                         Title: Vice President



                         EMERITUS  PROPERTIES  XVI,  INC.


                         By:  /s/ William M. Shorten
                         Name:    William M. Shorten
                         Title: Director of Real Estate Finance


                         ALTERRA  HEALTHCARE  CORPORATION


                         By:  /s/ Mark W. Ohlendorf
                         Name:    Mark W. Ohlendorf
                         Title: President