Conveyance  and  Operations  Transfer  Agreement
                  CONVEYANCE AND OPERATIONS TRANSFER AGREEMENT

     THIS CONVEYANCE AND OPERATIONS TRANSFER AGREEMENT (the "Agreement") is made
and entered into as of the 31st day of December, 2003 (the "Execution Date"), by
and  among  ALS  FINANCING,  INC.,  a Kansas corporation (the "Seller"), ALTERRA
HEALTHCARE  CORPORATION,  a  Delaware  corporation  ("Alterra"),  and  EMERITUS
PROPERTIES  XVI,  INC.,  a  Nevada  corporation  (the  "Purchaser").

                                    RECITALS

     A.     Seller  is  the  owner  of  the following: (i) the real property and
improvements  constituting  that certain 140 unit assisted living facility known
as  "Wynnwood  at  the  Palms"  located  at 25585 Van Leuven Street, Loma Linda,
California  (collectively,  the "Loma Property"), as more particularly described
on  Exhibit  A-1,  (ii)  the  real  property  and improvements constituting that
    ------------
certain  113  unit assisted living facility known as "Clare Bridge at Lake Park"
   --
located  at  3524  Lake  Boulevard,  Oceanside,  California  (collectively,  the
"Oceanside  Property"), as more particularly described on Exhibit A-2, (iii) the
                                                          -----------
real property and improvements constituting that certain 37 unit assisted living
facility  known  as  "Sterling  House  of  Broadmoor" located at 615 Southpointe
Court,  Colorado  Springs,  Colorado  (collectively,  the  "Colorado  Springs
Property"),  as  more  particularly  described  on  Exhibit  A-3,  (iv) the real
                                                    ------------
property  and  improvements  constituting  that  certain 21 unit assisted living
facility  known  as  "Sterling  House of Augusta" located at 1611 Fairway Drive,
Augusta,  Kansas  (collectively,  the  "Augusta Property"), as more particularly
described  on  Exhibit  A-4,  and  (v)  the  real  property  and  improvements
               -------------
constituting  that  certain  44 unit assisted living facility known as "Sterling
House  of  Woodland  Terrace"  located  at  1500 Terrace Avenue, Liberal, Kansas
(collectively,  the  "Liberal  Property"),  as  more  particularly  described on
Exhibit  A-5.  Hereinafter,  the  Loma  Property,  the  Oceanside  Property, the
      ------
Colorado  Springs Property, the Augusta Property and the Liberal Property may be
individually  referred  to  as  a "Property" and collectively referred to as the
"Properties".

     B.     The  Properties  are  subject  to  a  loan in the original amount of
Twenty  Five  Million  and NO/100 Dollars ($25,000,000.00) (the "Loan"), made to
Seller  by  GMAC  Commercial Mortgage Corporation, a California corporation (the
"Original  Lender"),  which  Loan  was  assigned  to  LaSalle  Bank  National
Association,  formerly  known  as  LaSalle  National  Bank,  as Trustee for GMAC
Commercial  Mortgage  Securities,  Inc.,  Commercial  Mortgage  Pass-Through
Certificates, Series 1998-C2 (the "Lender").  The Loan was made pursuant to that
certain  Loan  Agreement  dated  July  30,  1998  (the  "Loan Agreement") and is
evidenced  by  that  certain  Promissory  Note dated July 30, 1998 (the "Note"),
issued by Seller in favor of Original Lender in the original principal amount of
Twenty  Five Million and NO/100 Dollars ($25,000,000.00). The Loan Agreement and
the Note, together with any other documents executed, delivered, and/or recorded
in  connection  with  the  Loan  may  be  collectively  referred to as the "Loan
Documents".

     C.     Each  of the Properties is leased by Alterra from Seller pursuant to
those  certain  Leases  identified  on  Exhibit  B (collectively, the "Leases").
                                        ----------
Seller  is  a  subsidiary  of  Alterra.  Hereinafter,  Seller and Alterra may be
individually  referred to as an "Alterra Entity" and collectively referred to as
the  "Alterra  Entities".

D.     On  January  22, 2003, Alterra, as debtor and debtor in possession, filed
its  voluntary  petition for relief under Chapter 11 of the Bankruptcy Code (the
"Bankruptcy  Code")  in  the  United States Bankruptcy Court for the District of
Delaware  (the "Bankruptcy Court"), and by Stipulation and Order filed with, and
approved  by,  the  Bankruptcy  Court  (the "Stipulation"), Alterra obtained the
authorization  necessary  for  the  Alterra  Entities to sell and transfer their
respective  right, title, and interest, if any, in and to the Transferred Assets
(as  hereinafter  defined)  to  a  purchaser  approved  by  Lender.

E.     Lender  and  Emeritus  Corporation  ("Emeritus"),  the  parent company of
Purchaser, entered into a Letter of Intent, under which Emeritus or its designee
agreed,  subject  to  the  negotiation,  execution  and  delivery  of definitive
documentation,  to  (i) acquire the Transferred Assets from the Alterra Entities
and  (ii) assume the Alterra Entities' respective rights and obligations arising
from  and  after  the  Closing  Date under the Loan Documents (collectively, the
"Transaction").  Emeritus  has appointed Purchaser as its designee to consummate
the  Transaction.

F.     In  the  Stipulation,  Alterra consented to the Transaction and agreed to
execute  such  documents,  consents and waivers as may be reasonably required by
Lender  and  Emeritus  to  consummate  the  Transaction;  provided, however, the
conveyance  of  the  Transferred  Assets shall be made without representation or
warranty  except  to  the  extent  specifically  provided  in  the  Stipulation.

G.     The  Alterra  Entities,  Emeritus,  Purchaser  and  Lender have agreed to
document the assumption of the Loan pursuant to the terms and conditions of that
certain  Loan  Assumption Agreement of even date herewith entered into among the
parties  (the "Loan Assumption Agreement", and together with any other documents
executed,  delivered  and/or  recorded  in  connection  therewith,  the  "Loan
Assumption  Documents").

H.  The Alterra Entities and Purchaser have agreed to document the conveyance of
the  Transferred Assets on terms and conditions consistent with the Stipulation,
all  as  more  specifically  set  forth  herein.

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

<PAGE>
                                    AGREEMENT

     1.     THE  SELLER  ASSETS.
            -------------------

     On  the  terms  and  conditions  set  forth herein, Seller hereby sells and
transfers  to  Purchaser and Purchaser hereby purchases and acquires from Seller
all  of  Seller's  right,  title  and  interest  in  and  to  the  following:

     (a)     PROPERTIES.  (a)     REAL  PROPERTY  AND FACILITY.  The Properties,
together  with  all  tenements,  hereditaments,  rights,  privileges, interests,
easements, and appurtenances now or hereafter belonging or in any way pertaining
to  the  Properties.

     (b)     PERSONAL  PROPERTY.  (b)     PERSONAL  PROPERTY.  Except  for  the
Excluded  Property  (as  defined  in  Paragraph  1(e)),  any  and all furniture,
fixtures,  equipment  (including  computer  hardware  and software), appliances,
tools,  and  other  tangible personal property owned by Seller as of the Closing
Date  (as  defined  in Paragraph 4(a)) and located on the Properties and used by
Seller  in  connection  with the ownership, or by Alterra in connection with the
operation,  of  the  Properties  (collectively, the "Seller Personal Property").
Seller  shall  have no obligation to deliver the Seller Personal Property to any
location  other  than  the Properties, and Purchaser agrees that the presence of
the  Seller  Personal  Property  at  the  Properties at Closing shall constitute
delivery  thereof.

     (c)     MISCELLANEOUS  PROPERTY.  Except  for  the  Excluded  Property, all
plans,  drawings,  surveys,  applications to governmental authorities related to
the  development  and  ownership  of  the  Properties (collectively, the "Seller
Plans");  all  transferable  certificates  of  occupancy,  permits,  licenses,
authorizations,  or  approvals  relating  to  the  ownership  of  the Properties
(collectively,  the "Seller Permits"); and all general intangibles, intellectual
property,  and other intangible property or rights relating to or used or useful
in  connection  with  the ownership of the Properties (collectively, the "Seller
Intangible  Property").  Hereinafter,  the  Seller  Plans,  Seller  Permits, and
Seller  Intangible  Property  may  be  collectively  referred  to as the "Seller
Miscellaneous  Property."

     (d)     IMPOSITION  DEPOSITS.  All  deposits  for  impositions  or  other
escrowed  funds  or  reserves  required  to  be paid or funded by Seller for the
benefit of Lender under the Loan Documents, which shall include at a minimum tax
reserves  in  the  amount  of $177,375.26  (collectively, the "Seller Imposition
Deposits").

     (e)     EXCLUDED PROPERTY.  As used in this Agreement, the phrase "Excluded
Property"  means  (i)  any  proprietary brochures or proprietary software of the
Alterra  Entities, employee manuals, training materials and videotapes, policies
and  procedures  manuals  and  materials  of  the  Alterra Entities, promotional
materials  relating  to  marketing  and advertising of the Properties, marketing
studies  and  analyses, (ii) any computer hardware, computer software (including
the call light software and other software (the "Call Light Software") installed
on  the  personal  computer  located at the Loma Linda Property (the "Loma Linda
PC)), motor vehicles, copiers, facsimile machines, cell phones, pagers, or other
personal  property  located  at  or used in connection with the operation of the
Properties  which  is leased or licensed by the Alterra Entities (other than the
personal property owned by Seller and leased to Alterra pursuant to the Leases),
(iii)  Kronos  time clocks, (iv) any signage bearing the Alterra Entities' names
(or  any  portion thereof), and (v) any trademarks or service marks owned by the
Alterra  Entities;  provided,  however, notwithstanding anything to the contrary
set  forth  herein,  Purchaser  shall be entitled to use the Call Light Software
until the earlier to occur of (a) ninety (90) days following the Closing Date or
(b)  replacement  of  the  Call  Light  Software by Purchaser (the "Software Use
Period").  The  Alterra  Entities  shall be permitted to erase the hard drive of
the  Loam  Linda  PC  upon  expiration  of  the Software Use Period but prior to
installation  of  any  replacement  software  by  Purchaser.

     Hereinafter,  the  Properties,  the  Personal  Property,  the  Seller
Miscellaneous  Property  and  the Seller Imposition Deposits may be collectively
referred  to  as  the  "Seller  Assets."

     2.     THE  ALTERRA  ASSETS.
            --------------------

     Except  as  otherwise  specifically  set  forth  herein with respect to the
Colorado  Springs  Property,  concurrently  with  the  conveyance  by  Seller to
Purchaser  of  the  Seller Assets, on the terms and conditions set forth herein,
Alterra  hereby transfers and conveys to Purchaser, and Purchaser hereby accepts
and  assumes  from Alterra, all of Alterra's right, title and interest in and to
the  following:

     (a)     INVENTORY  AND  SUPPLIES.  All  inventory  and  supplies (including
linens,  consumables,  and  foodstuffs,  medical  supplies, office supplies, and
maintenance  inventories)  owned by Alterra and located at the Property and used
in  connection with the operation of the Properties (the "Consumables"). Alterra
shall  have  no obligation to deliver the Consumables to any location other than
the Properties, and Purchaser agrees that the presence of the Consumables at the
Properties  at  Closing  shall  constitute  delivery  thereof.

(b)     ACCOUNTS, CONTRACTS AND RESIDENT FEES AND FUNDS. All accounts receivable
for  periods  from  and  after  the Closing Date; resident trust funds; resident
deposits for periods from and after the Closing Date; the Designated Third Party
Contracts  (as  defined  in  Paragraph  6(a)(ii))  but  only  with  respect  to
obligations and liabilities for periods from and after the Closing Date; and, to
the  extent  transferable,  the  Residency  Agreements  (as defined in Paragraph
6(a)(iii))  but  only  with  respect to residency, services, or care for periods
from  and after the Closing Date; and the Records (as defined in Paragraph 6(c))
(the  "Operations  Assets").

     (c)     PERSONAL  PROPERTY.  (b)     PERSONAL  PROPERTY.  Except  for  the
Excluded  Property  (as  defined  in  Paragraph  1(e)),  any  and all furniture,
fixtures, equipment (including the Loma Linda PC and any other computer hardware
and  software), appliances, tools, and other tangible personal property owned by
Alterra as of the Closing Date and located on the Properties and used by Alterra
in  connection  with the operation of the Properties (collectively, the "Alterra
Personal  Property").  Alterra  shall  have no obligation to deliver the Alterra
Personal  Property  to  any  location  other  than the Properties, and Purchaser
agrees  that  the presence of the Alterra Personal Property at the Properties at
Closing  shall  constitute  delivery  thereof

     (d)     MISCELLANEOUS  PROPERTY. All plans, drawings, surveys, applications
to  governmental  authorities  related  to  the  operation  of  the  Properties
(collectively,  the  "Operating  Plans");  all  transferable  certificates  of
occupancy,  permits,  licenses,  authorizations,  or  approvals  relating to the
operation  of the Properties (collectively, the "Operating Permits"); and to the
extent  designated by Purchaser, all general intangibles, intellectual property,
and  other  intangible  property  or  rights  relating  to  or used or useful in
connection  with  the  operation of the Properties, including without limitation
the  rights to all telephone and facsimile numbers (collectively, the "Operating
Intangible Property").  Hereinafter, the Operating Plans, Operating Permits, and
Operating  Intangible  Property  may  be  collectively  referred  to  as  the
"Miscellaneous  Operating Property."  The Miscellaneous Operating Property shall
specifically  exclude  the  Excluded  Property.

     Notwithstanding  the foregoing, the conveyance to Purchaser or its designee
of  the  Alterra  Assets  related  to  the  Colorado  Springs  Property shall be
effective  on  the earlier of (i) the date on which Purchaser or its designee is
licensed  to  operate  the  Colorado  Springs Property or (ii) January 31, 2004,
provided that such date may be extended for any period during which Purchaser or
its  designee is diligently and in good faith pursuing the Regulatory Clearances
(as  hereinafter  defined)  for  the  Colorado Springs Facility, but in no event
later than March 31, 2004  (such effective date being hereinafter referred to as
the  "Licensure  Date").

Hereinafter,  the  Consumables,  the  Operations  Assets  and  the Miscellaneous
Operating  Property  may be collectively referred to as the "Alterra Assets" and
the  Seller Assets and the Alterra Assets may be collectively referred to as the
"Transferred  Assets."

     3.     PURCHASE  PRICE.2.     Purchase  Price     The  purchase  price (the
            ---------------
"Purchase  Price")  payable  by  Purchaser  to  the  Alterra  Entities  for  the
Transferred Assets shall be an amount equal to the outstanding principal balance
and  any  accrued  and  unpaid  interest  for the month immediately prior to the
Closing  Date  of  the  Loan.  The  Purchase  Price shall be paid by Purchaser's
assumption  at Closing of the Loan in accordance with the provisions of the Loan
Assumption  Documents.
     4.     CLOSING.3.     CLOSING
            -------        -------

     (a)     CLOSING;  CLOSING DATE. (a)     THE CLOSING DATE.  The closing (the
"Closing")  of  the Transaction shall take place on the Execution Date and shall
be  effective  on  and  as  of  January  1, 2004 (the "Closing Date"); provided,
however,  on  the Closing Date, Purchaser shall lease the Seller Assets acquired
by  it  with  respect to the Colorado Springs Property back to Alterra under the
terms of the Lease with respect to the Colorado Springs Property, as the same is
assigned to Purchaser and amended and restated by Purchaser and Alterra pursuant
to  the  Assignment, Amendment and Restatement of Lease Agreement (the "Colorado
Lease  Assignment")  attached  hereto as Exhibit ___ (such Lease as so assigned,
amended  and  restated  being  hereinafter  referred to as the "Colorado Springs
Lease")  and  Alterra shall continue to operate the Colorado Springs Property in
accordance with the terms of the Colorado Springs Lease during the term thereof.

     (b)     THE  CLOSING  PROCESS.  (b)     THE CLOSING PROCESS.  Closing shall
occur  through  escrow  and  accordingly,  at Closing, Purchaser and the Alterra
Entities,  as  applicable,  shall  deposit  with  Title  Company  (as defined in
Paragraph  6(d)),  which  shall  serve as escrow agent (the "Escrow Agent"), all
documents  and  monies  necessary  to  close the Transaction as herein provided.
Closing  of  escrow  shall  also mean and include the recording of the Deeds (as
defined  in Paragraph 4(c)(i)) in the counties where the Properties are located.
Closing  shall occur in accordance with the procedures and instructions given by
the  Alterra  Entities  and  Purchaser  to  the  Escrow  Agent prior to Closing.

     (c)     SELLER  DELIVERIES AT CLOSING.  At Closing Seller shall deliver the
following  to  Escrow  Agent for recording and/or delivery to Purchaser, each of
which  shall  be  duly  executed  by  Seller:

     (i)     DEEDS.  A  Special or Limited Warranty Deed with respect to each of
the  Properties  in  the  forms attached hereto as Exhibits C-1 through C-3 (the
                                                   ------------         ---
"Deeds).

     (ii)     BILL  OF  SALE.  A  Bill  of  Sale  covering  the  Seller Personal
Property  and  the Seller Miscellaneous Property, in the form attached hereto as
Exhibit  D-1  (the  "Seller  Bill  of  Sale").
 -----------

     (iii)     FIRPTA AFFIDAVIT.  An affidavit signed by Seller under penalty of
perjury,  stating Seller's United States taxpayer identification number and that
Seller  is  not  a foreign person, in accordance with the Internal Revenue Code,
Section  1445(b)(2),  in  the  form  attached  hereto  as  Exhibit  E.
                                                           ----------

     (iv)     TITLE  AFFIDAVITS.  Owner's affidavits with respect to each of the
properties  in  the  form  attached  hereto  as  Exhibit  I.
                                                 ----------

     (v)     CLOSING  STATEMENT.  A  closing  statement duly approved by Seller,
Purchaser  and  Alterra (the "Closing Statement") and the payment of any amounts
shown  thereon  as  being  due  from  Seller  at  Closing.

     (vi)     EVIDENCE  OF  AUTHORITY.  Documentation,  reasonably acceptable to
Purchaser,  confirming  the  authority  of  Seller  to  execute and deliver this
Agreement  and  all of the documents described in this Agreement to which Seller
is  a  party,  and  to  consummate  the  Transaction.

     (vii)     LOAN  ASSUMPTION  DOCUMENTS.  The  Loan  Assumption  Documents to
which  Seller  is  a  party.

     (vii)     COLORADO  SPRINGS  LEASE.  The  Colorado  Lease  Assignment.

     (d)     ALTERRA DELIVERIES AT CLOSING. At Closing Alterra shall deliver the
following  to  Escrow  Agent  for  recording and/or delivery to Purchaser on the
Closing  Date  with  respect  to  all  of the Properties other than the Colorado
Springs  Property  and,  to  Purchaser  or Purchaser's designee on the Licensure
Date,  in  the  case  of the documents described in clauses (i), (ii), (iii) and
(iv)  which relate to the Colorado Springs Property, each of which shall be duly
executed  by  Alterra:

     (i)     ASSIGNMENT  AND ASSUMPTION AGREEMENT.  An Assignment and Assumption
Agreement  with  respect to the Operations Assets in the form attached hereto as
Exhibit  F  (the  "Assignment  and  Assumption  Agreement").
 ---------

     (ii)     BILL OF SALE.  A Bill of Sale with respect to the Consumables, the
Alterra  Personal  Property and the Miscellaneous Operating Property in the form
of  Exhibit  D-2  (the  "Alterra  Bill  of  Sale").
    ------------

     (iii)     RESIDENT  TRUST FUNDS AND PROPERTY. A true, correct, and complete
accounting (properly reconciled) of any resident trust funds and an inventory of
all  residents'  property  held  by Alterra on the Closing Date or the Licensure
Date,  as  applicable,  and  all  of  the  funds and property described therein.

     (iv)     EMPLOYEE  BENEFITS.   A  true, correct, and complete accounting of
the  Employee  Benefits  (as  defined  in  Paragraph  5(l)).

     (v)     LOAN  ASSUMPTION DOCUMENTS.  The Loan Assumption Documents to which
Alterra  is  a  party.

     (vi)     EVIDENCE  OF  AUTHORITY.  Documentation,  reasonably acceptable to
Purchaser,  confirming  the  authority  of  Alterra  to execute and deliver this
Agreement  and all of the documents described in this Agreement to which Alterra
is  a  party,  and to consummate the Transaction, including, but not limited to,
reasonable  evidence  that  the  Stipulation  has not been amended, rescinded or
appealed.

     (vii)     CLOSING  STATEMENT.  The Closing Statement and the payment of any
amounts  shown  thereon  as  being  due  from  Alterra  at  Closing.

     (viii)     COLORADO  SPRINGS  LEASE.  The  Colorado  Lease  Assignment.

     (e)     PURCHASER  DELIVERIES  AT  CLOSING.  At  Closing  Purchaser  shall
deliver the following to Escrow Agent for recording and/or delivery to Seller or
Alterra,  as  applicable,  on  the  Closing  Date  or  the  Licensure  Date,  as
applicable,  each  of  which  shall  be  duly  executed  by  Purchaser:

     (i)     THE  ASSIGNMENT  AND  ASSUMPTION  AGREEMENT.  The  Assignment  and
Assumption  Agreement.

     (ii)     TITLE  AFFIDAVITS  AND DOCUMENTS.  Such documents, affidavits, and
indemnities  as  may  be required for the issuance of the Owner's Title Policies
and  the  Endorsements  in  accordance  with  the  terms  of  this  Agreement.

     (iii)     CLOSING  STATEMENT.  The Closing Statement and the payment of any
amounts  shown  thereon  as  being  due  from  Purchaser  at  Closing.

     (iv)     EVIDENCE  OF  AUTHORITY.  Documentation,  reasonably acceptable to
the  Alterra  Entities,  confirming  the  authority  of Purchaser to execute and
deliver  this  Agreement and all of the documents described in this Agreement to
which  Purchaser  is  a  party  and  to  consummate  the  Transaction.

(v)     REGULATORY  CLEARANCES.  Except  with  respect  to  the Colorado Springs
Property,  reasonable  evidence  of  the  receipt  by Purchaser of either: (i) a
license  or other approval issued by the Agency to operate the Properties of the
type  and  kind  which  is  substantially  consistent with the operations of the
Properties  as  of the Closing Date, or (ii) reasonable assurances by the Agency
that  the Agency will issue a license or other approval authorizing Purchaser to
operate the Properties in a manner substantially consistent with the manner that
the  Properties  are  being  operated  as of the Closing Date, and permission to
commence  such  operation  (collectively, the "Regulatory Clearances").  As used
herein,  "Agency"  means,  collectively,  any  and  all agencies and departments
responsible  for  licensure  of  assisted  living  facilities  in  the states of
California,  Kansas  and Colorado. With respect to the Colorado Springs Property
Purchaser  shall provide evidence of the receipt of the Regulatory Clearances by
Purchaser  or  its  designee  by  no  later  than  the  Outside  Licensure Date.

     (vi)     LOAN ASSUMPTION DOCUMENTS.  The Loan Assumption Documents to which
Purchaser  is  a  party.

     (vii)     COLORADO  SPRINGS  LEASE.  The  Colorado  Lease  Assignment.

     5.     CLOSING  COSTS;  PRORATIONS;  RECONCILIATION.  At Closing or, in the
            --------------------------------------------
case  of  the  costs  described  in  Section  5(b),  on  the  Licensure Date, as
applicable, the following costs and expenses related to the Transaction shall be
allocated between the Alterra Entities, as applicable, and Purchaser (subject to
a  post-Closing  reconciliation  as  set  forth  in  Paragraph  5(k)):

(A)     TRANSFER  TAXES.  Purchaser  shall  pay  any  state,  county,  or  local
transfer  tax  due  and  payable  by virtue of the transfer of the Properties to
Purchaser;  provided,  however,  Seller  shall take such action and provide such
documentation  as Purchaser may reasonably request in order to avoid paying such
transfer  taxes  under  applicable  provisions  of  the  Bankruptcy  Code.

(B)     SALES  AND  USE  TAX.  Purchaser shall pay any sales or use tax due with
respect  to  the  conveyance  of  the  Transferred  Assets  to  Purchaser.

(C)     RECORDING  FEES.  Purchaser shall pay the cost of any recording fees due
and  payable  in  connection  with  the  Transaction.

(D)     OWNER'S  TITLE  POLICIES, ENDORSEMENTS AND SURVEYS.  Purchaser shall pay
the  cost  of  (i) the Owner's Title Policies, including any additional premiums
required  to secure any extended coverage elected by Purchaser, (ii) any surveys
required  to issue the Owner's Title Policies without survey exception and (iii)
the  Endorsements.

(E)     DUE  DILIGENCE.  Purchaser  shall  pay the cost of the any due diligence
conducted  by it with respect to the Transferred Assets or the Alterra Entities,
including  without  limitation,  any  zoning  investigations,  soil  studies,
environmental  assessments,  seismic  assessments, wetlands reports, appraisals,
dry  rot  and  termite  inspections, structural inspections, and any litigation,
bankruptcy,  lien,  judgment  or  security  interest  searches.

(F)     ATTORNEYS'  FEES.  Purchaser  and each of the Alterra Entities shall pay
their  own  attorneys'  fees.

(G)     ESCROW  FEES.  Purchaser  shall  pay  any  escrow  fees.

     (h)     PROPERTY  EXPENSES, COSTS, AND CHARGES.  In recognition of the fact
that  Alterra  is  responsible for all of the costs and expense of operating the
Properties  under the terms of the Leases, the following items shall be prorated
effective as of the Closing Date between Alterra and Purchaser other than to the
extent  the same relate to the Colorado Springs Property, in which case the same
shall  be  prorated  between Alterra and Purchaser or Purchaser's designee as of
the Licensure Date, with Alterra responsible for such items for the period prior
to  the  Closing  Date  or  the  Licensure  Date,  as  applicable, but Alterra's
liability  therefor  for  the  month  of  December,  2003 only (as to all of the
Properties  other  than  the  Colorado Springs Property, and for the period from
December  1,  2003  through  the  Licensure  Date,  as  to  the Colorado Springs
Property,  shall  be  limited  to  the  extent funds are available therefor from
operation  of  the  Properties, and Purchaser responsible for such items for the
period  from  and  after  the  Closing Date or the Licensure Date as applicable:

     (i)     Water,  fuel,  electricity,  telephone, garbage collection, sewage,
and  other  utility  service  charges  and  expenses;  and

      (ii)     Any other accrued and apportionable operating costs, charges, and
expenses.

     Any refund or reduction in taxes applicable to any period prior to December
1,  2003,  will be and remain the property of Alterra and if any such tax refund
is  paid  to,  received  by,  or credited to Purchaser, Purchaser shall promptly
remit such payment or a check for such credit to Alterra.  Alterra and Purchaser
acknowledge and agree that many, if not all, of the items referenced in (ii) and
(iii)  may  not be readily or easily determinable as of the Closing Date, and as
such  will  be part of the post-Closing reconciliation process more particularly
described  in  Paragraph  5(k).

     (i)     RESIDENT  RENTS  AND  SERVICES  FEES.

(A)     Except with respect to the Colorado Springs Property, resident rents and
service fees for the month of Closing shall be allocated as of the Closing Date;
the  portion  thereof  allocable  to  all time periods prior to the Closing Date
shall  be  credited to Alterra, and the portion thereof allocable from and after
the  Closing  Date shall be credited to Purchaser.  The parties hereby recognize
and agree that all resident rents and service fees for the month of Closing will
not  have been collected as of the Closing Date and that Purchaser shall receive
a  credit  at  Closing  in  an  amount equal to fifty percent (50%) of the total
billed  amount  for  resident rents and service fees for each of the Properties,
other  than  the  Colorado  Springs  Property,  for  such  month.  The  parties
acknowledge  and agree that this is just an estimate and agree to reconcile such
estimate  post  Closing  in  accordance  with  Paragraph  5(k).

     (B)     With  respect  to the Colorado Springs Property, resident rents and
service fees for the month in which the Licensure Date occurs shall be allocated
as  of  the  Licensure  Date;  the portion thereof allocable to all time periods
prior  to  the  Licensure  Date  shall  be  credited to Alterra, and the portion
thereof  allocable  from  and  after  the  Licensure  Date  shall be credited to
Purchaser  or Purchaser's designee.  The parties hereby recognize and agree that
all  resident  rents  and service fees for the month in which the Licensure Date
occurs  will not have been collected as of the Licensure Date and that Purchaser
shall receive a credit on the Licensure Date in an amount equal to fifty percent
(50%)  of  the  total  billed amount for resident rents and service fees for the
Colorado  Springs  Property  for  such month.  The parties acknowledge and agree
that  this  is  just  an  estimate and agree to reconcile such estimate post the
Licensure  Date  in  accordance  with  Paragraph  5(k).

     (j)     SECURITY  DEPOSITS AND MOVE-IN FEES.  Alterra represents that there
are  no  traditional  security  deposits  posted  by  the  residents.  Security
deposits,  if  any,  posted by the residents will be transferred to Purchaser at
Closing or, in the case of the Colorado Springs Property, on the Licensure Date.
In  some instances, Alterra collects move-in fees from residents, which fees are
deemed  earned  on  their  payment  by  the  resident to Alterra.  Under limited
circumstances,  such as the death of the resident or if the resident's physician
determines  that the resident needs care not offered by Alterra within the first
ninety (90) days after the resident moves into a Facility, Alterra will refund a
pro-rated  portion  of  one-half  of  the move-in fee.  Move-in fees received by
Alterra  on or after December 1, 2003 which must be refunded to residents of the
Properties  shall  be  included in the reconciliations; Alterra shall refund any
move-in  fees  received  prior  to  December 1, 2003 to the extent refundable to
residents  of  the  Properties.

     (k)     RECONCILIATION.

(A)     Except  with respect to the Colorado Springs Property, within forty-five
(45)  days after the Closing Date representatives of Alterra and Purchaser shall
prepare  and  deliver  to  each  other  a  schedule itemizing the prorations and
adjustments  to  costs,  charges,  and  expenses under Paragraphs 5(h), 5(i) and
5(j),  together  with  resident  rents  and service fees actually collected (the
"Initial  Reconciliation"). The Initial Reconciliation shall include appropriate
detail to identify the items being adjusted.  A final reconciliation of all such
expenses,  costs,  charges,  service  fees,  and  resident rents for each of the
Properties,  other  than  the  Colorado  Springs Property, shall be prepared and
delivered  by  representatives  of  Purchaser  and  Alterra to each other within
seventy-five  (75) days after the Closing Date (the "Final Reconciliation"). The
Final Reconciliation shall appropriately net all items to reflect the net amount
owed  to  Purchaser  or  to  Alterra  as a result of such reconciliation.  After
approval by the parties of the Final Reconciliation, the party determined to owe
cash  as  a  result of such Final Reconciliation shall promptly pay such cash to
the  party owed such payment via wire transfer of immediately available funds to
a  bank account specified by such party; provided that any such amounts owing by
Alterra  for  the period on and after December 1, 2003 shall be paid solely from
funds  available  from  operation  of  the  Properties,  other than the Colorado
Springs  Property,  during  such  period  and  any such amounts owing to Alterra
(other  than management fees) for the period on and after December 1, 2003 shall
be  paid  to  Lender  or  as  Lender  shall  direct.

(B)     With  respect  to  the Colorado Springs Property, within forty-five (45)
days  after  the  Licensure  Date representatives of Alterra and Purchaser shall
prepare  and  deliver  to  each  other  a  schedule itemizing the prorations and
adjustments to costs, charges, and expenses under Paragraphs 5(h), 5(i) and 5(j)
which  relate to the Colorado Springs Property, together with resident rents and
service  fees  actually  collected  (the "Initial Colorado Reconciliation"). The
Initial Colorado Reconciliation shall include appropriate detail to identify the
items  being  adjusted.  A  final  reconciliation  of  all such expenses, costs,
charges,  service  fees,  and  resident rents for the Colorado Property shall be
prepared and delivered by representatives of Purchaser and Alterra to each other
within  seventy-five  (75)  days  after  the Licensure Date (the "Final Colorado
Reconciliation").  The Final Colorado Reconciliation shall appropriately net all
items  to  reflect the net amount owed to Purchaser or to Alterra as a result of
such  reconciliation.  After  approval  by  the  parties  of  the Final Colorado
Reconciliation,  the  party  determined  to  owe  cash as a result of such Final
Colorado  Reconciliation  shall  promptly  pay  such cash to the party owed such
payment  via  wire  transfer  of  immediately  available funds to a bank account
specified by such party; provided that any such amounts owing by Alterra for the
period  on  and after December 1, 2003 shall be paid solely from funds available
from  operation of the Colorado Property during such period and any such amounts
owing  to  Alterra  (other  than  management fees) for the period from and after
December  1, 2003 through December 31, 2003 shall be paid to Lender or as Lender
shall  direct  and  for  the  period  from  and  after January 1, 2004 until the
Licensure  Date  shall  be  paid  to  or  as  directed  by  Purchaser.

(l)     EMPLOYEES  AND  EMPLOYEE  BENEFITS.

     (i)     Alterra  shall  (A)  except  with  respect  to the Colorado Springs
Property,  terminate  all  Hired  Employees  (as  defined in Paragraph 5(l)(ii))
effective  as  of  11:59:59  p.m. on the Execution Date, (B) with respect to the
Colorado  Springs  Property,  terminate  all  Hired  Employees  effective  as of
11:59:59  pm  on  the  Licensure  Date,  it being understood and agreed that the
employees  at the Colorado Springs Property shall be and remain the employees of
Alterra  until  the  Licensure  Date,  (C) either terminate or reassign to other
duties  all  other  employees who are not Hired Employees, and (D) pay all costs
and  expenses  in  connection  with  such  termination  or  reassignment  of all
employees.  Alterra  shall  pay  all  wages due to all employees (whether or not
they  are  Hired  Employees)  as of 11:59:59 p.m. on the Execution Date or as of
11:59:59  pm  on the Licensure Date, as applicable.  There shall be no proration
at  Closing  or  on  the Licensure Date, as applicable, of payroll for employees
(whether  or  not  they  are  Hired  Employees),  as  all such employees will be
terminated  as  of  the  Execution  Date  or  the Licensure Date, as applicable.
     (ii)     Purchaser  is  offering employment to at least two-thirds (2/3) of
the  employees  who, on the Execution Date or the Licensure Date, as applicable,
work  at  each Property and have been employed on an average of 20 hours or more
per  week  in the month immediately preceding the Closing Date and have provided
services  solely  to  such  Property.  Such employees who accept employment with
Purchaser may be referred to as the "Hired Employees."  Any such employment of a
Hired  Employee  by  Purchaser  shall  be  on  such  terms  as  Purchaser in its
discretion  elects.  Alterra  and  any of its affiliates shall have the right to
employ  or offer to employ in any other facility or corporate offices of Alterra
or  its  affiliates any employee of any of the Properties who declines to accept
employment  with  Purchaser;  provided, however, that Alterra and its affiliates
shall  not  actively  solicit  such  employment.
(iii)     Purchaser  and  Alterra  acknowledge  and agree that the provisions of
Paragraph  5(l)(ii)  are designed, in part, to ensure that no notice is required
to be given to employees of any of the Properties of the "closure" thereof under
the  Worker  Adjustment and Restraining Notification Act (the "WARN Act") or any
other  comparable  state  law.  Nothing  in  this Paragraph 5(l) shall, however,
create any rights in favor of any person not a party hereto, including employees
of  any of the Properties, or constitute an employment agreement or condition of
employment  for  any  employee  of  Alterra or any affiliate of Alterra who is a
Hired  Employee.
(iv)     At  Closing  or  on  the  Licensure  Date, as applicable, Alterra shall
provide  an  accounting  of  all  accrued  and  earned  paid time off due to all
employees  in  accordance with Alterra's standard policies and state and federal
law  as  of  11:59:59  p.m.  on  the  Execution  Date  or the Licensure Date, as
applicable  (collectively,  the  "Employee  Benefits").  Alterra shall be solely
liable  for  payment  of  all  Employee  Benefits due as of 11:59:59 p.m. on the
Execution Date or the Licensure Date, as applicable, to all employees (including
all  Hired  Employees).  On  the  next  regularly occurring payday following the
Closing  Date  or  the  Licensure  Date, as applicable, Alterra shall pay to the
employees  their  respective  Employee  Benefits  in  their  final  paychecks.
(v)     Alterra  acknowledges  and agrees that (A) Purchaser is not assuming any
of  Alterra's obligations for benefits pursuant to Section 601, et seq. of ERISA
and  Section  4980B  of  the  Internal Revenue Code ("COBRA"), and that the same
shall  remain  with  Alterra,  (B) Purchaser shall not have any liability to any
employees terminated by or at the direction of Alterra prior to the Closing Date
for  benefits  pursuant to COBRA, and (C) Alterra shall provide required notices
to  all  employees  prior  to  the  Closing Date pursuant to COBRA. In addition,
Alterra  shall offer and provide, as appropriate, group health plan continuation
coverage pursuant to the requirements of Section 601 et. Seq. of ERISA and COBRA
to  all  the employees to whom it is required to offer the same under applicable
law.  Purchaser  in  its  discretion may also elect to provide group health plan
coverage to Hired Employees of each of the Properties on such terms as Purchaser
elects.
(vi)     For  a  period  of  ninety  (90)  days  after  the  Closing Date or the
Licensure  Date,  as  applicable,  Alterra  shall  retain  and  continue to make
available  for  consultation  with  Purchaser the Directors of Nursing, Property
Administrators  and  employees  of  Alterra  who  are not employed at any of the
Properties  but who provide essential services to any of the Properties, such as
billing,  collection,  filing  Medicaid  cost  reports,  attending  to licensing
issues,  and  similar services, and investigating, documenting, and filing proof
of  claims with respect to potential claims arising under any of the Properties'
insurance  policies.
(m)     ACCOUNTS  RECEIVABLE.
(i)     Subject  to  Paragraphs  5(h)  and  (i) with respect to the proration of
revenues  and  expenses  from operating the Properties, Alterra shall retain all
unpaid  accounts receivable, including, but not limited to, any arising prior to
the  Closing  Date  or  the  Licensure  Date,  as  applicable,  and any accounts
receivable arising from rate adjustments which relate to the period prior to the
Closing  Date  or  the  Licensure  Date, as applicable, even if such adjustments
occur  from  and after the Closing Date or the Licensure Date, as applicable, as
of 11:59:59 p.m. on the Execution Date or the Licensure Date, as applicable, but
only  to  the  extent  that such accounts receivable relate to services rendered
prior  to  the  Closing  Date  or the Licensure Date, as applicable, and Alterra
shall  provide  Purchaser  with  copies of all records with respect thereto upon
request.   All  accounts  receivable  that  relate to services rendered from and
after  the  Closing Date or the Licensure Date, as applicable, shall be the sole
property  of  Purchaser  free  and  clear of any liens or any security interests
(other  than those granted in favor of Lender and expressly assumed by Purchaser
under  the  Loan  Assumption  Documents).
(ii)     If  at  any time from and after the Closing Date or the Licensure Date,
as  applicable,  Purchaser  shall  receive any payment, which payment represents
payment for, or reimbursement with respect to, payments or underpayments made to
Alterra  for  services rendered prior to the Closing Date or the Licensure Date,
as  applicable,  then Purchaser shall remit such payments to Alterra.  If at any
time  before  or  after  the  Closing Date or the Licensure Date, as applicable,
Alterra  shall  receive  any  payment,  which payment represents payment for, or
reimbursement  with  respect to, payments or underpayments made to Purchaser for
services  to  be rendered from and after the Closing Date or the Licensure Date,
as  applicable,  then  Alterra  shall  remit  such  payments  to  Purchaser. All
non-designated  payments  received  during  the first thirty (30) days after the
Closing  Date or the Licensure Date, as applicable, will first be applied to any
pre-Closing  Date  accounts  receivable  of  Alterra due from such payee and not
older  than  sixty (60) days since the date of invoice, with the excess, if any,
applied  to  the  extent  of any balances due for services rendered by Purchaser
from  and  after  the  Closing  Date  or the Licensure Date, as applicable.  All
non-designated  payments  thereafter  shall  be retained by Purchaser; provided,
however,  that if Purchaser has been paid all amounts due from a resident during
the  period that Purchaser operates the applicable Property and that resident is
no  longer  a  resident  of the applicable Property, any non-designated payments
shall be remitted to Alterra if Alterra documents that it has a balance due from
that  resident.
(iii)     To  the  extent  either  party receives any proceeds from the accounts
receivable of the other party, both parties acknowledge that the party receiving
the  payment  belonging to the other party shall hold the payment in trust, that
neither  party  shall  have  any  right  to offset with respect to such accounts
receivable,  and  that the party erroneously receiving the payment shall have no
right,  title  or interest whatsoever in the payment and shall remit the same to
the  other  within  ten  (10)  days  of  receipt.
     6.     CONTRACTS/RECORDS.
            -----------------
(a)     CONTRACTS AND RESIDENCY AGREEMENTS.  Purchaser shall not be obligated to
assume  any  leases  or  executory  contracts  of  Alterra  except to the extent
specifically  set  forth  herein:
     (i)     The  parties  acknowledge  and agree that prior to Closing, Alterra
has  provided  Purchaser with copies of all current service contracts with third
party  vendors  related  to  the  Properties  (collectively,  the  "Operating
Contracts")  and  the  Alterra  Entities  acknowledge that none of the Operating
Contracts were in the name of Seller. The parties further acknowledge that prior
to  Closing, Purchaser has provided Alterra with written notice of any Operating
Contracts it wanted Alterra to terminate, and Alterra has provided notice to the
appropriate  vendors  to  terminate such contracts effective upon Closing or the
Licensure  Date,  as  applicable,  or  as  soon as possible after Closing or the
Licensure Date, as applicable.  Alterra and Purchaser acknowledge and agree that
in  the  event  any  of  the  Operating  Contracts  have  been terminated at the
direction  of  Purchaser  but such termination will not be effective until after
the Closing Date or the Licensure Date, as applicable, as a result of the notice
provisions  set  forth  in such Operating Contracts (the "Termination Date"), if
and  to  the  extent  Purchaser  derives  any benefit from the goods or services
provided  under  such  Operating  Contracts  between  the  Closing  Date  or the
Licensure  Date,  as  applicable,  and  the  Termination  Date,  Purchaser shall
reimburse  Alterra  as part of the reconciliation process for any payments under
such Operating Contracts made between the Closing Date or the Licensure Date, as
applicable,  and  the  Termination  Date.

(ii)     All Operating Contracts that Purchaser did not specify to be terminated
are  set  forth  on  ExhibitG  and  shall constitute the "Designated Third Party
                     --------
Contracts"  for  the Properties and shall be assigned by Alterra to Purchaser at
Closing  or  to  Purchaser  or  Purchaser's  desginee  on the Licensure Date, as
applicable,  pursuant to the Assignment Agreement; provided, however, that in no
event shall Purchaser assume any liability related to goods or services provided
under  the  Designated  Third  Party  Contracts relating to periods prior to the
Closing  Date  or  the  Licensure  Date,  as  applicable.

(iii)     To  the extent permitted by applicable law, Purchaser shall assume the
residency  agreements  for  residents at the Property on the Closing Date or the
Licensure  Date,  as  applicable, for residency, services, or care provided from
and  after the Closing Date  or the Licensure Date, as applicable (collectively,
the  "Residency  Agreements").

(b)     RECORDS.  The  parties  acknowledge  and agree that prior to Closing, to
the  extent  authorized by applicable law, Purchaser was permitted to review the
files  and  records  physically  located  at  each  of the Properties, including
without  limitation  all  resident  lists,  suppliers'  names,  vendors'  names,
resident billing information, rate information, unit mix information, employment
files,  medical  records,  cost  reports,  surveys  with  plans  of  correction,
historical  financial  records  related  to  the  Properties,  nonproprietary
electronic  files,  and any other nonproprietary operational information or data
reasonably  necessary to the operation of the Properties, and that Purchaser has
notified  Alterra  in  writing prior to Closing which files and records, if any,
Purchaser  wants  removed  from  any  of  the  Properties  at  Closing or on the
Licensure Date, as applicable, it being understood and agreed that the files and
records  related to the Colorado Springs Property, including those designated by
Purchaser  for  removal,  will remain at the Colorado Springs Property until the
Licensure  Date.  At  Closing  or  on the Licensure Date, as applicable, Alterra
shall  remove  the  designated files and records and shall transfer to Purchaser
all other files and records located at each of the Properties (collectively, the
"Records");  provided,  however, Alterra shall be entitled to keep copies of all
of  the  foregoing  as  they  deem  necessary.

     7.     ADDITIONAL  COVENANTS  OF THE ALTERRA ENTITIES.  Each of the Alterra
            ----------------------------------------------
Entities  on behalf of itself only and not on behalf of the other Alterra Entity
does  hereby  covenant  and  agree  for  the  benefit  of  Purchaser as follows:
     (a)      TRANSFER  OF  RESIDENTS.  After  the  Closing  Date,  the  Alterra
Entities  agree  not to actively solicit (or permit the active solicitation) for
transfer  any  residents  of  the  Properties.
     (b)     NON-SOLICITATION  OF  EMPLOYEES.  The Alterra Entities agree not to
directly  solicit  (or  permit  the  direct  solicitation  of)  any of the Hired
Employees  for employment at any other facility owned or operated by the Alterra
Entities  or  any  affiliate  thereof for a period of one year after the Closing
Date  with  respect  to  all  of  the Properties other than the Colorado Springs
Property  and  for a period of one year after the Licensure Date, in the case of
the  Hired  Employees  at  the  Colorado  Springs  Property.
     (c)     ACCOUNTS  RECEIVABLE  REPORTS.  After  the  Closing  Date until all
accounts  receivable  have  been reconciled or written off by Purchaser, Alterra
will  provide Purchaser with copies of accounts receivable aging reports for the
Properties  as  soon  as  such reports are available, but in no event later than
forty-five  (45)  days  after  the  end  of  each  calendar  month.
     (d)     OTHER  REPORTS.  After  the Closing Date, Alterra agrees to provide
Purchaser,  upon  its written request, with such financial and operating reports
for the Properties relating to the period prior to the Closing Date as Purchaser
may  request from time to time, and which can be produced on an automated basis,
provided  that any such request is made no later than ninety (90) days after the
Closing  Date  with  respect  to  all  of the Properties other than the Colorado
Springs  Property  or  within  ninety (90) days after the Licensure Date, in the
case  of  the  Colorado  Springs  Property.
     8.     POST  CLOSING  ACCESS  TO  RECORDS  AND  EXCLUDED  PROPERTY.
            -----------------------------------------------------------

(a)      Subsequent  to the Closing Date, Purchaser shall allow Alterra  and its
agents  and  representatives, at their sole cost and expense, to have reasonable
access  to  (upon reasonable prior notice), and to make copies of, the books and
records and supporting material of each Property relating to the period prior to
the  Closing Date or the Licensure Date, as applicable, to the extent reasonably
necessary  to enable Alterra to investigate and defend malpractice, employee, or
other claims, to file or defend cost reports and tax returns, to verify accounts
receivable  collections, and to perform similar matters. Purchaser will maintain
such  books,  records,  and other material comprising records of each Property's
operations  prior to the Closing Date or the Licensure Date, as applicable, that
have  been  received  by Purchaser from Alterra or otherwise, including, but not
limited  to,  resident  records  and  records  of  resident funds, to the extent
required by law, but in no event less than a period of three (3) years (provided
that  Purchaser will have no liability for failure to maintain any records which
are destroyed as a result of a fire or other similar casualty).  Notwithstanding
the  above,  (i)  Alterra  shall  remove  from  each  Property  any records that
Purchaser  requests  to  be  removed in accordance with Paragraph 6(c), and (ii)
with respect to any records that Purchaser does not request Alterra to remove at
Closing  or on the Licensure Date, as applicable, Purchaser may deliver any such
records  to  Alterra  at  any  time  after  Closing  or  the  Licensure Date, as
applicable, and shall thereafter not be required to maintain such records except
to  the  extent  required  by  law.

(b)     The  Alterra  Parties shall have a period of fifteen (15) days after the
Closing  Date  or the Licensure Date, as applicable, to remove Excluded Property
from  the  Properties,  at  Alterra's  sole cost and expense and upon reasonable
prior  notice.

9.     REPRESENTATIONS  AND  WARRANTIES  OF  THE  ALTERRA  ENTITIES. Each of the
       ------------------------------------------------------------
Alterra  Entities  does  hereby  represent  and  warrant to Purchaser, solely on
behalf  of  itself  and  not  on behalf of the other Alterra Entity, as follows:

     (a)     AUTHORITY,  VALIDITY AND BINDING EFFECT.  Subject to the provisions
of  the  Stipulation,  each  of the Alterra Entities has all necessary power and
authority  to  enter  into  this  Agreement  and  to  execute  all documents and
instruments referred to herein or contemplated hereby to which it is a party and
all  necessary  action has been taken to authorize the individual executing this
Agreement  to  do  so.  This  Agreement  has  been duly and validly executed and
delivered  by each of the Alterra Entities and, subject to the provisions of the
Stipulation,  is  enforceable against each of the Alterra Entities in accordance
with  its  terms  except  as  such  enforceability  may be limited by applicable
bankruptcy,  insolvency,  reorganization, moratorium, or creditors' rights  laws
and  general  principles  of  equity.

     (b)     PERSONAL  PROPERTY  AND  CONSUMABLES.  The  Personal  Property  and
Consumables have been maintained consistent with the operation of the Properties
in the ordinary course, and the Consumables reflect supply levels required to be
maintained  in  order  to  operate  each of the Properties as an assisted living
facility  and  to  satisfy  any minimum requirements under applicable state law.
     (c)     LEASED  PROPERTY.  Except  as  listed  on  Exhibit  H,  the Alterra
                                                        ----------
Entities  do  not  own  any  computer hardware used at any of the Properties but
instead  all  of such hardware is leased by Alterra from a third party. With the
exception of the leased personal property included within the Excluded Property,
the  Alterra  Entities  have  no  actual knowledge of any other property that is
leased  at  any  of  the  Properties.

     (d)     TITLE.  Seller holds good and marketable title to the Seller Assets
and Alterra holds good and marketable title to the Alterra Assets, in each case,
free  and clear of all liens and encumbrances, except for liens and encumbrances
(i)  for  taxes  not  yet  due and payable, (ii) created by, or relating to, any
tenants,  subtenants,  lessees,  sublessees,  residents,  occupants,  or  other
parties,  other  than  Alterra,  in  possession of each of the Properties, (iii)
granted  in  favor  of  Lender and expressly assumed by Purchaser under the Loan
Assumption  Documents  and  (iv)  set  forth on Schedule B to the Lender's Title
Policies  (the  liens  and  encumbrances  described  in clauses (i) through (iv)
constituting  "Permitted  Liens").
     (e)     TAX  ASSESSMENTS.  Alterra  is  not  appealing  any  ad valorem tax
assessment  or otherwise engaged in a tax contest in its own name or in the name
of  Seller  with  respect  to  the  Properties.

     (f)     DECEMBER  NET  CASH  FLOW.  The  "Net Cash Flow" (as defined in the
Stipulation)  for  the month of December 2003 shall be paid by Alterra to Lender
in  accordance with the provisions of the Stipulation. The "Rent" (as defined in
the  Colorado  Springs Lease) for the Colorado Springs Property shall be paid by
Alterra  to  Purchaser  as  rent  under  the  Colorado  Springs  Lease.

     10.     REPRESENTATIONS  AND WARRANTIES OF PURCHASER. Purchaser does hereby
             --------------------------------------------
represent  and  warrant  unto  each  of  the  Alterra  Entities  as  follows:

     (a)     AUTHORITY,  VALIDITY  AND  BINDING  EFFECT.  Purchaser  has  all
necessary  power  and  authority  to  carry  on  its business as it is now being
conducted  and  to  operate  the  Properties  as  assisted  living  residences.
Purchaser has all necessary power and authority to enter into this Agreement and
to  execute  all  documents  and  instruments referred to herein or contemplated
hereby  and  all  necessary  action  has  been taken to authorize the individual
executing  this  Agreement  to  do so.  This Agreement has been duly and validly
executed  and  delivered  by  Purchaser  and is enforceable against Purchaser in
accordance  with  its  terms  except  as  such  enforceability may be limited by
applicable  bankruptcy,  insolvency,  reorganization,  moratorium, or creditors'
rights  laws  and  general  principles  of  equity.
     (b)     PURCHASER  ACKNOWLEDGES  THAT THE TRANSFERRED ASSETS ARE BEING SOLD
     ---
IN  THEIR  "AS  IS  -  WHERE  IS"  WITH  ALL FAULTS CONDITION AND THAT EXCEPT AS
EXPRESSLY  SET FORTH IN THIS AGREEMENT AND THE DEEDS.  THE ALTERRA ENTITIES MAKE
                                                    =
NO  REPRESENTATION  OR  WARRANTY OF ANY KIND, EXPRESS OR IMPLIED WITH RESPECT TO
(I)  THE  DESIGN, CONSTRUCTION, LOCATION, SIZE, CHARACTER, PHYSICAL CONDITION OR
STATE  OF  REPAIR  OF  THE  TRANSFERRED  ASSETS OR ANY PORTION THEREOF; (II) THE
TOPOGRAPHY,  DRAINAGE  OR CONDITION OF THE SURFACE AND SUBSURFACE SOILS OF OR ON
THE  PROPERTIES,  (III)  THE PRESENCE OR ABSENCE OF HAZARDOUS WASTE OR HAZARDOUS
SUBSTANCES  ON OR FROM THE PROPERTIES; (IV) THE MERCHANTABILITY, HABITABILITY OR
FITNESS  FOR  ANY  PARTICULAR PURPOSE OF THE TRANSFERRED ASSETS, (V) THE PAST OR
FUTURE  TAXES  OR  ASSESSMENTS  OF THE TRANSFERRED ASSETS, (VI) THE CONDITION OF
TITLE  TO  THE  TRANSFERRED  ASSETS,  OR (VII) THE COMPLIANCE OF THE TRANSFERRED
ASSETS  WITH ANY APPLICABLE GOVERNMENTAL REQUIREMENT OR ANY OTHER REPRESENTATION
OR  WARRANTY  NOT  EXPRESSLY  SET FORTH IN THIS AGREEMENT.  BY EXECUTION OF THIS
AGREEMENT,  PURCHASER  REPRESENTS  AND  WARRANTS  TO  THE  ALTERRA ENTITIES THAT
PURCHASER  IS  AN EXPERIENCED, SOPHISTICATED PURCHASER OF COMMERCIAL REAL ESTATE
AND  OPERATOR  OF  ASSISTED  LIVING  RESIDENCES,  WITH  KNOWLEDGE AND EXPERIENCE
SUFFICIENT TO ENABLE IT TO EVALUATE THE MERITS AND RISKS OF THE TRANSACTION, AND
THAT IT IS REPRESENTED BY KNOWLEDGEABLE AND EXPERIENCED LEGAL COUNSEL OF ITS OWN
CHOOSING  AND  AGREES  THAT  NEITHER  THE  ALTERRA ENTITIES NOR THEIR RESPECTIVE
AGENTS  OR  REPRESENTATIVES HAVE MADE AND THAT PURCHASER HAS NOT RELIED UPON ANY
REPRESENTATION  OR WARRANTY OF ANY KIND WHICH IS NOT EXPRESSLY SET FORTH IN THIS
AGREEMENT AND THE DEEDS IN CONNECTION WITH THE SALE OF THE TRANSFERRED ASSETS OR
PURCHASER'S  ACTUAL PURCHASE THEREOF PURSUANT TO THE TERMS OF THIS AGREEMENT, IT
BEING  UNDERSTOOD  AND  AGREED  THAT ANY SUCH PURCHASE WILL BE BASED SOLELY UPON
PURCHASER'S  OWN  DUE  DILIGENCE  REVIEW  AND THE REPRESENTATIONS AND WARRANTIES
SPECIFICALLY  SET  FORTH  IN  THIS  AGREEMENT  AND  THE  DEEDS.
                                 _______________
                              PURCHASER'S INITIALS

     (c)     DECEMBER LOAN PAYMENT.  Purchaser has agreed to make the January 1,
2004  debt  service  payment  due  under  the  Loan.

     11.     BROKER.  Each  of  Purchaser,  on  the  one  hand,  and  Seller and
             ------
Alterra, on the other hand, represents and warrants to the other that it has not
retained the services of any broker or finder in connection with the Transaction
and  each  agrees  to  pay  any  commission  or finder's fee which may be due on
account  of this Agreement to any  broker or finder allegedly employed by it and
each  party  agrees  to  indemnify  the  other parties against any claim for any
commission  made  by  any  broker  allegedly  employed  by  it.

12.     INDEMNIFICATION.
        ---------------

     (a)     PURCHASER  INDEMNIFICATION  OF  THE  ALTERRA  ENTITIES.  Except  as
otherwise  provided  below, Purchaser shall defend, indemnify, and hold harmless
the  Alterra  Entities  from  and  against  any  and all losses, damages, costs,
expenses,  liabilities,  obligations,  and  claims  of  any  kind or any nature,
whether  arising in contract or tort, at law or in equity, or otherwise, from or
arising  out  of  or  in connection with (i) the ownership, leasing, management,
and/or  operation  of  each  of  the Properties from and after the Closing Date,
including,  but  not  limited to, (A) bodily injury or property damage occurring
within or about any of the Properties from and after the Closing Date, (B) labor
disputes,  including unfair labor practice allegations, from acts or occurrences
from  and after the Closing Date, and (C) accounts payable with respect to goods
or  services  provided to any of the Properties from and after the Closing Date;
and  (ii)  claims made by the Alterra Entities, as applicable, against Purchaser
      --
with  respect  to  Purchaser's indemnification obligations under this Agreement,
including  without  limitation  claims  relating to civil monetary penalties and
fraud  offsets relating to the period from and after the Closing Date; provided,
however,  nothing  herein shall be construed as an indemnity by Purchaser of the
Alterra  Entities  from  any acts or omissions by Alterra in connection with its
operation  of  the  Colorado  Springs  Property  from the Closing Date until the
Licensure  Date.
(b)     SELLER  INDEMNIFICATION  OF  PURCHASER.  Seller shall defend, indemnify,
and hold harmless Purchaser from and against any and all losses, damages, costs,
expenses,  liabilities,  obligations,  and  claims  of  any  kind of any nature,
whether  arising in contract or tort, at law or in equity, or otherwise, from or
arising out of or in connection with (i) the ownership of each of the Properties
prior  to the Closing Date and (ii) claims made by Purchaser against Seller with
respect  to  the  Seller's  indemnification  obligations  under  this Agreement.
     (c)     ALTERRA  INDEMNIFICATION  OF  PURCHASER.  Alterra  shall  defend,
indemnify,  and  hold  harmless  Purchaser  from and against any and all losses,
damages,  costs,  expenses,  liabilities, obligations, and claims of any kind of
any  nature,  whether  arising  in  contract  or  tort,  at law or in equity, or
otherwise,  from  or  arising  out  of  or  in  connection with (i) the leasing,
management  and/or  operation of the Properties, other than the Colorado Springs
Property  prior to the Closing Date and the leasing, management and/or operation
of the Colorado Springs Property prior to the Licensure Date, including, but not
limited  to,  (A) bodily injury or property damage occurring within or about any
of  the  Properties  prior  to  the  Closing  Date  or  the  Licensure  Date, as
applicable,  (B)  labor  disputes,  including unfair labor practice allegations,
from  acts  or  occurrences  prior to the Closing Date or the Licensure Date, as
applicable,  and (C) accounts payable with respect to goods or services provided
to  the  Properties  prior  to  the  Closing  Date  or  the  Licensure  Date, as
applicable, and which have not been assumed by Purchaser under this Agreement or
which  are  not subject to proration hereunder and (ii) claims made by Purchaser
                                                   ----
against  Alterra with respect to the Alterra's indemnification obligations under
this  Agreement  including  without limitation claims relating to civil monetary
penalties  and fraud offsets relating to the period prior to the Closing Date or
the  Licensure  Date,  as  applicable.

(d)     CLAIMS.  As  soon  as  is  reasonably  practicable  after  the  Alterra
Entities, on the one hand, or Purchaser, on the other hand, becomes aware of any
claim that it has to recover against the other under this Paragraph 12 the party
to  be  indemnified  (the "Indemnified Party") shall notify the other party (the
"Indemnifying  Party")  in  writing,  which  notice  shall describe the claim in
reasonable detail, and shall indicate the amount (estimated, if necessary and to
the  extent  feasible)  of  the  claim.  The failure of any Indemnified Party to
promptly  give  any  Indemnifying  Party  such  notice  shall  not preclude such
Indemnified Party from obtaining indemnification under this Agreement, except to
the  extent  that such Indemnified Party's failure has materially prejudiced the
Indemnifying  Party's  rights  or  materially  increased  its  liabilities  and
obligations  hereunder.  In the event of a third party claim which is subject to
indemnification  under  this  Agreement,  the  Indemnifying Party shall promptly
defend such claim by counsel of its own choosing, subject to the approval of the
Indemnified  Party,  which  approval shall not unreasonably be withheld, and the
Indemnified  Party shall cooperate with the Indemnifying Party in the defense of
such claim including the settlement of the matter on the basis stipulated by the
Indemnifying  Party (with the Indemnifying Party being responsible for all costs
and  expenses of such settlement). If the Indemnifying Party within a reasonable
time  after  notice  of  a  claim  fails  to  defend  the Indemnified Party, the
Indemnified  Party  shall  be  entitled  to undertake the defense, compromise or
settlement  of  such claim at the expense of and for the account and risk of the
Indemnifying  Party.
     13.     MISCELLANEOUS.
             -------------

     (a)     NOTICES.  Any  notice,  request,  or  other  communication  (the
"Notice")  to  be  given by any party hereunder shall be in writing and shall be
sent  by  registered  or certified mail, postage prepaid, or by hand delivery or
facsimile  transmission  to  the  following  addresses:

TO  SELLER:                    ALS  Financing,  Inc.
     c/o  Alterra  Healthcare  Corporation
10000  Innovation  Drive
Milwaukee,  WI  53226
Attn:  Kristin  Ferge,  Vice  President  of  Finance
Telephone  No.:  414/918-5506
     Facsimile  No.:   414/918-5055

With  copy  to               Rogers  &  Hardin
     (which  shall  not          2700  International  Tower
constitute  notice):     229  Peachtree  Street,  N.W.
     Atlanta,  Georgia  30303-1601
Attn:  Carolyn  B.  Dobbins,  Esq.
Telephone  No.:  404/420-4644
Facsimile  No.:   404/525-2224

TO  ALTERRA:                    Alterra  Healthcare  Corporation
     10000  Innovation  Drive
Milwaukee,  WI  53226
Attn:  Kristin  Ferge,  Vice  President  of  Finance
Telephone  No.:  414/918-5506
     Facsimile  No.:   414/918-5055

With  copy  to               Rogers  &  Hardin
     (which  shall  not          2700  International  Tower
constitute  notice):     229  Peachtree  Street,  N.W.
     Atlanta,  Georgia  30303-1601
Attn:  Carolyn  B.  Dobbins,  Esq.
Telephone  No.:  404/420-4644
Facsimile  No.:   404/525-2224

TO  PURCHASER:               Emeritus  Properties  XVI,  Inc.
     c/o  Emeritus  Corporation
     3131  Elliott  Avenue
Suite  500
Seattle,  WA  98121-1031
     Attn:  Bill  Shorten,  Director  of  Real  Estate  Finance
Telephone  No.:  (206)  298-2909
Facsimile  No.:  (206)  301-4500

With  copy  to               The  Nathanson  Group
     (which  shall  not          1520  Fourth  Avenue
constitute  notice):     Sixth  Floor
                         Seattle,  WA  98101
                         Attn:  Randi  S.  Nathanson,  Esq.
     Telephone  No.:  (206)  623-6239
Facsimile  No.:  (206)  623-1738

or  to  such other address as any party may hereafter designate. Notice shall be
deemed  to have been given on the date of delivery if such delivery is made on a
business  day,  or if not, on the first business day after delivery. If delivery
is  refused,  Notice shall be deemed to have been given on the date delivery was
first  attempted.  Notice  sent  by facsimile transmission shall be deemed given
upon  confirmation  (electronic  or verbal) that such Notice was received at the
number  specified  above.
     (b)     MUTUAL  WAIVER  OF  RIGHT  TO JURY TRIAL.  EACH PARTY HERETO HEREBY
WAIVES  THE  RIGHT  TO  TRIAL  BY  JURY  IN ANY ACTION OR PROCEEDING BASED UPON,
ARISING  OUT  OF,  OR  IN  ANY  WAY  RELATING  TO  THIS  AGREEMENT.
(c)     ARBITRATION.  In  case any controversy arises between the parties hereto
as  to  any  of the provisions of this Agreement or the performance thereof, and
the  parties  are  unable to settle the controversy by agreement or as otherwise
provided  herein,  the  controversy  shall  be  decided  by  arbitration.  The
arbitration  shall be conducted by three arbitrators selected in accordance with
the  rules and procedures of the American Arbitration Association.  The decision
of  the  arbitrators  shall  be  final  and binding, and judgment may be entered
thereon in any court of competent jurisdiction.  The decision shall set forth in
writing  the  basis  for the decision.  In rendering the decision and award, the
arbitrators  shall not add to, subtract from, or otherwise modify the provisions
of  this Agreement.  The expense of the arbitration shall be divided between the
Alterra  Entities,  on  the  one  hand, and Purchaser, on the other hand, unless
otherwise specified in the award.  Each party in interest shall pay the fees and
expenses  of  its  own  counsel.  The arbitration shall be conducted in Seattle,
Washington.  In  any  arbitration,  the  parties  shall  be  entitled to conduct
discovery in the same manner as permitted under Federal Rules of Civil Procedure
26 through 37, as amended.  No provision in this Paragraph shall limit the right
of  any party to this Agreement to obtain provisional or ancillary remedies from
a  court  of competent jurisdiction before, after, or during the pendency of any
arbitration,  and  the exercise of such remedies does not constitute a waiver of
the  right  of  any  party  to  arbitration.
(d)     ENTIRE  AGREEMENT,  AMENDMENT; WAIVER.  This Agreement together with the
other  agreements  referred  to  herein,  constitutes  the  entire understanding
between  the  parties with respect to the subject matter hereof, superseding all
negotiations, prior discussions, and preliminary agreements.  This Agreement may
not  be  modified or amended except in writing signed by the parties hereto.  No
waiver  of  any  term,  provision, or condition of this Agreement, in any one or
more instances, shall be deemed to be or be construed as a further or continuing
waiver  of  any  such  term, provision, or condition or as a waiver of any other
term,  provision,  or  condition  of this Agreement.  No failure to act shall be
construed  as  a  waiver  of  any  term, provision, condition, or rights granted
hereunder.
(e)     ASSIGNMENT.  Neither  this  Agreement  nor  the  rights,  duties,  or
obligations  arising  hereunder  shall  be  assignable or delegable by any party
hereto without the express prior written consent of the other parties; provided,
however,  that,  (i) any assignment by Purchaser may only be to a party who will
have all necessary Regulatory Clearances to operate each of the Properties as of
the  Closing Date, and (ii) this Agreement may be assigned as a matter of law to
either  of  the  Alterra  Entities.
(f)     JOINT  VENTURE;  THIRD  PARTY  BENEFICIARIES.  Nothing  contained herein
shall  be  construed as forming a joint venture or partnership among the parties
hereto  with  respect  to  the subject matter hereof.  The parties hereto do not
intend  that  any  third  party  shall  have  any  rights  under this Agreement.
(g)     REPRESENTATION  BY  COUNSEL.  The  parties  hereto acknowledge that they
have  been represented by independent legal counsel of their choosing throughout
all of the negotiations which preceded the execution of this Agreement, and that
each  party  has  executed  this Agreement with the consent and on the advice of
such  independent legal counsel.  This Agreement is a negotiated document.  As a
result,  any  rule  of  construction providing for any ambiguity in the terms of
this  Agreement to be construed against the draftsperson of this Agreement shall
be  inapplicable  to  the  interpretation  of  this  Agreement.
(h)     ATTORNEYS'  FEES.  If  any  legal  action  or  arbitration proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach,  default,  or misrepresentation in connection with any of the provisions
of  this  Agreement,  the  successful  or  prevailing  party or parties shall be
entitled  to  recover  reasonable and documented attorneys' fees and other costs
actually  incurred in that action in addition to any other relief to which it or
they  may  be  entitled.
(i)     CAPTIONS.  The  section  headings  contained  herein are for convenience
only  and  shall  not  be  considered  or  referred to in resolving questions of
interpretation.
(j)     COUNTERPARTS.  This  Agreement  may  be  executed  in  one  or  more
counterparts  and all such counterparts taken together shall constitute a single
original  Agreement.
     (k)     RECITALS,  SCHEDULES,  AND  EXHIBITS.  Each  recital  set forth and
schedule and exhibit referenced in this Agreement is incorporated and becomes an
integral  part  of  this  Agreement.

(l)     TIME  OF  THE  ESSENCE.  Time is of the essence of this Agreement and of
all  of  the  terms  and  provisions  of  this  Agreement.

     (m)     SEVERABILITY.  Should  any  one  or  more of the provisions of this
Agreement  be  determined  to  be  invalid,  unlawful,  or  unenforceable in any
respect,  the validity, legality, and enforceability of the remaining provisions
hereof  shall  not  in  any  way  be  affected  or  impaired  thereby.

     (n)     SURVIVAL.  All  covenants,  indemnities,  warranties,  and
representations  of  each of the Alterra Entities and Purchaser set forth herein
shall  survive  the date of Closing for a period of twelve (12) months and shall
not  merge  into  the Deeds and the recordation of them in the official records.
(o)     FURTHER  ASSURANCES.  Each  of  the parties hereto agrees to execute and
deliver  any  and all further agreements, documents, or instruments necessary to
effectuate  this  Agreement  and  the  Transaction  contemplated  hereunder  or
reasonably  requested  to  perfect  or  evidence  the parties' rights hereunder.
     (p)     ANNOUNCEMENTS.  Each  of  the  parties  hereto  agrees  that  any
communications to the residents and/or employees of the Properties regarding the
terms  of  this  Agreement  and  the Transaction contemplated hereunder shall be
mutually acceptable to the parties hereto unless required to be made pursuant to
court  order  or  law.

     (q)     GOVERNING  LAW.  This  Agreement shall be governed by, interpreted,
construed,  applied,  and  enforced  in accordance with the laws of the State of
Washington  applicable to contracts between residents of the State of Washington
which are to be performed entirely within the State of Washington, regardless of
(i)  where this Agreement is executed or delivered; or (ii) where any payment or
other  performance required by this Agreement is made or required to be made; or
(iii)  where  any breach of any provision of this Agreement occurs, or any cause
of  action  otherwise  accrues;  or (iv) where any action or other proceeding is
instituted  or pending; or (v) the nationality, citizenship, domicile, principal
place of business or jurisdiction of organization or domestication of any party;
or  (vi)  whether  the  laws of the forum jurisdiction otherwise would apply the
laws  of  the  jurisdiction  other  than  the  State of Washington; or (vii) any
combination  of  the  foregoing.
(r)     CALCULATION  OF  TIME  PERIODS. Unless otherwise specified, in computing
any  period  of  time described herein, the day of the act or event on which the
designated  period  of time begins to run shall not be included and the last day
of the period so computed shall be included, unless such last day is a Saturday,
Sunday  or legal holiday, in which event the period shall run until the next day
which  is  not  a  Saturday,  Sunday  or  a  legal  holiday.
     (s)     CONSTRUCTION.  Any  and  all  references  herein to the phrase "the
Closing Date or the Licensure Date, as applicable" or "the Execution Date or the
Licensure Date, as applicable" or words of similar import shall mean the Closing
Date or the Execution Date, with respect to all of the Properties other than the
Colorado  Springs Property, and the Licensure Date, with respect to the Colorado
Springs  Property.


                 [THE NEXT FOLLOWING PAGE IS THE SIGNATURE PAGE]


<PAGE>
IN  WITNESS  WHEREOF,  the  parties  hereby  execute  this  Agreement  as of the
Execution  Date.

SELLER:                    ALS  FINANCING,  INC.,  A  KANSAS  CORPORATION

                    By:   /s/  Mark W. Ohlendorf
                               Mark W. Ohlendorf
                    Its:     Vice President


ALTERRA  HEALTHCARE  CORPORATION,  A  DELAWARE  CORPORATION


                    By:   /s/  Mark W. Ohlendorf
                               Mark W. Ohlendorf
                    Its:     President

PURCHASER:     EMERITUS  PROPERTIES  XVI,  INC.,  A  NEVADA  CORPORATION

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



<PAGE>
                            EXHIBITS A-1 THROUGH A-5
                               LEGAL DESCRIPTIONS

                                   EXHIBIT A-1
                                   -----------
                                 (Loma Property)

Parcel  1  of  Parcel  Map  7277,  in  the  City  of  Loma  Linda, County of San
Bernardino,  State  of  California,  as per Map recorded in Book 83, Page 24, of
Parcel  Maps,  in  the  Office  of  the  County  Recorder  of  said  County.










<PAGE>


                                   EXHIBIT A-2
                                   -----------
                              (Oceanside Property)


Parcel  1  of Parcel Map No. 7252 in the City of Oceanside, County of San Diego,
State of California, as filed in the Office of the County Recorder of San Diego,
May  11,  1978  as  File  No.  78-191830,  Official  Records.

EXCEPTING  one  half of all petroleum and gas, if any, and allied hydrocarbonous
---------
substances  as  reserved  by the Vista Irrigation District by Deed recorded July
17,  1945 in Book 1901, Page 429, excepting the right to enter upon said land as
quitclaimed  by  the  Vista  Irrigation  District,  recorded  June  18,  1987 as
Instrument  No.  87-340401.


<PAGE>
                                     ------
                                   EXHIBIT A-3
                                   -----------
                           (Colorado Springs Property)

Lot  1,  Southpointe  Subdivision,  City of Colorado Springs, County of El Paso,
State  of  Colorado  as recorded in Plat Book F-5 at Page 91 under Reception No.
94015937  of  the  Records  of  El  Paso  County,  Colorado.











<PAGE>
                                     ------
                                   EXHIBIT A-4
                                   -----------
                               (Augusta Property)

Lot  Numbered 1, in Block Numbered 3, in Country Club First Addition to the City
of  Augusta,  in  Butler  County,  Kansas, Except the North 160.75 feet thereof.
                                           ------

Together with an easement for ingress and egress and for surface drainage across
the  West  50 feet of the North 160.75 feet of Lot Numbered 1, in Block Numbered
3,  in Country Club First Addition to the City of Augusta, Kansas, as granted in
Easement  filed  May  7,  1991  in  Book  592,  at  Page  484.









<PAGE>
                                   EXHIBIT A-5
                                   -----------
                               (Liberal Property)


The South 420 feet of Block 1, Woodland Terrace Addition to the City of Liberal,
Seward County, Kansas, more particularly described as follows:  Beginning at the
southwest  corner  of  said  Block 1; thence N 0010'40" W along the west line of
said  Block  1,  a  distance  of  420.00 feet; thence N 8959'58" E a distance of
458.22 feet to a point on the westerly right-of-way of Terrace Avenue (having an
80  foot  right-of-way); thence continuing along said right-of-way on a curve to
the  right having a radius of 260 feet an arc distance of 99.39 feet to a point;
thence continuing along said right-of-way S 1959'58" W a distance of 103.73 feet
to  a  point;  thence  continuing along said right-of-way on a curve to the left
having  a  radius  of 380 feet an arc distance of 132.64 feet to a point; thence
continuing  along  said  right-of-way  S 0000'02" E a distance of 95 feet to the
southeast  corner  of  said  Block  1,  said  point  also  being  located at the
intersection  of  the  westerly right-of-way of Terrace Avenue and the northerly
right-of-way  of 15th Street (having a 100 foot right-of-way); thence S 8959'58"
W  along  the northerly right-of-way of 15th Street a distance of 382.99 feet to
the  Point  of  Beginning.










<PAGE>

                                    EXHIBIT B
                              DESCRIPTION OF LEASES

Lease  Agreement  dated  as  of  July  30, 1998, between ALS Financing, Inc., as
--------------------------------------------------------------------------------
Lessor,  and  Alterra Healthcare Corporation, f/n/a Alternative Living Services,
--------------------------------------------------------------------------------
Inc.,  as  Tenant,  with respect to the real property, improvements and fixtures
--------------------------------------------------------------------------------
located  in  Loma  Linda,  California,  including  the  assisted living facility
--------------------------------------------------------------------------------
commonly  known  as  "Crossings  at  the  Palms"
------------------------------------------------
Lease  Agreement  dated  as  of  July  30, 1998, between ALS Financing, Inc., as
--------------------------------------------------------------------------------
Lessor,  and  Alterra Healthcare Corporation, f/n/a Alternative Living Services,
--------------------------------------------------------------------------------
Inc.,  as  Tenant,  with respect to the real property, improvements and fixtures
--------------------------------------------------------------------------------
located  in  Oceanside,  California,  including  the  assisted  living  facility
--------------------------------------------------------------------------------
commonly  known  as  "Lake  Park  Villas"
-----------------------------------------
Lease  Agreement effective upon the issuance by the State of Colorado Department
--------------------------------------------------------------------------------
of  Health  and  Environment  of  a  Personal Care Boarding Home license for the
--------------------------------------------------------------------------------
Facility known as "Sterling House at Broadmoor", between ALS Financing, Inc., as
--------------------------------------------------------------------------------
Lessor,  and  Alterra Healthcare Corporation, f/n/a Alternative Living Services,
--------------------------------------------------------------------------------
Inc.,  as  Tenant,  with respect to the real property, improvements and fixtures
--------------------------------------------------------------------------------
located  in  Colorado  Springs, Colorado, including the assisted living facility
--------------------------------------------------------------------------------
commonly  known  as  "Sterling  House  of  Broadmoor"
-----------------------------------------------------
Lease  Agreement  dated  as  of  July  30, 1998, between ALS Financing, Inc., as
--------------------------------------------------------------------------------
Lessor,  and  Alterra Healthcare Corporation, f/n/a Alternative Living Services,
--------------------------------------------------------------------------------
Inc.,  as  Tenant,  with respect to the real property, improvements and fixtures
--------------------------------------------------------------------------------
located  in  Augusta,  Kansas,  including  the assisted living facility commonly
--------------------------------------------------------------------------------
known  as  "Sterling  House  of  Augusta"
-----------------------------------------
Lease  Agreement  dated  as  of  July  30, 1998, between ALS Financing, Inc., as
--------------------------------------------------------------------------------
Lessor,  and  Alterra Healthcare Corporation, f/n/a Alternative Living Services,
--------------------------------------------------------------------------------
Inc.,  as  Tenant,  with respect to the real property, improvements and fixtures
--------------------------------------------------------------------------------
located  in  Liberal,  Kansas,  including  the assisted living facility commonly
--------------------------------------------------------------------------------
known  as  "Woodland  Terrace"
------------------------------


<PAGE>
                                   EXHBIT C-1
                                      DEED
                                  (CALIFORNIA)

                                   )
RECORDING  REQUESTED  BY               )
AND  WHEN  RECORDED  RETURN  TO:          )
     )
Randi  S.  Nathanson,  Esq.          )
The  Nathanson  Group  PLLC          )
1520  Fourth  Avenue          )
Sixth  Floor          )
Seattle,  WA  98101          )
                                                                            )
-----------------------------------------------------------------------------
(Space  above  this  line  for  recorder's  use)

(A.P.N.:  _____________)

Mail  Tax  Statements  To:

Emeritus  Corporation
3131  Elliott  Avenue
Suite  500
Seattle,  WA  98121
Attn:  Tax  Department

(Documentary  Transfer  Tax  is  not of public record and is shown on a separate
sheet  attached  to this Grant Deed in accordance with the provisions of Section
11932  of  the  California  Revenue  and  Taxation  Code.)

     GRANT  DEED
     -----------

FOR  A  VALUABLE  CONSIDERATION,  receipt  of  which is hereby acknowledged, ALS
Financing, Inc., a Kansas corporation, hereby grants to Emeritus Properties XVI,
Inc.,  a  Nevada  corporation,  all  of  that  real  property  described  with
particularity  in Exhibit "A" attached hereto and incorporated herein located in
the  County of [San Bernardino/San Diego], State of California (the "Property"),
subject  to  those  covenants,  conditions, and restrictions of record and other
matters  which  are  described  in  Exhibit  B  hereto;  provided,  however,
notwithstanding  anything  herein to the contrary, Grantor does hereby guarantee
the  quiet  possession of the Property only against the claims of those claiming
any right, interest or title through Grantor and Grantor will warrant and defend
the  Property against all lawful claims of those claiming any right, interest or
title through Grantor; but Grantor does not warrant title against those claiming
an  interest  that  arose  prior to, or separate from, Grantor's interest in the
Property.

     IN WITNESS WHEREOF, ALS Financing, Inc. has executed this Grant Deed on the
day  and  year  set  forth  below.

                         ALS  Financing,  Inc.,  a  Kansas  corporation

Date:  ______________          By:     ___________________________

Its:     ___________________________


<PAGE>
                                 ACKNOWLEDGMENT


State  of  _____________     )
     )     ss.
County  of  ___________     )

     On[date]  before me,[name of notary], personally appeared, personally known
to  me,  or  proved to me on the basis of satisfactory evidence to be the person
whose  name  is  subscribed to the within instrument and acknowledged to me that
he/she  executed  the  same  in his/her authorized capacity, and that by his/her
signature  on  the instrument the person, or the entity upon behalf of which the
person  acted,  executed  the  instrument.

     WITNESS  my  hand  and  official  seal.


     ____________________________
     ----------------------------
                (seal)                    Notary  Public





<PAGE>
                                   EXHIBIT C-2
                                      DEED
                                   (COLORADO)
              RECORDED AT _______________ O'CLOCK ___M.___________

                                   RECORDER'S
                                                               STAMP
               RECEPTION NO. _____________________________RECORDER


                              SPECIAL WARRANTY DEED

THIS  DEED,  made this ___________ day of December, 2003, between ALS Financing,
Inc.,  a corporation duly organized and existing under and by virtue of the laws
of  the  State  of  Kansas,  grantor,  and  Emeritus  Properties  XVI,  Inc.,  a
corporation  duly  organized and existing under and by virtue of the laws of the
State of Nevada, whose legal address is 3131 Elliott Avenue, Suite 500, Seattle,
Washington  98121-1031,  grantee;

WITNESSETH,  that  the  grantor,  for  and  in  consideration  of  the  sum  of
_______________________  DOLLARS  the receipt and sufficiency of which is hereby
acknowledged,  has granted, bargained, sold, and conveyed, and by these presents
does  grant,  bargain,  sell,  convey,  and  confirm,  unto  grantee, its heirs,
successors,  and  assigns  forever,  all  the  real  property, together with the
improvements,  if any, situate, lying, and being in the County of El Paso, State
of  Colorado,  described  as  follows:
                           [insert legal description]
Also  known  by  street  and  number  as:  ______________________:

Assessor's  schedule  or  parcel  number:  _____________________:

TOGETHER  with  all  and  singular  the  hereditaments and appurtenances thereto
belonging,  or  in  anywise  appertaining,  and  the  reversion  and reversions,
remainder  and  remainders,  rents,  issues,  and  profits  thereof, and all the
estate,  right,  title,  interest,  claim, and demand whatsoever of the grantor,
either  in  law or equity, of, in, and to the above bargained premises, with the
hereditaments  and  appurtenances;

SUBJECT TO, those easements, restrictions and other matters set forth in Exhibit
B;

TO  HAVE  AND  TO  HOLD the said premises above bargained and described with the
appurtenances,  unto  the  grantee,  its heirs, successors, and assigns forever.
The  grantor,  for  itself,  its successors and assigns, does covenant and agree
that  it  shall and will WARRANT AND FOREVER DEFEND the above-bargained premises
in  the  quiet  and  peaceable  possession  of the grantee against all and every
person  or  persons claiming the whole or any part thereof by, through, or under
grantor,  but  grantor does not warrant title against those claiming an interest
that  arose prior to, or separate from, grantor's interest in the said premises.

     IN  WITNESS  WHEREOF,  the  grantor  has  caused  its  corporate name to be
hereunto  subscribed  by  its  _______  ,  and its corporate seal to be hereunto
affixed,  the  day  and  year  first  above  written.


                              ALS  FINANCING,  INC.,  a  Kansas  corporation

                              By:     ____________________________
                              Its:     ____________________________

<PAGE>

STATE  OF  ___________________     }
                              }  ss.
County  of  ____________________     }

The  foregoing  instrument  was  acknowledged  before  me  this  ________ day of
December,  2003,  by  ___________________  as ________ of ALS Financing, Inc., a
Kansas  corporation.

Witness  my  hand  and  official  seal.
---------------------------------------
Notary  Public

My  commission  expires:

 ____________________.

Prepared  by  and  when
Recorded  return  to:

Randi  S.  Nathanson
The  Nathanson  Group  PLLC
1520  Fourth  Avenue,  6th  Floor
Seattle,  WA  98101



<PAGE>
                                   EXHIBIT C-3
                                      DEED
                                    (KANSAS)
     SPECIAL  WARRANTY  DEED

     On  this  _______ day of ____________________, 2003, ALS Financing, Inc., a
Kansas  corporation,  Grantor,  conveys  and  grants to Emeritus Properties XVI,
Inc.,  a  Nevada  corporation,  Grantee,  all  of  the  following  real  estate
("Property")  in  [Seward/Butler] County, Kansas described on Exhibit A attached
for  the  sum  of  ten  dollars  and  other  valuable  consideration,

     EXCEPT  AND SUBJECT TO: Those easements, restrictions and other matters set
forth  on  Exhibit  B.

     Grantor,  for  Grantor and Grantor's successors and assigns, guarantees the
quiet  possession  of the Property only against the claims of those claiming any
right, interest or title through Grantor and Grantor will warrant and defend the
Property  against  all  lawful  claims  of those claiming any right, interest or
title through Grantor; but Grantor does not warrant title against those claiming
an  interest  that  arose  prior to, or separate from, Grantor's interest in the
Property.

     IN  WITNESS WHEREOF, the Grantor has executed this special warranty deed on
and  as  of  the  day  and  year  first  above  written.

          ALS  Financing,  Inc.,  a  Kansas  corporation

          By:     ___________________
          Its:     ___________________

<PAGE>

STATE  OF___________________)
                                                       )  ss:
COUNTY  OF_________________)

     This  instrument  was acknowledged before me on December ____, 2003, by the
______________________  of  ALS Financing, Inc., a Kansas corporation, on behalf
of  the  corporation.

My  Appointment  Expires:

____________________
Notary  Public


<PAGE>
                                   EXHIBIT D-1
                           FORM OF SELLER BILL OF SALE

     This  Bill  of  Sale is being executed and delivered in accordance with the
provisions  of  that  certain Conveyance and Operations Transfer Agreement dated
December  31,  2003  (the  "Purchase  Agreement"), executed among ALS Financing,
Inc.,  a  Kansas  corporation  (the "Seller"), Alterra Healthcare Corporation, a
Delaware  corporation  ("Alterra"),  and Emeritus Properties XVI, Inc., a Nevada
corporation  (the  "Purchaser").  Any  term used but not defined in this Bill of
Sale  shall  have  the  meaning ascribed to such term in the Purchase Agreement.

In  consideration of Ten Dollars and NO/100 ($10.00) and other good and valuable
consideration,  the  receipt  and  sufficiency of which are hereby acknowledged,
Seller  does hereby grant, bargain, sell, convey, and transfer to Purchaser, all
of Seller's right, title, and interest, if any, in and to, all and singular, the
Seller  Personal  Property,  the  Seller  Miscellaneous  Property and the Seller
Imposition Deposits, free and clear of all liens and encumbrances except for the
Permitted  Liens.

Except  to  the  extent specifically set forth in the Purchase Agreement, Seller
makes  no  representations  or warranties of any kind with respect to the Seller
Personal  Property,  the  Seller Miscellaneous Property or the Seller Imposition
Deposits and the Seller Personal Property, the Seller Miscellaneous Property and
the Seller Imposition Deposits are hereby conveyed by Seller to Purchaser in its
current  "AS  IS",  "WHERE  IS"  "WITH  ALL  FAULTS"  condition.

Dated  this  31st  day  December,  2003  and  effective  as  of January 1, 2004.

ALS  FINANCING,  INC.,  A  KANSAS  CORPORATION

                         By:     ________________________
                         Its:     ________________________


<PAGE>

                                   EXHIBIT D-2
                          FORM OF ALTERRA BILL OF SALE

     This  Bill  of  Sale is being executed and delivered in accordance with the
provisions  of  that  certain Conveyance and Operations Transfer Agreement dated
December  31,  2003  (the  "Purchase  Agreement"), executed among ALS Financing,
Inc.,  a  Kansas  corporation  (the "Seller"), Alterra Healthcare Corporation, a
Delaware  corporation  ("Alterra"),  and Emeritus Properties XVI, Inc., a Nevada
corporation  (the  "Purchaser").  Any  term used but not defined in this Bill of
Sale  shall  have  the  meaning ascribed to such term in the Purchase Agreement.

In  consideration of Ten Dollars and NO/100 ($10.00) and other good and valuable
consideration,  the  receipt  and  sufficiency of which are hereby acknowledged,
Alterra does hereby grant, bargain, sell, convey, and transfer to Purchaser, all
of  Alterra's  right,  title, and interest, if any, in and to, all and singular,
the  Consumables,  the Alterra Personal Property and the Miscellaneous Operating
Property,  free and clear of all liens and encumbrances except for the Permitted
Liens.

Except  to  the extent specifically set forth in the Purchase Agreement, Alterra
makes  no  representations  or  warranties  of  any  kind  with  respect  to the
Consumables,  the  Alterra  Personal  Property  and  the Miscellaneous Operating
Property  and  the  Consumables,  the  Alterra  Personal  Property  and  the
Miscellaneous  Operating Property are hereby conveyed by Alterra to Purchaser in
their  current  "AS  IS",  "WHERE  IS"  "WITH  ALL  FAULTS"  condition.

Dated  this  31st  day  of December, 2003 and effective as of ____________, 2004
[INSERT  JANUARY  1  OR  LICENSURE  DATE,  AS  APPLICABLE].


                         ALTERRA  HEALTHCARE  CORPORATION,  A
DELAWARE  CORPORATION

                         By:     _______________________
                         Its:     _______________________

<PAGE>
                                    EXHIBIT E

                                FIRPTA AFFIDAVIT

     Section  1445  of the Internal Revenue Code provides that a transferee of a
U.S.  real  property  interest  must withhold tax if the transferor is a foreign
person.  To  inform  the transferee that withholding of tax is not required upon
the  disposition  of  certain  premises  located  in  Loma  Linda,  California,
Oceanside, California, Colorado Springs, Colorado, Augusta, Kansas, and Liberal,
Kansas,  as  more  particularly described in Exhibits A1-A5 attached hereto, the
                                             --------------
undersigned  hereby  certifies the following on behalf of ALS Financing, Inc., a
Kansas  corporation  ("Seller"):

1.     Seller is not a foreign person, foreign corporation, foreign partnership,
foreign  trust,  or  foreign  estate (as those terms are defined in the Internal
Revenue  Code  and  Income  Tax  Regulations).

     2.     Seller's  taxpayer  identification  number  is_________________.

     3.     Seller's office address is c/o Alterra Healthcare Corporation, 10000
Innovation  Drive,  Milwaukee,  Wisconsin,  53226.

     4.     Seller  understands  that this certification may be disclosed to the
Internal  Revenue  Service  by transferee and that any false statement contained
herein  could  be  punished  by  fine,  imprisonment,  or  both.

     Under  penalties  of  perjury,  I  declare  that  I  have  examined  this
certification and to the best of my knowledge and belief it is true, correct and
complete,  and  I further declare that I have authority to sign this document on
behalf  of  Seller  this  31st  day  of  December,  2003.

                         ALS  FINANCING,  INC.,  A  KANSAS  CORPORATION

                    By:     _______________________
                    Its:     _______________________

<PAGE>
                                    EXHIBIT A
                             (TO FIRPTA CERTIFICATE)

               --INCLUDE LEGAL DESCRIPTIONS FOR ALL 5 PROPERTIES-

<PAGE>
                                    EXHIBIT F
                          FORM OF ASSIGNMENT AGREEMENT

     This  Assignment  Agreement  (the  "Agreement")  is  made  and entered into
December  31,  2003  and  effective as ______________, 2004 [INSERT JANUARY 1 OR
LICENSURE DATE, AS APPLICABLE], by and between Alterra Healthcare Corporation, a
Delaware  corporation  ("Assignor"), and Emeritus Properties XVI, Inc., a Nevada
corporation  ("Assignee").

     RECITALS

     A.  Assignor,  ALS  Financing,  Inc.  and  Assignee  have entered into that
certain  Conveyance  and  Operations  Transfer Agreement dated December 31, 2003
(the  "Purchase  Agreement").  Any  term  used but not defined in this Agreement
shall  have  the  meaning  ascribed  to  such  term  in  the Purchase Agreement.

     B.  Under  the  terms  of  the  Purchase  Agreement,  on  the  [Closing
Date/Licensure  Date], Assignor agreed to convey and transfer to Assignee all of
Assignor's  right,  title,  and  interest  in  and  to,  all  and  singular, the
Operations  Assets.

     C.     Assignor  and  Assignee  are  desirous  of documenting the terms and
conditions  of  said  assignment  and  assumption.

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

     AGREEMENT

     1.  Assignment.  As  of  the  [Closing  Date/Licensure Date], Assignor does
         ----------
hereby  assign,  transfer and convey to Assignee all of Assignor's right, title,
and  interest,  in  and  to  the  Operations  Assets.

2.  Assumption.  As  of  the [Closing Date/Licensure Date], Assignee does hereby
    ----------
accept  the  assignment, transfer and conveyance of Assignor's right, title, and
interest,  in  and  to  the  Operations  Assets.

3. No Assumption of Liability. Nothing herein shall be construed as imposing any
   --------------------------
liability  on  Assignee with respect to the Operations Assets as a result of the
acts  or  omissions of Assignor prior to the [Closing Date/Licensure Date] or as
imposing  any  liability  on Assignor with respect to the Operations Assets as a
result  of  the  acts  or  omissions  of  Assignee  from  and after the [Closing
Date/Licensure  Date].

     4.  Governing  Law/Amendment.  This  Agreement  shall  be  governed  by and
         ------------------------
construed  in accordance with the laws of the State of Washington and may not be
amended  or  modified except by written instrument signed by the parties hereto.

     5.  Counterparts.  This  Agreement may be executed in counterparts, each of
         ------------
which  shall  be deemed to be an original, but all of which taken together shall
constitute but one and the same instrument.  Delivery of an executed counterpart
of a signature page to this Agreement via telephone facsimile transmission shall
be  effective  as delivery of a manually executed counterpart of this Agreement.

     6. Attorneys' Fees. In the event of a dispute among the parties hereto with
        ---------------
respect  to  the subject matter hereof, the prevailing party in any such dispute
shall  be  entitled  to  collect  from the other any and all attorneys' fees and
costs.

     7.  Entirety. This Agreement represents the entire agreement of the parties
         --------
with  respect  to the subject matter hereof, it being understood and agreed that
nothing  herein shall affect the rights and obligations of Assignor and Assignee
under  the  Purchase  Agreement.

     8.  Notices. Any notice, request, or other communication to be given by any
         -------
party  hereunder shall be in writing and shall be sent to the parties and in the
manner  specified  in  the  Purchase  Agreement.

     9.  Severability. Should any one or more of the provisions hereof be deemed
         ------------
to  be invalid or unenforceable said determination shall not affect the validity
or  enforceability  of  the  remaining  terms  hereof.

     10.  Captions.  The  captions  in  this  Agreement  have  been inserted for
          --------
convenience  of  reference only and shall not be construed to define or to limit
any  of  the  terms  or  conditions  hereof.

     11.     AS IS.  Except to the extent specifically set forth in the Purchase
             ------
Agreement,  Assignor  makes  no  representations  or warranties of any kind with
respect  to  the  Operations  Assets.

<PAGE>

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

ASSIGNOR:
                         ALTERRA  HEALTHCARE  CORPORATION,  A
                         DELAWARE  CORPORATION

                    By:     _______________________
                    Its:     _______________________

ASSIGNEE:     EMERITUS  PROPERTIES  XVI,  INC.,  A  NEVADA  CORPORATION

          By:     __________________________
                         Its:     __________________________


<PAGE>
                                    EXHIBIT G
                        DESIGNATED THIRD PARTY CONTRACTS

                                      NONE

THERE  ARE  NO  DESIGNATED  THIRD  PARTY  CONTRACTS.   PURCHASER  WILL ASSUME NO
OPERATING  CONTRACTS.



<PAGE>
                                    EXHIBIT H
                             OWNED COMPUTER HARDWARE



Computer  Hardware  Owned  By  Alterra  Entities

5  Dell  computers  located  at  Wynwood  of  the  Palms,  CA  residence

4  Dell  computers  located  at  Clare  Bridge  of  Lake  Park,  CA  residence

<PAGE>


                                    EXHIBIT I
                            FORM OF OWNER'S AFFIDAVIT

STATE  OF  WISCONSIN          )          (Name  of  Facility)
                         )  SS:
COUNTY  OF  MILWAUKEE     )

     The  undersigned,  Kristin A. Ferge (hereinafter the "Affiant"), being duly
sworn  according  to  law,  deposes  and  says  as  follows:

     1.     Affiant  is  the  Vice  President  of  ALS Financing, Inc., a Kansas
                                                   -------------------
corporation,  hereinafter  the "Company", that Affiant has personal knowledge of
the  facts  that are sworn to in this affidavit, and Affiant is fully authorized
and  qualified  to  make  this  affidavit;

2.     That  the  Company  is  the  owner  of  the land described on Exhibit "A"
                                                                     -----------
attached  hereto  and  made  a  part  hereof  by this reference (hereinafter the
"Property");

3.     That there are no unpaid bills incurred by the Company for work performed
upon  or materials delivered to the Property for the construction or improvement
of  the Property during the past twelve (12) months arising by, through or under
the  Company;

4.     Except  as  shown  on Exhibit "B" attached hereto and made a part hereof,
                             -----------
that  the  Company is in exclusive undisturbed possession of the Property and no
other  person  has  possession or any right to possession of the Property or any
interest  therein  arising  by, through or under the Company, but not otherwise,
including  oil,  gas  or  other minerals, and there are no unrecorded tenancies,
leases  or  other  occupancies  on  the  Property except as shown on Exhibit "B"
                                                                     -----------
arising  by,  through  or  under  the  Company,  but  not  otherwise;

5.     Except  as  shown  on  Exhibit  "B",  there  are no financing statements,
                              ------------
chattel  mortgages,  conditional  bills of sale or retention of title agreements
affecting  any fixtures located on the Property arising by, through or under the
Company,  but  not  otherwise;

6.     Except  as  shown  on  Exhibit  "B", there are no unrecorded easements or
                              ------------
claims  of easement arising by, through or under the Company, but not otherwise;
and  no  contracts,  options or rights to purchase other than in the transaction
for  which  this  affidavit  is  given arising by, through or under the Company;

7.     Except as shown on Exhibit "B", there are no unrecorded judgments, liens,
                          -----------
mortgages, or other claims against the Property arising by, through or under the
Company  or  against  the  Company  which  would  attach  as  a lien against the
Property;

8.     That  no  proceeding in bankruptcy has ever been instituted by or against
the  Company,  nor  has  the  Company ever made an assignment for the benefit of
creditors;

9.     That  there  is  no  action or proceeding relating to the Property in any
state or federal court of the United States nor any state or federal judgment or
any  federal lien of any kind or nature whatever which now constitutes a lien or
charge  upon  the  Property;

10.     That the Company has not entered into any agreement with any real estate
broker for payment of a real estate commission or fees relating to the purchase,
sale, management, leasing or other services in connection with the Property; and

11.     Except  as  shown  on  Exhibit  "B",  there are no unpaid taxes, special
                               ------------
assessments  or  assessments  of  any nature, whether imposed by governmental or
private  authority,  against  said  Property.



                 [THE NEXT FOLLOWING PAGE IS THE SIGNATURE PAGE]
<PAGE>

     This  affidavit is given to induce CHICAGO TITLE INSURANCE COMPANY to issue
its  policy  of title insurance including endorsements knowing full well that it
will  rely  upon  the  accuracy  of  same.

Sworn  to  and  subscribed
before  me  this  ________
day  of  December,  2003.


                              Kristin  A.  Ferge
Notary  Public
[NOTARY  SEAL]

My  commission  expires:


                              OWNER'S  FEDERAL  TAX  I.D.  NUMBER:
                                   39-1935364
                                   ----------

                              OWNER'S  POST-CLOSING  ADDRESS:

                              10000  Innovation  Drive,  Milwaukee,  WI  53226
                              ------------------------------------------------


<PAGE>
                                   EXHIBIT "A"

                           [ATTACH LEGAL DESCRIPTION]




<PAGE>
                                   EXHIBIT "B"

                        [ATTACH LIST OF TITLE EXCEPTIONS]