ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT
                                 (WITH CONSENT)

                          (KINGSLEY PLACE AT HENDERSON)

                          Dated as of December 31, 2003

HB-ESC  V,  L.P., a Washington limited partnership ("Assignor"), ESC IV, L.P., a
Washington  limited  partnership,  doing business in Texas as Texas-ESC IV, L.P.
("Assignee"),  EMERITUS  CORPORATION,  a  Washington  corporation  ("Emeritus"),
DANIEL  R.  BATY,  an  individual resident of the State of Washington ("Existing
Guarantor"),  and  HR  ACQUISITION  OF  SAN  ANTONIO,  LTD.,  an Alabama limited
partnership,  formerly  known  as  Capstone  Capital of San Antonio, Ltd., d/b/a
Cahaba  of  San  Antonio,  Ltd.  ("Lessor"),  agree  as  follows:

1.     PRELIMINARY  STATEMENTS.  Lessor  and  Integrated  Living  Communities of
Henderson, L.P, a Delaware limited partnership ("Original Lessee") (successor by
conversion  to  Integrated  Living  Communities  of  Henderson, Inc., a Delaware
corporation)  entered into that certain Lease Agreement dated as of December 31,
1996, which was amended by that certain First Amendment to Lease Agreement dated
as  of  December  1,  1997, and which was further amended by that certain Second
Amendment  to Lease Agreement dated as of May 9, 2002 (as amended, the "Lease"),
whereby Lessor agreed to lease to Original Lessee, and Original Lessee agreed to
lease  from  Lessor,  that  certain  assisted  living  facility  located at 1000
Richardson  Drive,  Henderson,  Texas  75654, as more particularly described and
defined  in  the Lease (the "Leased Property").  A copy of the Lease is attached
hereto  as  Exhibit  "A".  The Lease was assigned to Assignor by Original Lessee
pursuant  to  that  certain  Assignment  and Assumption of Lease Agreement (With
Consent)  dated  as  of  May 9, 2002.  Existing Guarantor executed a Guaranty of
Payment  and  Performance  dated  May 9, 2002 ("Existing Guaranty"), in favor of
Lessor,  guaranteeing  Assignor's  obligations  under  the  Lease.  Assignor now
desires to assign to Assignee, and Assignee desires to accept the assignment of,
any  right,  title  or  interest  Assignor  has in and to the Leased Property as
lessee  under the Lease, and Assignor and Assignee desire Lessor to, among other
things,  consent  to  such  assignment  and to make certain other agreements and
statements,  all  pursuant  to  the  terms and conditions of this Assignment and
Assumption  of  Lease  Agreement  (this  "Agreement").  Emeritus  is  the  sole
shareholder of ESC G.P. II, INC., a Washington corporation, which is the general
partner  of  Assignee.  Emeritus  is  required  to make certain representations,
warranties  and  agreements  in  this  Agreement as a condition precedent to the
execution  of  this  Agreement  by  Lessor.

2.     EFFECTIVENESS;  DEFINED  TERMS.  Unless  otherwise  indicated  to  the
contrary,  all  terms  and conditions of this Agreement shall be effective as of
the  date  first  written  above  (the  "Effective  Date").  Unless  defined  or
otherwise  indicated  herein,  capitalized  terms used herein without definition
shall  have  the  definitions  provided  therefor  in  the  Lease.

3.     ASSIGNMENT.  Assignor assigns and conveys unto Assignee all of Assignor's
right,  title  and  interest  in  and to the Leased Property as lessee under the
Lease,  effective  as  of the Effective Date.  Commencing on the Effective Date,
Assignee  shall be primarily liable, as principal rather than as surety, for the
payment  and  performance  of  all of Assignor's obligations as lessee under the
Lease  arising  on  or  after  the  Effective  Date.

4.     ASSUMPTION.  Assignee accepts said assignment from Assignor and expressly
assumes and agrees to keep and perform all of the terms of the Lease on the part
of  lessee under the Lease arising on or after the Effective Date.  Assignee and
Emeritus  shall  be  and become jointly and severally liable for the payment and
performance of each obligation of the lessee under the Lease arising on or after
the  Effective  Date.

5.     RELEASE OF ASSIGNOR/EXISTING GUARANTOR NOT RELEASED.  As of the Effective
Date,  Lessor  for  itself  and for its affiliates, subsidiaries, successors and
assigns, hereby releases Assignor, and its affiliates, subsidiaries, successors,
assigns,  agents  and  attorneys,  representatives  and  employees,  from  their
respective  obligations  and  liabilities of any kind or nature whatsoever under
the  Lease (including the payment of rent and other charges) arising or accruing
on or after the Effective Date, although Assignor shall not be released from any
obligations  or  liabilities  of any kind or nature arising or accruing prior to
the  Effective  Date.  Existing  Guarantor  shall  not  be  released  from  any
obligations  or  liability  under  the  Existing Guaranty and shall guaranty the
obligations  of  Assignee  under  the  Lease.

6.     ASSIGNOR'S  REPRESENTATIONS.  Assignor  represents  to Assignee, Emeritus
and  Lessor  that,  as  of  the date of this Agreement, (i) to Assignor's actual
knowledge, there is no default on the part of Lessor under the Lease; (ii) there
is  no default on the part of Assignor under the Lease or event, which, with the
giving  of  notice  or  passage  of  time  or both, would constitute an Event of
Default  under  the Lease; (iii) the Lease is valid and in full force and effect
and  has  not  been  modified,  supplemented,  or  amended,  nor  to  its actual
knowledge,  has  Lessor  assigned  its interest in the Lease; (iv) to Assignor's
actual  knowledge,  there  are no existing or impending condemnation proceedings
which  could  affect the Leased Property; (v) all Impositions (as defined in the
Lease)  are  current  and fully paid; and (vi) the amount of the current Minimum
Rent (per month) and the date through which rent has been paid for the Lease and
for  the  Related  Leases  is  set  forth  in  Exhibit  "B"  to  this Agreement.

7.     ASSIGNEE'S  AND  EMERITUS' REPRESENTATIONS.  Assignee and Emeritus hereby
(i)  acknowledge  and agree that there are no offsets or defenses to payment and
performance of the obligations of Assignor and Assignee or any other party under
the  Lease;  and (ii) waive any defense, claim or counterclaim arising out of or
in  connection  with  the obligations of Assignor or Assignee or any other party
under the Lease that exists as of the Effective Date (but not any defense, claim
or  counterclaim  that  may  arise  in  the  future).

8.     CONDITIONS  PRECEDENT  TO  LESSOR'S  CONSENT.  The  following  items  are
conditions  precedent  to  Lessor's  consent  to  the  assignment  of Assignor's
interest  under  the Lease to Assignee and must be completely satisfied prior to
the  effectiveness  of  such  assignment  (Lessor's  execution and unconditional
delivery  to  Assignor  and Assignee of this Agreement shall constitute Lessor's
agreement  that  the  Effective  Date  is  the  date first hereinabove written):

8.1     Assignor  and  its  affiliates  shall  execute and deliver the following
agreements  to Lessor, and shall complete and satisfy all of Lessor's conditions
precedent  set  forth  therein:

i.     the  Assignment  and Assumption of Lease Agreement, dated as of even date
herewith,  among  Assignor,  Assignee  and  Lessor,  with  respect  to the Lease
Agreement dated December 31, 1996, between Lessor, Integrated Living Communities
of  Oakwell,  L.P.,  a  Delaware  limited  partnership  ("ILCO"),  successor  by
conversion  to  Integrated  Living  Communities  of  Oakwell,  Inc.,  a Delaware
corporation, as lessee, for the assisted living facility located at 3360 Oakwell
Court,  San  Antonio,  Texas  78218,  which  was  amended  by that certain First
Amendment  to  Lease  Agreement  dated  as  of  December 1, 1997 and that Second
Amendment  to  Lease Agreement dated as of May 9, 2002, and which was previously
assigned  to  Assignor  by  that  certain  Assignment  and  Assumption  of Lease
Agreement  (With  Consent) dated as of May 9, 2002 (as amended and assigned, the
"Oakwell  Lease");
ii.     the  Assignment and Assumption of Lease Agreement, dated as of even date
herewith,  among  Assignor,  Assignee  and  Lessor,  with  respect  to the Lease
Agreement dated December 31, 1996, between Lessor, Integrated Living Communities
of  San  Antonio,  L.P.,  a Delaware limited partnership ("ILCSA"), successor by
conversion  to  Integrated  Living  Communities of San Antonio, Inc., a Delaware
corporation,  as  lessee, for the assisted living facility located at 9000 Floyd
Curl  Drive,  San Antonio, Texas  78240, which was amended by that certain First
Amendment  to  Lease  Agreement  dated  as  of  December 1, 1997 and that Second
Amendment  to  Lease Agreement dated as of May 9, 2002, and which was previously
assigned  to  Assignor  by  that  certain  Assignment  and  Assumption  of Lease
Agreement  (With  Consent) dated as of May 9, 2002 (as amended and assigned, the
"Medical  Center  Lease");  and
iii.     the Assignment and Assumption of Lease Agreement, dated as of even date
herewith,  among  Assignor,  Assignee  and  Lessor,  with  respect  to the Lease
Agreement dated December 31, 1996, between Lessor, Integrated Living Communities
of  McKinney,  L.P.,  a  Delaware  limited  partnership  ("ILCM"),  successor by
conversion  to  Integrated  Living  Communities  of  McKinney,  Inc., a Delaware
corporation,  as  lessee,  for  the  assisted living facility located at 1650 S.
Stonebridge  Drive,  McKinney,  Texas  75070,  which was amended by that certain
First  Amendment to Lease Agreement dated as of December 1, 1997 and that Second
Amendment  to  Lease Agreement dated as of May 9, 2002, and which was previously
assigned  to  Assignor  by  that  certain  Assignment  and  Assumption  of Lease
Agreement  (With  Consent) dated as of May 9, 2002 (as amended and assigned, the
"McKinney Lease" and, together with the Lease, the Oakwell Lease and the Medical
Center  Lease,  the  "Related  Leases").

8.2     Contemporaneously  with  or  prior to the execution and delivery of this
Agreement,  the  Management  Agreement between Assignor and Assignee pursuant to
which  Assignee  manages  the  Leased Property for Assignor shall be terminated.

8.3     Emeritus shall execute and deliver a Guaranty of Payment and Performance
in  form and content satisfactory to Lessor, guaranteeing Assignee's obligations
under  the  Lease.

8.4     No  later than the date of this Agreement, Assignee shall provide Lessor
with  the  proof  of  insurance  required  by  the  Lease.

8.5     Contemporaneously  with  the  execution  and delivery of this Agreement,
Assignee  shall  execute  and  deliver  to  Lessor  a  Security Agreement, UCC-1
financing  statements,  Short  Form  Memorandum and Assignment and Assumption of
Lease  and  First  Right of Refusal (to be recorded), and Absolute Assignment of
Rents  and  Leases, each in the form previously signed by Assignor in May, 2002.
The  existing  Security  Agreement  and  Absolute Assignment of Rents and Leases
shall  be deemed terminated and of no further force or effect upon the execution
and  delivery  of  this  Agreement.


9.     LESSOR'S  CONSENT.  Subject  to  satisfaction of the foregoing conditions
precedent,  Lessor  consents to the assignment of the Lease to Assignee.  LESSOR
HAS  NOT  MADE AND DOES NOT HEREBY MAKE ANY EXPRESS OR IMPLIED REPRESENTATION OR
WARRANTIES  WHATSOEVER  WITH  RESPECT  TO THE TITLE OR CONDITION OF THE ASSIGNED
RIGHTS  AND  INTERESTS,  INCLUDING  ANY  PREPRESENTATION  OR  WARRANTY REGARDING
QUALITY  OF  CONSTRUCTION,  WORKMANSHIP,  MERCHANTABILITY  OR  FITNESS  FOR  ANY
PARTICULAR  PURPOSE,  AND  ASSIGNEE  ACKNOWLEDGES  THAT  ASSIGNEE  ACCEPTS  THIS
AGREEMENT  WITHOUT  RELYING  UPON  ANY  SUCH STATEMENT OR REPRESENTATION MADE BY
LESSOR,  ITS  AGENTS OR CONTRACTORS, OR BY ANY OTHER PERSON(S) AND THAT ASSIGNEE
ACCEPTS  THE  LEASED  PROPERTY  "AS  IS"  "WHERE  IS"  AND  "WITH  ALL  FAULTS".

10.     RESERVATION  OF  RIGHTS.  Subject to the provisions of Section 5, Lessor
hereby  reserves  all of its rights and remedies available to it under the Lease
or  applicable  law,  including all rights and remedies available to Lessor as a
result  of any Event of Default or other event of which Lessor is unaware, which
event, with the giving of notice or passage of tie, or both, would constitute an
Event  of  Default.  Assignor  and  Assignee  consent and agree to the foregoing
reservation  of  rights  and  remedies.

11.     LESSOR'S  ESTOPPEL.  Lessor  represents  to  Assignee  that, to Lessor's
actual  knowledge,  (i)  there  is  no default on the part of Assignor under the
Lease  or  event,  which,  with the giving of notice or passage of time or both,
would  constitute  an  Event of Default under the Lease; (ii) the Lease is valid
and  in  full force and effect and has not been modified, supplemented, assigned
or  amended  by  Lessor;  (iii)  there are no existing or impending condemnation
proceedings  which  could  affect  the  Leased  Property;  and  (iv) Exhibit "B"
accurately  reflects  the amount of the current Minimum Rent payable monthly and
the  date  through  which  the  Minimum  Rent due under the Lease has been paid.

12.     EXECUTION  BY  EMERITUS.  Emeritus  has  joined in the execution of this
Agreement  for  the  purpose  of (i) making certain representations, warranties,
covenants  and  other agreements as set forth herein, and (ii) acknowledging and
consenting  to  the  terms  and  conditions  of  this  Agreement.

13.     SECURITY  DEPOSIT AGREEMENT.  The Security Deposit Agreement dated as of
November  19,  2002 executed and delivered by Assignor in favor of Lessor, shall
terminate  effective  January  1,  2004,  and  Lessor  shall  wire  transfer the
remaining Security Deposit thereunder to Assignor within three (3) business days
thereafter.

14.     REIMBURSEMENT  OF ATTORNEYS FEES AND EXPENSES.  Assignor shall reimburse
Lessor  for  reasonable  attorneys' fees and expenses incurred by Lessor through
the  Effective  Date  in  connection  with  the review of this Agreement and the
related  documents.

<PAGE>

15.     NOTICES.  Assignee  and  Lessor  acknowledge  that the new addresses for
notices  to Lessor and Assignee (as the successor Lessee under the Lease) are as
follows:

LESSOR:

HR  ACQUISITION  OF  SAN  ANTONIO,  LTD.,
c/o  Healthcare  Realty  Trust  Incorporated
3310  West  End  Avenue
Suite  700
Nashville,  TN  37203
Telephone:  (615)  269-8175
Facsimile:  (615)  269-8461
Attn:  Mr.  J.D.  Carter  Steele,  Senior  Vice  President-Asset  Administration

With  a  copy  to:

Healthcare  Realty  Trust  Incorporated
3310  West  End  Avenue
Suite  700
Nashville,  TN  37203
Telephone:  (615)  269-8175
Facsimile:  (615)  269-8461
Attn:  General  Counsel

ASSIGNEE:

ESC-IV,  LP/Texas-ESC  IV  L.P.
c/o  Emeritus  Corporation
3131  Elliott  Avenue,  Suite  500
Seattle,  WA  98121-1031
Telephone:  (206)  298-2909
Facsimile:  (206)  301-4500
Attn:  Raymond  E.  Brandstrom  -  VP  -  Finance

With  a  copy  to:

The  Nathanson  Group,  PLLC
1520  Fourth  Avenue,  Sixth  Floor
Seattle,  WA  98101
Telephone:  (206)  623-6239
Facsimile:  (206)  623-1738
Attn:  Randi  S.  Nathanson,  Esq.



16.     MISCELLANEOUS.  This  Agreement  shall  be  interpreted according to the
laws  of the State where the Leased Property is located.  Except as specifically
set  forth  herein,  no party shall assign its rights and obligations under this
Agreement  without  the  prior  written  approval  of  the  other parties.  This
Agreement constitutes the entire agreement and understanding of the parties with
respect  to  the subject matter hereof and supersedes all prior agreements, oral
or  written,  and  all  other  communications among the parties relating to such
subject  matter.  This  Agreement  shall  not  be  modified or amended except by
mutual  written  agreement.  The waiver by any party of a breach or violation of
any  provisions  of this Agreement shall not operate as or be construed to be, a
waiver  of  any  subsequent  breach  of the same or any other provision.  In the
event any provision of this Agreement is held to be unenforceable or invalid for
any reason, this Agreement shall remain in full force and effect and enforceable
in  accordance  with  its  terms  disregarding  such  unenforceable  or  invalid
provision.  The  captions or headings in this Agreement are made for convenience
and  general  reference  only and should not be construed to describe, define or
limit  the scope and intent of the provisions of this Agreement.  This Agreement
may  be executed in one or more counterparts, each of which shall be an original
and  taken  together  shall constitute one and the same document.  Signature and
acknowledgement  pages,  if  any,  may  be  detached  from  the counterparts and
attached  to  a  single  copy  of this document to physically form one document.
Subject  to the provisions set forth above regarding assignment by either party,
this  Agreement  shall  be binding and shall inure to the benefit of the parties
hereto,  and  their respective heirs, legatees, executors, administrators, legal
representatives,  successors  and  assigns.  The  parties  acknowledge  that all
parties  hereto,  and  their  counsel, have read and fully negotiated all of the
language  used  in  this  Agreement.  The  parties acknowledge that, because all
parties  and  their  counsel  participated  in  negotiating  and  drafting  this
Agreement, no rule of construction shall apply to this Agreement which construes
ambiguous  and  unclear  language  in favor of or against any party because such
party drafted this Agreement.  With respect to all provisions of this Agreement,
time  is  of  the  essence.  The  word  "including",  when following any general
statement,  term  or matter shall not be construed to limit such statement, term
or matter to the specific terms or matters as provided immediately following the
word  "including"  or  to  similar  items or matters, whether or not nonlimiting
language  (such  as  "without  limitation",  "but  not  limited to", or words of
similar  import)  is  used with reference to the word "including" or the similar
items  or  matters,  but  rather  shall be deemed to refer to all other items or
matters  that  could  reasonably  fall within the broadest possible scope of the
general  statement, term or matter.  References to any party in the singular, or
as  "him," "her," "it," "its," "itself," or other like references, shall also be
deemed  to  include  the  plural or the masculine or feminine references, as the
case  may  be.  References  to  any  of the parties in the plural, or as "they,"
"them,"  "their"  or  other like references, shall also be deemed to include the
singular  reference.

17.     EXECUTION  BY  TELEFACSIMILE.  Any  copy  of  this  Agreement  bearing a
signature  of a party to this Agreement and sent by facsimile to any other party
shall  be  deemed  a  manually-executed original of this Agreement, and shall be
deemed  sufficient  to  bind  such  party.


                       SIGNATURES BEGIN ON FOLLOWING PAGE

<PAGE>
IN  WITNESS  WHEREOF, Assignor, Assignee and Lessor, acting by and through their
respective  duly authorized officers, have executed and delivered this Agreement
as  of  the  Effective  Date.

ASSIGNOR

HB-ESC  V,  L.P.,

By  it  General  Partner:
HB-ESC  III,  LLC


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

<PAGE>

ASSIGNEE

ESC  IV,  L.P.,  a  Washington  limited  partnership,
doing  business  in  Texas  as  Texas-ESC  IV,  L.P.



By  its  general  partner:
ESC  G.P.  II,  INC.,
A  Washington  corporation


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


<PAGE>

LESSOR:


HR  ACQUISITION  OF  SAN  ANTONIO,  LTD.
By  its  general  partner:
Healthcare  Acquisition  of  Texas,  Inc.
By:  /s/  John M. Bryant, Jr.
          John M. Bryant, Jr.
Senior  Vice  President  and  General  Counsel


<PAGE>
"EXISTING  GUARANTOR"


/s/  Daniel R. Baty
Daniel  R.  Baty

<PAGE>

EMERITUS  CORPORATION


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


<PAGE>
                                    EXHIBIT A

                                Legal Description
                                   (Henderson)

Legal  description  of  land:

All  that  certain lot, tract or parcel of land being a 7.000 acre tract of land
situated  in  the  James  Smith  Survey,  Abstract  Number  709,  in the City of
Henderson,  Rusk  County,  Texas, and being all of Lot 4A, Block 320 of KINGSLEY
PLACE  an  addition  to  the City of Henderson according to the plat recorded in
Volume  1971,  Page  866  of  the Plat Records of Rusk County, Texas (PRRCT) and
being  more  particularly  described  as  follows:

BEGINNING  at  a 2 inch iron pipe found for the southwest corner of said Lot 4A,
Block  320  and  being  the  southwest corner of Lot 46 of the J.W. Price Second
Addition,  an  addition to the City of Henderson, according to the plat recorded
in  Volume  13, Page 199 (PRRCT) and being located in the northerly right-of-way
line  of  Richardson  Drive;

THENCE departing the northerly right-of-way line of said Richardson Drive, NORTH
09 deg 48' 42" WEST a distance of 555.99 feet to a 5/8 inch iron rod set for the
northwest  corner  of  said  Lot  4A,  Block  320;

THENCE  NORTH  81  deg 14' 18" EAST a distance of 603.80 feet to a 5/8 inch iron
rod  set  for  the  northeast  corner  of  said  Lot  4A,  Block  320:

THENCE  SOUTH  01  deg 35' 00" WEST a distance of 570.58 feet to a 5/8 inch iron
rod set for the southeast corner of said Lot 4A.  Block 320 and being located in
the  northerly right-of-way line of said Richardson Drive and being located in a
curve  to the left having a radius of 2,650.00 feet, a chord bearing of S 83 deg
01'  55"  WEST  and  a  chord  length  of  172.62  feet;

THENCE  along  the  northerly  right-of-way  line  of  said  Richardson Drive as
follows:
Continuing  along  said  curve to the left through a central angle of 03 deg 43'
59"  for an arc length of 172.65 feet to a 1/2 inch iron rod found for the point
of  tangency;

     SOUTH  81  deg  14'  18"  WEST  a  distance  of 318.61 feet to the POINT OF
BEGINNING;

CONTAINING  within  these metes and bounds 7.000 acres or 304,920 square feet of
land,  more  or  less.


<PAGE>

                                    Exhibit B
                                       To
                       Assignment and Assumption Agreement
                           Kingsley Place at Henderson



1.     Minimum  Monthly  Rent:  $48,307.26
2.     Rent  Current  Through:  December  31,  2003