Colonial Park Club Original Meditrust

 

THE FOLLOWING AGREEMENT IS SUBSTANTIALLY THE SAME 
EXCEPT FOR THE FOLLOWING:

						                                   
                                    
 COMMUNITY			         	BASE RENT	
	
	Colonial Park Club			Original Meditrust
                      Investment multiplied 
                      by 9.83%	

	Lodge at Mainlands			$924,530.37

 Fairhaven Estates    Original Meditrust      
                      Investment multiplied 
                      by 9.9%

 Highland Hills       Original Meditrust      
                      Investment multiplied 
                      by 9.9%

 Anderson Place       Original Meditrust      
                      Investment multiplied 
                      by 9.9%

                         ORIGINAL
 COMMUNITY              INVESTMENT

 Colonial Park Club       $7,841,931
             
 Lodge at Mainlands       $9,405,192

 Fairhaven Estates        $3,677,423

 Highland Hills           $3,360,000

 Anderson Place           $10,669,705

NOTE:  Colonial Park Club's lease commenced August 21, 1996 and
       ends March 31, 2008; Lodge at Mainland's lease commenced 
       August 20, 1996 and ends March 31, 2008; Fairhaven Estates,
       Highland Hills and Anderson Place leases commenced October 1,
       1996 and ends September 30, 2007.

                                                                       EMERITUS
                                                                       SARASOTA

               FACILITY LEASE AGREEMENT

           MEDITRUST ACQUISITION CORPORATION I

              (A Massachusetts corporation)

                          as

                        Lessor

                          AND

               EMERITUS PROPERTIES I, INC.

               (A Washington corporation)
 
                           as
        
                         Lessee

                Dated as of August __, 1996

                  For Premises Located AT
                 ________, __________, __________

FACILITY LEASE AGREEMENT

	This FACILITY LEASE AGREEMENT  ("Lease") is dated as of 
the _____ day of August, 1996 and is between MEDITRUST 
ACQUISITION CORPORATION I ("Lessor"), a Massachusetts corporation 
having its principal office at 197 First Avenue, Needham Heights, 
Massachusetts 02194, and EMERITUS PROPERTIES I, INC. ("Lessee"), a 
Washington corporation, having its principal office at c/o Emeritus 
Corporation, 3131 Elliott Avenue, Suite 500, Seattle, Washington 98121-
2162.

ARTICLE 1

LEASED PROPERTY; TERM; CONSTRUCTION; EXTENSIONS

	1.1	LEASED PROPERTY.  Upon and subject to the terms 
and conditions hereinafter set forth, Lessor leases to Lessee and Lessee 
rents and leases from Lessor all of Lessor's rights and interests in and to the
following real and personal property (collectively, the "Leased Property"):

		(a)	the real property described in EXHIBIT A 
attached hereto (the "Land");

		(b)	all buildings, structures, Fixtures (as hereinafter 
defined) and other improvements of every kind including, but not limited 
to, alleyways and connecting tunnels, sidewalks, utility pipes, conduits and 
lines, and parking areas and roadways appurtenant to such buildings and 
structures presently or hereafter situated upon the Land (collectively, the 
"Leased Improvements");

		(c)	all easements, rights and appurtenances of every 
nature and description now or hereafter relating to or benefitting any or all 
of the Land and the Leased Improvements; 

		(d)	all equipment, machinery, building fixtures, and 
other items of property (whether realty, personalty or mixed), including all 
components thereof, now or hereafter located in, on or used in connection 
with, and permanently affixed to or incorporated into the Leased 
Improvements, including, without limitation, all furnaces, boilers, heaters, 
electrical equipment, heating, plumbing, lighting, ventilating, refrigerating, 
incineration, air and water pollution control, waste disposal, air-cooling and 
air-conditioning systems and apparatus, sprinkler systems and fire and theft 
protection equipment, and built-in oxygen and vacuum systems, all of 
which, to the greatest extent permitted by law, are hereby deemed by the 
parties hereto to constitute real estate, together with all replacements, 
modifications, alterations and additions thereto, but specifically excluding 
all items included within the category of Tangible Personal Property (as 
hereinafter defined) which are not permanently affixed to or incorporated in 
the Leased Property (collectively, the "Fixtures"); and

	The Leased Property is leased in its present condition, AS IS, 
without representation or warranty of any kind, express or implied, by 
Lessor and subject to:  (i) the rights of parties in possession; (ii) the 
existing state of title including all covenants, conditions, Liens (as 
hereinafter defined) and other matters of record (including, without 
limitation, the matters set forth in EXHIBIT B); (iii) all applicable laws 
and (iv) all matters, whether or not of a similar nature, which would be 
disclosed by an inspection of the Leased Property or by an accurate survey 
thereof.

	1.2	TERM.  The term of this Lease shall consist of:  the 
"Initial Term", which shall commence on [August 21, 1996] (the 
"Commencement Date") and end on March 31, 2008 (the "Expiration 
Date"); provided, however, that this Lease may be sooner terminated as 
hereinafter provided. In addition, Lessee shall have the option(s) to extend 
the Term (as hereinafter defined) as provided for in Section 1.3.  

	1.3	EXTENDED TERMS.  Provided that this Lease has not 
been previously terminated, and as long as there exists no Lease Default (as 
hereinafter defined) at the time of exercise and on the last day of the Initial
Term or the then current Extended Term (as hereinafter defined), as the 
case may be, Lessee is hereby granted the option to extend the Initial Term 
of this Lease for four (4) additional periods (collectively, the "Extended 
Terms") as follows:  four (4) successive five (5) year periods for a 
maximum Term, if all such options are exercised, which ends on March 31, 
2028.  Lessee's extension option rights shall be exercised by Lessee by 
giving written notice to Lessor of each such extension at least one hundred 
eighty (180) days, but not more than three hundred sixty (360) days, prior 
to the termination of the Initial Term or the then current Extended Term, as 
the case may be.  Lessee shall have no right to rescind any such notice once 
given.  Lessee may not exercise its option for more than one Extended 
Term at a time.  During each effective Extended Term, all of the terms and 
conditions of this Lease shall continue in full force and effect, except that 
the Base Rent (as hereinafter defined) for each such Extended Term shall be 
adjusted as set forth in Section 3.1(a).

	Notwithstanding anything to the contrary set forth herein, Lessee's 
rights to exercise the options granted in this Section 1.3 are subject to the 
further condition that concurrently with the exercise of any extension option 
hereunder, Lessee shall have exercised its option to extend the terms of all 
of the Related Leases in accordance with the provisions of the Agreement 
Regarding Related Transactions and the provisions of Section 1.3 of each of 
the Related Leases.  

ARTICLE 2

DEFINITIONS AND RULES OF CONSTRUCTION

	2.1	DEFINITIONS.  For all purposes of this Lease and the 
other Lease Documents (as hereinafter defined), except as otherwise 
expressly provided or unless the context otherwise requires, (i) the terms 
defined in this Article have the meanings assigned to them in this Article 
and include the plural as well as the singular and (ii) all references in this 
Lease or any of the other Lease Documents to designated "Articles", 
"Sections" and other subdivisions are to the designated Articles, Sections 
and other subdivisions of this Lease or the other applicable Lease 
Document.

	ACCOUNTS: As defined in the UCC.

	ACCREDITATION BODY:  Any person, including any Person 
having or claiming jurisdiction over the accreditation, certification, 
evaluation or operation of the Facility.

	ADDED VALUE PERCENTAGE:  The proportion of the Fair 
Market Added Value of Capital Additions paid for or financed by Lessee to 
the Fair Market Value of the entire Leased Property, expressed as a 
percentage.

	ADDITIONAL CHARGES:  As defined in Article 3.

	ADDITIONAL LAND:  As defined in Section 9.3.

	ADDITIONAL RENT:  As defined in Article 3.

	ADDITIONAL RENT COMMENCEMENT DATE:  As defined 
in Article 3.

	AFFILIATE:  With respect to any Person (i) any other Person 
which, directly or indirectly, controls or is controlled by or is under 
common control with such Person, (ii) any other Person that owns, 
beneficially, directly or indirectly, five percent (5%) or more of the 
outstanding capital stock, shares or equity interests of such Person or (iii) 
any officer, director, employee, general partner or trustee of such Person, or 
any other Person controlling, controlled by, or under common control with, 
such Person (excluding trustees and Persons serving in a fiduciary or 
similar capacity who are not otherwise an Affiliate of such Person).  For the 
purposes of this definition, "control" (including the correlative meanings of 
the terms "controlled by" and "under common control with"), as used with 
respect to any Person, shall mean the possession, directly or indirectly, of 
the power to direct or cause the direction of the management and policies of 

such Person, through the ownership of voting securities, partnership 
interests or other equity interests provided, however, that, (a) for purposes 
of determining a Related Party Default, the percentage of outstanding 
capital stock, shares or equity interests referenced in (ii) above shall be
fifty percent (50%) and (b) any Person who is an Affiliate by virtue of 
the ownership thereof by Daniel R. Baty or his status therein as an officer or 
director shall not be deemed an Affiliate for purposes of determining a 
Related Party Default. 

	AFFILIATED PARTY SUBORDINATION AGREEMENT:  That 
certain Affiliated Party Subordination Agreement of even date by and 
among Lessee, the Guarantor, various Affiliates of Lessee and various 
Affiliates of Lessor.

	AGREEMENT REGARDING RELATED TRANSACTIONS 
(ACQUISITION):  The Fourth Amended and Restated Agreement 
Regarding Related Transactions (Acquisition) of even date, as amended 
from time to time, between Lessee, Lessor and any Related Party that is 
party to any Related Lease or Related Party Agreement.  Lessor and Lessee 
anticipate that the Agreement Regarding Related Transactions will be 
amended from time to time to include Affiliates of Lessor and Lessee as 
parties thereto in connection with future transactions and acknowledge and 
agree that for all purposes under this Lease Agreement such amendments 
shall be deemed to be included in this definition.

	ANNUAL FACILITY UPGRADE EXPENDITURE:  An 
aggregate annual amount equal to the product of TWO HUNDRED 
DOLLARS ($200) (as increased as of the first day of each Lease Year in 
which the Annual Facility Upgrade Expenditure is to be made by an amount 
equal to the product of the CPI Increase multiplied by TWO HUNDRED 
DOLLARS ($200)) times the number of units in the Facility, such amount 
to be spent on Upgrade Renovations.  The term "CPI Increase" means a 
fraction, the numerator of which is the Price Index in effect as of the first 
day of the Lease Year in which the Annual Facility Upgrade Expenditure is 
to be made and the denominator of which is the Price Index in effect as of 
the date hereof.  The term "Price Index" means the Consumer Price Index 
for Urban Wage Earners and Clerical Workers, All Items-Series A (1982-
84=100), published by the Bureau of Labor Statistics, U.S. Department of 
Labor.  If the Bureau of Labor Statistics should cease to publish such Price 
Index in its present form and calculated on the present basis, then the most 
similar index published by the same Bureau shall be used for the same 
purpose.  If there is no such similar index, a substitute index which is then 
generally recognized as being similar to such Price Index, such substitute 
index to be reasonably selected by Lessor.

	APPURTENANT AGREEMENTS:  Collectively, all instruments, 
documents and other agreements that now or hereafter create any utility, 
access or other rights or appurtenances benefiting or relating to the Leased 
Property.

	AWARD:  All compensation, sums or anything of value awarded, 
paid or received on a total or partial Condemnation.

	BASE GROSS REVENUES:  The annualized Gross Revenues of 
the Facility for the period from and including [___________] and including 
[___________], initially as shown by Lessee's certified Consolidated 
Financial Statements and as later verified by Lessee's Consolidated 
Financial Statements.

	BASE RENT:  As defined in Section 3.1.  

	BUSINESS DAY:  Any day which is not a Saturday or Sunday or 
a public holiday under the laws of the United States of America, the 
Commonwealth of Massachusetts, the State or the state in which Lessor's 
depository bank is located.

	CAPITAL ADDITIONS:  Collectively, all new buildings and 
additional structures annexed to any portion of any of the Leased 
Improvements and material expansions of any of the Leased Improvements 
which are constructed on any portion of the Land during the Term, 
including, without limitation, the construction of a new wing or new story, 
the renovation of any of the Leased Improvements on the Leased Property 
and any expansion, construction, renovation or conversion in connection 
therewith (a) in order to provide a functionally new facility that is needed or
used to provide services not previously offered or (b) in order to (i) increase
the bed capacity of a Facility, (ii) change the purpose for which such beds 
are utilized and/or (iii) change the utilization of any material portion of any
of the Leased Improvements provided that for the purposes of Article 9 
hereof the Project shall not be treated as a Capital Addition. 

	CAPITAL ADDITION COST:  The cost of any Capital Addition 
made by Lessee whether paid for by Lessee or Lessor.  Such cost shall 
include all costs and expenses of every nature whatsoever incurred directly 
or indirectly in connection with the development, permitting, construction 
and financing of a Capital Addition as reasonably determined by, or to the 
reasonable satisfaction of, Lessor.

	CASH COLLATERAL:  As defined in the Deposit Pledge 
Agreement.

	CASH FLOW:  The Consolidated Net Income (or Consolidated 
Net Loss) before federal and state income taxes for any period plus (i) the 
amount of the provision for depreciation and amortization actually deducted 
on the books of the applicable Person for the purposes of computing such 
Consolidated Net Income (or Consolidated Net Loss) for the period 
involved, plus (ii) Rent and interest on all other Indebtedness which is fully 
subordinated to the Lease Obligations, plus (iii) any indebtedness which is 
fully subordinated to the Lease Obligations pursuant to the Affiliated Party 
Subordination Agreement or the Management Subordination Agreement.

	CASUALTY:  As defined in Section 13.1.

	CHATTEL PAPER:  As defined in the UCC.

	CLOSING:  As defined in Section 18.3.6.

	CODE:  The Internal Revenue Code of 1986, as amended.

	COLLATERAL:  All of the property in which security interests 
are granted to Lessor and the other Meditrust Entities pursuant to the Lease 
Documents and the Related Party Agreements to secure the Lease 
Obligations, including, without limitation, the Cash Collateral.

	COMPETITIVE ACTIVITY:  As defined in Section 11.5.

	COMPLETION DATE:  As defined in the Leasehold 
Improvement Agreement.

	COMPLETION OF THE PROJECT:  As defined in the Leasehold 
Improvement Agreement.

	CONDEMNATION:  With respect to the Leased Property or any 
interest therein or right accruing thereto or use thereof (i) the exercise of 
any governmental authority, whether by legal proceedings or otherwise, by 
a Condemnor or (ii) a voluntary sale or transfer by Lessor to any 
Condemnor, either under threat of Condemnation or Taking or while legal 
proceedings for Condemnation or Taking are pending.

	CONDEMNOR:  Any public or quasi-public authority, or private 
corporation or individual, having the power of condemnation.

	CONSOLIDATED:  The consolidated accounts of the relevant 
Person and its Subsidiaries consolidated in accordance with GAAP.

	CONSOLIDATED FINANCIALS:  For any fiscal year or other 
accounting period for any Person and its consolidated Subsidiaries, 
statements of earnings and retained earnings and of changes in financial 
position for such period and for the period from the beginning of the 
respective fiscal year to the end of such period and the related balance sheet 
as at the end of such period, together with the notes thereto, all in 
reasonable detail and setting forth in comparative form the corresponding 
figures for the corresponding period in the preceding fiscal year, and 
prepared in accordance with GAAP, and disclosing all liabilities of such 
Person and its consolidated Subsidiaries, including, without limitation, 
contingent liabilities.

	CONSULTANTS:  Collectively, the architects, engineers, 
inspectors, surveyors and other consultants that are engaged from time to 
time by Lessor to perform services for Lessor in connection with this Lease.

	CONTRACTS:  All agreements (including, without limitation, 
Provider Agreements, to the extent applicable, and any Residency 
Agreement), contracts (including without limitation, construction contracts, 
subcontracts, and architects' contracts), contract rights, warranties and 
representations, franchises, and records and books of account benefiting, 
relating to or affecting the Leased Property or the ownership, construction, 
development, maintenance, management, repair, use, occupancy, 
possession, or operation thereof, or the operation of any programs or 
services in conjunction with the Facility and all renewals, replacement and 
substitutions therefor, now or hereafter issued to any member of the 
Leasing Group by, or entered into by any member of the Leasing Group 
with, any Governmental Authority, Accreditation Body or Third Party 
Payor or maintained or used by any member of the Leasing Group or 
entered into by any member of the Leasing Group with any third Person.

	CURRENT ASSETS:  All assets of any Person which would, in 
accordance with GAAP, be classified as current assets.

	CURRENT LIABILITIES:  All liabilities of any Person which 
would, in accordance with GAAP, be classified as current liabilities.

	DATE OF TAKING:  The date the Condemnor has the right to 
possession of the property being condemned.

	DEBT COVERAGE RATIO:  The ratio of (i) Cash Flow for each 
applicable period to (ii) the total of all Rent (excluding Additional Rent due 
under this Lease) paid or payable during such period or accrued for such 
period.

	DECLARATION:  As defined in Article 23.

	DEED:  As defined in Section 18.3.

	DEPOSIT:  As defined in Section 18.3.

	DEPOSIT PLEDGE AGREEMENT:  The pledge and security 
agreement so captioned and dated as of even date herewith between Lessee 
and Lessor.

	DOCUMENTS:  As defined in the UCC.

	ENCUMBRANCE:  As defined in Section 20.3.

	ENVIRONMENTAL INDEMNITY AGREEMENT:  The 
Environmental Indemnity Agreement of even date herewith by and among 
Lessee the Guarantor and Lessor.

	ENVIRONMENTAL LAWS:  As defined in the Environmental 
Indemnity Agreement.

	ERISA:  The Employment Retirement Income Security Act of 
1974, as amended.

	EVENT OF DEFAULT:  As defined in Article 16.

	EXCESS GROSS REVENUES:  Gross Revenues less Base Gross 
Revenues.  

	EXPIRATION DATE:  As defined in Section 1.2.

	EXTENDED TERMS:  As defined in Section 1.4.  

	FACILITY:  The 90 unit, 110 bed, fully licensed assisted living 
facility known as American House Sarasota on the Land (together with 
related parking and other amenities), together with (after the Completion 
Date) the fully licensed assisted living facility addition (the assisted living 
facility addition is defined as the Project under the Leasehold Improvement 
Agreement) to be constructed on the Land (together with related parking 
and other amenities).

	FAILURE TO OPERATE:  As defined in Article 16.

	FAILURE TO PERFORM:  As defined Article 16.

	FAIR MARKET ADDED VALUE:  The Fair Market Value of the 
Leased Property (including all Capital Additions) minus the Fair Market 
Value of the Leased Property determined as if no Capital Additions paid for 
by Lessee had been constructed.

	FAIR MARKET VALUE OF THE CAPITAL ADDITION:  The 
amount by which the Fair Market Value of the Leased Property upon the 
completion of a particular Capital Addition exceeds the Fair Market Value 
of the Leased Property just prior to the construction of the particular Capital 
Addition.

	FAIR MARKET VALUE OF THE LEASED PROPERTY:  The 
fair market value of the Leased Property, including all Capital Additions, 
and including the Land and all other portions of the Leased Property, and 
(a) assuming the same is unencumbered by this Lease, (b) determined in 
accordance with the appraisal procedures set forth in Section 18.2 or in 
such other manner as shall be mutually acceptable to Lessor and Lessee and 
(c) not taking into account any reduction in value resulting from any Lien to 
which the Leased Property is subject and which Lien Lessee or Lessor is 
otherwise required to remove at or prior to closing of the transaction.  
However, the positive or negative effect on the value of the Leased 
Property attributable to the interest rate, amortization schedule, maturity 
date, prepayment provisions and other terms and conditions of any Lien on 

the Leased Property which is not so required or agreed to be removed shall 
be taken into account in determining the Fair Market Value of the Leased 
Property.  The Fair Market Value shall be determined as the overall value 
based on due consideration of the "income" approach, the "comparable 
sales" approach, and the "replacement cost" approach. 

	FEE MORTGAGE:  As defined in Section 20.3.

	FEE MORTGAGEE:  As defined in Section 20.3.

	FINANCING PARTY:  Any Person who is or may be participating 
with Lessor in any way in connection with the financing of any Capital 
Addition.

	FINANCING STATEMENTS:  Uniform Commercial Code 
financing statements evidencing the security interests granted to Lessor in 
connection with the Lease Documents.

	FISCAL QUARTER:  Each of the three (3) month periods 
commencing on January 1st, April 1st, July 1st and October 1st.

	FISCAL YEAR:  The twelve (12) month period from January 1st 
to December 31st.

	FIXTURES:  As defined in Article 1.

	GAAP:  Generally accepted accounting principles, consistently 
applied throughout the relevant period.

	GENERAL INTANGIBLES:  As defined in the UCC.

	GOVERNMENTAL AUTHORITIES:  Collectively, all agencies, 
authorities, bodies, boards, commissions, courts, instrumentalities, 
legislatures, and offices of any nature whatsoever of any government, 
quasi-government unit or political subdivision, whether with a federal, 
state, county, district, municipal, city or otherwise and whether now or 
hereinafter in existence.

	GROSS REVENUES:  Collectively, all revenues generated by 
reason of the operation of the Leased Property (including any Capital 
Additions), directly or indirectly received or to be received by Lessee or 
any Affiliate of Lessee, including, without limitation, all resident revenues 
received or receivable for the use of, or otherwise by reason of, all rooms, 
units and other facilities provided, meals served, services performed, space 
or facilities subleased or goods sold on or from the Leased Property and 
further including, without limitation, except as otherwise specifically 
provided below, any consideration received under any subletting, licensing, 
or other arrangements with any Person relating to the possession or use of 

the Leased Property and all revenues from all ancillary services provided at 
or relating to the Leased Property; provided, however, that Gross Revenues 
shall not include non-operating revenues such as interest income or gain 
from the sale of assets not sold in the ordinary course of business; and 
provided, further, that there shall be excluded or deducted (as the case may 
be) from such revenues:

		(i)	all applicable contractual allowances (relating to any 
period during the Term of this Lease and thereafter until the Rent 
hereunder is paid in full), if any, for billings not paid by or 
received from the appropriate Governmental Agencies or Third 
Party Payors,

		(ii)	all applicable allowances according to GAAP for 
uncollectible accounts,

		(iii)	all proper resident billing credits and adjustments 
according to GAAP, if any, relating to health care accounting,

		(iv)	federal, state or local sales, use, gross receipts and 
excise taxes and any tax based upon or measured by said Gross 
Revenues which is added to or made a part of the amount billed to 
the resident or other recipient of such services or goods, whether 
included in the billing or stated separately,

		(v)	provider discounts for hospital or other medical 
facility utilization contracts, if any,

		(vi)	the cost, if any, of any federal, state or local govern-
mental program imposed specially to provide or finance indigent 
resident care (other than Medicare, Medicaid and the like),

	   (vii)  deposits refundable to residents of the Facility, and

	  (viii)  payments received on behalf of, and paid to, Persons who 
are not Affiliates of Lessee.
		
	To the extent that the Leased Property is subleased or occupied by 
an Affiliate of Lessee, Gross Revenues calculated for all purposes of this 
Lease (including, without limitation, the determination of the Additional 
Rent payable under this Lease) shall include the Gross Revenues of such 
Sublessee with respect to the premises demised under the applicable 
Sublease (i.e., the Gross Revenues generated from the operations conducted 
on such subleased portion of the Leased Property) and the rent received or 
receivable from such Sublessee pursuant to such Subleases shall be 
excluded from Gross Revenues for all such purposes.  As to any Sublease 
between Lessee and a non-Affiliate of Lessee, only the rental actually 
received by Lessee from such non-Affiliate shall be included in Gross 
Revenues.

	GROUP TWO ACQUISITION FACILITIES:  As defined in the 
Agreement Regarding Related Transactions.

	GUARANTOR:  Emeritus Corporation, a Washington corporation, 
and its successors and assigns.

	GUARANTY OF LEASE OBLIGATIONS:  The Guaranty of 
Lease Obligations of even date executed by Guarantor in favor of Lessor, 
relating to the Lease Obligations.  

	HAZARDOUS SUBSTANCES:  As defined in the Environmental 
Indemnity Agreement.

	IMPOSITIONS:  Collectively, all taxes (including, without 
limitation, all capital stock and franchise taxes of Lessor, all ad valorem, 
property, sales and use, single business, gross receipts, transaction privilege,
rent or similar taxes), assessments (including, without limitation, all 
assessments for public improvements or benefits, whether or not 
commenced or completed prior to the date hereof and whether or not to be 
completed within the Term), ground rents, water and sewer rents, water 
charges or other rents and charges, excises, tax levies, fees (including, 
without limitation, license, permit, inspection, authorization and similar 
fees), transfer taxes and recordation taxes imposed as a result of this Lease 
or any extensions hereof, and all other governmental charges, in each case 
whether general or special, ordinary or extraordinary, or foreseen or 
unforeseen, of every character in respect of either or both of the Leased 
Property and the Rent (including all interest and penalties thereon due to 
any failure in payment by Lessee), which at any time prior to, during or in 
respect of the Term hereof and thereafter until the Leased Property is 
surrendered to Lessor as required by the terms of this Lease, may be 
assessed or imposed on or in respect of or be a Lien upon (a) Lessor or 
Lessor's interest in the Leased Property, (b) the Leased Property or any rent 
therefrom or any estate, right, title or interest therein, or (c) any occupancy,
operation, use or possession of, sales from, or activity conducted on, or in 
connection with, the Leased Property or the leasing or use of the Leased 
Property.  Notwithstanding the foregoing, nothing contained in this Lease 
shall be construed to require Lessee to pay (1) any tax based on net income 
(whether denominated as a franchise or capital stock or other tax) imposed 
on Lessor or any other Person, except Lessee or its successors, (2) any net 
revenue tax of Lessor or any other Person, except Lessee and its successors, 
(3) any tax imposed with respect to the sale, exchange or other disposition 
by Lessor of the Leased Property or the proceeds thereof, or (4) except as 
expressly provided elsewhere in this Lease, any principal or interest on any 
Encumbrance on the Leased Property; provided, however, the provisos set 
forth in clauses (1) and (2) of this sentence shall not be applicable to the 
extent that any real or personal property tax, assessment, tax levy or charge 
which Lessee is obligated to pay pursuant to the first sentence of this 
definition and which is in effect at any time during the Term hereof is 
totally or partially repealed, and a tax, assessment, tax levy or charge set 

forth in clause (1) or (2) is levied, assessed or imposed expressly in lieu 
thereof.  In computing the amount of any franchise tax or capital stock tax 
which may be or become an Imposition, the amount payable by Lessee 
shall be equitably apportioned based upon all properties owned by Lessor 
that are located within the particular jurisdiction subject to any such tax.

	INDEBTEDNESS:  The total of all obligations of a Person, 
whether current or long-term, which in accordance with GAAP would be 
included as liabilities upon such Person's balance sheet at the date as of 
which Indebtedness is to be determined, and shall also include (i) all capital 
lease obligations and (ii) all guarantees, endorsements (other than for 
collection of instruments in the ordinary course of business), or other 
arrangements whereby responsibility is assumed for the obligations of 
others, whether by agreement to purchase or otherwise acquire the 
obligations of others, including any agreement contingent or otherwise to 
furnish funds through the purchase of goods, supplies or services for the 
purpose of payment of the obligations of others.

	INDEMNIFIED PARTIES:  As defined in Section 12.2.2.

	INDEX:  The rate of interest of actively traded marketable United 
States Treasury Securities bearing a fixed rate of interest adjusted for a 
constant maturity of ten (10) years as calculated by the Federal Reserve 
Board.

	INITIAL TERM:  As defined in Section 1.2.

	INSTRUMENTS:  As defined in the UCC.

	INSURANCE REQUIREMENTS:  All terms of any insurance 
policy required by this Lease, all requirements of the issuer of any such 
policy with respect to the Leased Property and the activities conducted 
thereon and the requirements of any insurance board, association or 
organization or underwriters' regulations pertaining to the Leased Property.

	LAND:  As defined in Article 1.

	LEASE:  As defined in the preamble of this Lease.

	LEASE DEFAULT:  The occurrence of any default or breach of 
condition continuing beyond any applicable notice and/or grace periods 
under this Lease and/or any of the other Lease Documents.

	LEASE DOCUMENTS:  Collectively, this Lease, the Guaranty of 
Lease Obligations, the Agreement Regarding Related Transactions, the 
Leasehold Improvement Agreement, the Security Agreement, the Deposit 
Pledge Agreement, the Negative Pledge Agreement, the Permits 
Assignment, the Financing Statements, the Affiliated Party Subordination 
Agreement, the Environmental Indemnity Agreement, and any and all other 
instruments, documents, certificates or agreements executed or furnished by 
any member of the Leasing Group in connection with the transactions 
evidenced by the Lease and/or any of the foregoing documents.

	LEASE OBLIGATIONS:  Collectively, all indebtedness, 
covenants, liabilities, obligations, agreements and undertakings (other than 
Lessor's obligations) under this Lease and the other Lease Documents.

	LEASE YEAR:  A twelve month period ending on March 31st of 
each year; provided, that the first Lease Year shall begin on the 
Commencement Date and shall end on March 31, 1997.

	LEASED IMPROVEMENTS:  As defined in Article 1.  

	LEASED PROPERTY:  As defined in Article 1.

	LEASEHOLD IMPROVEMENT AGREEMENT:  The Leasehold 
Improvement Agreement of even date by and between Lessee and Lessor.

	LEASING GROUP:  Collectively, Lessee, the Guarantor, the 
General Partner, any Sublessee which is an Affiliate of Lessee and any 
Manager which is an Affiliate of Lessee.

	LEGAL REQUIREMENTS:   Collectively, all statutes, ordinances, 
by-laws, codes, rules, regulations, restrictions, orders, judgments, decrees 
and injunctions (including, without limitation, all applicable building, 
health code, zoning, subdivision, and other land use and assisted living 
licensing statutes, ordinances, by-laws, codes, rules and regulations), 
whether now or hereafter enacted, promulgated or issued by any 
Governmental Authority, Accreditation Body or Third Party Payor 
affecting Lessor, any member of the Leasing Group or the Leased Property 
or the ownership, construction, development, maintenance, management, 
repair, use, occupancy, possession or operation thereof or the operation of 
any programs or services in connection with the Leased Property, including, 
without limitation, any of the foregoing which may (i) require repairs, 
modifications or alterations in or to the Leased Property, (ii) in any way 
affect (adversely or otherwise) the use and enjoyment of the Leased 
Property or (iii) require the assessment, monitoring, clean-up, containment, 
removal, remediation or other treatment of any Hazardous Substances on, 
under or from the Leased Property.  Without limiting the foregoing, the 
term Legal Requirements includes all Environmental Laws and shall also 
include all Permits and Contracts issued or entered into by any 

Governmental Authority, any Accreditation Body and/or any Third Party 
Payor and all Permitted Encumbrances.

	LESSEE:  As defined in the preamble of this Lease and its 
successors and assigns.

	LESSEE'S ELECTION NOTICE:  As defined in Section 14.3.

	LESSEE'S PURCHASE OPTION NOTICE:  As defined in Section 
18.3.

	LESSOR:  As defined in the preamble of this Lease and its 
successors and assigns.

	LIEN:  With respect to any real or personal property, any 
mortgage, easement, restriction, lien, pledge, collateral assignment, 
hypothecation, charge, security interest, title retention agreement, levy, 
execution, seizure, attachment, garnishment or other encumbrance of any 
kind in respect of such property, whether or not inchoate, vested or 
perfected.

	LIMITED PARTIES:  As defined in Section 11.5.4; provided, 
however, in no event shall the term Limited Parties include any Person in 
its capacity as a shareholder of a public entity, unless such shareholder is a 
member of the Leasing Group or an Affiliate thereof.

	MANAGED CARE PLANS:  All health maintenance 
organizations, preferred provider organizations, individual practice 
associations, competitive medical plans, and similar arrangements.

	MANAGEMENT AGREEMENT:  Any agreement, whether 
written or oral, between Lessee or any Sublessee and any other Person 
pursuant to which Lessee or such Sublessee provides any payment, fee or 
other consideration to any other Person to operate or manage the Facility.  

	MANAGEMENT SUBORDINATION AGREEMENT:  The 
Management Subordination Agreement as of even date herewith between 
Lessee and Lessor.

	MANAGER:  Any Person who has entered into a Management 
Agreement with Lessee or any Sublessee.

	MATERIAL STRUCTURAL WORK:  Any (i) structural 
alteration, (ii) structural repair or (iii) structural renovation to the Leased 
Property, which would customarily require or which require the design 
and/or involvement of a structural engineer or architect or which would 
require the issuance of a Permit.

	MEDICAID:  The medical assistance program established by Title 
XIX of the Social Security Act (42 USC 1396 et seq.) and any statute 
succeeding thereto.

	MEDICARE:  The health insurance program for the aged and 
disabled established by Title XVIII of the Social Security Act (42 USC 
1395 et seq.) and any statute succeeding thereto.

	MEDITRUST:  As defined in Article 23.

	MEDITRUST/EMERITUS TRANSACTION AFFILIATE:  An 
Affiliate of Lessee, the business and activities of which are limited to those 
subject to Meditrust/Emeritus Transaction Documents (other than the 
Affiliated Party Subordination Agreement, the Agreement Regarding 
Related Transactions and comparable agreement now or hereafter in effect 
among Affiliates of Lessee and of Lessor) to which such Affiliate is a party.

	MEDITRUST/EMERITUS TRANSACTION DOCUMENTS:  As 
defined in the Agreement Regarding Related Transactions.

	MEDITRUST ENTITIES:  Collectively, Meditrust, Lessor and any 
other Affiliate of Lessor which may now or hereafter be a party to any 
Related Party Agreement.

	MEDITRUST INVESTMENT:  The sum of (i) the Original 
Meditrust Investment plus (ii) the aggregate amount of all Subsequent 
Investments plus (iii) so much of the Project Funds as Lessor has expended 
from time to time less the sum of any Net Award Amounts and/or Net 
Proceeds Amounts.

	MONTHLY DEPOSIT DATE:  As defined in Section 4.6.

	NEGATIVE PLEDGE AGREEMENT:  The Group Two Negative 
Pledge Agreement (Acquisition) of even date by and between Guarantor, 
Lessee and Lessor.

	NET AWARD AMOUNT:  As defined in Section 3.7.

	NET INCOME (OR NET LOSS):  The net income (or net loss, 
expressed as a negative number) of a Person for any period, after all taxes 
actually paid or accrued and all expenses and other charges determined in 
accordance with GAAP.

	NET PROCEEDS AMOUNT:  As defined in Section 3.7.

	NET WORTH:  An amount determined in accordance with GAAP 
equal to the total assets of any Person, minus the total liabilities of such 
Person.

	OBLIGATIONS:  Collectively, the Lease Obligations and the 
Related Party Obligations.

	OFFICER'S CERTIFICATE:  A certificate of Lessee signed on 
behalf of Lessee by the Chairman of the Board of Directors, the President, 
any Vice President or the Treasurer of Lessee, or another officer authorized 
to so sign by the Board of Directors or By-Laws of Lessee, or any other 
Person whose power and authority to act has been authorized by delegation 
in writing by any of the Persons holding the foregoing offices.

	ORIGINAL MEDITRUST INVESTMENT:  The sum of SEVEN 
MILLION EIGHT HUNDRED FORTY-ONE THOUSAND NINE 
HUNDRED THIRTY-ONE DOLLARS ($7,841,931).

	OTHER PERMITTED USES:  To the extent permitted under 
applicable Legal Requirements and under Insurance Requirements, and so 
long as the same do not detract in any material manner from the Primary 
Intended Use and do not occupy more than ten percent (10%) of the useable 
floor area of the building comprising the Facility, such uses as Lessee 
reasonably determines are appropriate and incidental to the Primary 
Permitted Use.

	OVERDUE RATE:  On any date, a rate of interest per annum 
equal to the greater of:  (i) a variable rate of interest per annum equal to one
hundred twenty percent (120%) of the Prime Rate, or (ii) eighteen percent 
(18%) per annum; provided, however, in no event shall the Overdue Rate 
be greater than the maximum rate then permitted under applicable law to be 
charged by Lessor.

	PBGC:  Pension Benefit Guaranty Corporation.

	PERMITS:  Collectively, all permits, licenses, approvals, 
qualifications, rights, variances, permissive uses, accreditation, certificates,
certifications, consents, agreements, contracts, contract rights, franchises, 
interim licenses, permits and other authorizations of every nature 
whatsoever required by, or issued under, applicable Legal Requirements 
relating or affecting the Leased Property or the construction, development, 
maintenance, management, use or operation thereof, or the operation of any 
programs or services in conjunction with the Facility and all renewals, 
replacements and substitutions therefor, now or hereafter required or issued 
by any Governmental Authority, Accreditation Body or Third Party Payor 
to any member of the Leasing Group, or maintained or used by any member 
of the Leasing Group, or entered into by any member of the Leasing Group 
with any third Person with respect to the Leased Property.

	PERMITS ASSIGNMENT:  The Collateral Assignment of Permits, 
Licenses and Contracts of even date granted by Lessee to Lessor.

	PERMITTED ENCUMBRANCES:  As defined in Section 10.1.18.

	PERMITTED PRIOR SECURITY INTERESTS:  As defined in 
Section 6.1.2.

	PERSON:  Any individual, corporation, general partnership, 
limited partnership, joint venture, stock company or association, company, 
bank, trust, trust company, land trust, business trust, unincorporated 
organization, unincorporated association, Governmental Authority or other 
entity of any kind or nature.

	PLANS AND SPECIFICATIONS:  As defined in Section 13.1.3.

	PRIMARY INTENDED USE:  The use of the Facility as an 
assisted living facility with ninety (90) units, one hundred-ten (110) beds 
prior to the Completion Date, and additional units and beds after the 
Completion Date consisting of (i) an existing facility with ninety (90) units 
one hundred-ten (110) beds; and (ii) an assisted living addition as provided 
in the Leasehold Improvement Agreement; or such additional number of 
units or beds as may hereafter be permitted under this Lease, and such 
ancillary uses as are permitted by law and may be necessary in connection 
therewith or incidental thereto.  

	PRIME RATE:  The variable rate of interest per annum from time 
to time announced by the Reference Bank as its prime rate of interest and in 
the event that the Reference Bank no longer announces a prime rate of 
interest, then the Prime Rate shall be deemed to be the variable rate of 
interest per annum which is the prime rate of interest or base rate of interest 
from time to time announced by any other major bank or other financial 
institution reasonably selected by Lessor.  

	PRINCIPAL PLACE OF BUSINESS:  As defined in Section 
10.1.28.

	PROCEEDS:  As defined in the UCC.

	PROJECT:  As defined in the Leasehold Improvement Agreement.

	PROJECT FUNDS:  As defined in the Leasehold Improvement 
Agreement.

	PROVIDER AGREEMENTS:  All participation, provider and 
reimbursement agreements or arrangements, if any, now or hereafter in 
effect for the benefit of Lessee or any Sublessee in connection with the 
operation of the Facility relating to any right of payment or other claim 
arising out of or in connection with Lessee's or such Sublessee's 
participation in any Third Party Payor Program.

	PURCHASE OPTION:  As defined in Section 18.3.

	PURCHASE OPTION DATE:  As defined in Section 18.3.

	PURCHASE OPTION PURCHASE PRICE:  As defined in Section 
18.3.

	PURCHASER:  As defined in Section 11.5.

	RECEIVABLES:  Collectively, (i) all rights to payment for goods 
sold or leased or services rendered by Lessee or any other party, whether 
now in existence or arising from time to time hereafter and whether or not 
yet earned by performance, including, without limitation, obligations 
evidenced by an account, note, contract, security agreement, chattel paper, 
or other evidence of indebtedness, including Accounts and Proceeds, and 
(ii) a license to use such Instruments, Documents, Accounts, Proceeds, 
General Intangibles and Chattel Paper as are reasonably required for 
purposes of exercising the rights set forth in (i) above.

	REFERENCE BANK:  Fleet Bank of Connecticut, N.A.

	RELATED LEASES:  The Group Two Acquisition Facility Leases 
(as defined in the Agreement Regarding Related Transactions), together 
with such other new leases identified from time to time in the Agreement 
Regarding Related Transactions.

	RELATED PARTIES:  Collectively, each Person that may now or 
hereafter be a party to any Related Party Agreement other than the 
Meditrust Entities.

	RELATED PARTY AGREEMENT:  Any agreement, document or 
instrument now or hereafter evidencing or securing any Related Party 
Obligation, including, without limitation, the Related Leases.

	RELATED PARTY DEFAULT:  The occurrence of a default or 
breach of condition continuing beyond the expiration of any applicable 
notice and grace periods, if any, under the terms of any Related Party 
Agreement.

	RELATED PARTY OBLIGATIONS:  Collectively, all 
indebtedness, covenants, liabilities, obligations, agreements and 
undertakings due to, or made for the benefit of, Lessor or any of the other 
Meditrust Entities by Lessee or any other member of the Leasing Group or 
any of their respective Affiliates in connection with any of the properties 
described in EXHIBIT E to the Agreement Regarding Related Transactions, 
as the same may be modified and amended from time to time; whether such 
indebtedness, covenants, liabilities, obligations, agreements and/or 
undertakings are direct or indirect, absolute or contingent, liquidated or 
unliquidated, due or to become due, joint, several or joint and several, 
primary or secondary, now existing or hereafter arising.

	RENT:  Collectively, the Base Rent, Additional Rent, the 
Additional Charges and all other sums payable under this Lease and the 
other Lease Documents.

	RENT ADJUSTMENT DATE:  The first day of any of the 
Extended Terms.

	RENT ADJUSTMENT RATE:  325 basis points over the Index.

	RENT INSURANCE PROCEEDS:  As defined in Section 13.8.

	RESIDENCY AGREEMENT:  All contracts, agreements and 
consents executed by or on behalf of any resident or other Person seeking 
services at the Facility, including, without limitation, assignments of 
benefits and guarantees.

	RETAINAGE:  As defined in Section 13.1.3.

	SECURITY AGREEMENT:  The Security Agreement as of even 
date herewith between Lessee and Lessor.

	SELLER:  American House Sarasota Limited Partnership, a 
Michigan limited partnership.

	STATE:  The state or commonwealth in which the Leased Property 
is located.

	SUBLEASE:  Collectively, all subleases, licenses, use agreements, 
concession agreements, tenancy at will agreements and other occupancy 
agreements of every kind and nature (but excluding any Residency 
Agreement), whether oral or in writing, now in existence or subsequently 
entered into by Lessee, encumbering or affecting the Leased Property.

	SUBLESSEE:  Any sublessee, licensee, concessionaire, tenant or 
other occupant under any of the Subleases.

	SUBSEQUENT INVESTMENTS:  The aggregate amount of all 
sums expended and liabilities incurred by Lessor in connection with Capital 
Additions.

	SUBSIDIARY OR SUBSIDIARIES:  With respect to any Person, 
any corporation or other entity of which such Person, directly, or indirectly, 
through another entity or otherwise, owns, or has the right to control or 
direct the voting of, fifty percent (50%) or more of the outstanding capital 
stock or other ownership interest having general voting power (under 
ordinary circumstances).

	TAKING:  A taking or voluntary conveyance during the Term of 
the Leased Property, or any interest therein or right accruing thereto, or use 
thereof, as the result of, or in settlement of, any Condemnation or other 
eminent domain proceeding affecting the Leased Property whether or not 
the same shall have actually been commenced.

	TANGIBLE PERSONAL PROPERTY:  All machinery, 
equipment, furniture, furnishings, movable walls or partitions, computers or 
trade fixtures, goods, inventory, supplies, and other personal property 
owned or leased (pursuant to equipment leases) by Lessee and used in the 
operation of the Leased Property.

	TERM:  Collectively, the Initial Term and each Extended Term 
which has become effective pursuant to Section 1.4, as the context may 
require, unless earlier terminated pursuant to the provisions hereof.  

	THIRD PARTY PAYOR PROGRAMS:  Collectively, all third 
party payor programs in which Lessee or any Sublessee presently or in the 
future may participate, including without limitation, Medicare, Medicaid, 
Blue Cross and/or Blue Shield, Managed Care Plans, other private 
insurance plans and employee assistance programs.

	THIRD PARTY PAYORS:  Collectively, Medicare, Medicaid, 
Blue Cross and/or Blue Shield, private insurers and any other Person which 
presently or in the future maintains Third Party Payor Programs.

	TIME OF CLOSING:  As defined in Section 18.3.

	UCC:  The Uniform Commercial Code as in effect from time to 
time in the State.

	UNITED STATES TREASURY SECURITIES:  The uninsured 
treasury securities issued by the United States Federal Reserve Bank.  

	UNSUITABLE FOR ITS PRIMARY INTENDED USE:  As used 
anywhere in this Lease, the term "Unsuitable For Its Primary Intended Use" 
shall mean that, by reason of Casualty, or a partial or temporary Taking by 
Condemnation, in the good faith judgment of Lessor, the Facility cannot be 
operated on a commercially practicable basis for the Primary Intended Use, 
taking into account, among other relevant factors, the number of usable 
units or beds affected by such Casualty or partial or temporary Taking.

	UNAVOIDABLE DELAYS:  Delays due to strikes, lockouts, 
inability to procure materials, power failure, acts of God, governmental 
restrictions, enemy action, civil commotion, fire, unavoidable casualty or 
other causes beyond the control of the party responsible for performing an 
obligation hereunder, provided that lack of funds shall not be deemed a 
cause beyond the control of either party hereto.

	UPGRADE RENOVATIONS:  Repair and refurbishing other than 
normal janitorial, cleaning and maintenance activities.

	WORK:  As defined in Section 13.1.1.

	WORK CERTIFICATES:  As defined in Section 13.1.3.

	WORKING CAPITAL LOAN:  As defined in Section 6.1.3. 

	WORKING CAPITAL STOCK PLEDGE:  As defined in Section 
16.1(h). 

	2.2	RULES OF CONSTRUCTION.  The following rules of 
construction shall apply to the Lease and each of the other Lease 
Documents:  (a) references to "herein", "hereof" and "hereunder" shall be 
deemed to refer to this Lease or the other applicable Lease Document, and 
shall not be limited to the particular text or section or subsection in which 
such words appear; (b) the use of any gender shall include all genders and 
the singular number shall include the plural and vice versa as the context 
may require; (c) references to Lessor's attorneys shall be deemed to include, 
without limitation, special counsel and local counsel for Lessor; (d) 
reference to attorneys' fees and expenses shall be deemed to include all 
costs for administrative, paralegal and other support staff and to exclude 
any fees and expenses of attorneys who are employees of an Affiliate of 
Lessor; (e) references to Leased Property shall be deemed to include 
references to all of the Leased Property and references to any portion 
thereof; (f) references to the Lease Obligations shall be deemed to include 
references to all of the Lease Obligations and references to any portion 
thereof; (g) references to the Obligations shall be deemed to include 
references to all of the Obligations and references to any portion thereof; 
(h) the term "including", when following any general statement, will not be 
construed to limit such statement to the specific items or matters as 
provided immediately following the term "including" (whether or not non-
limiting language such as "without limitation" or "but not limited to" or 
words of similar import are also used), but rather will be deemed to refer to 
all of the items or matters that could reasonably fall within the broadest 
scope of the general statement; (i) any requirement that financial statements 
be Consolidated in form shall apply only to such financial statements as 
relate to a period during any portion of which the relevant Person has one 
or more Subsidiaries; (j) all accounting terms not specifically defined in the 
Lease Documents shall be construed in accordance with GAAP and (k) all 
exhibits annexed to any of the Lease Documents as referenced therein shall 
be deemed incorporated in such Lease Document by such annexation and/or 
reference.

ARTICLE 3

RENT

	3.1 RENT FOR LAND, LEASED IMPROVEMENTS, RELATED 
RIGHTS AND FIXTURES.  Lessee will pay to Lessor, in lawful money of 
the United States of America, at Lessor's address set forth herein or at such 
other place or to such other Person as Lessor from time to time may 
designate in writing, rent for the Leased Property, as follows.

		3.1.1 BASE RENT:  From and after the Commencement 
Date, Lessee shall pay to Lessor a base rent (the "Base Rent") per 
annum which is equal to the product of (i) the Original Meditrust 
Investment plus so much of the Project Funds as Lessor has 
expended from time to time multiplied by  (ii) nine and eighty-
three one hundredths percent (9.83%) calculated on a daily basis 
and that is payable in arrears in consecutive monthly installments 
due on the first day of each calendar month commencing on 
September 1, 1996; provided, however, that on each Rent 
Adjustment Date, the Base Rent shall be adjusted to equal the 
greater of (i) the then current Base Rent or (ii) the Original 
Meditrust Investment plus so much of the Project Funds as Lessor 
has expended from time to time plus Subsequent Investments 
multiplied by the Rent Adjustment Rate calculated on a daily basis 
and further provided, however, that Base Rent shall be prorated for 
any partial month. 

		3.1.2	ADDITIONAL RENT:  In addition to the Base 
Rent, Lessee shall also pay to Lessor additional rent (the 
"Additional Rent") in an amount equal to five percent (5%) of 
Excess Gross Revenues.  Additional Rent shall accrue 
commencing, September 1, 1998 (in each case, an "Additional 
Rent Accrual Date") and shall be payable during the Term, 
quarterly in arrears, commencing on the first day of the first fiscal 
quarter occurring following the Additional Rent Accrual Date and 
there shall be an annual reconciliation as provided in Section 3.2 
below.  

	3.2	CALCULATION AND PAYMENT OF ADDITIONAL 
RENT; ANNUAL RECONCILIATION.

		3.2.1	OFFICER'S CERTIFICATE AND 
PRORATION.  Each quarterly payment of Additional Rent shall be 
delivered to Lessor, together with an Officer's Certificate setting 
forth the calculation thereof, within thirty (30) days after the end of 
the corresponding quarter.  Additional Rent due for any portion of 
any calendar year shall be prorated accordingly.

		3.2.2	ANNUAL STATEMENT.  In addition, on or 
before the first day of April of each year following any calendar 
year for which Additional Rent is payable hereunder, Lessee shall 
deliver to Lessor an Officer's Certificate, reasonably acceptable to 
Lessor and certified by the chief financial officer of Lessee, setting 
forth the Gross Revenues for the immediately preceding calendar 
year.

		3.2.3	DEFICITS.  If the Additional Rent, as finally 
determined for any calendar year (or portion thereof), exceeds the 
sum of the quarterly payments of Additional Rent previously paid 

              by Lessee with respect to said calendar year, within thirty (30) 
days after such determination is required to be made hereunder, 
Lessee shall pay such deficit to Lessor and, if the deficit exceeds 
five percent (5%) of the Additional Rent which was previously 
paid to Lessor with respect to said calendar year, then Lessee shall 
also pay Lessor interest on such deficit at the Overdue Rate from 
the date that such payment should have been made by Lessee to the 
date that Lessor receives such payment.

		3.2.4	OVERPAYMENTS.  If the Additional Rent, as 
finally determined for any calendar year (or portion thereof), is less 
than the amount previously paid with respect thereto by Lessee, 
Lessee shall notify Lessor either (a) to pay to Lessee an amount 
equal to such difference or (b) to grant Lessee a credit against 
Additional Rent next coming due in the amount of such difference.

		3.2.5	FINAL DETERMINATION.  The obligation to 
pay Additional Rent shall survive the expiration or earlier 
termination of the Term (as to Additional Rent payments that are 
due and payable prior to the expiration or earlier termination of the 
Term and during any periods that Lessee remains in possession of 
the Leased Property), and a final reconciliation, taking into 
account, among other relevant adjustments, any contractual 
allowances which related to Gross Revenues that accrued prior to 
the date of such expiration or earlier termination, but which have 
been determined to be not payable and Lessee's good faith best 
estimate of the amount of any unresolved contractual allowances, 
shall be made not later than two (2) years after said expiration or 
termination date.  Within sixty (60) days after the expiration or 
earlier termination of the Term, Lessee shall advise Lessor of 
Lessee's best estimate of the approximate amount of such 
adjustments, which estimate shall not be binding on Lessee or have 
any legal effect whatsoever.

		3.2.6	BEST EFFORTS TO MAXIMIZE.  Lessee 
further covenants that the operation of the Facility shall be 
conducted in a manner consistent with the prevailing standards and 
practices recognized in the assisted living industry as those 
customarily utilized by reputable business operations.  Subject to 
any applicable Legal Requirements, the members of the Leasing 
Group shall use their best efforts to maximize the Facility's Gross 
Revenues.

	3.3	CONFIRMATION AND AUDIT OF ADDITIONAL 
RENT.

		3.3.1	MAINTAIN ACCOUNTING SYSTEMS.  
Lessee shall utilize, or cause to be utilized, an accounting system 
for the Leased Property in accordance with usual and customary 
practices in the assisted living industry and in accordance with 
GAAP which will accurately record all Gross Revenues.  Lessee 
shall retain, for at least three (3) years after the expiration of each 
calendar year (and in any event until the final reconciliation 
described in Section 3.2 above has been made), adequate records 
conforming to such accounting system showing all Gross Revenues 
for such calendar year.

		3.3.2	AUDIT BY LESSOR.  Lessor, at its own 
expense except as provided hereinbelow, shall have the right from 
time to time to have its accountants or representatives audit the 
information set forth in the Officer's Certificate referred to in 
Section 3.2 and in connection with such audits, to examine Lessee's 
records with respect thereto (including supporting data, income tax 
and sales tax returns), subject to any prohibitions or limitations on 
disclosure of any such data under applicable law or regulations.

		3.3.3	DEFICIENCIES AND OVERPAYMENTS.  If 
any such audit discloses a deficiency in the reporting of Gross 
Revenues, and either Lessee agrees with the result of such audit or 
the matter is compromised, Lessee shall forthwith pay to Lessor the 
amount of the deficiency in Additional Rent which would have 
been payable by it had such deficiency in reporting Gross 
Revenues not occurred, as finally agreed or determined, together 
with interest on the Additional Rent which should have been 
payable by it, calculated at the Overdue Rate, from the date when 
said payment should have been made by Lessee to the date that 
Lessor receives such payment.  Notwithstanding anything to the 
contrary herein, with respect to any audit that is commenced more 
than two (2) years after the date Gross Revenues for any calendar 
year are reported by Lessee to Lessor, the deficiency, if any, with 
respect to Additional Rent shall bear interest as permitted herein 
only from the date such determination of deficiency is made, 
unless such deficiency is the result of gross negligence or willful 
misconduct on the part of Lessee (or any Affiliate thereof).  If any 
audit conducted for Lessor pursuant to the provisions hereof 
discloses that (a) the Gross Revenues actually received by Lessee 
for any calendar year exceed those reported by Lessee by more 
than five percent (5%), Lessee shall pay the reasonable cost of such 
audit and examination or (b) Lessee has overpaid Additional Rent, 
Lessor shall so notify Lessee and Lessee shall direct Lessor either 
(i) to refund the overpayment to Lessee or (ii) grant a credit against 
Additional Rent next coming due in the amount of such difference.

		3.3.4	SURVIVAL.  The obligations of Lessor and 
Lessee contained in this Section shall survive the expiration or 
earlier termination of this Lease.

	3.4	ADDITIONAL CHARGES.  Subject to the rights to 
contest as set forth in Article 15, in addition to the Base Rent and 
Additional Rent, (a) Lessee will also pay and discharge as and when due 
and payable all Impositions, all amounts, liabilities and obligations under 
the Appurtenant Agreements and all other amounts, liabilities and 
obligations which Lessee assumes or agrees to pay under this Lease, and (b) 
in the event of any failure on the part of Lessee to pay any of those items 
referred to in clause (a) above, Lessee will also promptly pay and discharge 
every fine, penalty, interest and cost which may be added for non-payment 
or late payment of such items (the items referred to in clauses (a) and (b) 
above being referred to herein collectively as the "Additional Charges"), 
and Lessor shall have all legal, equitable and contractual rights, powers and 
remedies provided in this Lease, by statute or otherwise, in the case of non-
payment of the Additional Charges, as well as the Base Rent and Additional 
Rent.  To the extent that Lessee pays any Additional Charges to Lessor 
pursuant to any requirement of this Lease, Lessee shall be relieved of its 
obligation to pay such Additional Charges to any other Person to which 
such Additional Charges would otherwise be due.

	3.5	NET LEASE.  The Rent shall be paid absolutely net to 
Lessor, so that this Lease shall yield to Lessor the full amount of the 
installments of Base Rent, and the payments of Additional Rent and, if and 
to the extent payable to Lessor, Additional Charges throughout the Term.

	3.6	NO LESSEE TERMINATION OR OFFSET.

		3.6.1	NO TERMINATION.  Except as may be 
otherwise specifically and expressly provided in this Lease, Lessee, 
to the extent not prohibited by applicable law, shall remain bound 
by this Lease in accordance with its terms and shall neither take 
any action without the consent of Lessor to modify, surrender or 
terminate the same, nor seek nor be entitled to any abatement, 
deduction, deferment or reduction of Rent, or set-off against the 
Rent, nor shall the respective obligations of Lessor and Lessee be 
otherwise affected by reason of (a) any Casualty or any Taking of 
the Leased Property, (b) the lawful or unlawful prohibition of, or 
restriction upon, Lessee's use of the Leased Property or the 
interference with such use by any Person (other than Lessor, except 
to the extent permitted hereunder) or by reason of eviction by 
paramount title; (c) any claim that Lessee has or might have against 
Lessor, (d) any default or breach of any warranty by Lessor or any 
of the other Meditrust Entities under this Lease, any other Lease 
Document or any Related Party Agreement, (e) any bankruptcy, 
insolvency, reorganization, composition, readjustment, liquidation, 
dissolution, winding up or other proceedings affecting Lessor or 
any assignee or transferee of Lessor or (f) for any other cause 
whether similar or dissimilar to any of the foregoing, other than a 
discharge of Lessee from any of the Lease Obligations as a matter 
of law.

		3.6.2	WAIVER.  Lessee to the fullest extent not 
prohibited by applicable law, hereby specifically waives all rights, 
arising from any occurrence whatsoever, which may now or 
hereafter be conferred upon it by law to (a) modify, surrender or 
terminate this Lease or quit or surrender the Leased Property or (b) 
entitle Lessee to any abatement, reduction, suspension or 
deferment of the Rent or other sums payable by Lessee hereunder, 
except as otherwise specifically and expressly provided in this 
Lease.

		3.6.3	INDEPENDENT COVENANTS.  The 
obligations of Lessor and Lessee hereunder shall be separate and 
independent covenants and agreements and the Rent and all other 
sums payable by Lessee hereunder shall continue to be payable in 
all events unless the obligations to pay the same shall be terminated 
pursuant to the express provisions of this Lease or (except in those 
instances where the obligation to pay expressly survives the 
termination of this Lease) by termination of this Lease other than 
by reason of an Event of Default.

	3.7	ABATEMENT OF RENT LIMITED.  There shall be no 
abatement of Rent on account of any Casualty, Taking or other event, 
except that (a) in the event of a partial Taking or a temporary Taking as 
described in Section 14.3, the Base Rent shall be abated as follows:  (i) in 
the case of such a partial Taking, the Meditrust Investment shall be reduced 
for the purposes of calculating Base Rent pursuant to Section 3.1 by 
subtracting therefrom, as applicable, the net amount of the Award received 
by Lessor, and (ii) in the case of such a temporary Taking, by reducing the 
Base Rent for the period of such a temporary Taking, by the net amount of 
the Award received by Lessor and (b) in the event of a Casualty, the Base 
Rent shall be abated as follows: the Meditrust Investment shall be reduced 
for the purposes of calculating Base Rent pursuant to Section 3.1 by 
subtracting therefrom, as applicable, the net amount of the insurance 
proceeds.

	For the purposes of this Section 3.7, the "net amount of the Award 
received by Lessor" shall mean the Award paid to Lessor or Lessor's 
mortgagee on account of such Taking, minus all costs and expenses 
incurred by Lessor in connection therewith, and minus any amounts paid to 
or for the account of Lessee to reimburse for the costs and expenses of 
reconstructing the Facility following such Taking in order to create a viable 
and functional Facility under all of the circumstances ("Net Award 
Amount") and the "net amount of the insurance proceeds" shall mean the 
insurance proceeds paid to Lessor or Lessor's mortgagee on account of such 
Casualty, minus all costs and expenses incurred by Lessor in connection 
therewith and minus any amounts paid to or for the account of Lessee to 
reimburse for the costs and expenses of reconstructing the Facility 
following such Casualty in order to create a viable and functional Facility 
under all of the circumstances ("Net Proceeds Amount").

ARTICLE 4

IMPOSITIONS; TAXES; UTILITIES;
INSURANCE PAYMENTS

	4.1	PAYMENT OF IMPOSITIONS.

		4.1.1	LESSEE TO PAY.  Subject to the provisions of 
Article 15, Lessee will pay or cause to be paid all Impositions 
before any fine, penalty, interest or cost may be added for non-
payment, such payments to be made directly to the taxing authority 
where feasible, and Lessee will promptly furnish Lessor copies of 
official receipts or other satisfactory proof evidencing payment not 
later than the last day on which the same may be paid without 
penalty or interest.  Subject to the provisions of Article 15 and 
Section 4.1.2, Lessee's obligation to pay such Impositions shall be 
deemed absolutely fixed upon the date such Impositions become a 
lien upon the Leased Property or any part thereof.

		4.1.2	INSTALLMENT ELECTIONS.  If any such 
Imposition may, at the option of the taxpayer, lawfully be paid in 
installments (whether or not interest shall accrue on the unpaid 
balance of such Imposition), Lessee may exercise the option to pay 
the same (and any accrued interest on the unpaid balance of such 
Imposition) in installments and, in such event, shall pay such 
installments during the Term hereof (subject to Lessee's right to 
contest pursuant to the provisions of Section 4.1.5 below) as the 
same respectively become due and before any fine, penalty, 
premium, further interest or cost may be added thereto.

		4.1.3	RETURNS AND REPORTS.  Lessor, at its 
expense, shall, to the extent permitted by applicable law, prepare 
and file all tax returns and reports as may be required by 
Governmental Authorities in respect of Lessor's net income, gross 
receipts, franchise taxes and taxes on its capital stock, and Lessee, 
at its expense, shall, to the extent permitted by applicable laws and 
regulations, prepare and file all other tax returns and reports in 
respect of any Imposition as may be required by Governmental 
Authorities.  Lessor and Lessee shall, upon request of the other, 
provide such data as is maintained by the party to whom the 
request is made with respect to the Leased Property as may be 
necessary to prepare any required returns and reports.  In the event 
that any Governmental Authority classifies any property covered 
by this Lease as personal property, Lessee shall file all personal 
property tax returns in such jurisdictions where it may legally so 
file.  Lessor, to the extent it possesses the same, and Lessee, to the 
extent it possesses the same, will provide the other party, upon 
request, with cost and depreciation records necessary for filing 
returns for any portion of Leased Property so classified as personal 
property.  Where Lessor is legally required to file personal 
property tax returns, if Lessee notifies Lessor of the obligation to 
do so in each year at least thirty (30) days prior to the date any 
protest must be filed, Lessee will be provided with copies of 
assessment notices so as to enable Lessee to file a protest.

		4.1.4	REFUNDS.  If no Lease Default shall have 
occurred and be continuing, any refund due from any taxing 
authority in respect of any Imposition paid by Lessee shall be paid 
over to or retained by Lessee.  If a Lease Default shall have 
occurred and be continuing, at Lessor's option, such funds shall be 
paid over to Lessor and/or retained by Lessor and applied toward 
Lease Obligations which relate to the Leased Property in 
accordance with the Lease Documents.

		4.1.5	PROTEST.  Upon giving notice to Lessor, at 
Lessee's option and sole cost and expense, and subject to 
compliance with the provisions of Article 15, Lessee may contest, 
protest, appeal, or institute such other proceedings as Lessee may 

             deem appropriate to effect a reduction of any Imposition and 
Lessor, at Lessee's cost and expense as aforesaid, shall fully 
cooperate in a reasonable manner with Lessee in connection with 
such protest, appeal or other action.

	4.2	NOTICE OF IMPOSITIONS.  Lessor shall give prompt 
notice to Lessee of all Impositions payable by Lessee hereunder of which 
Lessor at any time has knowledge, but Lessor's failure to give any such 
notice shall in no way diminish Lessee's obligations hereunder to pay such 
Impositions.

	4.3	ADJUSTMENT OF IMPOSITIONS.  Impositions 
imposed in respect of the period during which the expiration or earlier 
termination of the Term occurs shall be adjusted and prorated between 
Lessor and Lessee, whether or not such Impositions are imposed before or 
after such expiration or termination, and Lessee's obligation to pay its 
prorated share thereof shall survive such expiration or termination.

	4.4	UTILITY CHARGES.  Lessee will pay or cause to be paid 
all charges for electricity, power, gas, oil, water, telephone, cable television
and other utilities used in the Leased Property during the Term and 
thereafter until Lessee surrenders the Leased Property in the manner 
required by this Lease.

	4.5	INSURANCE PREMIUMS.  Lessee will pay or cause to 
be paid all premiums for the insurance coverage required to be maintained 
pursuant to Article 12 during the Term, and thereafter until Lessee yields up 
the Leased Property in the manner required by this Lease.  All such 
premiums shall be paid annually in advance and Lessee shall furnish Lessor 
with evidence satisfactory to Lessor that all such premiums have been so 
paid prior to the commencement of the Term and thereafter at least thirty 
(30) days prior to the due date of each premium which thereafter becomes 
due.  Notwithstanding the foregoing, Lessee may pay such insurance 
premiums to the insurer in monthly installments so long as the applicable 
insurer is contractually obligated to give Lessor not less than a sixty (60) 
days notice of non-payment and so long as no Lease Default has occurred 
and is continuing.  In the event of the failure of Lessee either to comply 
with the insurance requirements in Article 12, or to pay the premiums for 
such insurance, or to deliver such policies or certificates thereof to Lessor at
the times required hereunder, Lessor shall be entitled, but shall have no 
obligation, to effect such insurance and pay the premiums therefor, which 
premiums shall be a demand obligation of Lessee to Lessor.

	4.6	DEPOSITS.

		4.6.1	LESSOR'S OPTION.  At the option of Lessor 
upon the occurrence of an event or circumstance which, with the 
giving of notice and/or the passage of time, would constitute a 
Lease Default, which may be exercised at any time thereafter, 
Lessee shall, upon written request of Lessor, on the first day on the 
calendar month immediately following such request, and on the 
first day of each calendar month thereafter during the Term (each 
of which dates is referred to as a "Monthly Deposit Date"), pay to 
and deposit with Lessor a sum equal to one-twelfth (1/12th) of the 
Impositions to be levied, charged, filed, assessed or imposed upon 
or against the Leased Property within one (1) year after said 
Monthly Deposit Date and a sum equal to one-twelfth (1/12th) of 
the premiums for the insurance policies required pursuant to 
Article 12 which are payable within one (1) year after said 
Monthly Deposit Date.  If the amount of the Impositions to be 
levied, charged, assessed or imposed or insurance premiums to be 
paid within the ensuing one (1) year period shall not be fixed upon 
any Monthly Deposit Date, such amount for the purpose of 
computing the deposit to be made by Lessee hereunder shall be 
estimated by Lessor based upon the most recent available 
information concerning said Impositions with an appropriate 
adjustment to be promptly made between Lessor and Lessee as 
soon as such amount becomes determinable.  In addition, Lessor 
may, at its option, from time to time require that any particular 
deposit be greater than one-twelfth (1/12th) of the estimated 
amount payable within one (1) year after said Monthly Deposit 
Date, if such additional deposit is required in order to provide to 
Lessor a sufficient fund from which to make payment of all 
Impositions on or before the next due date of any installment 
thereof, or to make payment of any required insurance premiums 
not later than the due date thereof.

		4.6.2	USE OF DEPOSITS.  The sums deposited by 
Lessee under this Section 4.6 shall be held by Lessor and shall be 
applied in payment of the Impositions or insurance premiums, as 
the case may be, when due.  Any such deposits may be 
commingled with other assets of Lessor, and shall be deposited by 
Lessor at such bank as Lessor may, from time to time select, and, 
provided that Lessor has invested such deposits in one or more of 
the investment vehicles described on SCHEDULE 4.6.2 attached 
hereto and incorporated by reference, Lessor shall not be liable to 
Lessee or any other Person (a) based on Lessor's (or such bank's) 
choice of investment vehicles, (b) for any consequent loss of 
principal or interest or (c) for any unavailability of funds based on 
such choice of investment.  Furthermore, Lessor shall bear no 
responsibility for the financial condition of, nor any act or 
omission by, Lessor's depository bank.  The income from such 

investment or interest on such deposit shall be paid to Lessee on a
semi-annual basis as long as no Lease Default has occurred and is 
then continuing, and as long as no fact or circumstance exists 
which, with the giving of notice and/or the passage of time, would 
constitute a Lease Default.  Lessee shall give not less than ten (10) 
days prior written notice to Lessor in each instance when an 
Imposition or insurance premium is due, specifying the Imposition 
or premium to be paid and the amount thereof, the place of 
payment, and the last day on which the same may be paid in order 
to comply with the requirements of this Lease.  If Lessor, in 
violation of its obligations under this Lease, does not pay any 
Imposition or insurance premium when due, for which a sufficient 
deposit exists, Lessee shall not be in default hereunder by virtue of 
the failure of Lessor to pay such Imposition or such insurance 
premium and Lessor shall pay any interest or fine assessed by 
virtue of Lessor's failure to pay such Imposition or insurance 
premium.

		4.6.3	DEFICITS.  If for any reason any deposit held 
by Lessor under this Section 4.6 shall not be sufficient to pay an 
Imposition or insurance premium within the time specified therefor 
in this Lease, then, within ten (10) days after demand by Lessor, 
Lessee shall deposit an additional amount with Lessor, increasing 
the deposit held by Lessor so that Lessor holds sufficient funds to 
pay such Imposition or premium in full (or in installments as 
otherwise provided for herein), together with any penalty or 
interest due thereon.  Lessor may change its estimate of any 
Imposition or insurance premium for any period on the basis of a 
change in an assessment or tax rate or on the basis of a prior 
miscalculation or for any other good faith reason; in which event, 
within ten (10) days after demand by Lessor, Lessee shall deposit 
with Lessor the amount in excess of the sums previously deposited 
with Lessor for the applicable period which would theretofore have 
been payable under the revised estimate.

		4.6.4	OTHER PROPERTIES.  If any Imposition shall 
be levied, charged, filed, assessed, or imposed upon or against the 
Leased Property, and if such Imposition shall also be a levy, 
charge, assessment, or imposition upon or for any other real or 
personal property that does not constitute a part of the Leased 
Property but for which a lien exists or can exist upon the Leased 
Property, then, at Lessor's reasonable discretion, the computation 
of the amounts to be deposited under this Section 4.6 shall be 
based upon the entire amount of such Imposition and Lessee shall 
not have the right to apportion any deposit with respect to such 
Imposition.

		4.6.5	TRANSFERS.  In connection with any 
assignment of Lessor's interest under this Lease, the original Lessor 
named herein and each successor in interest shall transfer all 
amounts deposited pursuant to the provisions of this Section 4.6 
and still in its possession to such assignee (as the subsequent holder 
of Lessor's interest in this Lease) and upon such transfer, the 
original Lessor named herein or the applicable successor in interest 
transferring the deposits shall thereupon be completely released 
from all liability with respect to such deposits so transferred and 
Lessee shall look solely to said assignee, as the subsequent holder 
of Lessor's interest under this Lease, in reference thereto.

		4.6.6	SECURITY.  All amounts deposited with Lessor 
pursuant to the provisions of this Section 4.6 shall be held by 
Lessor as additional security for the payment and performance of 
the Obligations and, upon the occurrence of any Lease Default, 
Lessor may, in its sole and absolute discretion, apply said amounts 
towards payment or performance of such Obligations.

		4.6.7	RETURN.  Upon the expiration or earlier 
termination of this Lease, provided that all of the Lease Obligations 
relating to the Leased Property have been fully paid and 
performed, any sums then held by Lessor under this Section 4.6 
shall be refunded to Lessee.

		4.6.8	RECEIPTS.  Lessee shall deliver to Lessor 
copies of all notices, demands, claims, bills and receipts in relation 
to the Impositions and insurance premiums upon the earlier to 
occur of (a) ten (10) days following receipt thereof by Lessee and 
(b) in the case of an invoice, demand or bill for the payment of an 
Imposition, prior to the date when such Imposition is due and 
payable.

ARTICLE 5

OWNERSHIP OF LEASED PROPERTY AND PERSONAL PROPERTY;
INSTALLATION, REMOVAL AND REPLACEMENT OF
PERSONAL PROPERTY;

	5.1	OWNERSHIP OF THE LEASED PROPERTY.  Lessee 
acknowledges that the Leased Property is the property of Lessor and that 
Lessee has only the right to the exclusive possession and use of the Leased 
Property upon the terms and conditions of this Lease.

	5.2	PERSONAL PROPERTY; REMOVAL AND 
REPLACEMENT OF PERSONAL PROPERTY.

		5.2.1	LESSEE TO EQUIP FACILITY.  If and to the 
extent not included in the Leased Property, Lessee, at its sole cost 
and expense, shall install, affix or assemble or place on the Leased 
Property, sufficient items of Tangible Personal Property, to enable 
the operation of the Facility in accordance with the requirements of 
this Lease for the Primary Intended Use, and such Tangible 
Personal Property and replacements thereof, shall be at all times 
the property of Lessee.

		5.2.2	SUFFICIENT PERSONAL PROPERTY.  
Lessee shall maintain, during the entire Term, the Tangible 
Personal Property in good order and repair and shall provide at its 
expense all necessary replacements thereof, as may be necessary in 
order to operate the Facility in compliance with all applicable 
Legal Requirements and Insurance Requirements and otherwise in 
accordance with customary practice in the industry for the Primary 
Intended Use and, if applicable, Other Permitted Uses.  In addition, 
Lessee shall furnish all necessary replacements of such obsolete 
items of the Tangible Personal Property during the Term as are 
necessary to enable the operation of the Facility in accordance with 
the requirements of this Lease for the Primary Intended Use.

		5.2.3	REMOVAL AND REPLACEMENT; 
LESSOR'S OPTION TO PURCHASE.  Lessee shall not remove 
from the Leased Property any one or more items of Tangible 
Personal Property (whether now owned or hereafter acquired), the 
fair market value of which exceeds TWENTY-FIVE THOUSAND 
DOLLARS ($25,000), individually or ONE HUNDRED 
THOUSAND DOLLARS ($100,000.00) collectively, if such 
Tangible Personal Property is necessary to enable the operation of 
the Facility in accordance with the requirements of this Lease for 
the Primary Intended Use.  At its sole cost and expense, Lessee 
shall restore the Leased Property to the condition required by 
Article 8, including repair of all damage to the Leased Property 
caused by the removal of the Tangible Personal Property, whether 
effected by Lessee or Lessor.  Upon the expiration or earlier 
termination of this Lease, Lessor shall have the option, which may 
be exercised by giving notice thereof within twenty (20) days prior 
to such expiration or termination, of (a) acquiring the Tangible 
Personal Property (pursuant to a bill of sale and assignments of any 
equipment leases, all in such forms as are reasonably satisfactory to 
Lessor) upon payment of its fair market value or (b) requiring 
Lessee to remove the Tangible Personal Property.  If Lessor 
exercises its option to purchase the Tangible Personal Property, the 
price to be paid by Lessor shall be (i) reduced by the amount of all 
payments due on any equipment leases or any other Permitted Prior 

Security Interests assumed by Lessor and (ii) applied to the Lease 
Obligations before any payment to Lessee.  If Lessor requires the 
removal of the Tangible Personal Property, then all of the Tangible 
Personal Property that is not removed by Lessee within ten (10) 
days following such request shall be considered abandoned by 
Lessee and may be appropriated, sold, destroyed or otherwise 
disposed of by Lessor without first giving notice thereof to Lessee, 
without any payment to Lessee and without any obligation to 
account therefor.

ARTICLE 6

SECURITY FOR LEASE OBLIGATIONS

	6.1	SECURITY FOR LESSEE'S OBLIGATIONS; 
PERMITTED PRIOR SECURITY INTERESTS.

		6.1.1	SECURITY.  In order to secure the payment and 
performance of all of the Obligations, Lessee agrees to provide or 
cause there to be provided the following security:

			(a)	a first lien and exclusive security 
interest in the Collateral, as more particularly provided for 
in the Security Agreement;

			(b)	the Cash Collateral.

			(c)	a first lien and exclusive pledge and 
assignment of, and security interest in, all Permits and 
Contracts, as more particularly provided for in the 
Collateral Assignment of Permits and Contracts; and  

			(d)	in the event that, at any time during the 
Term, Lessee holds the fee title to or a leasehold interest 
in any real property and/or personal property which is 
used as an integral part of the operation of the Leased 
Property (but is not subject to this Lease), Lessee shall (i) 
provide Lessor with prior notice of such acquisition and 
(ii) shall take such actions and enter into such agreements 
as Lessor shall reasonably request in order to grant Lessor 
a first priority mortgage or other security interest in such 
real property and personal property, subject only to the 
Permitted Encumbrances and other Liens reasonably 
acceptable to Lessor.  Without limiting the foregoing, it is 
acknowledged and agreed that all revenues generated from 
the operation of such additional real property shall be 
included in the determination of Gross Revenues (subject 
to such adjustments as agreed upon hereunder).

			Notwithstanding the foregoing, Lessor shall 
subordinate its security interest in Receivables to a prior 
security interest to secure a working capital line as 
provided in Section 6.1.3.

			6.1.2	PURCHASE-MONEY SECURITY 
INTERESTS AND EQUIPMENT LEASES.  
Notwithstanding any other provision hereof regarding the 
creation of Liens, Lessee may (a) grant priority purchase 
money security interests in items of Tangible Personal 
Property, (b) lease Tangible Personal Property from 
equipment lessors as long as: (i) the aggregate value of 
such Tangible Personal Property shall not exceed TWO 
HUNDRED THOUSAND DOLLARS ($200,000) or (ii) 
(A) the secured party or equipment lessor enters into an 
intercreditor agreement with, and satisfactory to, Lessor, 
pursuant to which, without limiting the foregoing, (1) 
Lessor shall be afforded the option of curing defaults and 
the option of succeeding to the rights of Lessee and (2) 
Lessor's security interest in Tangible Personal Property 
shall be subordinated to the security interest granted to 
such secured party, (B) all of the terms, conditions and 
provisions of the financing, security interest or lease are 
reasonably acceptable to Lessor, (C) Lessee provides a 
true and complete copy, as executed, of each such 
purchase money security agreement, financing document 
and equipment lease and all amendments thereto and (D) 
no such security interest, financing agreement or lease is 
cross-defaulted or cross-collateralized with any other 
obligation.  Security interests granted by Lessee in full 
compliance with the provisions of this Section 6.1.2 are 
referred to as "Permitted Prior Security Interests".

			6.1.3	RECEIVABLES FINANCING.  
Notwithstanding any other provision hereof regarding the 
creation of Liens, Lessee shall also be permitted to grant a 
prior security interest in Receivables (with the Lessor 
retaining a junior security interest therein) to an 
institutional lender which is providing a working capital 
line of credit (a "Working Capital Loan") for the exclusive 
use of Guarantor, Lessee and Affiliates of Lessee as long 
as such Lender enters into an intercreditor agreement with, 
and satisfactory to, Lessor pursuant to which, without 
limiting the foregoing, (1) Lessor shall be provided with  
notice with respect to defaults under the Working Capital 
Loan simultaneously with the delivery of such notice to 
Lessee and shall be afforded the option of curing defaults 
thereunder, (2) such lender's use of Instruments, 
Documents, General Intangibles and Chattel Paper shall

be limited to a license only for the purpose of collecting 
Receivables and (3) the subordination of Lessor's interest 
in the Receivables shall be of no force and effect and 
Lessor's first priority security interest shall be reinstated 
from and after the occurrence of an Event of Default if, 
upon or following such Event of Default, Lessor either 
exercises any of its remedies set forth in Article 16 or 
Lessor notifies in writing such lender of Lessor's intention 
to invoke its right to reinstate its first priority security 
interest in the Receivables.

	6.2	GUARANTY.  All of the Lease Obligations shall be 
unconditionally and irrevocably guaranteed by the Guarantor pursuant to 
the Guaranty of Lease Obligations.

ARTICLE 7

CONDITION AND USE OF LEASED PROPERTY;
MANAGEMENT AGREEMENTS

	7.1	CONDITION OF THE LEASED PROPERTY.  Lessee 
acknowledges that Lessee has caused the Leased Property to be sold to 
Lessor and has concurrently entered into this Lease.  Lessee acknowledges 
receipt and delivery of possession of the Leased Property and that Lessee 
has examined and otherwise has acquired knowledge of the condition of the 
Leased Property prior to the execution and delivery of this Lease and has 
found the same to be in good order and repair and satisfactory for its 
purposes hereunder.  Lessee is leasing the Leased Property "AS-IS" in its 
present condition, provided, however, that nothing herein contained in this 
Section 7.1 shall be deemed to modify the terms and provisions of the 
Leasehold Improvement Agreement.  Lessee waives any claim or action 
against Lessor in respect of the condition of the Leased Property.  LESSOR 
MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR 
IMPLIED, WITH RESPECT TO THE LEASED PROPERTY, EITHER AS 
TO ITS FITNESS FOR ANY PARTICULAR PURPOSE OR USE, ITS 
DESIGN OR CONDITION OR OTHERWISE, OR AS TO DEFECTS IN 
THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, 
LATENT OR PATENT; IT BEING AGREED THAT ALL RISKS 
RELATING TO THE DESIGN, CONDITION AND/OR USE OF THE 
LEASED PROPERTY ARE TO BE BORNE BY LESSEE.  LESSEE 
HEREBY ASSUMES ALL RISK OF THE PHYSICAL CONDITION OF 
THE LEASED PROPERTY, THE SUITABILITY OF THE LEASED 
PROPERTY FOR LESSEE'S PURPOSES, AND THE COMPLIANCE OR 
NON-COMPLIANCE OF THE LEASED PROPERTY WITH ALL 
APPLICABLE REQUIREMENTS OF LAW, INCLUDING BUT NOT 
LIMITED TO ENVIRONMENTAL LAWS AND ZONING OR LAND 
USE LAWS.

	Upon the request of Lessor, at any time and from time to time 
during the Term, Lessee shall engage one (1) or more independent 
professional consultants, engineers and inspectors, qualified to do business 
in the State and acceptable to Lessor to perform any environmental and/or 
structural investigations and/or other inspections of the Leased Property and 
the Facility as Lessor may reasonably request in order to detect (a) any 
structural deficiencies in the Leased Improvements or the utilities servicing 
the Leased Property or (b) the presence of any condition that (i) may be 
harmful or present a health hazard to the residents and other occupants of 
the Leased Property or (ii) constitutes a breach or violation of any of the 
Lease Documents.  In the event that Lessor reasonably determines that the 
results of such testing or inspections are unsatisfactory, within thirty (30) 
days of notice from Lessor, Lessee shall commence such appropriate 
remedial actions as may be reasonably requested by Lessor to correct such 
unsatisfactory conditions and, thereafter, shall diligently and continuously 
prosecute such remedial actions to completion within the time limits 
prescribed in this Lease or the other Lease Documents.

	7.2	USE OF THE LEASED PROPERTY; COMPLIANCE; 
MANAGEMENT.

		7.2.1	OBLIGATION TO OPERATE.  Lessee shall 
continuously operate the Leased Property in accordance with the 
Primary Intended Use and the Other Permitted Uses and maintain 
its qualifications for licensure and accreditation as required by all 
applicable Legal Requirements.

		7.2.2	PERMITTED USES.  During the entire Term, 
Lessee shall use the Leased Property, or permit the Leased 
Property to be used, only for the Primary Intended Use and, if 
applicable, the Other Permitted Uses.  Lessee shall not use the 
Leased Property or permit the Leased Property to be used for any 
other use without the prior written consent of Lessor, which 
consent may be withheld in Lessor's sole and absolute discretion.

		7.2.3	COMPLIANCE WITH INSURANCE 
REQUIREMENTS.  No use shall be made or permitted to be made 
of the Leased Property and no acts shall be done which will cause 
the cancellation of any insurance policy covering the Leased 
Property, nor shall Lessee, any Manager or any other Person sell or 
otherwise provide to residents, other occupants or invitees therein, 
or permit to be kept, used or sold in or about the Leased Property, 
any article which may be prohibited by any of the Insurance 
Requirements.  Furthermore, Lessee shall, at its sole cost and 
expense, take whatever other actions that may be necessary to 
comply with and to insure that the Leased Property complies with 
all Insurance Requirements.

		7.2.4	NO WASTE.  Lessee shall not commit or suffer 
to be committed any waste on, in or under the Leased Property, nor 
shall Lessee cause or permit any nuisance thereon.

		7.2.5	NO IMPAIRMENT.  Lessee shall neither permit 
nor knowingly suffer the Leased Property to be used in such a 
manner as (a) might reasonably tend to impair Lessor's title thereto 
or (b) may reasonably make possible a claim or claims of adverse 
usage or adverse possession by the public or of implied dedication 
of the Leased Property.

		7.2.6	NO LIENS.  Except as permitted pursuant to 
Section 6.1.2, Lessee shall not permit or suffer any Lien to exist on 
the Tangible Personal Property and shall in no event cause, permit 
or suffer any Lien to exist with respect to the Leased Property other 
than as set forth in Section 11.5.2.

	7.3	COMPLIANCE WITH LEGAL REQUIREMENTS.  
Lessee covenants and agrees that the Leased Property shall not be used for 
any unlawful purpose and that Lessee, at its sole cost and expense, will 
promptly (a) comply with, and shall cause every other member of the 
Leasing Group to comply with, all applicable Legal Requirements relating 
to the use, operation, maintenance, repair and restoration of the Leased 
Property, whether or not compliance therewith shall require structural 
change in any of the Leased Property or interfere with the use and 
enjoyment of the Leased Property and (b) procure, maintain and comply 
with (in all material respects), and shall cause every other member of the 
Leasing Group to procure, maintain and comply with (in all material 
respects), all Contracts and Permits necessary or desirable in order to 
operate the Leased Property for the Primary Intended Use and/or, if 
applicable, Other Permitted Uses, and for compliance with all of the terms 
and conditions of this Lease.  Unless a Lease Default has occurred or any 
event has occurred which, with the passage of time and/or the giving of 
notice would constitute a Lease Default, Lessee may, upon prior written 
notice to Lessor, contest any Legal Requirement to the extent permitted by, 
and in accordance with, Article 15 below.

	7.4	MANAGEMENT AGREEMENTS.  Throughout the 
Term, Lessee shall not enter into any Management Agreement without the 
prior written approval of Lessor, in each instance, which approval shall not 
be unreasonably withheld.  Lessee shall not, without the prior written 
approval of Lessor, in each instance, which approval shall not be 
unreasonably withheld, agree to or allow: (a) any change in the Manager or 
change in the ownership or control of the Manager, (b) the termination of 
any Management Agreement (other than in connection with the exercise by 
Lessee of any of its remedies under the Management Agreement as a result 
of any default by the Manager thereunder), (c) any assignment by the 
Manager of its interest under the Management Agreement or (d) any 
material amendment of the Management Agreement.  In addition, Lessee 

shall, at its sole cost and expense, promptly and fully perform or cause to be 
performed every covenant, condition, promise and obligation of the 
licensed operator of the Leased Property under any Management 
Agreement.

	Each Management Agreement shall provide that Lessor shall be 
provided notice of any defaults thereunder and, at Lessor's option, an 
opportunity to cure such default.  Lessee shall furnish to Lessor, within 
three (3) days after receipt thereof, or after the mailing or service thereof by
Lessee, as the case may be, a copy of each notice of default which Lessee 
shall give to, or receive from any Person, based upon the occurrence, or 
alleged occurrence, of any default in the performance of any covenant, 
condition, promise or obligation under any Management Agreement.

	Whenever and as often as Lessee shall fail to perform, promptly 
and fully, at its sole cost and expense, any covenant, condition, promise or 
obligation on the part of the licensed operator of the Leased Property under 
and pursuant to any Management Agreement, Lessor, or a lawfully 
appointed receiver of the Leased Property, may, at their respective options 
(and without any obligation to do so), after five (5) days' prior notice to 
Lessee (except in the case of an emergency) enter upon the Leased Property 
and perform, or cause to be performed, such work, labor, services, acts or 
things, and take such other steps and do such other acts as they may deem 
advisable, to cure such defaulted covenant, condition, promise or 
obligation, and any amount so paid or advanced by Lessor or such receiver 
and all costs and expenses reasonably incurred in connection therewith 
(including, without limitation, attorneys' fees and expenses and court costs), 
shall be a demand obligation of Lessee to Lessor or such receiver, and, 
Lessor shall have the same rights and remedies for failure to pay such costs 
on demand as for Lessee's failure to pay any other sums due hereunder.

	7.5	PARTICIPATION IN THIRD PARTY PAYOR 
PROGRAMS.  No provision of this Lease shall be deemed to require 
Lessee to commence participation in any Third Party Payor Program or any 
Managed Care Plan.

ARTICLE 8

REPAIRS; RESTRICTIONS

	8.1	MAINTENANCE AND REPAIR.

		8.1.1  LESSEE'S RESPONSIBILITY.  Lessee, at its sole 
cost and expense, shall keep the Leased Property (with respect to 
the Project, to the extent consistent with the stage of construction 
of the Project) and all private roadways, sidewalks and curbs 
appurtenant thereto which are under Lessee's control in good order 
and repair (whether or not the need for such repairs occurs as a 

result of Lessee's use, any prior use, the elements or the age of the 
Leased Property or such private roadways, sidewalks and curbs or 
any other cause whatsoever other than Lessor's gross negligence or 
willful misconduct) and, subject to Articles 9, 13 and 14, Lessee 
shall promptly, with the exercise of all reasonable efforts, 
undertake and diligently complete all necessary and appropriate 
repairs, replacements, renovations, restorations, alterations and 
modifications thereof of every kind and nature, whether interior or 
exterior, structural or non-structural, ordinary or extraordinary, 
foreseen or unforeseen or arising by reason of a condition 
(concealed or otherwise) existing prior to the commencement of, or 
during, the Term and thereafter until Lessee surrenders the Leased 
Property in the manner required by this Lease.  In addition, Lessee, 
at its sole cost and expense, shall make all repairs, modifications, 
replacements, renovations and alterations of the Leased Property 
(and such private roadways, sidewalks and curbs) that are 
necessary to comply with all applicable Legal Requirements and 
Insurance Requirements so that the Leased Property can be legally 
operated for the Primary Intended Use and, if applicable, the Other 
Permitted Uses.  All repairs, replacements, renovations, alterations, 
and modifications required by the terms of this Section 8.1 shall be 
(a) performed in a good and workmanlike manner in compliance 
with all applicable Legal Requirements, Insurance Requirements 
and the requirements of Article 9 hereof, using new materials well 
suited for their intended purpose and (b) consistent with the 
operation of the Facility in a reputable manner.  Lessee will not 
take or omit to take any action the taking or omission of which 
might materially impair the value or the usefulness of the Leased 
Property for the Primary Intended Use and, if applicable, the Other 
Permitted Uses.  To the extent that any of the repairs, 
replacements, renovations, alterations or modifications required by 
the terms of this Section 8.1 constitute Material Structural Work, 
Lessee shall obtain Lessor's prior written approval (which approval 
shall not be unreasonably withheld) of the specific repairs, 
replacements, renovations, alterations and modifications to be 
performed by or on behalf of Lessee in connection with such 
Material Structural Work.  Notwithstanding the foregoing, in the 
event of a bona fide emergency during which Lessee is unable to 
contact the appropriate representatives of Lessor, Lessee may 
commence such Material Structural Work as may be necessary in 
order to address such emergency without Lessor's prior approval, 
provided, however, that Lessee shall immediately thereafter advise 
Lessor of such emergency and the nature and scope of the Material 
Structural Work commenced and shall obtain Lessor's approval of 
the remaining Material Structural Work to be completed.

		8.1.2  NO LESSOR OBLIGATION.  Lessor shall not, 
under any circumstances, be required to build or rebuild any 
improvements on the Leased Property (or any private roadways, 
sidewalks or curbs appurtenant thereto), or to make any repairs, 
replacements, renovations, alterations, restorations, modifications, 
or renewals of any nature or description to the Leased Property (or 
any private roadways, sidewalks or curbs appurtenant thereto), 
whether ordinary or extraordinary, structural or non-structural, 
foreseen or unforeseen, or to make any expenditure whatsoever 
with respect thereto in connection with this Lease, or to maintain 
the Leased Property (or any private roadways, sidewalks or curbs 
appurtenant thereto) in any way.

		8.1.3  LESSEE MAY NOT OBLIGATE LESSOR.  
Nothing contained herein nor any action or inaction by Lessor shall 
be construed as (a) constituting the consent or request of Lessor, 
express or implied, to any contractor, subcontractor, laborer, 
materialman or vendor to or for the performance of any labor or 
services for any construction, alteration, addition, repair or 
demolition of or to the Leased Property or (b) except as otherwise 
provided in this Lease, giving Lessee any right, power or 
permission to contract for or permit the performance of any labor 
or services or the furnishing of any materials or other property in 
such fashion as would permit the making of any claim against 
Lessor for the payment thereof or to make any agreement that may 
create, or in any way be the basis for, any right, title or interest in, 
or Lien or claim against, the estate of Lessor in the Leased 
Property.  Without limiting the generality of the foregoing and 
except as otherwise provided in this Lease, the right title and 
interest of Lessor in and to the Leased Property shall not be subject 
to liens or encumbrances for the performance of any labor or 
services or the furnishing of any materials or other property 
furnished to the Leased Property at or by the request of Lessee or 
any other Person other than Lessor.  Lessee shall notify any 
contractor, subcontractor, laborer, materialman or vendor 
providing any labor, services or materials to the Leased Property of 
this provision.

	8.2	ENCROACHMENTS; TITLE RESTRICTIONS.  If any 
of the Leased Improvements shall, at any time, encroach upon any property, 
street or right-of-way adjacent to the Leased Property, or shall violate the 
agreements or conditions contained in any lawful restrictive covenant or 
other Lien now or hereafter affecting the Leased Property, or shall impair 
the rights of others under any easement, right-of-way or other Lien to which 
the Leased Property is now or hereafter subject, then promptly upon the 
request of Lessor, Lessee shall, at its sole cost and expense, subject to 
Lessee's right to contest the existence of any encroachment, violation or 
impairment as set forth in Article 15, (a) obtain valid and effective waivers 
or settlements of all claims, liabilities and damages resulting from each such 

encroachment, violation or impairment or (b) make such alterations to the 
Leased Improvements, and take such other actions, as Lessee in the good 
faith exercise of its judgment deems reasonably practicable, to remove such 
encroachment, or to end such violation or impairment, including, if 
necessary, the alteration of any of the Leased Improvements.  
Notwithstanding the foregoing, Lessee shall, in any event, take all such 
actions as may be reasonably necessary in order to be able to continue the 
operation of the Leased Improvements for the Primary Intended Use and, if 
applicable, the Other Permitted Uses substantially in the manner and to the 
extent that the Leased Improvements were operated prior to the assertion of 
such encroachment, violation or impairment and nothing contained herein 
shall limit Lessee's obligations to operate the Leased Property in accordance 
with its Primary Intended Use.  Any such alteration made pursuant to the 
terms of this Section 8.2 shall be completed in conformity with the 
applicable requirements of Section 8.1 and Article 9.  Lessee's obligations 
under this Section 8.2 shall be in addition to and shall in no way discharge 
or diminish any obligation of any insurer under any policy of title or other 
insurance.  If and to the extent any obligation of an insurer under any policy 
of title or other insurance exists and Lessee has incurred costs and expenses 
with respect to the subject matter of such obligation and provided Lessor is 
reasonably satisfied with the resolution of such subject matter, at the request 
of Lessee, Lessor, at Lessor's option, shall either assign to Lessee any right 
it may have to proceed against such insurer or remit to Lessee any amount 
which Lessor recovers from such insurer, minus any amounts needed to 
reimburse Lessor for its reasonable costs and expenses, for the costs and 
expenses incurred by Lessee in reconstructing the Facility or taking such 
other action reasonably required in order to create a viable and functional 
Facility under all of the circumstances.

ARTICLE 9

MATERIAL STRUCTURAL WORK AND
CAPITAL ADDITIONS

	9.1	LESSOR'S APPROVAL.  Without the prior written 
consent of Lessor, which consent may be withheld by Lessor, in its sole and 
absolute discretion, Lessee shall make no Capital Addition or Material 
Structural Work to the Leased Property (including, without limitation, any 
change in the size or unit capacity of the Facility), except as may be 
otherwise expressly required pursuant to Article 8.

	9.2	GENERAL PROVISIONS AS TO CAPITAL 
ADDITIONS AND CERTAIN MATERIAL STRUCTURAL WORK.  As 
to any Capital Addition or Material Structural Work (other than such 
Material Structural Work that is required to be performed pursuant to the 
terms of Section 8.1) for which Lessor has granted its prior written 
approval, the following terms and conditions shall apply unless otherwise 
expressly set forth in Lessor's written approval.

		9.2.1	NO LIENS.  Lessee shall not be permitted to 
create any Lien on the Leased Property in connection with any 
Capital Addition or Material Structural Work (including, without 
limitation, Liens relating to the provision of financing for a Capital 
Addition) other than Liens expressly permitted by the terms and 
provisions of this Lease Agreement.

		9.2.2	LESSEE'S PROPOSAL REGARDING 
CAPITAL ADDITIONS AND MATERIAL STRUCTURAL 
WORK.  If Lessee desires to undertake any Capital Addition or 
Material Structural Work, Lessee shall submit to Lessor in writing 
a proposal setting forth in reasonable detail any proposed Capital 
Addition or Material Structural Work and shall provide to Lessor 
copies of, or information regarding, the applicable plans and 
specifications, Permits, Contracts and any other materials 
concerning the proposed Capital Addition or Material Structural 
Work, as the case may be, as Lessor may reasonably request.  
Without limiting the generality of the foregoing, each such 
proposal pertaining to any Capital Addition shall indicate the 
approximate projected cost of constructing such Capital Addition, 
the use or uses to which it will be put and a good faith estimate of 
the change, if any, in the Gross Revenues that Lessee anticipates 
will result from the construction of such Capital Addition.

		9.2.3	LESSOR'S OPTIONS REGARDING CAPITAL 
ADDITIONS AND MATERIAL STRUCTURAL WORK.  Lessor 
shall have the options of:  (a) denying permission for the 
construction of the applicable Capital Addition or Material 
Structural Work, (b) offering to finance the construction of the 
Capital Addition pursuant to Section 9.3 on such terms as may be 
specified by Lessor, including the terms of any amendment to this 
Lease, including, without limitation, an increase in Base Rent 
based on Lessor's then existing terms and prevailing conditions to 
compensate Lessor for the additional funds advanced by it, (c) 
allowing Lessee to separately pay for or finance the construction of 
the Capital Addition, subject to compliance with the terms and 
conditions of Section 9.2.1, Section 9.4, Section 13.1.3, all 
applicable Legal Requirements, all other requirements of this Lease 
and to such other terms and conditions as Lessor may in its 
discretion reasonably impose or (d) any combination of the 
foregoing.  Unless Lessor notifies Lessee in writing of a contrary 
election within thirty (30) days of Lessee's request or unless Lessor 
is required to consent thereto pursuant to this Section 9.2.3, Lessor 
shall be deemed to have denied the request for the Capital Addition 
or Material Structural Work.  In the event and to the extent Lessor 
has granted permission for the construction of the applicable 
Capital Addition or Material Structural Work and (x) Lessor has 
not offered to finance the construction of the same or (y) Lessee 
declines to accept the financing offered by Lessor, Lessee may 

separately finance such construction, subject to the limitation on 
Liens set forth in Section 9.2.1, or pay for such construction itself.  
In the event Lessee declines to accept the financing offered by 
Lessor or if Lessor has not offered such financing to Lessee and 
proposes to obtaining financing from another Person, Lessee shall 
inform Lessor in writing of the terms and conditions of such 
financing and shall provide Lessor with a copy of a commitment 
letter evidencing the same and Lessor may, by giving notice 
thereof to Lessee within twenty (20) days following being so 
informed, elect to provide financing to Lessee at the effective rate 
of interest as such financing. Lessor shall not unreasonably 
withhold its permission for the construction of Material Structural 
Work which is necessary to protect the safety or welfare of 
residents of the Facility.

		9.2.4	LESSOR MAY ELECT TO FINANCE 
CAPITAL ADDITIONS.  If Lessor elects to offer financing for the 
proposed Capital Addition and Lessee accepts Lessor's financing 
proposal, the provisions of Section 9.3 shall apply.

	9.3	CAPITAL ADDITIONS FINANCED BY LESSOR.

		9.3.1	ADVANCES.  All advances of funds for any 
such financing shall be made in accordance with Lessor's then 
standard construction loan requirements and procedures, which 
may include, without limitation, the requirements and procedures 
applicable to Work under Sections 13.1.3 and 13.1.4.

		9.3.2	LESSOR'S GENERAL REQUIREMENTS.  If 
Lessor agrees to finance the proposed Capital Addition and Lessee 
accepts Lessor's proposal therefor, in addition to all other items 
which Lessor or any applicable Financing Party may reasonably 
require, Lessee shall provide to Lessor the following:

			(a)	prior to any advance of funds, (i) any 
information, opinions, certificates, Permits or documents 
reasonably requested by Lessor or any applicable 
Financing Party which are necessary to confirm that 
Lessee is reasonably expected to be able to use the Capital 
Addition upon completion thereof in accordance with the 
Primary Intended Use and/or, if applicable, the Other 
Permitted Uses and (ii) evidence satisfactory to Lessor and 
any applicable Financing Party that all Permits required 
for the construction and use of the Capital Addition have 
been received, are in full force and effect and are not 
subject to appeal, except only for those Permits which 
cannot in the normal course be obtained prior to 
commencement or completion of the construction; 

provided, that Lessor and any applicable Financing Party 
are furnished with reasonable evidence that the same is 
reasonably expected to be available in the normal course 
of business without unusual condition;

			(b)	prior to any advance of funds, an 
Officer's Certificate and, if requested, a certificate from 
Lessee's architect, setting forth in reasonable detail the 
projected (or actual, if available) Capital Addition Cost;

			(c)	bills of sale, instruments of transfer and 
other documents required by Lessor so as to vest title to 
the Capital Addition in Lessor free and clear of all Liens 
(except to the extent a Lien is being duly contested in 
accordance with the terms and provisions of this Lease), 
and amendments to this Lease and any recorded notice or 
memorandum thereof, duly executed and acknowledged, 
in form and substance reasonably satisfactory to Lessor, 
providing for any changes required by Lessor including, 
without limitation, changes in the Base Rent and the legal 
description of the Land; 

			(d)	upon payment therefor, a deed 
conveying to Lessor title to any land acquired for the 
purpose of constructing the Capital Addition ("Additional 
Land") free and clear of any Liens except those approved 
by Lessor;

			(e)	upon completion of the Capital 
Addition, a final as-built survey thereof reasonably 
satisfactory to Lessor, if required by Lessor; 

			(f)	during and following the advance of 
funds and the completion of the Capital Addition, 
endorsements to any outstanding policy of title insurance 
covering the Leased Property satisfactory in form and 
substance to Lessor (i) updating the same without any 
additional exception except as may be reasonably 
permitted by Lessor and (ii) increasing the coverage 
thereof by an amount equal to the Fair Market Value of 
the Capital Addition and/or increasing the coverage 
thereof by an amount equal to the Fair Market Value of 
the Additional Land and including the Additional Land in 
the premises covered by such title insurance policy; 

			(g)	simultaneous with the initial advance of 
funds, if appropriate, (i) an owner's policy of title 
insurance insuring fee simple title to any Additional Land 
conveyed to Lessor pursuant to subparagraph (d) free and 

clear of all Liens except those approved by Lessor and (ii) 
an owner's policy of title insurance reasonably satisfactory 
in form and substance to Lessor and a lender's policy of 
title insurance reasonably satisfactory in form and 
substance to any applicable Financing Party; 

			(h)	following the completion of the Capital 
Addition, if reasonably deemed necessary by Lessor, an 
appraisal of the Leased Property by an M.A.I. appraiser 
acceptable to Lessor, which states that the Fair Market 
Value of the Leased Property upon completion of the 
Capital Addition exceeds the Fair Market Value of the 
Leased Property prior to the commencement of such 
Capital Addition by an amount not less than one hundred 
twenty-five percent (125%) of the Capital Addition Cost; 
and

			(i)	during or following the advancement of 
funds, prints of architectural and engineering drawings 
relating to the Capital Addition and such other materials, 
including, without limitation, the modifications to 
outstanding policies of title insurance contemplated by 
subsection (f) above, opinions of counsel, appraisals, 
surveys, certified copies of duly adopted resolutions of the 
board of directors of Lessee authorizing the execution and 
delivery of the lease amendment and any other documents 
and instruments as may be reasonably required by Lessor 
and any applicable Financing Party.

		9.3.3	PAYMENT OF COSTS.  By virtue of making a 
request to finance a Capital Addition, whether or not such 
financing is actually consummated, Lessee shall be deemed to have 
agreed to pay, upon demand, all costs and expenses reasonably 
incurred by Lessor and any Person participating with Lessor in any 
way in the financing of the Capital Addition Cost, including, but 
not limited to (a) fees and expenses of their respective attorneys, 
(b) all photocopying expenses, if any, (c) the amount of any filing, 
registration and recording taxes and fees, (d) documentary stamp 
taxes and intangible taxes (e) title insurance charges and appraisal 
fees.

	9.4	GENERAL LIMITATIONS.  Without in any way limiting 
Lessor's options with respect to proposed Capital Additions or Material 
Structural Work:  (a) no Capital Addition or Material Structural Work shall 
be completed that could, upon completion, significantly alter the character 
or purpose or detract from the value or operating efficiency of the Leased 
Property, or significantly impair the revenue-producing capability of the 
Leased Property, or adversely affect the ability of Lessee to comply with 
the terms of this Lease; (b) no Capital Addition or Material Structural Work 

shall be completed which would tie in or connect any Leased Improvements 
on the Leased Property with any other improvements on property adjacent 
to the Leased Property (and not part of the Land covered by this Lease) 
including, without limitation, tie-ins of buildings or other structures or 
utilities, unless Lessee shall have obtained the prior written approval of 
Lessor, which approval may be withheld in Lessor's sole and absolute 
discretion and (c) all proposed Capital Additions and Material Structural 
Work shall be architecturally integrated and consistent with the Leased 
Property.

	9.5	NON-CAPITAL ADDITIONS.  Lessee shall have the 
obligation and right to make repairs, replacements and alterations which are 
not Capital Additions as required by the other Sections of this Lease, but in 
so doing, Lessee shall always comply with and satisfy the conditions of 
Section 9.4.  Lessee shall have the right, from time to time, to make 
additions, modifications or improvements to the Leased Property which do 
not constitute Capital Additions or Material Structural Work as it may deem 
to be desirable or necessary for its uses and purposes, subject to the same 
limits and conditions imposed under Section 9.4.  The cost of any such 
repair, replacement, alteration, addition, modification or improvement shall 
be paid by Lessee and the results thereof shall be included under the terms 
of this Lease and become a part of the Leased Property, without payment 
therefor by Lessor at any time.  Notwithstanding the foregoing, all such 
additions, modifications and improvements which affect the structure of 
any of the Leased Improvements, or which involve the expenditure of more 
than FIFTY THOUSAND DOLLARS ($50,000.00), shall be undertaken 
only upon compliance with the provisions of Section 13.1.3, all applicable 
Legal Requirements and all other applicable requirements of this Lease; 
provided, however, that in the event of a bona fide emergency during which 
Lessee is unable to contact the appropriate representatives of Lessor, Lessee 
may commence such additions, modifications and improvements as may be 
necessary in order to address such emergency without Lessor's prior 
approval, as long as Lessee immediately thereafter advises Lessor of such 
emergency and the nature and scope of the additions, modifications and 
improvements performed and obtains Lessor's approval of the remaining 
work to be completed.  Any such addition, modification and improvement 
which affects the structure of any of the Leased Improvements which is not 
a Capital Addition or Material Structural Work shall be exempt from the 
requirements of Section 9.2 hereof.

	9.6	COMPENSATION TO LESSEE FOR CAPITAL 
ADDITIONS PAID FOR OR FINANCED BY LESSEE.  Upon the 
expiration or earlier termination of this Lease, except by reason of the 
default by Lessee hereunder, Lessor shall compensate Lessee for all Capital 
Additions paid for or financed by Lessee in any of the following ways, 
determined in the sole discretion of Lessor:

	(a)	By purchasing all Capital Additions paid for or financed 
by Lessee from Lessee for cash in the amount of the Fair Market Added 
Value (determined as of the date of such purchase) of all such Capital 
Additions  paid for or financed by Lessee; or

	(b)	By purchasing such Capital Addition from Lessee by 
delivering to Lessee Lessor's purchase money promissory note in the 
amount of said Fair Market Added Value, due and payable no later than 
eighteen (18) months after the date of expiration or other termination of this 
Lease, bearing interest at a rate equal to one hundred ten percent (110%) of 
the applicable federal rate (determined at the time of execution of such note 
pursuant to Section 1274 of the Code or any successor section thereto), 
compounded semiannually, or, if no such rate exists, or such rate is in 
excess of that permitted under applicable law, at the Prime Rate, which 
interest shall be payable monthly, and which note shall be secured by a 
mortgage on the Leased Property, subject to all Liens on the Leased 
Property at the time of such purchase; or

	(c)	By Lessor assigning to Lessee under appropriate written 
instruments the right to receive an amount equal to the Added Value 
Percentage (determined as of the expiration of earlier termination of this 
Lease) from all rent and other consideration receivable by Lessor under any 
re-letting or other disposition of the Leased Property, after deducting all 
costs and expenses incurred by Lessor in connection with such re-letting or 
other disposition of the leased Property and all costs and expenses of 
operating and maintaining the Leased Property during any such new lease 
which are not borne by the tenant thereunder.  The provisions of this 
Subparagraph (c) shall remain in effect until the sale or other final 
disposition of the Leased Property in which event Lessor shall pay to 
Lessee the outstanding balance of the Fair Market Added Value in 
accordance with Subparagraph (a), (b), or (d) of this Section 9.6, after 
deducting any amounts received by Lessee under this Subparagraph (c); or

	(d)	Such other arrangement regarding such compensation as 
shall be mutually acceptable to Lessor and Lessee. 

ARTICLE 10

WARRANTIES AND REPRESENTATIONS

	10.1	REPRESENTATIONS AND WARRANTIES.  Lessee 
hereby represents and warrants to, and covenants and agrees with, Lessor 
that:

		10.1.1	EXISTENCE; POWER; QUALIFICATION.

		Lessee is a corporation duly organized, validly existing 
and in good standing under the laws of the State of Washington.  
Lessee has all requisite corporate power to own and operate its 
properties and to carry on its business as now conducted and is 
duly qualified to transact business and is in good standing in each 
jurisdiction where such qualification is necessary or desirable in 
order to carry out its business as presently conducted.  As of the 
date of this Agreement, Lessee does not have any Subsidiaries and 
Lessee is not a member of any partnership or joint venture.  
Attached hereto as EXHIBIT C is a true and correct list of all of the 
shareholders of Lessee and their respective ownership interests in 
Lessee;

		10.1.2	VALID AND BINDING.  Lessee is duly 
authorized to make and enter into all of the Lease Documents to 
which Lessee is a party and to carry out the transactions 
contemplated therein.  All of the Lease Documents to which Lessee 
is a party have been duly executed and delivered by Lessee, and 
each is a legal, valid and binding obligation of Lessee, enforceable 
in accordance with its terms.

		10.1.3	SINGLE PURPOSE.  Lessee is, and during the 
entire time that this Lease remains in force and effect shall be, 
engaged in no business, trade or activity other than the operation 
and development of the Leased Property for the Primary Intended 
Use and such other activities in which Lessee may be permitted to 
engage by the provisions of Meditrust/Emeritus Transaction 
Documents.  The fiscal year of Lessee, and the Guarantor is the 
Fiscal Year.

		10.1.4	NO VIOLATION.  The execution, delivery and 
performance of the Lease Documents by the members of the 
Leasing Group and the consummation by the members of the 
Leasing Group of the transactions thereby contemplated shall not 
result in any breach of, or constitute a default under, or result in the 
acceleration of, or constitute an event which, with the giving of 
notice or the passage of time, or both, could result in default or 
acceleration of any obligation of any such member of the Leasing 
Group under any of the Permits or Contracts or any other contract, 
mortgage, lien, lease, agreement, instrument, franchise, arbitration 
award, judgment, decree, bank loan or credit agreement, trust 
indenture or other instrument to which any member of the Leasing 
Group is a party or by which any member of the Leasing Group 
may be bound or affected and do not violate or contravene any 
Legal Requirement.

		10.1.5	CONSENTS AND APPROVALS.  Except as 
already obtained or filed or, with respect to the Project, reasonably 
expected to be obtained in the ordinary course of business prior to 
or upon the Completion of the Project, as the case may be, no 
consent or approval or other authorization of, or exemption by, or 
declaration or filing with, any Person and no waiver of any right by 
any Person is required to authorize or permit, or is otherwise 
required as a condition of the execution, delivery and performance 
of its obligations under the Lease Documents by any member of 
the Leasing Group or as a condition to the validity (assuming the 
due authorization, execution and delivery by Lessor of the Lease 
Documents to which it is a party) and the first priority of any Liens 
granted under the Lease Documents, except the filing of the 
Financing Statements.

		10.1.6	NO LIENS OR INSOLVENCY 
PROCEEDINGS.  Each member of the Leasing Group in existence 
as of the date hereof is financially solvent and there are no actions, 
suits, investigations or proceedings including, without limitation, 
outstanding federal or state tax liens, garnishments or insolvency or 
bankruptcy proceedings, pending or, to the best of Lessee's 
knowledge and belief, threatened:

			(a)	against or affecting any member of the 
Leasing Group, which if adversely resolved to such 
member of the Leasing Group, would materially adversely 
affect the ability of any of the foregoing to perform their 
respective obligations under the Lease Documents;

			(b)	against or affecting the Leased Property 
or the ownership, construction, development, 
maintenance, management, repair, use, occupancy, 
possession or  operation thereof; or

			(c)	which may involve or affect the 
validity, priority or enforceability of any of the Lease 
Documents, at law or in equity, or before or by any 
arbitrator or Governmental Authority.

		10.1.7	INTENTIONALLY DELETED.

		10.1.8	COMMERCIAL ACTS.  Lessee's performance 
of and compliance with the obligations and conditions set forth 
herein and in the other Lease Documents will constitute 
commercial acts done and performed for commercial purposes.

		10.1.9	ADEQUATE CAPITAL, NOT INSOLVENT.  
After giving effect to the consummation of the transactions 
contemplated by the Lease Documents, each member of the 
Leasing Group:

			(a)	will be able to pay its debts as they 
become due;

			(b)	will have sufficient funds or available 
capital to carry on its business as now conducted or as 
contemplated to be conducted (in accordance with the 
terms of the Lease Documents); and

			(c)	will not be rendered insolvent as 
determined by applicable law.

		10.1.10	NOT DELINQUENT.  Except as permitted 
under Section 11.3.8, no member of the Leasing Group which 
exists as of the date hereof is delinquent or claimed to be 
delinquent under any obligation for the payment of borrowed 
money.

		10.1.11	NO AFFILIATE DEBT.  Lessee has not created, 
incurred, guaranteed, endorsed, assumed or suffered to exist any 
liability (whether direct or contingent) for borrowed money from 
the Guarantor (or any of its Affiliates) or any Affiliate of Lessee 
which has not been fully subordinated to the Lease Obligations.

		10.1.12	TAXES CURRENT.  Each member of the 
Leasing Group which exists as of the date hereof has filed all 
federal, state and local tax returns which are required to be filed as 
to which extensions are not currently in effect and has paid all 
taxes, assessments, impositions, fees and other governmental 
charges (including interest and penalties) which have become due 
pursuant to such returns or pursuant to any assessment or notice of 
tax claim or deficiency received by each such member of the 
Leasing Group.  No tax liability has been asserted by the Internal 
Revenue Service against any member of the Leasing Group or any 
other federal, state or local taxing authority for taxes, assessments, 
impositions, fees or other governmental charges (including interest 
or penalties thereon) in excess of those already paid.

		10.1.13	FINANCIALS COMPLETE AND ACCURATE. 
 The financial statements of each member of the Leasing Group given to 
Lessor in connection with the execution and delivery of the Lease 
Documents were true, complete and accurate, in all material respects, and 
fairly presented the financial condition of each such member of the Leasing 
Group as of the date thereof and for the periods covered thereby, having 
been prepared in accordance with GAAP and such financial statements 
disclosed all liabilities, including, without limitation, contingent
liabilities, of each such member of the Leasing Group as of the date thereof. 
There has been no material adverse change since such date with respect to the 
Net Worth of any such member of the Leasing Group or with respect to any 
other matters contained in such financial statements, nor have any 
additional material liabilities, including, without limitation, contingent 
liabilities, of any such member of the Leasing Group arisen or been 
incurred or asserted since such date except as otherwise disclosed to Lessor. 
 The projections heretofore delivered to Lessor continue to be reasonable 
(with respect to the material assumptions upon which such projections are 
based) and Lessee reasonably anticipates based on information currently 
available to it after due inquiry the results projected therein will be 
achieved, there having been (a) no material adverse change in the business, 
assets or condition, financial or otherwise of any such member of the 
Leasing Group  or the Leased Property and (b) no material depletion of the 
cash or decrease in working capital of any such member of the Leasing 
Group.

		10.1.14	PENDING ACTIONS, NOTICES AND 
REPORTS.

		(a)	There is no action or investigation pending or, to 
the best knowledge and belief of Lessee, threatened, anticipated or 
contemplated (nor, to the knowledge of Lessee, is there any 
reasonable basis therefor) against or affecting the Leased Property 
or any member of the Leasing Group (or any Affiliate thereof) 
before any Governmental Authority which could prevent or hinder 
the consummation of the transactions contemplated hereby or call 
into question the validity of any of the Lease Documents or any 
action taken or to be taken in connection with the transactions 
contemplated thereunder or which in any single case or in the 
aggregate might result in any material adverse change in the 
business, prospects, condition, affairs of any member of the 
Leasing Group or the Leased Property (including, without 
limitation, any action to revoke, withdraw or suspend any Permit 
necessary or desirable for the operation of the Leased Property in 
accordance with its Primary Intended Use and any action to 
transfer or relocate any such Permit to a location other than the 
Leased Property) or any material impairment of the right or ability 
of any member of the Leasing Group to carry on its operations as 
presently conducted or, with respect to the Project, proposed upon 

              Completion of the Project to be conducted with respect to the 
Leased Property or with respect to its obligations under the Lease 
Documents.

		(b)	Neither the Facility nor any member of the 
Leasing Group has received any notice of any claim, requirement 
or demand of any Governmental Authority, Accreditation Body, if 
any, Third Party Payor or any insurance body having or claiming 
any licensing, certifying, supervising, evaluating or accrediting 
authority over the Leased Property to rework or redesign the 
Leased Property, its professional staff or its professional services, 
procedures or practices in any material respect or to provide 
additional furniture, fixtures, equipment or inventory or to 
otherwise take action so as to make the Leased Property conform 
to or comply with any Legal Requirement;

		(c)  	The most recent utilization reviews, if any, 
relating to the Leased Property by all applicable Third Party 
Payors, Accreditation Bodies and Governmental Authorities and 
all applicable reviews or scrutiny by any managed care or 
utilization review companies, if any, have not had a material 
adverse impact on the utilization of units or programs at any of the 
Leased Property.  No claims or assertions have been made in any 
utilization review that any of the practices or procedures used at 
the Leased Property are improper or inappropriate other than such 
claims or assertions which singly and in the aggregate will not 
have a material adverse impact on the Leased Property; and

		(d)	 Lessee has delivered or caused to be delivered 
to Lessor true and correct copies of all licenses, inspection surveys 
and accreditation reviews, if any, relating to the Leased Property, 
issued by any Governmental Authority during the most recent 
licensing period, together with all plans of correction relating 
thereto.

		10.1.15	COMPLIANCE WITH LEGAL AND OTHER 
REQUIREMENTS.

		(a)	Lessee and the Leased Property (with respect to 
the Project, to the extent consistent with the stage of construction 
of the Project) and the ownership, construction, development, 
maintenance, management, repair, use, occupancy, possession and 
operation thereof comply with all applicable Legal Requirements 
and there is no claim of any violation thereof known to Lessee.  
Without limiting the foregoing, Lessee has obtained all Permits 
that are necessary or desirable to operate the Leased Property in 
accordance with its Primary Intended Use or, with respect to the 
Project, reasonably expects to obtain such Permits prior to, or 
upon, the Completion of the Project.

		(b)	Except as previously delivered to Lessor 
pursuant to Section 10.1.14(d) hereof, there are no outstanding 
notices of deficiencies, notices of proposed action or orders of any 
kind relating to the Leased Property, if any, issued by any 
Governmental Authority requiring conformity to any of the 
applicable Legal Requirements.   

		10.1.16	NO ACTION BY GOVERNMENTAL 
AUTHORITY OR ACCREDITATION BODY.  There is no action 
pending or, to the best knowledge and belief of Lessee, 
recommended, by any Governmental Authority to revoke, repeal, 
cancel, modify, withdraw or suspend any Permit or Contract or to 
take any other action of any other type which could have a 
material adverse effect on the Leased Property.

		10.1.17	PROPERTY MATTERS.

		(a)	The Leased Property is free and clear of 
agreements, covenants and Liens, except those agreements, 
covenants and Liens to which this Lease is expressly subject, 
whether presently existing, as are listed on EXHIBIT B or were 
listed on the UCC lien search results delivered to Lessor at or prior 
to the execution and delivery of this Lease (and were not required 
to be terminated as a condition of the execution and delivery of 
this Lease), or which may hereafter be created in accordance with 
the terms hereof (collectively referred to herein as the "Permitted 
Encumbrances"); and Lessee shall warrant and defend Lessor's 
title to the Leased Property against any and all claims and demands 
of every kind and nature whatsoever;

		(b)	There is no Condemnation or similar proceeding 
pending with respect to or affecting the Leased Property, and 
Lessee is not aware, to the best of Lessee's knowledge and belief, 
that any such proceeding is contemplated;

		(c)	No part of the Collateral or the Leased Property 
has been damaged by any fire or other casualty.  The Leased 
Improvements (except the Project prior to completion of the 
Project) are in good operating condition and repair, ordinary wear 
and tear excepted, free from known defects in construction or 
design;

		(d)	None of the Permitted Encumbrances has or is 
likely to have a material adverse impact upon, nor interfere with or 
impede, in any material respect, the operation of the Leased 
Property in accordance with the Primary Intended Use;

		(e)	All buildings, facilities and other improvements 
necessary, both legally and practically, for the proper and efficient 
operation of the Facility are (or in the case of the Project, will be) 
located upon the Leased Property and all real property and 
personal property currently utilized by Lessee is (or in the case of 
the Project, will be) included within the definition of the Leased 
Property or the Collateral;

		(f)	The Leased Property abuts on and has direct 
vehicular access to a public road or access to a public road via 
permanent, irrevocable, appurtenant easements;

		(g)	The Leased Property constitutes a parcel(s) for 
real estate tax purposes separate from any real property that does 
not constitute a portion of the Leased Property and no portion of 
any real property that does not constitute a portion of the Leased 
Property is part of the same tax parcel as any part of the Leased 
Property;

		(h)	All utilities necessary for the use and operation 
of the Facility are available to the lot lines of the Leased Property:

			(i)	in sufficient supply and capacity;

			(ii)	through validly created and existing 
easements of record appurtenant to or encumbering the 
Leased Property (which easements shall not impede or 
restrict the operation of the Facility);

			(iii)	without need for any Permits and/or 
Contracts to be issued by or entered into with any 
Governmental Authority, except as already obtained or 
executed, as the case may be, or as otherwise shown to 
the satisfaction of Lessor to be readily obtainable; and

			(iv)	Lessee has made no structural 
alterations or improvements to any of the Leased 
Improvements that changed the foot-print of any of the 
Leased Improvements, added an additional story to any of 
the Leased Improvements, decreased the amount of 
parking available on the Leased Property or otherwise 
involved any alteration which would be regulated by 
applicable zoning requirements, in each case without the 
express written consent of Lessor.  Except for matters 
which have been disclosed to Lessor or concerning which 
Lessor has independent actual knowledge, Lessee has no 
actual knowledge of any such structural alteration or 

improvement made to any of the Leased Improvements 
during the last ten (10) years and has no knowledge of 
any such structural alteration or renovation made to any 
of the Leased Improvements or any such decrease in 
parking during such period.

		10.1.18	THIRD PARTY PAYOR AGREEMENTS.

		Neither Lessee nor the Facility is qualified as a provider 
of services under or participates in any Third Party Payor 
Programs and neither Lessor nor the Facility is accredited by any 
Accreditation Body.

		10.1.19	RATE LIMITATIONS.  The State currently 
imposes no restrictions or limitations on rates which may be 
charged to private pay residents receiving services at the Facility.

		10.1.20	FREE CARE.  There are no Contracts, Permits 
or applicable Legal Requirements which require that, a percentage 
of units in any program at the Facility be reserved for Medicaid or 
Medicare eligible residents or that the Facility provide a certain 
amount of welfare, free or charity care or discounted or 
government assisted resident care.

		10.1.21	NO PROPOSED CHANGES.  Lessee has no 
actual knowledge of any applicable Legal Requirements which 
have been enacted, promulgated or issued within the eighteen (18) 
months preceding the date of this Lease or any proposed 
applicable Legal Requirements currently pending in the State 
which may materially adversely affect rates at the Facility (or any 
program operated by a member of the Leasing Group in 
conjunction with the Facility) or may result in the likelihood of 
increased competition at the Facility or the imposition of 
Medicaid, Medicare, charity, free care, welfare or other discounted 
or government assisted residents at the Facility or require that 
Lessee or the Facility obtain a certificate of need, Section 1122 
approval or the equivalent, which Lessee or the Facility does not 
currently possess.

		10.1.22	ERISA.  No employee pension benefit plan 
maintained by any member of the Leasing Group has any 
accumulated funding deficiency within the meaning of the ERISA, 
nor does any member of the Leasing Group have any material 
liability to the PBGC established under ERISA (or any successor 
thereto) in connection with any employee pension benefit plan (or 
other class of benefit which the PBGC has elected to insure), and 
there have been no "reportable events" (not waived) or "prohibited 
transactions" with respect to any such plan, as those terms are 

defined in Section 4043 of ERISA and Section 4975 of the Internal 
Revenue Code of 1986, as now or hereafter amended, respectively.
 
		10.1.23	NO BROKER.  No member of the Leasing 
Group nor any of their respective Affiliates has dealt with any 
broker or agent in connection with the transactions contemplated 
by the Lease Documents.

		10.1.24	NO IMPROPER PAYMENTS.  No member of 
the Leasing Group nor any of their respective Affiliates has:

			(a)	made any contributions, payments or 
gifts of its funds or property to or for the private use of 
any government official, employee, agent or other Person 
where either the payment or the purpose of such 
contribution, payment or gifts is illegal under the laws of 
the United States, any state thereof or any other 
jurisdiction (foreign or domestic);

			(b)	knowingly established or maintained 
any unrecorded fund or asset for any purpose or 
knowingly made any false or artificial entries on any of its 
books or records for any reason;

			(c)	made any payments to any Person with 
the intention or understanding that any part of such 
payment was to be used for any other purpose other than 
that described in the documents supporting the payment; 
or

			(d)	made any contribution, or reimbursed 
any political gift or contribution made by any other 
Person, to candidates for public office, whether federal, 
state or local, where such contribution would be in 
violation of applicable law.

		10.1.25	NOTHING OMITTED.  Neither this Lease, nor 
any of the other Lease Documents, nor any certificate, agreement, 
statement or other document, including, without limitation, any 
financial statements concerning the financial condition of any 
member of the Leasing Group, furnished to or to be furnished to 
Lessor or its attorneys in connection with the transactions 
contemplated by the Lease Documents, contains or will contain 
any untrue statement of a material fact or omits or will omit to 
state a material fact necessary in order to prevent all statements 
contained herein and therein from being misleading.  There is no 
fact within the special knowledge of Lessee which has not been 
disclosed herein or in writing to Lessor that materially adversely 
affects, or in the future, insofar as Lessee can reasonably foresee 

based on the information currently available to it after due inquiry, 
may materially adversely affect the business, properties, assets or 
condition, financial or otherwise, of any member of the Leasing 
Group or the Leased Property.

		10.1.26	NO MARGIN SECURITY.  Lessee is not 
engaged in the business of extending credit for the purpose of 
purchasing or carrying margin stock (within the meaning of 
Regulation U of the Board of Governors of the Federal Reserve 
System), and no part of the proceeds of the Meditrust Investment 
will be used to purchase or carry any margin security or to extend 
credit to others for the purpose of purchasing or carrying any 
margin security or in any other manner which would involve a 
violation of any of the regulations of the Board of Governors of 
the Federal Reserve System.  Lessee is not an "investment 
company" within the meaning of the Investment Company Act of 
1940, as amended.

		10.1.27	NO DEFAULT.  No event or state of facts which 
constitutes, or which, with notice or lapse of time, or both, could 
constitute, a Lease Default has occurred and is continuing.

		10.1.28	PRINCIPAL PLACE OF BUSINESS.  The 
principal place of business and chief executive office of Lessee is 
located at 3131 Elliott Avenue, Suite 500, Seattle, Washington 
98121-2162 (the "Principal Place of Business").

		10.1.29	LABOR MATTERS.  There are no proceedings 
now pending, nor, to the best of Lessee's knowledge, threatened 
with respect to the operation of the Facility before the National 
Labor Relations Board, State Commission on Human Rights and 
Opportunities, State Department of Labor, U.S. Department of 
Labor or any other Governmental Authority having jurisdiction of 
employee rights with respect to hiring, tenure and conditions of 
employment, and no member of the Leasing Group has 
experienced any material controversy with any Facility 
administrator or other employee of similar stature or with any 
labor organization which has, or is likely, to have a materially 
adverse effect upon the financial condition and/or operations of the 
Facility.

		10.1.30	INTELLECTUAL PROPERTY.  Lessee is duly 
licensed or authorized to use all (if any) copyrights, rights of 
reproduction, trademarks, trade-names, trademark applications, 
service marks, patent applications, patents and patent license 
rights, (all whether registered or unregistered, U.S. or foreign), 
inventions, franchises, discoveries, ideas, research, engineering, 
methods, practices, processes, systems, formulae, designs, 
drawings, products, projects, improvements, developments, 

know-how and trade secrets which are used in or necessary for the 
development and/or operation of the Facility in accordance with its 
Primary Intended Use, without conflict with or infringement of 
any, and subject to no restriction, lien, encumbrance, right, title or 
interest in others.

		10.1.31	MANAGEMENT AGREEMENTS.  There is no 
Management Agreement in force and effect as of the date hereof.

	10.2	CONTINUING EFFECT OF REPRESENTATIONS 
AND WARRANTIES.  All representations and warranties contained in this 
Lease and the other Lease Documents shall constitute continuing 
representations and warranties which shall remain true, correct and 
complete throughout the Term.  Notwithstanding the provisions of the 
foregoing sentence but without derogation from any other terms and 
provisions of this Lease, including, without limitation, those terms and 
provisions containing covenants to be performed or conditions to be 
satisfied on the part of Lessee, the representations and warranties contained 
in Sections 10.1.6, 10.1.7, 10.1.10, 10.1.14, 10.1.15, 10.1.17(b), 10.1.17(c), 
10.1.17(i), 10.1.18, 10.1.19, 10.1.20, 10.1.21, 10.1.22, 10.1.27, 10.1.29, in 
the second sentence of Section 10.1.12, in the second and third sentences of 
Section 10.1.13 and in the second sentence of Section 10.1.25 shall not 
constitute continuing representations and warranties throughout the Term 
provided, however, that nothing contained in the first sentence of Section 
10.1.25 shall be construed as imposing any obligation on Lessee to update 
after the Commencement Date the information furnished to Lessor prior to 
the execution and delivery of this Lease but without derogation of any other 
obligation Lessee has under this Lease to provide information to Lessor.

ARTICLE 11

FINANCIAL AND OTHER COVENANTS

	11.1	STATUS CERTIFICATES.  At any time, and from time 
to time, upon request from the other, Lessee and Lessor shall furnish to the 
other, within ten (10) Business Days' after receipt of such request, an 
Officer's Certificate certifying that this Lease is unmodified and in full 
force and effect (or that this Lease is in full force and effect as modified 
and setting forth the modifications) and the dates to which the Rent has been 
paid.  Any Officer's Certificate furnished pursuant to this Section at the 
request of Lessor shall be addressed to any prospective purchaser or 
mortgagee of the Leased Property as Lessor may request and may be relied 
upon by Lessor and any such prospective purchaser or mortgagee of the 
Leased Property.

	11.2	FINANCIAL STATEMENTS; REPORTS; NOTICE 
AND INFORMATION.

		11.2.1	OBLIGATION TO FURNISH.  Lessee will 
furnish and shall cause to be furnished to Lessor the following 
statements, information and other materials:

			(a)	ANNUAL STATEMENTS.  Within 
ninety (90) days after the end of each of their respective 
fiscal years, (i) a copy of the Consolidated Financials for 
each of (x) Lessee, (y) the Guarantor and (z) any 
Sublessee which is an Affiliate of Lessee for the preceding 
fiscal year, certified and, in the case of Guarantor, audited 
by, and with the unqualified opinion of, independent 
certified public accountants acceptable to Lessor and 
certified as true and correct by Lessee, the Guarantor or 
the applicable Sublessee, as the case may be (and, without 
limiting anything else contained herein, the Consolidated 
Financials for Lessee and for each such Sublessee shall 
include a detailed balance sheet for Leased Property as of 
the last day of such fiscal year and a statement of earnings 
from the Leased Property for such fiscal year showing, 
among other things, all rents and other income therefrom 
and all expenses paid or incurred in connection with the 
operation of the Leased Property); (ii) separate statements, 
certified as true and correct by Lessee, the Guarantor, any 
Manager which is an Affiliate of Lessee and each such 
Sublessee which is an Affiliate of Lessee, stating whether, 
to the best of the signer's knowledge and belief after 
making due inquiry, Lessee, the Guarantor, such Manager 
or any such Sublessee, as the case may be, is in default in 
the performance or observance of any of the terms of this 
Lease or any of the other Lease Documents and, if so, 
specifying all such defaults, the nature thereof and the 
steps being taken to immediately remedy the same; (iii) a 
copy of all letters from the independent certified 
accountants engaged to perform the annual audits referred 
to above, directed to the management of the Guarantor 
regarding the existence of any reportable conditions or 
material weaknesses; (iv) a statement certified as true and 
correct by Lessee setting forth all Subleases as of the last 
day of such fiscal year, the respective areas demised 
thereunder, the names of the Sublessees thereunder, the 
respective expiration dates of the Subleases, the respective 
rentals provided for therein, and such other information 
pertaining to the Subleases as may be reasonably 
requested by Lessor; and (v) evidence satisfactory to 
Lessor that Lessee has fulfilled its obligation to make the 

Annual Facility Upgrade Expenditure, provided, however, 
that no such evidence shall be required to be submitted 
until the fourth Lease Year with respect to that portion of 
the Leased Property comprised only of the Project.

			(b)	MONTHLY STATEMENTS OF 
LESSEE.  Within thirty (30) days after the end of each 
calendar month during the pendency of this Lease, (i) a 
statement certified as true and correct by Lessee setting 
forth the Gross Revenues of the Leased Property for the 
immediately preceding month, (ii) an unaudited, detailed 
month and year to date income and expense statement for 
the Leased Property which shall include a comparison to 
corresponding budget figures, occupancy statistics 
(including the actual number of residents, the number of 
units available and total resident days for such month) and 
resident mix breakdowns (for each resident day during 
such month classifying residents by the type of care 
required and source of payment) and (iii) an express 
written calculation showing the compliance or non-
compliance, as the case may be, with the specific financial 
covenants set forth in Section 11.3 for the applicable 
period, including, with respect to the calculation of 
Lessee's Debt Coverage Ratio, a schedule substantially in 
the form attached hereto as EXHIBIT E.

			(c)	QUARTERLY STATEMENTS.  
Within thirty (30) days after the end of each respective 
fiscal quarter, unaudited Consolidated Financials for each 
of (i) Lessee and (ii) each Sublessee which is an Affiliate 
of Lessee certified as true and correct by Lessee or such 
applicable Sublessee, as the case may be and within thirty 
(30) days after each calendar quarter, Lessee shall also 
provide Lessor with a calculation of the Additional Rent 
payable for such quarter.

			(d)	QUARTERLY STATEMENTS OF 
THE GUARANTOR. Within forty-five (45) days after the 
end of each fiscal quarter, unaudited Consolidated 
Financials for the Guarantor certified as true and correct 
by the Guarantor.

			(e)	PERMITS AND CONTRACTS.  
Within ten (10) days after the issuance or the execution 
thereof, as the case may be, true and complete copies of (i) 
all Permits which constitute operating licenses for the 
Facility issued by any Governmental Authority having 
jurisdiction over assisted living matters and (ii) Contracts 
(involving payments in the aggregate in excess of 

$100,000 per annum), including, without limitation, all 
Provider Agreements.

			(f)	CONTRACT NOTICES.  Promptly but 
in no event more than ten (10) days after the receipt 
thereof, true and complete copies of any notices, consents, 
terminations or statements of any kind or nature relating to 
any of the Contracts (involving payments in the aggregate 
in excess of ONE HUNDRED THOUSAND DOLLARS 
($100,000) per annum) other than those issued in the 
ordinary course of business.

			(g)	PERMIT OR CONTRACT 
DEFAULTS.  Promptly but in no event more than ten (10) 
days after the receipt thereof, true and complete copies of 
all surveys, follow-up surveys, licensing surveys, 
complaint surveys, examinations, compliance certificates, 
inspection reports, statements (other than those statements 
that are issued in the ordinary course of business), if any, 
terminations and notices of any kind (other than those 
notices that are furnished in the ordinary course of 
business) issued or provided to Lessee, the Manager or 
any Sublessee by any Governmental Authority, 
Accreditation Body, or any Third Party Payor, including, 
without limitation, any notices pertaining to any 
delinquency in, or proposed revision of, Lessee's, the 
Manager's or any Sublessee's obligations under the terms 
and conditions of any Permits or Contracts now or 
hereafter issued by or entered into with any Governmental 
Authority, Accreditation Body, or Third Party Payor and 
the response(s) thereto made by or on behalf of Lessee, 
the Manager or any Sublessee.

			(h)	OFFICIAL REPORTS.  Upon 
completion or filing thereof, complete copies of all 
applications (other than those that are furnished in the 
ordinary course of business), notices (other than those that 
are furnished in the ordinary course of business), 
statements, annual reports, cost reports and other reports 
or filings of any kind (other than those that are furnished 
in the ordinary course of business) provided by Lessee, 
the Manager or any Sublessee to any Governmental 
Authority, Accreditation Body, or any Third Party Payor 
with respect to the Leased Property.

			(i)	OTHER INFORMATION.  With 
reasonable promptness, such other information as Lessor 
may from time to time reasonably request respecting (i) 
the financial condition and affairs of each member of the 
Leasing Group and the Leased Property and (ii) the 
licensing and operation of the Leased Property; including, 
without limitation, financial statements, certificates and 
consents from accountants and all other financial and 
licensing/operational information as may be required or 
requested by any Governmental Authority.

			(j)	DEFAULT CONDITIONS.  As soon as 
possible, and in any event within five (5) days after the 
occurrence of any Lease Default, or any event or 
circumstance which, with the giving of notice or the 
passage of time, or both, would constitute a Lease Default, 
a written statement of Lessee setting forth the details of 
such Lease Default, event or circumstance and the action 
which Lessee proposes to take with respect thereto.

			(k)	OFFICIAL ACTIONS.  Promptly but in 
no event more than ten (10) days after the commencement 
thereof, notice of all actions, suits and proceedings before 
any Governmental Authority or Accreditation Body, 
which could have a material adverse effect on any 
member of the Leasing Group or the Leased Property.

			(l)	AUDIT REPORTS.  Promptly but in no 
event more than ten (10) days after receipt, a copy of all 
audits or reports submitted to Lessee by any independent 
public accountant in connection with any annual, special 
or interim audits of the books of Lessee and, if requested 
by Lessor, any letter of comments directed by such 
accountant to the management of Lessee.

			(m)	ADVERSE DEVELOPMENTS.  
Promptly but in no event more than ten (10) days after 
Lessee acquires knowledge thereof, written notice of:

				(i)	the potential termination of any 
Permit or Provider Agreement 
necessary for the operation of the 
Leased Property;

				(ii)	any loss, damage or destruction 
to or of the Leased Property in 
excess of TWENTY-FIVE 
THOUSAND DOLLARS 
($25,000) (regardless of whether 
the same is covered by 
insurance);

				(iii)	any material controversy 
involving Lessee or any 
Sublessee which is an Affiliate of 
Lessee and (x) Facility 
administrator or Facility 
employee of similar stature or (y) 
any labor organization or (z) the 
Manager or any employee of the 
Manager which has, or is 
reasonably likely to have, a 
materially adverse effect on the 
financial condition and/or 
operations of the Facility;

				(iv)	any controversy that calls into 
question the eligibility of the 
Facility for the participation in 
any Medicaid, Medicare or other 
Third Party Payor Program in 
which the Facility is 
participating;

				(v)	any refusal of reimbursement by 
any Third Party Payor which, 
singularly or together with all 
other such refusals by any Third 
Party Payors, could reasonably 
be expected to have a material 
adverse effect on the financial 
condition of Lessee or any 
Sublessee which is an Affiliate of 
Lessee; and

				(vi)	any fact within the special 
knowledge of any member of the 
Leasing Group, or any other 
development in the business or 
affairs of any member of the 
Leasing Group, which could 
reasonably be expected to be 
materially adverse to the 

business, properties, assets or 
condition, financial or otherwise, 
of any member of the Leasing 
Group or the Leased Property.

			(n)	RESPONSES TO INSPECTION 
REPORTS.  Within thirty (30) days after receipt of an 
inspection report relating to the Leased Property from 
Lessor, a written response describing in detail prepared 
plans to address concerns raised by the inspection report.

			(o)	PUBLIC INFORMATION.  Upon the 
completion or filing, mailing or other delivery thereof, 
complete copies of all financial statements, reports, 
notices and proxy statements, if any, sent by any member 
of the Leasing Group (which is a publicly held 
corporation) to its shareholders and of all reports, if any, 
filed by any member of the Leasing Group (which is a 
publicly held corporation) with any securities exchange or 
with the Securities Exchange Commission.

			(p)	ANNUAL BUDGETS.  Prior to the end 
of each Fiscal Year, Lessee, any Sublessee which is an 
Affiliate of Lessee and/or any Manager which is an 
Affiliate of Lessee shall submit to Lessor a preliminary 
annual financial budget for the Facility for the next Fiscal 
Year, a preliminary capital expenditures budget for the 
Facility for the next Fiscal Year and a report detailing the 
capital expenditures made in the then current Fiscal Year 
and on or before the end of the first month of each Fiscal 
Year, Lessee, any such Sublessee and/or any such 
Manager shall submit to Lessor revised finalized versions 
of such budgets and report.

			(q)	WORKING CAPITAL LOAN.  
Promptly after receipt thereof, copies of any notices with 
respect to default from a lender of a Working Capital 
Loan. 

		11.2.2	RESPONSIBLE OFFICER.  Any certificate, 
instrument, notice, or other document to be provided to Lessor 
hereunder by any member of the Leasing Group shall be signed by 
an executive officer of such member (in the event that any of the 
foregoing is not an individual), having a position of Vice President 
or higher and with respect to financial matters, any such certificate, 
instrument, notice or other document shall be signed by the chief 
financial officer of such member.

		11.2.3	NO MATERIAL OMISSION.  No certificate, 
instrument, notice or other document, including without limitation, 
any financial statements furnished or to be furnished to Lessor 
pursuant to the terms hereof or of any of the other Lease 
Documents shall contain any untrue statement of a material fact or 
shall omit to state any material fact necessary in order to prevent 
all statements contained therein from being misleading.

		11.2.4	CONFIDENTIALITY.  Lessor shall afford any 
information received pursuant to the provisions of the Lease 
Documents the same degree of confidentiality that Lessor affords 
similar information proprietary to Lessor; provided, however,  that 
Lessor shall have the unconditional right to (a) disclose any such 
information as Lessor deems necessary or appropriate in 
connection with any sale, transfer, conveyance, participation or 
assignment of the Leased Property or any of the Lease Documents 
or any interest therein and (b) use such information in any 
litigation or arbitration proceeding between Lessor and any 
member of the Leasing Group.  Without limiting the foregoing, 
Lessor may also utilize any information furnished to it hereunder 
as and to the extent (i) counsel to Lessor determines that such 
utilization is necessary pursuant to 15 U.S.C. 77a-77aa or 15 
U.S.C. 78a-78jj and the rules and regulations promulgated 
thereunder, (ii) Lessor is required or requested by any 
Governmental Authority to disclose any such information and/or 
(iii) Lessor is requested to disclose any such information by any of 
the Meditrust Entities' lenders or potential lenders.  Lessor shall 
not be liable in any way for any subsequent disclosure of such 
information by any Person to which Lessor has provided such 
information in accordance with the terms hereof.  Nevertheless, in 
connection with any such disclosure, Lessor shall inform the 
recipient of any such information of the confidential nature 
thereof.  Lessor shall observe any prohibitions or limitations on the 
disclosure of any such information under applicable confidentiality 
law or regulations, to the extent that the same are applicable to 
such information.

	11.3	FINANCIAL COVENANTS.  Lessee covenants and 
agrees that, throughout the Term and as long as Lessee is in possession of 
the Leased Property:

		11.3.1	DEBT COVERAGE RATIO OF LESSEE.  
From and after the second anniversary of the date hereof until the 
fourth anniversary hereof, Lessee shall maintain with respect to the 
Facility and all other Group Two Acquisition Facilities for each 
Fiscal Quarter an aggregate Debt Coverage Ratio equal to or 
greater than 1.1 to 1 and from and after the fourth anniversary 
thereof and for the remainder of the Term, Lessee shall maintain 
with respect to the Facility and all other Group Two Acquisition 
Facilities each Fiscal Quarter an aggregate Debt Coverage Ratio 
equal to or greater than 1.2 to 1.

		11.3.2	INTENTIONALLY DELETED.

		11.3.3	INTENTIONALLY DELETED.

		11.3.4	INTENTIONALLY DELETED.

		11.3.5	CURRENT RATIO - GUARANTOR.  From 
and after December 31, 1999 and for the remainder of the Term, 
the Guarantor shall maintain a ratio of Consolidated Current Assets 
to Consolidated Current Liabilities equal to or greater than 1 to 1 
as of the end of each fiscal year.

		11.3.6	INTENTIONALLY DELETED. 

		11.3.7	NET WORTH - GUARANTOR.  The 
Guarantor shall maintain, at all times, a Net Worth of not less than 
TWENTY MILLION DOLLARS ($20,000,000).

		11.3.8	NO INDEBTEDNESS.  Lessee shall not 
create, incur, assume or suffer to exist any liability for borrowed 
money except (i) Indebtedness to Lessor under the Lease 
Documents and, (ii) Impositions allowed pursuant to the 
provisions of the Lease, (iii) unsecured normal trade debt incurred 
upon customary terms in the ordinary course of business, 
(iv) Indebtedness created in connection with any financing of any 
Capital Addition, provided, that each such financing has been 
approved by Lessor in accordance with the terms of Article 9 
hereof, (v) Indebtedness to any Affiliate, provided, that, such 
Indebtedness is fully subordinated to this Lease pursuant to the 
Affiliated Party Subordination Agreement, (vi) other Indebtedness 
of Lessee in the aggregate amount not to exceed TWO HUNDRED 
THOUSAND DOLLARS ($200,000) incurred, for the exclusive 
use of the Leased Property, on account of purchase money 
indebtedness or finance lease arrangements, each of which shall 
not exceed the fair market value of the assets or property acquired 
or leased and shall not extend to any assets or property other than 
those purchased or leased and purchase money security interests in 
equipment and equipment leases which comply with the provisions 

of Section 6.1.2 and (vii) Indebtedness specifically permitted by 
the Meditrust/Emeritus Transaction Documents.

		11.3.9	NO GUARANTIES.  Lessee shall not 
assume, guarantee, endorse, contingently agree to purchase or 
otherwise become directly or contingently liable (including, 
without limitation, liable by way of agreement, contingent or 
otherwise, to purchase, to provide funds for payment, to supply 
funds to or otherwise to invest in any debtor or otherwise to assure 
any creditor against loss) in connection with any Indebtedness of 
any other Person, except by the endorsement of negotiable 
instruments for deposit or collection or similar transactions in the 
ordinary course of business and except for a guaranty of the 
Indebtedness of the Guarantor in connection with a Working 
Capital Loan which expressly limits recourse under such guaranty 
to the Receivables. 

	11.4	AFFIRMATIVE COVENANTS.  Lessee covenants and 
agrees that throughout the Term and any periods thereafter that Lessee 
remains in possession of the Leased Property:

		11.4.1	MAINTENANCE OF EXISTENCE.  If 
Lessee is a corporation, trust or partnership, during the entire time 
that this Lease remains in full force and effect, Lessee shall keep in 
effect its existence and rights as a corporation, trust or partnership 
under the laws of the state of its incorporation or formation and its 
right to own property and transact business in the State.

		11.4.2	MATERIALS.  Except as provided in Section 
6.1.2, Lessee shall not suffer the use in connection with any 
renovations or other construction relating to the Leased Property of 
any materials, fixtures or equipment intended to become part of the 
Leased Property which are purchased upon lease or conditional bill 
of sale or to which Lessee does not have absolute and 
unencumbered title, and Lessee covenants to cause to be paid 
punctually all sums becoming due for labor, materials, fixtures or 
equipment used or purchased in connection with any such 
renovations or construction, subject to Lessee's right to contest to 
the extent provided for in Article 15.

		11.4.3	COMPLIANCE WITH LEGAL 
REQUIREMENTS AND APPLICABLE AGREEMENTS.  Lessee 
and the Leased Property and all uses thereof shall comply with (i) 
all applicable Legal Requirements (except to the extent being duly 
contested in accordance with the terms hereof), (ii) all Permits and 
Contracts, (iii) all Insurance Requirements, (iv) the Lease 
Documents, (v) the Permitted Encumbrances and (vi) the 
Appurtenant Agreement.

		11.4.4	BOOKS AND RECORDS.  Lessee shall 
cause to be kept and maintained, and shall permit Lessor and its 
representatives to inspect at all reasonable times and upon 
reasonable notice, accurate books of accounts in which complete 
entries will be made in accordance with GAAP reflecting all 
financial transactions of Lessee (showing, without limitation, all 
materials ordered and received and all disbursements, accounts 
payable and accounts receivable in connection with the operation 
of the Leased Property).

		11.4.5	PARTICIPATION IN THIRD PARTY 
PAYOR PROGRAMS.  If Lessee or a Sublessee which is an 
Affiliate of Lessee elects to participate in Third Party Payor 
Programs, Lessee or such Sublessee shall remain eligible to 
participate in such Third Party Payor Programs in accordance with 
all requirements thereof (including, without limitation, all 
applicable Provider Agreements), if and to the extent remaining 
eligible shall be necessary for the prudent operation of the Facility 
in the good faith exercise of commercially reasonable business 
judgment. 

		11.4.6	CONDUCT OF ITS BUSINESS.  Lessee will 
maintain, and cause any Sublessee and any Manager to maintain, 
experienced and competent professional management with respect 
to its business and with respect to the Leased Property.  Lessee, 
any Sublessee and any Manager shall conduct, in the ordinary 
course, the operation of the Facility, and Lessee and any Sublessee 
which is an Affiliate of Lessee shall not enter into any other 
business or venture during the Term or such time as Lessee or any 
such Sublessee is in possession of the Leased Property other than 
activities in which Lessee or such Sublessee are permitted to 
engage by the provisions of the Meditrust/Emeritus Transaction 
Documents.

		11.4.7	ADDRESS.  Lessee shall provide Lessor        
        thirty (30) days' prior written notice of any change of its Principal 
        Place of Business from its current Principal Place of Business.       
        Lessee shall maintain the Collateral, including without limitation,  
        all books and records relating to its business, solely at its Principal 
        Place of Business and at the Leased Property.  Lessee shall not (a) 
        remove the Collateral, including, without limitation, any books or 
        records relating to Lessee's business from either the Leased            
        Property or Lessee's Principal Place of Business or (b) relocate its 
        Principal Place of Business until after receipt of a certificate from  
        Lessor, signed by an officer thereof, stating that Lessor has, to its  
        satisfaction, obtained all documentation that it deems necessary or 
        desirable to obtain, maintain, perfect and confirm the first priority  
        security interests granted in the Lease Documents.

		11.4.8	SUBORDINATION OF AFFILIATE 
TRANSACTIONS.  Without limiting the provisions of any other 
Section of this Lease or the Affiliated Party Subordination 
Agreement, any payments to be made by Lessee to (a) any 
member of the Leasing Group (or any of its Affiliates) or (b) any 
Affiliate of Lessee, in connection with any transaction between 
Lessee and such Person, including, without limitation, the 
purchase, sale or exchange of any property, the rendering of any 
service to or with any such Person (including, without limitation, 
all allocations of any so-called corporate or central office costs, 
expenses and charges of any kind or nature) or the making of any 
loan or other extension of credit or the making of any equity 
investment, shall be subordinate to the complete payment and 
performance of the Lease Obligations; provided, however, that all 
such subordinated payments may be paid at any time unless:  (x) 
after giving effect to such payment, Lessee shall be unable to 
comply with any of its obligations under any of the Lease 
Documents or (y) a Lease Default has occurred and is continuing 
and has not been expressly waived in writing by Lessor or an event 
or state of facts exists, which, with the giving of notice or the 
passage of time, or both, would constitute a Lease Default.

		11.4.9	INSPECTION.  At reasonable times and 
upon reasonable notice, Lessee shall permit Lessor and its 
authorized representatives (including, without limitation, the 
Consultants) to inspect the Leased Property as provided in Section 
7.1 above, provided, however, that, in the event results of any such 
testing or inspection reflect the same satisfactory results as the 
results of a similar testing or inspection initiated by Lessor within 
the prior twelve (12) months period, the costs and expense of such 
testing or inspection shall be the responsibility of Lessor.

		11.4.10	ANNUAL FACILITY UPGRADE 
EXPENDITURE.  Lessee shall spend an amount equal to the 
Annual Facility Upgrade Expenditure on Upgrade Renovations to 
the Facility each Lease Year provided, however, that such 
expenditures shall not be required until the fourth Lease Year with 
respect to that portion of the Leased Property consisting of units 
added to the Leased Property through construction of the Project.  
Lessee will furnish and shall cause to be furnished to Lessor 
evidence satisfactory to Lessor that Lessee has fulfilled its 
obligation to make the Annual Facility Upgrade Expenditure 
within ninety (90) days after the end of Lessee's Fiscal year, 
provided, however, that no such evidence shall be required to be 
submitted until the fourth Lease Year with respect to that portion 
of the Leased Property comprised only of the Project.

	11.5	ADDITIONAL NEGATIVE COVENANTS.  Lessee 
covenants and agrees that, throughout the Term and such time as Lessee 
remains in possession of the Leased Property:  

		11.5.1	RESTRICTIONS RELATING TO LESSEE.  
Except as may otherwise be expressly provided in Section 19.4 or 
in any of the other Lease Documents, Lessee shall not, without the 
prior written consent of Lessor, in each instance, which consent 
may be withheld in the sole and absolute discretion of Lessor:

			(a)	convey, assign, hypothecate, transfer, 
dispose of or encumber, or permit the conveyance, 
assignment, transfer, hypothecation, disposal or 
encumbrance of all or any part of any legal or beneficial 
interest in this Lease, its other assets or the Leased 
Property except as expressly permitted by the terms of this 
Lease Agreement; provided, however, that this restriction 
shall not apply to (i) the Permitted Encumbrances that 
may be created after the date hereof pursuant to the Lease 
Documents; (ii) Liens created in accordance with Section 
6.1.2 against Tangible Personal Property securing 
Indebtedness permitted under Section 11.3.8(v); (iii) the 
sale, conveyance, assignment, hypothecation, lease or 
other transfer of any material asset or assets (whether now 
owned or hereafter acquired), the fair market value of 
which equals or is less than TWENTY-FIVE 
THOUSAND DOLLARS ($25,000), individually, or ONE 
HUNDRED THOUSAND DOLLARS ($100,000) 
collectively; (iv) without limitation as to amount, the 
disposition in the ordinary course of business of any 
obsolete, worn out or defective fixtures, furnishings or 
equipment used in the operation of the Leased Property 
provided that the same are replaced with fixtures, 
furnishings or equipment of equal or greater utility or 
value or Lessee provides Lessor with an explanation 
(reasonably satisfactory to Lessor) as to why such fixtures, 
furnishings or equipment is no longer required in 
connection with the operation of the Leased Property; (v) 
without limitation as to amount, any sale of inventory by 
Lessee in the ordinary course of business; and (vi) subject 
to the terms of the Negative Pledge Agreement and the 
Affiliated Party Subordination Agreement, distributions to 
the shareholders of Lessee;

			(b)	permit the use of the Facility for any 
purpose other than the Primary Intended Use and the 
Other Permitted Uses; or

			(c)	liquidate, dissolve or merge or 
consolidate with any other Person except, subject to 
Lessor's prior written consent, which consent shall not be 
unreasonably withheld, a Meditrust/Emeritus Transaction 
Affiliate.

		11.5.2	NO LIENS.  Lessee will not directly or 
indirectly create or allow to remain and will promptly discharge at 
its expense any Lien, title retention agreement or claim upon or 
against the Leased Property (including Lessee's interest therein) or 
Lessee's interest in this Lease or any of the other Lease 
Documents, or in respect of the Rent, excluding (a) this Lease and 
any permitted Subleases, (b) the Permitted Encumbrances, 
(c) Liens which are consented to in writing by Lessor, (d) Liens for 
those taxes of Lessor which Lessee is not required to pay 
hereunder, (e) Liens of mechanics, laborers, materialmen, 
suppliers or vendors for sums either not yet due or being contested 
in strict compliance with the terms and conditions of Article 15, (f) 
any Liens which are the responsibility of Lessor pursuant to the 
provisions of Article 20, (g) Liens for Impositions which are either 
not yet due and payable or which are in the process of being 
contested in strict compliance with the terms and conditions of 
Article 15 (h) the Liens incurred pursuant to the provisions of 
Section 6.1.2 and (i) involuntary Liens caused by the actions or 
omissions of Lessor.

		11.5.3	LIMITS ON AFFILIATE TRANSACTIONS.  
Lessee shall not enter into any transaction with any Affiliate, 
including, without limitation, the purchase, sale or exchange of 
any property, the rendering of any service to or with any Affiliate 
and the making of any loan or other extension of credit, except in 
the ordinary course of, and pursuant to the reasonable 
requirements of, Lessee's business and upon fair and reasonable 
terms no less favorable to the Lessee than would be obtained in a 
comparable arms'-length transaction with any Person that is not an 
Affiliate.

		11.5.4	NON-COMPETITION.  Lessee acknowledges 
that upon and after any termination of this Lease, any competition 
by any member of the Leasing Group with any subsequent owner 
or subsequent lessee of the Leased Property (the "Purchaser") 
would cause irreparable harm to Lessor and any such Purchaser.  
To induce Lessor to enter into this Lease, Lessee agrees that, from 
and after the date hereof and thereafter until (a) in the case of the 
expiration of the Initial Term or a termination of this Lease, the 
fifth (5th) anniversary of the termination hereof or of the 
expiration of the Initial Term, as applicable, and (b) in the case of 
an expiration of any of the Extended Terms, the second (2nd) 

anniversary of the expiration of the applicable Extended Term, no 
member of the Leasing Group nor any Person holding or 
controlling, directly or indirectly, any interest in any member of 
the Leasing Group (collectively, the "Limited Parties") shall be 
involved in any capacity in or lend any of their names to or engage 
in any capacity in any assisted living facility, center, unit or 
program (or in any Person engaged in any such activity or any 
related activity competitive therewith) other than (a) those set forth 
on Schedule 11.5.4 annexed hereto, (b) those activities in which a 
Meditrust/Emeritus Transaction Affiliate is permitted to engage by 
the provisions of the Meditrust/Emeritus Transaction Documents 
which relate to any such facility, center, unit or program and (c) 
the acquisition of an ownership interest in any such facility, center, 
unit or program which is part of a single transaction in which an 
ownership interest in at least four (4) other facilities, centers, units 
or programs (provided, however, that if such acquisition occurs 
within the last twelve month period of the Initial Term or any of 
the Extended Terms, Lessee shall have the benefit of this clause (c) 
only if at the time such acquisition occurs Lessee has already (x) 
exercised in that twelve month period its right under Section 1.3 
hereof to extend the Term for another Extended Term or (y) given 
a Purchase Option Notice and has waived any right to rescind the 
same based upon the determination of the Fair Market Value of the 
Leased Property), whether such competitive activity shall be as an 
officer, director, owner, employee, agent, advisor, independent 
contractor, developer, lender, sponsor, venture capitalist, 
administrator, manager, investor, partner, joint venturer, consultant 
or other participant in any capacity whatsoever with respect to an 
assisted living facility, center, unit or program located within a five 
(5) mile radius of the Leased Property.

		Lessee hereby acknowledges and agrees that none of the 
time span, scope or area covered by the foregoing restrictive 
covenants is or are unreasonable and that it is the specific intent of 
Lessee that each and all of the restrictive covenants set forth 
hereinabove shall be valid and enforceable as specifically set forth 
herein.  Lessee further agrees that these restrictions are special, 
unique, extraordinary and reasonably necessary for the protection 
of Lessor and any Purchaser and that the violation of any such 
covenant by any of the Limited Parties would cause irreparable 
damage to Lessor and any Purchaser for which a legal remedy 
alone would not be sufficient to fully protect such parties.

		Therefore, in addition to and without limiting any other 
remedies available at law or hereunder, in the event that any of the 
Limited Parties breaches any of the restrictive covenants hereunder 
or shall threaten breach of any of such covenants, then Lessor and 
any Purchaser shall be entitled to obtain equitable remedies, 
including specific performance and injunctive relief, to prevent or 

otherwise restrain a breach of this Section 11.5.4 (without the 
necessity of posting a bond) and to recover any and all costs and 
expenses (including, without limitation, reasonable attorneys' fees 
and expenses and court costs) incurred in enforcing the provisions 
of this Section 11.5.4.  The existence of any claim or cause of 
action of any of the Limited Parties or any member of the Leasing 
Group against Lessor or any Purchaser, whether predicated on this 
Lease or otherwise, shall not constitute a defense to the 
enforcement by Lessor or any Purchaser of the foregoing 
restrictive covenants and the Limited Parties shall not defend on 
the basis that there is an adequate remedy at law.

		Without limiting any other provision of this Lease, the 
parties hereto acknowledge that the foregoing restrictive covenants 
are severable and separate.  If at any time any of the foregoing 
restrictive covenants shall be deemed invalid or unenforceable by a 
court having jurisdiction over this Lease, by reason of being vague 
or unreasonable as to duration, or geographic scope or scope of 
activities restricted, or for any other reason, such covenants shall 
be considered divisible as to such portion and such covenants shall 
be immediately amended and reformed to include only such 
covenants as are deemed reasonable and enforceable by the court 
having jurisdiction over this Lease to the full duration, geographic 
scope and scope of restrictive activities deemed reasonable and 
thus enforceable by said court; and the parties agree that such 
covenants as so amended and reformed, shall be valid and binding 
as through the invalid or unenforceable portion has not been 
included therein.

		The provisions of this Section 11.5.4 shall survive the 
termination of the Lease and any satisfaction of the Lease 
Obligations in connection therewith or subsequent thereto.  The 
parties hereto acknowledge and agree that any Purchaser may 
enforce the provisions of this Section 11.5.4 as a third party 
beneficiary.

		11.5.5	INTENTIONALLY DELETED.

		11.5.6	INTENTIONALLY DELETED.

		11.5.7	INTENTIONALLY DELETED.

		11.5.8	ERISA.  Lessee shall not establish or permit any 
Sublessee to establish any new pension or defined benefit plan or 
modify any such existing plan for employees subject to ERISA, 
which plan provides any benefits based on past service without the 
advance consent of Lessor (which consent shall not be 
unreasonably withheld) to the amount of the aggregate past service 
liability thereby created.

		11.5.9	FORGIVENESS OF INDEBTEDNESS.  Lessee 
will not waive, or permit any Sublessee or Manager which is an 
Affiliate to waive any debt or claim, except in the ordinary course 
of its business.

		11.5.10	VALUE OF ASSETS.  Except as disclosed in 
the financial statements provided to Lessor as of the date hereof, 
Lessee will not write up (by creating an appraisal surplus or 
otherwise) the value of any assets of Lessee above their cost to 
Lessee, less the depreciation regularly allowable thereon.

		11.5.11	CHANGES IN FISCAL YEAR AND 
ACCOUNTING PROCEDURES.  Upon notice to Lessor, Lessee 
may (a) change its fiscal year or capital structure or (b) change, 
alter, amend or in any manner modify in accordance with GAAP 
any of its current accounting procedures related to the method of 
revenue recognition, billing procedures or determinations of 
doubtful accounts or bad debt expenses or  permit any of its 
Subsidiaries to so change its fiscal year, provided that, in the event 
of such change, modification or alteration, Lessee and Lessor shall 
make such adjustments to the calculation of Additional Rent and 
the financial covenants contained herein as Lessor shall reasonably 
require to make the same consistent in result with the calculation 
thereof immediately prior to such change, modification or 
alteration.

ARTICLE 12

INSURANCE AND INDEMNITY

	12.1	GENERAL INSURANCE REQUIREMENTS.  During 
the Term of this Lease and thereafter until Lessee surrenders the Leased 
Property in the manner required by this Lease, Lessee shall at its sole cost 
and expense keep the Leased Property, the Tangible Personal Property 
located thereon and the business operations conducted on the Leased 
Property insured as set forth below.

		12.1.1	TYPES AND AMOUNTS OF INSURANCE.  
Lessee's insurance shall include the following:

			(a)	property loss and physical damage 
insurance on an all-risk basis (with only such exceptions 
as Lessor may in its reasonable discretion approve) 
covering the Leased Property (exclusive of Land) for its 
full replacement cost, which cost shall be reset once a year 
at Lessor's option, with an agreed-amount endorsement 
and a deductible not in excess of TWENTY FIVE 
THOUSAND DOLLARS ($25,000).  Such insurance shall 

include, without limitation, the following coverages: (i) 
increased cost of construction, (ii) cost of demolition, (iii) 
the value of the undamaged portion of the Facility and (iv) 
contingent liability from the operation of building laws, 
less exclusions provided in the normal "All Risk" 
insurance policy.  During any period of construction, such 
insurance shall be on a builder's-risk, completed value, 
non-reporting form (including all risk and extended 
coverage, collapse, cost of demolition, increased cost of 
construction and value of undamaged portion of the 
improvements protection) with permission to occupy;

			(b)	flood insurance (if the Leased Property 
or any portion thereof is situated in an area which is 
considered a flood risk area by the U.S. Department of 
Housing and Urban Development or any future 
governmental authority charged with such flood risk 
analysis in the future) in limits reasonably acceptable to 
Lessor and subject to the availability of such flood 
insurance;

			(c)	boiler and machinery insurance 
(including related electrical apparatus and components) 
under a standard comprehensive form, providing coverage 
against loss or damage caused by explosion of steam 
boilers, pressure vessels or similar vessels, now or 
hereafter installed on the Leased Property, in limits 
acceptable to Lessor;

			(d)	earthquake insurance (if reasonably 
deemed necessary by Lessor) in limits and with 
deductibles acceptable to Lessor;

			(e)	environmental impairment liability 
insurance (if available on commercially reasonable terms 
and deemed reasonably necessary by Lessor) in limits and 
with deductibles acceptable to Lessor;

			(f)	business interruption insurance in an 
amount equal to the annual Base Rent due hereunder plus 
the aggregate sum of the Impositions relating to the 
Leased Property due and payable during one year;

			(g)	comprehensive general public liability 
insurance including coverages commonly found in the 
Broad Form Commercial Liability Endorsements with 
amounts not less than FIVE MILLION DOLLARS 
($5,000,000) per occurrence with respect to bodily injury 

and death and THREE MILLION DOLLARS 
($3,000,000) for property damage and with all limits 
based solely upon occurrences at the Leased Property 
without any other impairment;

			(h)	professional liability insurance in an 
amount not less than TEN MILLION DOLLARS 
($10,000,000) for each medical incident;

			(i)	physical damage insurance on an all-
risk basis (with only such exceptions as Lessor in its 
reasonable discretion shall approve) covering the Tangible 
Personal Property for the full replacement cost thereof and 
with a deductible not in excess of one percent (1%) of the 
full replacement cost thereof;

			(j)	"Workers' Compensation and 
Employers' Liability Insurance providing protection 
against all claims arising out of injuries to all employees 
of Lessee or of any Sublessee (employed on the Leased 
Property or any portion thereof) in amounts equal for 
Workers' Compensation, to the statutory benefits payable 
to employees in the State and for Employers' Liability, to 
limits of not less than ONE HUNDRED THOUSAND 
DOLLARS ($100,000) for injury by accident, ONE 
HUNDRED THOUSAND DOLLARS ($100,000) per 
employee for disease and FIVE HUNDRED THOUSAND 
DOLLARS ($500,000) disease policy limit;

			(k)	subsidence insurance (if deemed 
necessary by Lessor) in limits acceptable to Lessor; and

			(l)	such other insurance as Lessor from 
time to time may reasonably require and also, as may from 
time to time be required by applicable Legal Requirements 
and/or by any Fee Mortgagee.

		12.1.2	INSURANCE COMPANY 
REQUIREMENTS.  All such insurance required by this Lease or 
the other Lease Documents shall be issued and underwritten by 
insurance companies licensed to do insurance business by, and in 
good standing under the laws of, the State and which companies 
have and maintain a rating of A:X or better by A.M. Best Co.

		12.1.3	POLICY REQUIREMENTS.  Every policy 
of insurance from time to time required under this Lease or any of 
the other Lease Documents (other than worker's compensation) 
shall name Lessor as owner, loss payee, secured party (to the extent 
applicable) and additional named insured as its interests may 
appear.  If an insurance policy covers properties other than the 
Leased Property, then Lessor shall be so named with respect only 
to the Leased Property.  Each such policy, where applicable or 
appropriate, shall:

			(a)	include an agreed amount endorsement 
and loss payee, additional named insured and secured 
party endorsements, in forms acceptable to Lessor in its 
reasonable discretion;

			(b)	include mortgagee, secured party, loss 
payable and additional named insured endorsements 
reasonably acceptable to each Fee Mortgagee;

			(c)	provide that the coverages may not be 
cancelled or materially modified except upon thirty (30) 
days' prior written notice to Lessor and any Fee 
Mortgagee;

			(d)	be payable to Lessor and any Fee 
Mortgagee notwithstanding any defense or claim that the 
insurer may have to the payment of the same against any 
other Person holding any other interest in the Leased 
Property;

			(e)	be endorsed with standard 
noncontributory clauses in favor of and in form 
reasonably acceptable to Lessor and any Fee Mortgagee;

			(f)	expressly waive any right of 
subrogation on the part of the insurer against Lessor, any 
Fee Mortgagee or the Leasing Group; and

			(g)	otherwise be in such forms as shall be 
reasonably acceptable to Lessor.

		12.1.4	NOTICES; CERTIFICATES AND 
POLICIES.  Lessee shall promptly provide to Lessor copies of any 
and all notices (including notice of non-renewal), claims and 
demands which Lessee receives from insurers of the Leased 
Property.  At least ten (10) days prior to the expiration of any 
insurance policy required hereunder, Lessee shall deliver to Lessor 
certificates and evidence of insurance relating to all renewals and 
replacements thereof, together with evidence, satisfactory to 
Lessor, of payment of the premiums thereon.  Lessee shall deliver 
to Lessor original counterparts or copies certified by the insurance 
company to be true and complete copies, of all insurance policies 
required hereunder not later than ten (10) days after receipt thereof 
by Lessee.  Lessee shall use its best efforts to obtain such 
counterparts or copies within ninety (90) days after the effective 
date of each such policy.

		12.1.5	LESSOR'S RIGHT TO PLACE 
INSURANCE.  If Lessee shall fail to obtain any insurance policy 
required hereunder by Lessor, or shall fail to deliver the certificate 
and evidence of insurance relating to any such policy to Lessor, or 
if any insurance policy required hereunder (or any part thereof) 
shall expire or be cancelled or become void or voidable by reason 
of any breach of any condition thereof, or if Lessor reasonably 
determines that such insurance coverage is unsatisfactory by reason 
of the failure or impairment of the capital of any insurance 
company which wrote any such policy, upon demand by Lessor, 
Lessee shall promptly but in any event in not more than ten (10) 
days thereafter obtain new or additional insurance coverage on the 
Leased Property, or for those risks required to be insured by the 
provisions hereof, satisfactory to Lessor, and, in the event Lessee 
fails to perform its obligations under this Section and at its option, 
Lessor may obtain such insurance and pay the premium or 
premiums therefor; in which event, any amount so paid or 
advanced by Lessor and all costs and expenses incurred in 
connection therewith (including, without limitation, reasonable 
attorneys' fees and expenses and court costs), shall be a demand 
obligation of Lessee to Lessor, payable as an Additional Charge.

		12.1.6	PAYMENT OF PROCEEDS.  All insurance 
policies required hereunder (except for general public liability, 
professional liability and workers' compensation and employers 
liability insurance) shall provide that in the event of loss, injury or 
damage, subject to the rights of any Fee Mortgagee, all proceeds 
shall be paid to Lessor alone (rather than jointly to Lessee and 
Lessor).  Lessor is hereby authorized to adjust and compromise any 
such loss with the consent of Lessee or, following any Lease 
Default, whether or not cured, without the consent of Lessee, and 
to collect and receive such proceeds in the name of Lessor and 
Lessee, and Lessee appoints Lessor (or any agent designated by 

Lessor) as Lessee's attorney-in-fact with full power of substitution, 
to endorse Lessee's name upon any check in payment thereof.  
Subject to the provisions of Article 13, such insurance proceeds 
shall be applied first toward reimbursement of all costs and 
expenses reasonably incurred by Lessor in collecting said 
insurance proceeds, then toward payment of the Lease Obligations 
or any portion thereof, which have not been paid when due and 
payable or within any applicable cure period, in such order as 
Lessor determines, and then in whole or in part toward restoration, 
repair or reconstruction of the Leased Property for which such 
insurance proceeds shall have been paid.

		12.1.7	IRREVOCABLE POWER OF 
ATTORNEY.  The power of attorney conferred on Lessor pursuant 
to the provisions of Section 12.1, being coupled with an interest, 
shall be irrevocable for as long as this Lease is in effect or any 
Lease Obligations are outstanding, shall not be affected by any 
disability or incapacity which Lessee may suffer and shall survive 
the same.  Such power of attorney, is provided solely to protect the 
interests of Lessor and shall not impose any duty on Lessor to 
exercise any such power, and neither Lessor nor such attorney-in-
fact shall be liable for any act, omission, error in judgment or 
mistake of law, except as the same may result from its gross 
negligence or wilful misconduct.

		12.1.8	BLANKET POLICIES.  Notwithstanding 
anything to the contrary contained herein, Lessee's obligations to 
carry the insurance provided for herein may be brought within the 
coverage of a so-called blanket policy or policies of insurance 
carried and maintained by Lessee and its Affiliates; provided, 
however, that the coverage afforded to Lessor shall not be reduced 
or diminished or otherwise be different from that which would 
exist under a separate policy meeting all other requirements of this 
Lease by reason of the use of such blanket policy of insurance, and 
provided, further that the requirements of Section 12.1 are 
otherwise satisfied.

		12.1.9	NO SEPARATE INSURANCE.  Lessee 
shall not, on Lessee's own initiative or pursuant to the request or 
requirement of any other Person, take out separate insurance 
concurrent in form or contributing in the event of loss with the 
insurance required hereunder to be furnished by Lessee, or increase 
the amounts of any then existing insurance by securing an 
additional policy or additional policies, unless (a) all parties having 
an insurable interest in the subject matter of the insurance, 
including Lessor, are included therein as additional insureds and 
(b) losses are payable under said insurance in the same manner as 
losses are required to be payable under this Lease.  Lessee shall 

immediately notify Lessor of the taking out of any such separate 
insurance or of the increasing of any of the amounts of the then existing 
insurance by securing an additional insurance policy or policies.
	
	12.1.10	ASSIGNMENT OF UNEARNED PREMIUMS.  Lessee 
hereby assigns to Lessor all rights of Lessee in and to any unearned 
premiums on any insurance policy required hereunder to be furnished by 
Lessee which may become payable or are refundable after the occurrence of 
an Event of Default hereunder, which premium, upon receipt thereof, 
Lessor shall at Lessor's option apply toward the Lease Obligations or hold 
as security therefor.  In the event that this Lease is terminated for any 
reason (other than the purchase of the Leased Property by Lessee), the 
insurance policies required to be maintained hereunder, including all right, 
title and interest of Lessee thereunder, shall become the absolute property 
of Lessor subject to any limitation on assignment provided for therein.

	12.2	INDEMNITY.

		12.2.1	INDEMNIFICATION.  Except with respect 
to the gross negligence or wilful misconduct of Lessor or any of 
the other Indemnified Parties, as to which no indemnity is 
provided, Lessee hereby agrees to defend with counsel reasonably 
acceptable to Lessor, against all claims and causes of action and to 
indemnify and hold harmless Lessor and each of the other 
Indemnified Parties from and against all damages, losses, 
liabilities, obligations, penalties, costs and expenses (including, 
without limitation, reasonable attorneys' fees, court costs and other 
expenses of litigation) suffered by, or claimed or asserted against, 
Lessor or any of the other Indemnified Parties, directly or 
indirectly, by any Person other than a member of the Leasing 
Group who prevails in such claim or action based on, arising out of 
or resulting from (a) the use and occupancy of the Leased Property 
or any business conducted therein, (b) any act, fault, omission to 
act or misconduct by (i) any member of the Leasing Group, (ii) any 
Affiliate of Lessee or (iii) any employee, agent, licensee, business 
invitee, guest, customer, contractor or sublessee of any of the 
foregoing parties, relating to, directly or indirectly, the Leased 
Property, (c) any accident, injury or damage whatsoever caused to 
any Person, including, without limitation, any claim of malpractice, 
or to the property of any Person in or about the Leased Property or 
outside of the Leased Property where such accident, injury or 
damage results or is claimed to have resulted from any act, fault, 
omission to act or misconduct by any member of the Leasing 
Group or any Affiliate of Lessee or any employee, agent, licensee, 
contractor or sublessee of any of the foregoing parties, (d) any 
Lease Default, (e) any claim brought or threatened against Lessor 
by any member of the Leasing Group or by any other Person on 
account of (i) Lessor's relationship with any member of the Leasing 
Group pertaining in any way to the Leased Property and/or the 
transaction evidenced by the Lease Documents and/or (ii) Lessor's 
negotiation of, entering into and/or performing any of its 
obligations and/or exercising any of its right and remedies under 
any of the Lease Documents, (f) any attempt by any member of the 
Leasing Group or any Affiliate of Lessee to transfer or relocate any 
of the Permits to any location other than the Leased Property 
and/or (g) the enforcement of this indemnity.  Any amounts which 
become payable by Lessee under this Section 12.2.1 shall be a 
demand obligation of Lessee to Lessor, payable as an Additional 
Charge.  The indemnity provided for in this Section 12.2.1 shall 
survive any termination of this Lease.

		12.2.2	INDEMNIFIED PARTIES.  As used in this 
Lease the term "Indemnified Parties" shall mean the Meditrust 
Entities, any Fee Mortgagee and their respective successors, 
assigns, employees, servants, agents, attorneys, officers, directors, 
shareholders, partners and owners.

		12.2.3	LIMITATION ON LESSOR LIABILITY.  
Neither Lessor nor any Affiliate of Lessor shall be liable to any 
member of the Leasing Group or any Affiliate of any member of 
the Leasing Group, or to any other Person whatsoever for any 
damage, injury, loss, compensation, or claim (including, but not 
limited to, any claim for the interruption of or loss to any business 
conducted on the Leased Property) based on, arising out of or 
resulting from any cause whatsoever, including, but not limited to, 
the following:  (a) repairs to the Leased Property, (b) interruption 
in use of the Leased Property; (c) any accident or damage resulting 
from the use or operation of the Leased Property or any business 
conducted thereon; (d) the termination of this Lease by reason of 
Casualty or Condemnation, (e) any fire, theft or other casualty or 
crime, (f) the actions, omissions or misconduct of any other 
Person, (g) damage to any property, or (h) any damage from the 
flow or leaking of water, rain or snow.  All Tangible Personal 
Property and the personal property of any other Person on the 
Leased Property shall be at the sole risk of Lessee and Lessor shall 
not in any manner be held responsible therefor (except in the event 
of loss caused by the gross negligence or willful misconduct of 
Lessor).  Notwithstanding the foregoing, Lessor shall not be 
released from liability for any injury, loss, damage or liability 
suffered by Lessee to the extent caused directly by the gross 
negligence or willful misconduct of Lessor, its servants, employees 
or agents acting within the scope of their authority on or about the 
Leased Property or in regards to the Lease; provided, however, that 
in no event shall Lessor, its servants, employees or agents have any 
liability based on any loss for any indirect or consequential 
damages. or

		12.2.4	RISK OF LOSS.  During the Term of this 
Lease, the risk of loss or of decrease in the enjoyment and 
beneficial use of the Leased Property in consequence of any 
damage or destruction thereof by fire, the elements, casualties, 
thefts, riots, wars or otherwise, or in consequence of foreclosures, 
levies or executions  of Liens (other than those created by Lessor in 
accordance with the provisions of Article 20) is assumed by Lessee 
and, in the absence of the gross negligence or willful misconduct as 
set forth in Section 12.2.3, Lessor shall in no event be answerable 
or accountable therefor (except for the obligation to account for 
insurance proceeds and Awards to the extent provided for in 
Articles 13 and 14) nor shall any of the events mentioned in this 
Section entitle Lessee to any abatement of Rent (except for an 
abatement, if any, as specifically provided for in Section 3.7).

ARTICLE 13

FIRE AND CASUALTY

	13.1	RESTORATION FOLLOWING FIRE OR OTHER 
CASUALTY.

		13.1.1	FOLLOWING FIRE OR CASUALTY.  In 
the event of any damage or destruction to the Leased Property by 
reason of fire or other hazard or casualty (a "Casualty"), Lessee 
shall give immediate written notice thereof to Lessor and, subject 
to the terms of this Article 13 and any applicable Legal 
Requirements, Lessee shall proceed with reasonable diligence, in 
full compliance with all applicable Legal Requirements, to perform 
such repairs, replacement and reconstruction work (referred to 
herein as the "Work") to restore the Leased Property to the 
condition it was in immediately prior to such damage or 
destruction and to a condition adequate to operate the Facility for 
the Primary Intended Use and, if applicable, the Other Permitted 
Uses and in compliance with applicable Legal Requirements.  All 
Work shall be performed and completed in accordance with all 
applicable Legal Requirements and the other requirements of this 
Lease within one hundred and twenty (120) days following the 
occurrence of the damage or destruction plus a reasonable time to 
compensate for Unavoidable Delays (including for the purposes of 
this Section, delays in obtaining Permits and in adjusting insurance 
losses), but in no event beyond two-hundred and seventy (270) 
days following the occurrence of the Casualty.

		13.1.2	PROCEDURES.  In the event that any 
Casualty results in non-structural damage to the Leased Property in 
excess of FIFTY THOUSAND DOLLARS ($50,000) or in any 
structural damage to the Leased Property, regardless of the extent 
of such structural damage, prior to commencing the Work, Lessee 
shall comply with the following requirements:

			(a)	Lessee shall furnish to Lessor complete 
plans and specifications for the Work (collectively and as 
the same may be modified and amended from time to time 
pursuant to the terms hereof, the "Plans and 
Specifications"), for Lessor's approval, in each instance, 
which approval shall not be unreasonably withheld.  The 
Plans and Specifications shall bear the signed approval 
thereof by an architect, licensed to do business in the 
State, reasonably satisfactory to Lessor (in the event 
Lessor reasonably determines that the Work is of a nature 
for which the involvement of an architect is appropriate) 
and shall be accompanied by a written estimate from the 
architect, bearing the architect's seal, of the entire cost of 

completing the Work, and to the extent feasible, the Plans 
and Specifications shall provide for Work of such nature, 
quality and extent, that, upon the completion thereof, the 
Leased Property shall be at least equal in value and 
general utility to its value and general utility prior to the 
Casualty and shall be adequate to operate the Leased 
Property for the Primary Intended Use and, if applicable, 
the Other Permitted Uses;

			(b)	Lessee shall furnish to Lessor certified 
or photostatic copies of all Permits and Contracts required 
by all applicable Legal Requirements in connection with 
the commencement and conduct of the Work to the extent 
the same can be secured in the ordinary course prior to the 
commencement of construction;

			(c)	Lessee shall furnish to Lessor a cash 
deposit or a payment and performance bond sufficient to 
pay for completion of and payment for the Work in an 
amount not less than the architect's estimate of the entire 
cost of completing the Work, less the amount of property 
insurance proceeds (net of costs and expenses incurred by 
Lessor in collecting the same), if any, then held by Lessor 
and which Lessor shall be required to apply toward 
restoration of the Leased Property as provided in Section 
13.2;

			(d)	Lessee shall furnish to Lessor such 
insurance with respect to the Work (in addition to the 
insurance required under Section 12.1 hereof) in such 
amounts and in such forms as is reasonably required by 
Lessee; and

			(e)	Lessee shall not commence any of the 
Work until Lessee shall have complied with the 
requirements set forth in clauses (a) through (d) 
immediately above, as applicable, and, thereafter, Lessee 
shall perform the Work diligently, in a good and 
workmanlike fashion and in good faith in accordance with 
(i) the Plans and Specifications referred to in clause (a) 
immediately above, (ii) the Permits and Contracts referred 
to in clause (b) immediately above and (iii) all applicable 
Legal Requirements and other requirements of this Lease; 
provided, however, that in the event of a bona fide 
emergency during which Lessee is unable to contact the 
appropriate representatives of Lessor, Lessee may 
commence such Work as may be necessary in order to 
address such emergency without Lessor's prior approval,

as long as Lessee immediately thereafter advises Lessor of 
such emergency and the nature and scope of the Work 
performed and obtains Lessor's approval of the remaining 
Work to be completed.

		13.1.3	DISBURSEMENT OF INSURANCE 
PROCEEDS.  If, as provided in Section 13.2, Lessor is required to 
apply any property insurance proceeds toward repair or restoration 
of the Leased Property, then as long as the Work is being diligently 
performed by Lessee in accordance with the terms and conditions 
of this Lease, Lessor shall disburse such insurance proceeds from 
time to time during the course of the Work in accordance with and 
subject to satisfaction of the following provisions and conditions.  
Lessor shall not be required to make disbursements more often 
than at thirty (30) day intervals.  Lessee shall submit a written 
request for each disbursement at least ten (10) Business Days in 
advance and shall comply with the following requirements in 
connection with each disbursement:

			(a)	Prior to the commencement of any 
Work, Lessee shall have received Lessor's written 
approval of the Plans and Specifications (which approval 
shall not be unreasonably withheld) and the Work shall be 
supervised by an experienced construction manager with 
the consultation of an architect or engineer qualified and 
licensed to do business in the State (in the event Lessor 
reasonably determines that the Work is of a nature for 
which the involvement of such architect or engineer is 
appropriate).  Lessee shall not make any changes in, and 
shall not permit any changes in, the quality of the 
materials to be used in the Work, the Plans and 
Specifications or the Work, whether by change order or 
otherwise, without the prior written consent of Lessor, in 
each instance (which consent may be withheld in Lessor's 
sole and absolute discretion); provided, however, that such 
consent shall not be required for any individual change 
which has been approved by the architect, which does not 
materially affect the structure or exterior of the Facility, 
and the cost of which does not exceed TEN THOUSAND 
DOLLARS ($10,000) or which changes, in the aggregate, 
do not exceed ONE HUNDRED THOUSAND DOLLARS 
($100,000) in cost.  Notwithstanding the foregoing, prior 
to making any change in Plans and Specifications, copies 
of all change orders shall be submitted by Lessee to 
Lessor and Lessee shall also deliver to Lessor evidence 
satisfactory to Lessor, in its reasonable discretion, that all 
necessary Permits and/or Contracts required by any 
Governmental Authority in connection therewith have 
been obtained or entered into, as the case may be.

			(b)	Each request for payment shall be 
accompanied by (x) a certificate of the architect or 
engineer, bearing the architect's or engineer's seal, and 
(y) a certificate of the general contractor, qualified and 
licensed to do business in the State, that is performing the 
Work (collectively, the "Work Certificates"), each dated 
not more than ten (10) days prior to the application for 
withdrawal of funds, and each stating:

			(i)	that all of the Work performed as of the 
date of the certificates has been 
completed in compliance with the 
approved Plans and Specifications, 
applicable Contracts and all applicable 
Legal Requirements;

			(ii)	that the sum then requested to be 
withdrawn has been paid by Lessee or 
is justly due to contractors, 
subcontractors, materialmen, engineers, 
architects or other Persons, whose 
names and addresses shall be stated 
therein, who have rendered or furnished 
certain services or materials for the 
Work, and the certificate shall also 
include a brief description of such 
services and materials and the principal 
subdivisions or categories thereof and 
the respective amounts so paid or due to 
each of said Persons in respect thereof 
and stating the progress of the Work up 
to the date of said certificate;

			(iii)	that the sum then requested to be 
withdrawn, plus all sums previously 
withdrawn, does not exceed the cost of 
the Work insofar as actually 
accomplished up to the date of such 
certificate;

			(iv)	that the remainder of the funds held by 
Lessor will be sufficient to pay for the 
full completion of the Work in 
accordance with the Plans and 
Specifications;

			(v)	that no part of the cost of the services 
and materials described in the 
applicable Work Certificate has been or 
is being made the basis of the 
withdrawal of any funds in any 
previous or then pending application; 
and

			(vi)	that, except for the amounts, if any, 
specified in the applicable Work 
Certificate  to be due for services and 
materials, there is no outstanding 
indebtedness known, after due inquiry, 
which is then due and payable for work, 
labor, services or materials in 
connection with the Work which, if 
unpaid, might become the basis of a 
vendor's, mechanic's, laborer's or 
materialman's statutory or other similar 
Lien upon the Leased Property.

			(c)	Lessee shall deliver to Lessor 
satisfactory evidence that the Leased Property and all 
materials and all property described in the Work 
Certificates are free and clear of Liens, except (i) Liens, if 
any, securing indebtedness due to Persons (whose names 
and addresses and the several amounts due them shall be 
stated therein) specified in an applicable Work Certificate, 
which Liens shall be discharged upon disbursement of the 
funds then being requested or duly contested in 
accordance with the terms of this Lease Agreement, (ii) 
any Fee Mortgage and (iii) the Permitted Encumbrances.  
Lessor shall accept as satisfactory evidence of the 
foregoing lien waivers in customary form from the general 
contractor and all subcontractors performing the Work, 
together with an endorsement of its title insurance policy 
(relating to the Leased Property) in form acceptable to 
Lessor, dated as of the date of the making of the then 
current disbursement, confirming the foregoing.

			(d)	If the Work involves alteration or 
restoration of the exterior of any Leased Improvement that 
changes the footprint of any Leased Improvement, Lessee 
shall deliver to Lessor, upon the request of Lessor, an "as-
built" survey of the Leased Property dated as of a date 
within ten (10) days prior to the making of the first and 
final advances (or revised to a date within ten (10) days 
prior to each such advance) showing no encroachments 
other than such encroachments, if any, by the Leased 

Improvements upon or over the Permitted Encumbrances 
as are in existence as of the date hereof.

			(e)	Lessee shall deliver to Lessor (i) an 
opinion of counsel (satisfactory to Lessor both as to 
counsel and as to the form of opinion) prior to the first 
advance opining that all necessary Permits for the repair, 
replacement and/or restoration of the Leased Property 
which can be obtained in the ordinary course as of said 
date have been obtained and  that the Leased Property, if 
repaired, replaced or rebuilt in accordance, in all material 
respects, with the approved Plans and Specifications and 
such Permits, shall comply with all applicable Legal 
Requirements subject to such limitations as may be 
imposed on such opinion under local law and (ii) if 
applicable, an architect's certificate (satisfactory to Lessor 
both as to the architect and as to the form of the 
certificate) prior to the final advance, certifying that the 
Leased Property was repaired, replaced or rebuilt in 
accordance, in all material respects, with the approved 
Plans and Specifications and complies with all applicable 
Legal Requirements, including, without limitation, all 
Permits referenced in the foregoing clause (i).

			(f)	There shall be no Lease Default or any 
state of facts or circumstance existing which, with the 
giving of notice and/or the passage of time, would 
constitute any Lease Default.

	Lessor, at its option, may waive any of the foregoing requirements 
in whole or in part in any instance.  Upon compliance by Lessee 
with the foregoing requirements (except for such requirements, if 
any, as Lessor may have expressly elected to waive), and to the 
extent of (x) the insurance proceeds, if any, which Lessor may be 
required to apply to restoration of the Leased Property pursuant to 
the provisions of this Lease and (y) all other cash deposits made by 
Lessee, Lessor shall make available for payment to the Persons 
named in the Work Certificate the respective amounts stated in said 
certificate(s) to be due, subject to a retention of ten percent (10%) 
as to all hard costs of the Work (the "Retainage").  It is understood 
that the Retainage is intended to provide a contingency fund to 
assure Lessor that the Work shall be fully completed in accordance 
with the Plans and Specifications and the requirements of Lessor.  
Upon the full and final completion of all of the Work in accordance 
with the provisions hereof, the Retainage shall be made available 
for payment to  those Persons entitled thereto. 

	Upon completion of the Work, and as a condition precedent to 
making any further advance, in addition to the requirements set 
forth above, Lessee shall promptly deliver to Lessor:

		(i)	if applicable, written certificates of the architect 
or engineer, bearing the architect's or engineer's 
seal, and the general contractor, certifying that 
the Work has been fully completed in a good and 
workmanlike manner in material compliance 
with the Plans and Specifications and all 
applicable Legal Requirements;

		(ii)	an endorsement of its title insurance policy 
(relating to the Leased Property) in form 
reasonably acceptable to Lessor insuring the 
Leased Property against all mechanic's and 
materialman's liens accompanied by the final 
lien waivers from the general contractor and all 
subcontractors;

		(iii)	a certificate by Lessee in form and substance 
reasonably satisfactory to Lessor, listing all costs 
and expenses in connection with the completion 
of the Work and the amount paid by Lessee with 
respect to the Work; and

		(iv)	a temporary certificate of occupancy (if 
obtainable) and all other applicable Permits and 
Contracts issued by or entered into with any 
Governmental Authority with respect to the 
Primary Intended Use not already delivered to 
Lessor and, to the extent applicable, the Other 
Permitted Uses and by the appropriate Board of 
Fire Underwriters or other similar bodies acting 
in and for the locality in which the Leased 
Property is situated with respect to the Facility; 
provided, that within thirty (30) days after 
completion of the Work, Lessee shall obtain and 
deliver to Lessor a permanent certificate of 
occupancy for the Leased Property, subject to 
seasonal delays.

		Upon completion of the Work and delivery of the 
documents required pursuant to the provisions of this Section 13.1, 
Lessor shall pay the Retainage to Lessee or to those Persons 
entitled thereto and if there shall be insurance proceeds or cash 
deposits, other than the Retainage, held by Lessor in excess of the 
amounts disbursed pursuant to the foregoing provisions, then 
provided that no Lease Default has occurred and is continuing, nor 
any state of facts or circumstances which, with the giving of notice 
and/or the passage of time would constitute a Lease Default, Lessor 
shall pay over such proceeds or cash deposits to Lessee.

		No inspections or any approvals of the Work during or 
after construction shall constitute a warranty or representation by 
Lessor, or any of its agents or Consultants, as to the technical 
sufficiency, adequacy or safety of any structure or any of its 
component parts, including, without limitation, any fixtures, 
equipment or furnishings, or as to the subsoil conditions or any 
other physical condition or feature pertaining to the Leased 
Property.  All acts, including any failure to act, relating to Lessor 
are performed solely for the benefit of Lessor to assure the 
payment and performance of the Lease Obligations and are not for 
the benefit of Lessee or the benefit of any other Person.

	13.2	DISPOSITION OF INSURANCE PROCEEDS.

		13.2.1	PROCEEDS TO BE RELEASED TO PAY 
FOR WORK.  In the event of any Casualty, except as provided for 
in Section 13.2.2, Lessor shall release proceeds of property 
insurance held by it to pay for the Work in accordance with the 
provisions and procedures set forth in this Article 13, only if:

			(a)	all of the terms, conditions and 
provisions of Sections 13.1 and 13.2.1 are satisfied;

			(b)	Lessee demonstrates to Lessor's 
satisfaction that Lessee has the financial ability to satisfy 
the Lease Obligations during such repair or restoration; 
and

			(c)	no Sublease material to the operation of 
the Facility immediately prior to such damage or taking 
shall have been cancelled or terminated, nor contain any 
still exercisable right to cancel or terminate, due to such 
Casualty if and to the extent that the income from such 
Sublease is necessary in order to avoid the violation of any 
of the financial covenants set forth in this Lease or 
otherwise to avoid the creation of an Event of Default.

	If a Fee Mortgagee prevents Lessor from releasing proceeds of 
property insurance notwithstanding the satisfaction of the 
foregoing requirements, Lessee shall have no obligation to restore 
the Casualty to which such proceeds pertain.

		13.2.2	PROCEEDS NOT TO BE RELEASED.  If, 
as the result of any Casualty,  the Leased Property is damaged to 
the extent it is rendered Unsuitable For Its Primary Intended Use 
and if either:  (a) Lessee, after exercise of diligent efforts, cannot 
within a reasonable time (not in excess of ninety (90) days) obtain 
all necessary Permits in order to be able to perform all required 
Work and to again operate the Facility for its Primary Intended Use 
and, if applicable, the Other Permitted Uses within two hundred 
and seventy (270) days from the occurrence of the damage or 
destruction in substantially the manner as immediately prior to 
such damage or destruction or (b) such Casualty occurs during the 
last twenty-four (24) months of the Term and would reasonably 
require more than nine (9) months to obtain all Permits and 
complete the Work, then Lessee may either (i) acquire the Leased 
Property from Lessor for a purchase price equal to the greater of 
(x) the Meditrust Investment or (y) the Fair Market Value of the 
Leased Property minus the Fair Market Added Value, with the Fair 
Market Value and the Fair Market Added Value to be determined 
as of the day immediately prior to such Casualty and prior to any 
other Casualty which has not been fully repaired, restored or 
replaced, in which event, Lessee shall be entitled upon payment of 
the full purchase price to receive all property insurance proceeds 
(less any costs and expenses incurred by Lessor in collecting the 
same), or (ii) terminate this Lease, in which event (subject to the 
provisions of the last sentence of this Section 13.2.2) Lessor shall 
be entitled to receive and retain the insurance proceeds; provided, 
however, that Lessee shall only have such right of termination 
effective upon payment to Lessor of all Rent and other sums due 
under this Lease and the other Lease Documents through the date 
of termination plus an amount, which when added to the sum of 
(1) the Fair Market Value of the Leased Property as affected by all 
unrepaired or unrestored damage due to any Casualty (and giving 
due regard for delays, costs and expenses incident to completing all 
repair or restoration required to fully repair or restore the same) 
plus (2) the amount of insurance proceeds actually received by 
Lessor (net of costs and expenses incurred by Lessor in collecting 
the same) equals (3) the greater of the Meditrust Investment or the 
Fair Market Value of the Leased Property minus the Fair Market 
Added Value, with the Fair Market Value and the Fair Market 
Added Value to be determined as of the day immediately prior to 
such Casualty and prior to any other Casualty which has not been 
fully repaired.  Any acquisition of the Leased Property pursuant to 
the terms of this Section 13.2.2 shall be consummated in 
accordance with the provisions of Article 18, mutatis, mutandis.  If 

such termination becomes effective, Lessor shall assign to Lessee 
any outstanding insurance claims and, at Lessee's expense, shall 
cooperate in Lessee's efforts to secure the same.  In the event this 
Lease is terminated pursuant to the provisions of this Section 
13.2.2 and the insurance proceeds received by Lessor in connection 
therewith (net of costs and expenses incurred in obtaining such 
proceeds) exceeds one hundred fifteen percent (115%) of the Fair 
Market Value of the Leased Premises at the time of such 
termination, Lessor shall pay to Lessee fifty percent (50%) of the 
amount of such excess. 

	13.3	TANGIBLE PERSONAL PROPERTY.  All insurance 
proceeds payable by reason of any loss of or damage to any of the Tangible 
Personal Property shall be paid to Lessor as secured party, subject to the 
rights of the holders of any Permitted Prior Security Interests, and, 
thereafter, provided that no Lease Default, nor any fact or circumstance 
which with the giving of notice and/or the passage of time could constitute 
a Lease Default, has occurred and is continuing, Lessor shall pay such 
insurance proceeds to Lessee to reimburse Lessee for the cost of repairing 
or replacing the damaged Tangible Personal Property, subject to the terms 
and conditions set forth in the other provisions of this Article 13, mutatis 
mutandis.

	13.4	RESTORATION OF CERTAIN IMPROVEMENTS AND 
THE TANGIBLE PERSONAL PROPERTY.  If Lessee is required or elects 
to restore the Facility, Lessee shall either (a) restore (i) all alterations and
improvements to the Leased Property made by Lessee and (ii) the Tangible 
Personal Property or (b) replace such alterations and improvements and the 
Tangible Personal Property with improvements or items of the same or 
better quality and utility in the operation of the Leased Property provided, 
however, that Lessee shall be obligated to so restore or replace the Tangible 
Personal Property only to the extent desirable for the prudent operation of 
the Facility in the good faith exercise of commercially reasonable business 
judgment.

	13.5	NO ABATEMENT OF RENT.  In no event shall any Rent 
abate as a result of any Casualty except as expressly provided in Section 
3.7.

	13.6	TERMINATION OF CERTAIN RIGHTS.  Any 
termination of this Lease pursuant to this Article 13 shall cause any right of 
Lessee to extend the Term of this Lease granted to Lessee herein and any 
right of Lessee to purchase the Leased Property contained in this Lease to 
be terminated and to be without further force or effect.

	13.7	WAIVER.  Lessee hereby waives any statutory rights of 
termination which may arise by reason of any damage or destruction to the 
Leased Property due to any Casualty which Lessee is obligated to restore or 
may restore under any of the provisions of this Lease.

	13.8	APPLICATION OF RENT LOSS AND/OR BUSINESS 
INTERRUPTION INSURANCE.  Lessor shall direct all proceeds of rent 
loss and/or business interruption insurance (collectively, "Rent Insurance 
Proceeds") to be paid to Lessee, provided no fact or circumstance exists 
which constitutes, or with notice, or passage of time, or both, would 
constitute, a Lease Default pertaining to the Facility or the Leased Property. 
 If a Lease Default or such fact or circumstance exists, Lessor may rescind 
such direction and apply all such insurance proceeds towards the Lease 
Obligations pertaining to the Facility or the Leased Property or hold such 
proceeds as security therefor.

	13.9	OBLIGATION TO ACCOUNT.  Upon Lessee's written 
request, which may not be made not more than once in any three (3) month 
period, Lessor shall provide Lessee with a  written accounting of the 
application of all insurance proceeds received by Lessor.

ARTICLE 14

CONDEMNATION

	14.1	PARTIES' RIGHTS AND OBLIGATIONS.  If during the 
Term there is any Taking of all or any part of the Leased Property or any 
interest in this Lease, the rights and obligations of the parties shall be 
determined by this Article 14.

	14.2	TOTAL TAKING.  If there is a permanent Taking of all 
or substantially all of the Leased Property, this Lease shall terminate on the 
Date of Taking.  In the event this Lease is terminated pursuant to the 
provisions of this Section 14.2 and the Award received by Lessor in 
connection therewith (net of costs and expenses incurred in obtaining such 
Award) exceeds one hundred fifteen percent (115%) of the Fair Market 
Value of the Leased Premises at the time of such termination, Lessor shall 
pay to Lessee fifty percent (50%) of the amount of such excess.

	14.3	PARTIAL OR TEMPORARY TAKING.  If there is a 
Permanent Taking of a portion of the Leased Property, or if there is a 
temporary Taking of all or a portion of the Leased Property, this Lease shall 
remain in effect so long as the Leased Property is not thereby rendered 
permanently Unsuitable For Its Primary Intended Use or temporarily 
Unsuitable For Its Primary Intended Use for a period not likely to, or which 
does not, exceed two hundred and seventy (270) days.  If, however, the 
Leased Property is thereby so rendered permanently or temporarily 
Unsuitable For Its Primary Intended Use:  (a) if only rendered temporarily 
Unsuitable For Its Primary Intended Use, Lessee shall have the right to 
restore the Leased Property, at its own expense (subject to the right under 
certain circumstances as provided for in Section 14.5 to receive the net 
proceeds of an Award for reimbursement), to the extent possible, to 
substantially the same condition as existed immediately before the partial or 

temporary Taking or (b) Lessee shall have the right to acquire the Leased 
Property from Lessor (i) upon payment of all Rent due through the date that 
the purchase price is paid, for a purchase price equal to the greater of (x) the
Meditrust Investment or (y) the Fair Market Value of the Leased Property 
minus the Fair Market Added Value, with the Fair Market Value of the 
Leased Property and the Fair Market Added Value to be determined as of 
the day immediately prior to such partial or temporary Taking and (ii) in 
accordance with the terms and conditions set forth in Article 18; in which 
event, this Lease shall terminate upon payment of such purchase price and 
the consummation of such acquisition.  Notwithstanding the foregoing, 
Lessor may overrule Lessee's election under clause (a) or (b) and instead 
either (1) terminate this Lease (with no obligation on the part of Lessee to 
acquire the Leased Property as a result thereof) as of the date when Lessee 
is required to surrender possession of the portion of the Leased Property so 
taken if (X) such portion comprises more than thirty percent (30%) of the 
Leased Property or of the residential building(s) located thereon or (Y) 
possession thereof is to be surrendered within two years of the expiration of 
the Term or (2) compel Lessee to keep the Lease in full force and effect and 
to restore the Leased Property as provided in clause (a) above, but only if 
the Leased Property may be operated for at least eighty percent (80%) of 
the licensed unit capacity of the Facility in effect prior to the Taking.  
Lessee shall exercise its election under this Section 14.3 by giving Lessor 
notice thereof ("Lessee's Election Notice") within sixty (60) days after 
Lessee receives notice of the Taking.  Lessor shall exercise its option to 
overrule Lessee's election under this Section 14.3 by giving Lessee notice 
of Lessor's exercise of its rights under Section 14.3 within thirty (30) days 
after Lessor receives Lessee's Election Notice.  If, as the result of any such 
partial or temporary Taking, this Lease is not terminated as provided above, 
Lessee shall be entitled to an abatement of Rent, but only to the extent, if 
any, provided for in Section 3.7, effective as of the date upon which the 
Leased Property is rendered Unsuitable For Its Primary Intended Use.   

	14.4	RESTORATION.  If there is a partial or temporary Taking 
of the Leased Property and this Lease remains in full force and effect 
pursuant to Section 14.3, Lessee shall accomplish all necessary restoration 
and Lessor shall release the net proceeds of such Award to reimburse 
Lessee for the actual reasonable costs and expenses thereof, subject to all of 
the conditions and provisions set forth in Article 13 as though the Taking 
was a Casualty and the Award was insurance proceeds.  If the cost of the 
restoration exceeds the amount of the Award (net of costs and expenses 
incurred in obtaining the Award), Lessee shall be obligated to contribute 
any excess amount needed to restore the Facility or pay for such costs and 
expenses.  To the extent that the cost of restoration is less than the amount 
of the Award (net of cost and expenses incurred in obtaining the Award), 
the remainder of the Award shall be retained by Lessor and Rent shall be 
abated as set forth in Section 3.7.

	14.5	AWARD DISTRIBUTION.  In the event Lessee 
completes the purchase of the Leased Property, as described in Section 
14.3, the entire Award shall, upon payment of the purchase price and all 
Rent and other sums due under this Lease and the other Lease Documents, 
belong to Lessee and Lessor agrees to assign to Lessee all of Lessor's rights 
thereto or, to the extent Lessor has received payment of the Award, the 
amount of such payment shall be credited against the purchase price.  In 
any other event, the entire Award (except for such portion thereof which the 
Condemner designates as allocable to Lessee's loss of business or Tangible 
Personal Property) shall belong to and be paid to Lessor.

	14.6	CONTROL OF PROCEEDINGS.  Subject to the rights of 
any Fee Mortgagee, unless and until Lessee completes the purchase of the 
Leased Property as provided in Section 14.3, all proceedings involving any 
Taking and the prosecution of claims arising out of any Taking against the 
Condemnor shall be conducted, prosecuted and settled by Lessor; provided, 
however, that Lessor shall keep Lessee apprised of the progress of all such 
proceedings and shall solicit Lessee's advice with respect thereto and shall 
give due consideration to any such advice.  In addition, Lessee shall 
reimburse Lessor (as an Additional Charge) for all costs and expenses, 
including reasonable attorneys' fees, appraisal fees, fees of expert witnesses 
and costs of litigation or dispute resolution, in relation to any Taking, 
whether or not this Lease is terminated; provided, however, if this Lease is 
terminated as a result of a Taking, Lessee's obligation to so reimburse 
Lessor shall be diminished by the amount of the Award, if any, received by 
Lessor which is in excess of the Meditrust Investment.

ARTICLE 15

PERMITTED CONTESTS

	15.1	LESSEE'S RIGHT TO CONTEST.  To the extent of the 
express references made to this Article 15 in other Sections of this Lease, 
Lessee, any Sublessee or any Manager on their own or on Lessor's behalf 
(or in Lessor's name), but at their sole cost and expense, may contest, by 
appropriate legal proceedings conducted in good faith and with due 
diligence (until the resolution thereof), the amount, validity or application, 
in whole or in part, of any Imposition, Legal Requirement, the decision of 
any Governmental Authority related to the operation of the Leased Property 
for its Primary Intended Use and/or, if applicable, any of the Other 
Permitted Uses or any Lien or claim relating to the Leased Property not 
otherwise permitted by this Agreement; provided, that (a) prior written 
notice of such contest is given to Lessor, (b) in the case of an unpaid 
Imposition, Lien or claim, the commencement and continuation of such 
proceedings shall suspend the collection thereof from Lessor and/or 
compliance by any applicable member of the Leasing Group with the 
contested Legal Requirement or other matter may be legally delayed 
pending the prosecution of any such proceeding without the occurrence or 
creation of any Lien, charge or liability of any kind against the Leased 
Property, (c) neither the Leased Property nor any rent therefrom would be 
in any immediate danger of being sold, forfeited, attached or lost as a result 
of such proceeding, (d) in the case of a Legal Requirement, neither Lessor 
nor any member of the Leasing Group would be in any immediate danger 
of civil or criminal liability for failure to comply therewith pending the 
outcome of such proceedings, (e) in the event that any such contest shall 
involve a sum of money or potential loss in excess of TWENTY FIVE 
THOUSAND DOLLARS ($25,000), Lessee shall deliver to Lessor an 
Officer's Certificate and opinion of counsel, if Lessor deems the delivery of 
an opinion to be appropriate, certifying or opining, as the case may be, as to 
the validity of the statements set forth to the effect set forth in clauses (b),
(c) and (d), to the extent applicable, (f) Lessee shall give such cash security 
as may be demanded in good faith by Lessor to insure ultimate payment of 
any fine, penalty, interest or cost and to prevent any sale or forfeiture of the
affected portion of the Leased Property by reason of such non-payment or 
non-compliance, (g) if such contest is finally resolved against Lessor or any 
member of the Leasing Group, Lessee shall promptly pay, as Additional 
Charges due hereunder, the amount required to be paid, together with all 
interest and penalties accrued thereon and/or comply (and cause any 
Sublessee and any Manager to comply) with the applicable Legal 
Requirement, and (h) no state of facts or circumstance exists which 
constitutes, or with the passage of time and/or the giving of notice, could 
constitute a Lease Default; provided, however, but without limiting any 
other right Lessee may have under the Lease Documents to contest the 
payment of Rent, the provisions of this Article 15 shall not be construed to 
permit Lessee to contest the payment of Rent or any other sums payable by 

Lessee to Lessor under any of the Lease Documents.  If such contest is 
finally resolved in favor of Lessee, Lessee shall be entitled to any refund 
resulting therefrom.

	15.2	LESSOR'S COOPERATION.  Lessor, at Lessee's sole cost 
and expense, shall execute and deliver to Lessee such authorizations and 
other documents as may reasonably be required in any such contest, so long 
as the same does not expose Lessor to any civil or criminal liability, and, if 
reasonably requested by Lessee or if Lessor so desires, Lessor shall join as a 
party therein.

	15.3	LESSEE'S INDEMNITY.  Lessee, as more particularly 
provided for in Section 12.2, shall indemnify, defend (with counsel 
acceptable to Lessor) and save Lessor harmless against any liability, cost or 
expense of any kind, including, without limitation, attorneys' fees and 
expenses that may be imposed upon Lessor in connection with any such 
contest and any loss resulting therefrom and in the enforcement of this 
indemnification.

ARTICLE 16

DEFAULT

	16.1	EVENTS OF DEFAULT.  Each of the following shall 
constitute an "Event of Default" hereunder and shall entitle Lessor to 
exercise its remedies hereunder and under any of the other Lease 
Documents:

		(a)	any failure of Lessee to pay any amount due 
hereunder or under any of the other Lease Documents within ten 
(10) days following the date when such payment was due;

		(b)	any failure in the observance or 
performance of any other covenant, term, condition or warranty 
provided in this Lease or any of the other Lease Documents, other 
than the payment of any monetary obligation and other than as 
specified in subsections (c) through (v) below (a "Failure to 
Perform"), continuing for thirty (30) days after the giving of notice 
by Lessor to Lessee specifying the nature of the Failure to Perform; 
except as to matters not susceptible to cure within thirty (30) days, 
provided that with respect to such matters, (i) Lessee commences 
the cure thereof within thirty (30) days after the giving of such 
notice by Lessor to Lessee,  (ii) Lessee continuously prosecutes 
such cure to completion, (iii) such cure is completed within one 
hundred twenty (120) days after the giving of such notice by 
Lessor to Lessee and (iv) such Failure to Perform does not impair 
the value of, or Lessor's rights with respect to, the Leased Property 
or otherwise impair the Collateral or Lessor's security interest 
therein;

		(c)	the occurrence of any default or breach of 
condition continuing beyond the expiration of the applicable notice 
and grace periods, if any, under any of the other Lease Documents, 
including, without limitation, the Agreement Regarding Related 
Transactions;

		(d)	if any representation, warranty or statement 
contained herein or in any of the other Lease Documents proves to 
be untrue in any material respect as of the date when made or at 
any time during the Term if such representation or warranty is a 
continuing representation or warranty pursuant to Section 10.2;

		(e)	if any member of the Leasing Group shall 
(i) voluntarily be adjudicated a bankrupt or insolvent, (ii) seek or 
consent to the appointment of a receiver or trustee for itself or for 
the Leased Property, (iii) file a petition seeking relief under the 
bankruptcy or other similar laws of the United States, any state or 
any jurisdiction, (iv) make a general assignment for the benefit of 
creditors, (v) make or offer a composition of its debts with its 
creditors or (vi) be unable to pay its debts as such debts mature;

		(f)	if any court shall enter an order, judgment or 
decree appointing, without the consent of any member of the 
Leasing Group, a receiver or trustee for such member or for any of 
its property and such order, judgment or decree shall remain in 
force, undischarged or unstayed, ninety (90) days after it is entered;

		(g)	if a petition is filed against any member of 
the Leasing Group which seeks relief under the bankruptcy or other 
similar laws of the United States, any state or any other 
jurisdiction, and such petition is not dismissed within ninety (90) 
days after it is filed; 

		(h)	in the event that:   

		i.	all or any portion of the interest of any 
partner, shareholder, member in any 
member of the Leasing Group (other than 
Guarantor) shall be, on any one or more 
occasions, directly or indirectly, sold, 
assigned, hypothecated or otherwise 
transferred (whether by operation of law or 
otherwise), if such member of the Leasing 
Group shall be a partnership, joint venture, 
syndicate or other group, without the prior 
written consent of Lessor, in each instance, 
which consent may be withheld by Lessor in 
its reasonable discretion with respect to a 

sale, assignment, hypothecation or other 
transfer to a Meditrust/Emeritus Transaction 
Affiliate and in all other cases, in its sole 
and absolute discretion;  

		ii.	the shares of the issued and outstanding 
capital stock of any member of the Leasing 
Group (other than Guarantor) shall be, on 
any one or more occasions, directly or 
indirectly, sold, assigned, hypothecated or 
otherwise transferred (whether by operation 
of law or otherwise), if such member of the 
Leasing Group shall be a corporation, 
without the prior written consent of Lessor, 
in each instance, which consent may be 
withheld by Lessor in its reasonable 
discretion with respect to a sale, assignment, 
hypothecation or other transfer to a 
Meditrust/Emeritus Transaction Affiliate 
and in all other cases, in its sole and 
absolute discretion; or 

		iii.	all or any portion of the beneficial interest in 
any member of the Leasing Group (other 
than Guarantor) shall be, directly or 
indirectly, sold or otherwise transferred 
(whether by operation of law or otherwise), 
if such member of the Leasing Group shall 
be a trust, without the prior written consent 
of Lessor, in each instance, which consent 
may be withheld by Lessor in its reasonable 
discretion with respect to a sale, assignment, 
hypothecation or other transfer to a 
Meditrust/Emeritus Transaction Affiliate 
and in all other cases, in its sole and 
absolute discretion;

	Notwithstanding the foregoing, no consent of Lessor to a pledge by 
Lessee of its stock to the lender of a Working Capital Loan 
satisfying the requirements of Section 6.1.3 shall be required (a 
"Working Capital Stock Pledge").

		(i)	the death, incapacity, liquidation, 
dissolution or termination of existence of any member of the 
Leasing Group or the merger or consolidation of any member of 
the Leasing Group with any other Person except as expressly 
permitted by the terms of this Lease Agreement;

		(j)	except as provided in Section 19.1 hereof, 
if, without the prior written consent of Lessor, in each instance, 
which consent may be withheld by Lessor in its sole and absolute 
discretion, Lessee's or any interest of a Sublessee which is an 
Affiliate of Lessee in the Leased Property shall be, directly or 
indirectly, mortgaged, encumbered (by any voluntary or 
involuntary Lien other than the Permitted Encumbrances), 
subleased, sold, assigned, hypothecated or otherwise transferred 
(whether by operation of law or otherwise);

		(k)	the occurrence of a default or breach of 
condition continuing beyond the expiration of the applicable notice 
and grace periods, if any, in connection with the payment or 
performance of any other material obligation of Lessee or any 
Sublessee which is an Affiliate of Lessee, if the applicable creditor 
or obligee elects to declare the obligations of Lessee or the 
applicable Sublessee under the applicable agreement due and 
payable or to exercise any other right or remedy available to such 
creditor or obligee, or, whether or not such creditor or obligee has 
so elected or exercised, such creditor's or obligee's rights and 
remedies, if exercised, may involve or result in the taking of 
possession of, or the creation of a Lien on, the Leased Property; 
provided, however, that in any event, the election by the applicable 
creditor or obligee to declare the obligations of Lessee under the 
applicable agreement due and payable or to exercise any other right 
or remedy available to such creditor or obligee shall be an Event of 
Default hereunder only if such obligations, individually or in the 
aggregate, are in excess of TWO HUNDRED FIFTY THOUSAND 
DOLLARS ($250,000);

		(l)	the occurrence of a Related Party Default;

		(m)	the occurrence of any default or breach of 
condition which is not cured within any applicable cure period 
under a Working Capital Loan secured by a Working Capital Stock 
Pledge (or any documents executed in connection therewith) or the 
exercise of any ownership rights by the lender of a Working 
Capital Loan secured by a Working Capital Stock Pledge; 

		(n)	except as a result of Casualty or a partial or 
complete Condemnation (including a temporary taking), if Lessee 
or any Sublessee ceases operation of the Facility for a period in 
excess of thirty (30) days (a "Failure to Operate"); 

		(o)	if one or more judgments against Lessee or 
any Sublessee which is an Affiliate of Lessee or attachments 
against Lessee's interest or any such Sublessee's interest in the 

Leased Property, which in the aggregate exceed TWO HUNDRED 
FIFTY THOUSAND DOLLARS ($250,000) or which may 
materially and adversely interfere with the operation of the 
Facility, remain unpaid, unstayed on appeal, undischarged, 
unbonded or undismissed for a period of thirty (30) days; 

		(p)	if any malpractice award or judgment 
exceeding any applicable professional liability insurance coverage 
by more than FIVE HUNDRED THOUSAND DOLLARS 
($500,000) shall be rendered against any member of the Leasing 
Group and either (i) enforcement proceedings shall have been 
commenced by any creditor upon such award or judgment or 
(ii) such award or judgment shall continue unsatisfied and in effect 
for a period of ten (10) consecutive days without an insurance 
company satisfactory to Lessor (in its sole and absolute discretion) 
having agreed to fund such award or judgment in a manner 
satisfactory to Lessor (in its sole and absolute discretion) and in 
either case such award or judgment shall, in the reasonable opinion 
of Lessor, have a material adverse affect on the ability of Lessee or 
any Sublessee to operate the Facility; 

		(q)	if any Provider Agreement material to the 
operation or financial condition of the Leased Property shall be 
terminated prior to the expiration of the term thereof or, without 
the prior written consent of Lessor, in each instance, which consent 
may be withheld in Lessor's reasonable discretion, shall not be 
renewed or extended upon the expiration of the stated term thereof; 

		(r)	if, after Lessee or any Sublessee has 
obtained approval for Medicare and/or Medicaid funding, a final 
unappealable determination is made by the applicable 
Governmental Authority that Lessee or any Sublessee shall have 
failed to comply with applicable Medicare and/or Medicaid 
regulations in the operation of the Facility, as a result of which 
failure Lessee or such Sublessee is declared ineligible to continue 
its participation in the Medicare and/or Medicaid programs and 
such determination could reasonably be expected to have a 
material adverse effect on the operation or financial condition of 
the Leased Property;

		(s)	if any member of the Leasing Group 
receives notice of a final unappealable determination by applicable 
Governmental Authorities of the revocation of any Permit required 
for the lawful construction or operation of the Facility in 
accordance with the Primary Intended Use and, if applicable, the 
Other Permitted Uses or the loss of any Permit under any other 
circumstances under which any member of the Leasing Group is 
required to permanently cease the construction or operation of the 
Facility in accordance with the Primary Intended Use and the Other 
Permitted Uses; and

		(t)	any failure to maintain the insurance 
required pursuant to Section 13 of this Lease in force and effect at 
all times until the Lease Obligations are fully paid and performed;

		(u)	the appointment of a temporary manager (or 
operator) for the Leased Property by any Governmental Authority; 

		(v)	the entry of an order by a court with 
jurisdiction over the Leased Property to close the Facility, to 
transfer one or more residents the Facility as a result of an 
allegation of abuse or neglect or to take any action to eliminate an 
emergency situation then existing at the Facility, if such order has 
not been stayed pending appeal within ten (10) following such 
entry; or

		(w)	the occurrence of any default or breach of 
condition continuing for more than thirty (30) days under any 
credit agreement, loan agreement or other agreement establishing a 
major line of credit (including, without limitation, a major line of 
credit or a Working Capital Loan which is not secured by a 
Working Capital Stock Pledge)(or any documents executed in 
connection with such lines of credit) on behalf of Guarantor 
without regard to whether the applicable creditor has elected to 
declare the indebtedness due and payable under such line of credit 
or to exercise any other right or remedy available to it or the 
occurrence of any such default or breach of condition if the 
applicable creditor has elected to declare the indebtedness due and 
payable under such line of credit or to exercise any other right or 
remedy available to it.  For the purpose of this provision, a major 
line of credit shall mean and include any line of credit established 
in an amount equal to or greater than ONE MILLION DOLLARS 
($1,000,000) with respect to a line of credit for which Guarantor is 
an obligor, endorser, surety or guarantor.

	16.2	REMEDIES.

	(a)	If any Lease Default shall have occurred, Lessor may at its 
option terminate this Lease by giving Lessee not less than ten (10) days' 
notice of such termination, or exercise any one or more of its rights and 
remedies under this Lease or any of the other Lease Documents, or as 
available at law or in equity and upon the expiration of the time fixed in 
such notice, the Term shall terminate (but only if Lessor shall have 
specifically elected by a written notice to so terminate the Lease) and all 
rights of Lessee under this Lease shall cease.  Notwithstanding the 
foregoing, in the event of Lessee's failure to pay Rent, if such Rent remains 
unpaid beyond ten (10) days from the due date thereof, Lessor shall not be 
obligated to give ten (10) days notice of such termination or exercise of any 
of its other rights and remedies under this Lease, or the other Lease 
Documents, or otherwise available at law or in equity, and Lessor shall be 
at liberty to pursue any one or more of such rights or remedies without 
further notice.  No taking of possession of the Leased Property by or on 
behalf of  Lessor, and no other act done by or on behalf of Lessor, shall 
constitute an acceptance of surrender of the Leased Property by Lessee or 
reduce Lessee's obligations under this Lease or the other Lease Documents, 
unless otherwise expressly agreed to in a written document signed by an 
authorized officer or agent of Lessor.

	(b)	To the extent permitted under applicable law, Lessee shall 
pay as Additional Charges all costs and expenses (including, without 
limitation, attorneys' fee and expenses) reasonably incurred by or on behalf 
of Lessor as a result of any Lease Default.

	(c)	If any Lease Default shall have occurred, whether or not 
this Lease has been terminated pursuant to Paragraph (a) of this Section, 
Lessee shall, to the extent permitted under applicable law, if required by 
Lessor so to do, upon not less than ten (10) days' prior notice from Lessor, 
immediately surrender to Lessor the Leased Property pursuant to the 
provisions of Paragraph (a) of this Section and quit the same, and Lessor 
may enter upon and repossess the Leased Property by reasonable force, 
summary proceedings, ejectment or otherwise, and may remove Lessee and 
all other Persons and any and all of the Tangible Personal Property from the 
Leased Property, subject to the rights of any residents of the Facility and 
any Sublessees who are not Affiliates of any member of the Leasing Group 
and to any requirements of applicable law, or Lessor may claim ownership 
of the Tangible Personal Property as set forth in Section 5.2.3 hereof or 
Lessor may exercise its rights as secured party under the Security 
Agreement.  Lessor shall use reasonable, good faith efforts to relet the 
Leased Property or otherwise mitigate damages suffered by Lessor as a 
result of Lessee's breach of this Lease.

	(d)	In addition to all of the rights and remedies of Lessor set 
forth in this Lease and the other Lease Documents, if Lessee shall fail to 
pay any rental or other charge due hereunder (whether denominated as Base 
Rent, Additional Rent, Additional Charges or otherwise) within ten (10) 
days after same shall have become due and payable, then and in such event 
Lessee shall also pay to Lessor (i) a late payment service charge (in order to 
partially defray Lessor's administrative and other overhead expenses) equal 
to TWO HUNDRED FIFTY DOLLARS ($250) and (ii) to the extent 
permitted by applicable law, interest on such unpaid sum at the Overdue 
Rate; it being understood, however, that nothing herein shall be deemed to 
extend the due date for payment of any sums required to be paid by Lessee 
hereunder or to relieve Lessee of its obligation to pay such sums at the time 
or times required by this Lease.

	16.3	DAMAGES.  None of (a) the termination of this Lease 
pursuant to Section 16.2, (b) the eviction of Lessee or the repossession of 
the Leased Property, (c) the inability after reasonable diligence of Lessor, 
notwithstanding reasonable good faith efforts, to relet the Leased Property, 
(d) the reletting of the Leased Property or (e) the failure of Lessor to collect
or receive any rentals due upon any such reletting, shall relieve Lessee of its 
liability and obligations hereunder, all of which shall survive any such 
termination, repossession or reletting.  In any such event, Lessee shall 
forthwith pay to Lessor all Rent due and payable with respect to the Leased 
Property to and including the date of such termination, repossession or 
eviction.  Thereafter, Lessee shall forthwith pay to Lessor, at Lessor's 
option, either:

	(i)	the sum of: (x) all Rent that is due and unpaid at later to 
occur of termination, repossession or eviction, together 
with interest thereon at the Overdue Rate to the date of 
payment, plus (y) the worth (calculated in the manner 
stated below) of the amount by which the unpaid Rent for 
the balance of the Term after the later to occur of the 
termination, repossession or eviction exceeds the fair 
market rental value of the Leased Property for the balance 
of the Term, plus (z) any other amount necessary to 
compensate Lessor for all damage proximately caused by 
Lessee's failure to perform the Lease Obligations or which 
in the ordinary course would be likely to result therefrom 
and less the amount of rent that has actually been received 
by Lessor following the termination of this Lease from a 
Person other than an Affiliate of Lessor (which for 
purposes hereof shall include the net income received by 
Lessor or an Affiliate of Lessor from its own operation of 
the Leased Property in the event it elects to resume 
operation thereof in lieu of hiring a third party manager or 
re-letting the Leased Property); or

	(ii)	each payment of Rent as the same would have become due 
and payable if Lessee's right of possession or other rights 
under this Lease had not been terminated, or if Lessee had 
not been evicted, or if the Leased Property had not been 
repossessed which Rent, to the extent permitted by law, 
shall bear interest at the Overdue Rate from the date when 
due until the date paid, and Lessor may enforce, by action 
or otherwise, any other term or covenant of this Lease.  
There shall be credited against Lessee's obligation under 
this Clause (ii) amounts actually collected by Lessor from 
another tenant to whom the Leased Property may have 
actually been leased or, if Lessor is operating the Leased 
Property for its own account, the actual Cash Flow of the 
Leased Property.

	In making the determinations described in subparagraph (i) above, 
the "worth" of unpaid Rent shall be determined by a court having 
jurisdiction thereof using the lowest rate of capitalization (highest present 
worth) reasonably applicable at the time of such determination and allowed 
by applicable law and the Additional Rent shall be deemed to be the same 
as the average Additional Rent of the preceding five (5) full calendar years, 
or if shorter, the average Additional Rent for the calendar years or portions 
thereof since the date that Additional Rent commenced to accrue or such 
other amount as either party shall prove reasonably could have been earned 
during the remainder of the Term or any portion thereof.

	16.4	LESSEE WAIVERS.  If this Lease is terminated pursuant 
to Section 16.2, Lessee waives, to the extent not prohibited by applicable 
law, (a) any right of redemption, re-entry or repossession, (b) any right to a 
trial by jury in the event of summary proceedings to enforce the remedies 
set forth in this Article 16, and (c) the benefit of any laws now or hereafter 
in force exempting property from liability for rent or for debt.

	16.5	APPLICATION OF FUNDS.  Any payments otherwise 
payable to Lessee which are received by Lessor under any of the provisions 
of this Lease during the existence or continuance of any Lease Default shall 
be applied to the Lease Obligations in the order which Lessor may 
reasonably determine or as may be required by the laws of the State.

	16.6	FAILURE TO CONDUCT BUSINESS.  For the purpose 
of determining rental loss damages or Additional Rent, in the event Lessee 
fails to conduct business upon the Leased Property, exact damages or the 
amount of Additional Rent being unascertainable, it shall be deemed that 
the Additional Rent for such period would be equal to the average annual 
Additional Rent during the five (5) preceding calendar years or such shorter 
period of time as may have existed between the date Additional Rent 
commenced to accrue and the date of computation. 

	16.7	LESSOR'S RIGHT TO CURE.  If Lessee shall fail to 
make any payment, or to perform any act required to be made or performed 
under this Lease and to cure the same within the relevant time periods 
provided in Section 16.1, Lessor, after five (5) Business Days' prior notice 
to Lessee (except in an emergency when such shorter notice shall be given 
as is reasonable under the circumstances), and without waiving or releasing 
any obligation or Event of Default, may (but shall be under no obligation 
to) at any time thereafter make such payment or perform such act for the 
account and at the expense of Lessee, and may, to the extent permitted by 
law, enter upon the Leased Property for such purpose and take all such 
action thereon as, in Lessor's opinion, may be necessary or appropriate 
therefor.  No such entry shall be deemed an eviction of Lessee.  All sums so 
paid by Lessor and all costs and expenses (including, without limitation, 
reasonable attorneys' fees and expenses, in each case, to the extent 
permitted by law) so incurred shall be paid by Lessee to Lessor on demand 
as an Additional Charge.  The obligations of Lessee and rights of Lessor 
contained in this Article shall survive the expiration or earlier termination 
of this Lease.

	16.8	NO WAIVER BY LESSOR.  Lessor shall not by any act, 
delay, omission or otherwise (including, without limitation, the exercise of 
any right or remedy hereunder) be deemed to have waived any of its rights 
or remedies hereunder or under any of the other Lease Documents unless 
such waiver is in writing and signed by Lessor, and then, only to the extent 
specifically set forth therein.  No waiver at any time of any of the terms, 
conditions, covenants, representations or warranties set forth in any of the 
Lease Documents (including, without limitation, any of the time periods set 
forth therein for the performance of the Lease Obligations) shall be 
construed as a waiver of any other term, condition, covenant, representation 
or warranty of any of the Lease Documents, nor shall such a waiver in any 
one instance or circumstances be construed as a waiver of the same term, 
condition, covenant, representation or warranty in any subsequent instance 
or circumstance.  No such failure, delay or waiver shall be construed as 
creating a requirement that Lessor must thereafter, as a result of such 
failure, delay or waiver, give notice to Lessee or any Guarantor, or any 
other Person that Lessor does not intend to, or may not, give a further 
waiver or to refrain from insisting upon the strict performance of the terms, 
conditions, covenants, representations and warranties set forth in the Lease 
Documents before Lessor can exercise any of its rights or remedies under 
any of the Lease Documents or before any Lease Default can occur, or as 
establishing a course of dealing for interpreting the conduct of and 
agreements between Lessor and Lessee, the Guarantor or any other Person.

	The acceptance by Lessor of any payment that is less than payment 
in full of all amounts then due under any of the Lease Documents at the 
time of the making of such payment shall not: (a) constitute a waiver of the 
right to exercise any of Lessor's remedies at that time or at any subsequent 
time, (b) constitute an accord and satisfaction or (c) nullify any prior 

exercise of any remedy, without the express written consent of Lessor.  Any 
failure by Lessor to take any action under this Lease or any of the other 
Lease Documents by reason of a default hereunder or thereunder, 
acceptance of a past due installment, or indulgences granted from time to 
time shall not be construed as a novation of this Lease or any of the other 
Lease Documents or as a waiver of such right or of the right of Lessor 
thereafter to insist upon strict compliance with the terms of this Lease or 
any of the other Lease Documents, or (d) prevent the exercise of such right 
of acceleration or any other right granted hereunder or under applicable law 
for purposes of obtaining the damages set forth in Section 16.3, specific 
performance or equitable remedies; and to the maximum extent not 
prohibited by applicable law, Lessee hereby expressly waives the benefit of 
any statute or rule of law or equity now provided, or which may hereafter 
be provided, which would produce a result contrary to or in conflict with 
the foregoing.

	16.9	RIGHT OF FORBEARANCE.  Whether or not for 
consideration paid or payable to Lessor and, except as may be otherwise 
specifically agreed to by Lessor in writing, no forbearance on the part of 
Lessor, no extension of the time for the payment of the whole or any part of 
the Obligations, and no other indulgence given by Lessor to Lessee or any 
other Person, shall operate to release or in any manner affect the original 
liability of Lessee or such other Persons, or to limit, prejudice or impair any 
right of Lessor, including, without limitation, the right to realize upon any 
collateral, or any part thereof, for any of the Obligations evidenced or 
secured by the Lease Documents; notice of any such extension, forbearance 
or indulgence being hereby waived by Lessee and all those claiming by, 
through or under Lessee.

	16.10	CUMULATIVE REMEDIES.  The rights and remedies set 
forth under this Lease are in addition to all other rights and remedies 
afforded to Lessor under any of the other Lease Documents or at law or in 
equity, all of which are hereby reserved by Lessor, and this Lease is made 
and accepted without prejudice to any such rights and remedies.  All of the 
rights and remedies of Lessor under each of the Lease Documents shall be 
separate and cumulative and may be exercised concurrently or successively 
in Lessor's sole and absolute discretion.

ARTICLE 17

SURRENDER OF LEASED PROPERTY OR LEASE; HOLDING OVER

	17.1	SURRENDER.  Lessee shall, upon the expiration or prior 
termination of the Term (unless occasioned by Lessee's purchase of the 
Leased Property pursuant to the terms of this Lease Agreement), vacate and 
surrender the Leased Property to Lessor in good repair and condition, in 
compliance with all applicable Legal Requirements, all Insurance 
Requirements, and in compliance with the provisions of Article 8, except 
for: (a) ordinary wear and tear (subject to the obligation of Lessee to 
maintain the Leased Property in good order and repair during the entire 
Term of the Lease), (b) damage caused by the gross negligence or willful 
acts of Lessor, and (c) any damage or destruction resulting from a Casualty 
or Taking that Lessee is not required by the terms of this Lease to repair or 
restore. 

	17.2	TRANSFER OF CONTRACTS AND PERMITS.  In 
connection with the expiration or any earlier termination of this Lease 
(unless occasioned by Lessee's purchase of the Leased Property pursuant to 
the terms of this Lease Agreement), upon any request made from time to 
time by Lessor, Lessee shall (a) promptly and diligently use its best efforts 
to (i) transfer and assign all Permits and Contracts necessary or desirable for 
the operation of the Leased Property in accordance with its Primary 
Intended Use to Lessor or its designee to the extent the same are assignable 
under applicable Legal Requirements and/or (ii) arrange for the transfer or 
assignment of such Permits and Contracts to Lessor or its designee and (b) 
cooperate in every respect (and to the fullest extent possible) and assist 
Lessor or its designee in obtaining such Permits and Contracts (whether by 
transfer, assignment or otherwise) provided, however, that unless a 
termination is the result of a Lease Default, Casualty or Condemnation, 
Lessee's efforts and cooperation shall not require Lessee to pay the costs 
and expenses incurred by Lessor or Lessor's designated transferee of the 
Contracts and Permits.  Such efforts and cooperation on the part of Lessee 
shall include, without limitation, the execution, delivery and filing with 
appropriate Governmental Authorities and Third Party Payors of any 
applications, petitions, statements, notices, requests, assignments and other 
documents or instruments requested by Lessor.  Furthermore, Lessee shall 
not take any action or refrain from taking any action which would defer, 
delay or jeopardize the process of Lessor or its designee obtaining said 
Permits and Contracts (whether by transfer, assignment or otherwise).  
Without limiting the foregoing, Lessee shall not seek to transfer or relocate 
any of said Permits or Contracts to any location other than the Leased 
Property.  The provisions of this Section 17.2 shall survive the expiration or 
earlier termination of this Lease.

	Lessee hereby appoints Lessor as its attorney-in-fact, with full 
power of substitution to take such actions, in the event that Lessee fails to 
comply with any request made by Lessor hereunder, as Lessor (in its sole 
absolute discretion) may deem necessary or desirable to effectuate the 
intent of this Section 17.2.  The power of attorney conferred on Lessor by 
the provisions of this Section 17.2, being coupled with an interest, shall be 
irrevocable until the Obligations are fully paid and performed and shall not 
be affected by any disability or incapacity which Lessee may suffer and 
shall survive the same.  Such power of attorney is provided solely to protect 
the interests of Lessor and shall not impose any duty on the Lender to 
exercise any such power and neither Lessor nor such attorney-in-fact shall 
be liable for any act, omission, error in judgment or mistake of law, except 
as the same may result from its gross negligence or willful misconduct.

	17.3	NO ACCEPTANCE OF SURRENDER.  Except at the 
expiration of the Term in the ordinary course, no surrender to Lessor of this 
Lease or of the Leased Property or any interest therein shall be valid or 
effective unless agreed to and accepted in writing by Lessor and no act by 
Lessor or any representative or agent of Lessor, other than such a written 
acceptance by Lessor, shall constitute an acceptance of any such surrender.

	17.4	HOLDING OVER.  If, for any reason, Lessee shall remain 
in possession of the Leased Property after the expiration or any earlier 
termination of the Term, such possession shall be as a tenant at sufferance 
during which time Lessee shall pay as rental each month, one and one-half 
times the aggregate of (i) one-twelfth of the aggregate Base Rent, and 
Additional Rent payable at the time of such expiration or earlier termination 
of the Term; (ii) all Additional Charges accruing during the month and (iii) 
all other sums, if any, payable by Lessee pursuant to the provisions of this 
Lease with respect to the Leased Property.  During such period of tenancy, 
Lessee shall be obligated to perform and observe all of the terms, covenants 
and conditions of this Lease, but shall have no rights hereunder other than 
the right, to the extent given by law to tenants at sufferance, to continue its 
occupancy and use of the Leased Property.  Nothing contained herein shall 
constitute the consent, express or implied, of Lessor to the holding over of 
Lessee after the expiration or earlier termination of this Lease.

ARTICLE 18

PURCHASE OF THE LEASED PROPERTY

	18.1	PURCHASE OF THE LEASED PROPERTY.  In the 
event Lessee purchases the Leased Property from Lessor pursuant to any of 
the terms of this Lease, Lessor shall, upon receipt from Lessee of the 
applicable purchase price, together with full payment of any unpaid Rent 
due and payable with respect to any period ending on or before the date of 
the purchase, deliver to Lessee a deed with covenants only against acts of 
Lessor conveying the entire interest of Lessor in and to the Leased Property 
to Lessee subject to all applicable Legal Requirements, all of the matters 
described in clauses (a), (b), (e) and (g) of Section 11.5.2, Impositions, any 
Liens created by Lessee, any Liens created in accordance with the terms of 
this Lease (except to the extent specifically excluded by the terms hereof) 
or consented to by Lessee, the claims of all Persons claiming by, through or 
under Lessee, any other matters assented to by Lessee and all matters for 
which Lessee has responsibility under any of the Lease Documents, but 
otherwise not subject to any other Lien created by Lessor from and after the 
Commencement Date (other than an Encumbrance permitted under Article 
20 which Lessee elects to assume).  The applicable purchase price shall be 
paid in cash to Lessor, or as Lessor may direct, in federal or other 
immediately available funds except as otherwise mutually agreed by Lessor 
and Lessee.  All expenses of such conveyance, including, without 
limitation, the cost of title examination or standard or extended coverage 
title insurance, attorneys' fees incurred by Lessor in connection with such 
conveyance, recording and transfer taxes and recording fees and similar 
charges and specifically excluding any prepayment penalties, if any, due 
Lessor's mortgagee, shall be paid by Lessee.

	18.2	APPRAISAL.

		18.2.1	DESIGNATION OF APPRAISERS.  In the 
event that it becomes necessary to determine the Fair Market Value 
of the Leased Property for any purpose of this Lease, the party 
required or permitted to give notice of such required determination 
shall include in the notice the name of a Person selected to act as 
appraiser on its behalf.  Within ten (10) days after receipt of any 
such notice, Lessor (or Lessee, as the case may be) shall by notice 
to Lessee (or Lessor, as the case may be) either accept such Person 
to be the sole appraiser to determine the Fair Market Value  of the 
Leased Property or appoint a second Person as appraiser on its 
behalf.

		18.2.2	APPRAISAL PROCESS.  The appraisers thus 
appointed, each of whom must be a member of the American 
Institute of Real Estate Appraisers (or any successor organization 
thereto), shall, within forty-five (45) days after the date of the 

notice appointing the first appraiser, proceed to appraise the Leased 
Property to determine the Fair Market Value of the Leased 
Property as of the relevant date (giving effect to the impact, if any, 
of inflation from the date of their decision to the relevant date); 
provided, however, that if only one appraiser shall have been so 
appointed, or if two appraisers shall have been so appointed but 
only one such appraiser shall have made such determination within 
fifty (50) days after the making of Lessee's or Lessor's request, then 
the determination of such appraiser shall be final and binding upon 
the parties.  If two appraisers shall have been appointed and shall 
have made their determinations within the respective requisite 
periods set forth above and if the difference between the amounts 
so determined shall not exceed ten per cent (10%) of the lesser of 
such amounts, then the Fair Market Value of the Leased Property 
shall be an amount equal to fifty percent (50%) of the sum of the 
amounts so determined.  If the difference between the amounts so 
determined shall exceed ten percent (10%) of the lesser of such 
amounts, then such two appraisers shall have twenty (20) days to 
appoint a third appraiser, but if such appraisers fail to do so, then 
either party may request the American Arbitration Association or 
any successor organization thereto to appoint an appraiser within 
twenty (20) days of such request, and both parties shall be bound 
by any appointment so made within such twenty (20) day period.  
If no such appraiser shall have been appointed within such twenty 
(20) days or within ninety (90) days of the original request for a 
determination of Fair Market Value of the Leased Property, 
whichever is earlier, either Lessor or Lessee may apply to any 
court having jurisdiction to have such appointment made by such 
court.  Any appraiser appointed by the original appraisers, by the 
American Arbitration Association or by such court shall be 
instructed to determine the Fair Market Value of the Leased 
Property within thirty (30) days after appointment of such 
Appraiser.  The determination of the appraiser which differs most 
in terms of dollar amount from the determinations of the other two 
appraisers shall be excluded, and fifty percent (50%) of the sum of 
the remaining two determinations shall be final and binding upon 
Lessor and Lessee as the Fair Market Value of the Leased Property.

		18.2.3	SPECIFIC ENFORCEMENT AND COSTS.  
This provision for determination by appraisal shall be specifically 
enforceable to the extent such remedy is available under applicable 
law, and any determination hereunder shall be final and binding 
upon the parties except as otherwise provided by applicable law.  
Lessor and Lessee shall each pay the fees and expenses of the 
appraiser appointed by it and each shall pay one-half of the fees 
and expenses of the third appraiser and one-half of all other cost 
and expenses incurred in connection with each appraisal.

		18.3	LESSEE'S OPTION TO PURCHASE.  

		18.3.1	CONDITIONS TO OPTION.  On the 
conditions (which conditions Lessor may waive, at its sole option, 
by notice to Lessee at any time) that (a) at the time of exercise of 
the Purchase Option and on the applicable Purchase Option Date, 
there then exists no Lease Default, nor any state of facts or 
circumstance which constitutes, or with the passage of time and/or 
the giving of notice, would constitute a Lease Default and 
(b) Lessee strictly complies with the provisions of this Section 
18.3, then Lessee shall have the option to purchase the Leased 
Property, at the price and upon the terms hereinafter set forth (the 
"Purchase Option").

		18.3.2	EXERCISE OF OPTION; DEPOSIT.  Such 
Purchase Option shall permit Lessee to purchase the Leased 
Property (a) on the last day of the Initial Term or (b) on the last day 
of any Extended Term effectively exercised by Lessee (each of 
such dates are referred to herein as a "Purchase Option Date") and 
shall be exercised by notice given by Lessee to Lessor (the 
"Lessee's Purchase Option Notice") at least one hundred eighty 
(180) days (but not more than three hundred sixty (360) days) prior 
to the relevant Purchase Option Date.  Notwithstanding anything to 
the contrary set forth in this Lease, Lessee's right to purchase the 
Leased Property is subject to the further conditions that (i) 
concurrently with the exercise of the option set forth under this 
Section 18.3, the Lessee shall have exercised its right to purchase 
the premises demised under each of the Related Leases in 
accordance with the provisions of Section 18.3 of each of the 
Related Leases, (ii) the conveyance of the Leased Property 
pursuant to the provisions of this Section 18.3 shall occur 
simultaneously with the conveyance of the premises demised under 
each of the Related Leases pursuant to Section 18.3 of each of the 
Related Leases and (iii) all conditions contained in the Agreement 
Regarding Related Transactions pertaining to the Purchase Option 
are satisfied.  Lessee shall have no right to rescind Lessee's 
Purchase Option Notice once given unless (a) a notice of such 
rescission is given (i) within ten (10) days following receipt of the 
final determination of the Fair Market Value of the Leased 
Property or (ii) within thirty (30) days following an event of 
Casualty or Condemnation as to which Lessee has waived any right 
of termination set forth in Section 13.2.2 hereof and (b) 
simultaneously with such notice of rescission, Lessee, by notice 
given pursuant to Section 1.3 hereof extends the Term.

		18.3.3	CONVEYANCE.  If the Purchase Option is 
exercised by Lessee in accordance with the terms hereof, the 
Leased Property shall be conveyed by a good and sufficient deed 
with covenants only against acts of Lessor (the "Deed") running to 

Lessee or to such grantee as Lessee may designate by notice to 
Lessor at least seven (7) days before the Time of Closing.

		18.3.4	CALCULATION OF PURCHASE PRICE.  
The price to be paid by Lessee for the acquisition of the Leased 
Property pursuant to this Purchase Option (the "Purchase Price") 
shall be equal to the greater of (a) the Meditrust Investment or (b) 
an amount equal to the then Fair Market Value of the Leased 
Property minus the Fair Market Added Value, subject to the terms 
of the Agreement Regarding Related Transactions.

		18.3.5	PAYMENT OF PURCHASE PRICE.  The 
Purchase Price shall be paid by Lessee at the Time of Closing by 
certified, cashier's, treasurer's or bank check(s) or wire transfer 
pursuant to instructions received from Lessor in accordance with 
the terms of the Agreement Regarding Related Transactions as 
reduced by the principal balance of any Fee Mortgage which 
Lessee has elected to, and has the right to, assume in accordance 
with the terms hereof.

		18.3.6	PLACE AND TIME OF CLOSING.  If this 
Purchase Option is exercised, the closing shall occur and the Deed 
shall be delivered (the "Closing") at the office of Lessor at 12:00 
o'clock noon (E.S.T.) on the applicable Purchase Option Date (such 
time, as the same may be extended by mutual written agreement of 
Lessor and Lessee, being hereinafter referred to as the "Time of 
Closing") in accordance with the terms of the Agreement 
Regarding Related Transactions.  It is agreed that time is of the 
essence of this Purchase Option.

		18.3.7	CONDITION OF LEASED PROPERTY.  The 
Leased Property is to be purchased "AS IS" and "WHERE IS" as of 
the Time of Closing.

		18.3.8	QUALITY OF TITLE.  If Lessor shall be 
unable to give title or to make conveyance, as stipulated in this 
Section 18.3, then, at Lessor's option, Lessor shall use reasonable 
efforts to remove all defects in title and the applicable Purchase 
Option Date and Time of Closing shall be extended for period of 
thirty (30) days other than with respect to any Encumbrances 
which Lessor has caused to exist.  Lessor shall not be required to 
expend more than FIFTY THOUSAND DOLLARS ($50,000) 
(inclusive of attorney's fees) in order to have used "reasonable 
efforts."

		18.3.9	LESSOR'S INABILITY TO PERFORM.  If at 
the expiration of the extended time Lessor shall have failed so to 
remove any such defects in title, then all other obligations of all 
parties hereto under Section 18.3 shall cease and Section 18.3 shall 
be void and without recourse to the parties hereto.  
Notwithstanding the foregoing, Lessee shall have the election, at 
either the original or extended Purchase Option Date and Time of 
Closing, to accept such title as Lessor can deliver to the Leased 
Property in its then condition and to pay therefor the Purchase 
Price without reduction, in which case Lessor shall convey such 
title; provided, that, in the event of such conveyance, if any portion 
of the Leased Property shall have been taken by Condemnation 
prior to the applicable Purchase Option Date and Time of Closing, 
Lessor shall pay over or assign to Lessee at the Time of Closing, all 
Awards recovered on account of such Taking, less any amounts 
reasonably expended by Lessor in obtaining such Award and less 
any amounts expended for restoration pursuant to the provisions of 
Article 14 hereof, or, to the extent such Awards have not been 
recovered as of the applicable Purchase Option Date and Time of 
Closing, Lessor shall assign to Lessee all its rights with respect to 
any claim therefor and further  provided, that, in the event of such 
conveyance, if any portion of the Leased Property shall have 
suffered a Casualty prior to the applicable Purchase Option Date 
and Time of Closing, Lessor shall pay over or assign to Lessee at 
the Time of Closing, all insurance proceeds recovered on account 
of such Casualty, less any amounts reasonably expended by Lessor 
in obtaining such proceeds and less any amounts expended for 
restoration pursuant to the provisions of Article 13 hereof, or, to 
the extent such proceeds have not been recovered as of the 
applicable Purchase Option Date and Time of Closing, Lessor shall 
assign to Lessee all its rights with respect to any claim therefor.

		18.3.10	MERGER BY DEED.  The acceptance of the 
Deed by Lessee or the grantee designated by Lessee, as the case 
may be, shall be deemed to be a full performance and discharge of 
every agreement and obligation to be performed by Lessor 
contained or expressed in this Lease.

		18.3.11	USE OF PURCHASE PRICE TO CLEAR 
TITLE.  To enable Lessor to make conveyance as provided in this 
Section, Lessor may, at the Time of Closing, use the Purchase Price 
or any portion thereof to clear the title of any Lien, provided that 
all instruments so procured are recorded contemporaneously with 
the Closing or reasonable arrangements are made for a recording 
subsequent to the Time of Closing in accordance with customary 
conveyancing practices.

		18.3.12	LESSEE'S DEFAULT.  If Lessee delivers 
Lessee's Purchase Option Notice and fails to consummate the 
purchase of the Leased Property in accordance with the terms 
hereof for any reason other than Lessor's willful and unexcused 
refusal to deliver the Deed or exercise of the right of rescission in 
Section 18.3.2 hereof, (a) Lessee shall thereafter have no further 
right to purchase the Leased Property pursuant to this Section, 
although this Lease shall otherwise continue in full force and effect 
and (b) Lessor shall have the right to sue for specific performance 
of Lessee's obligations to purchase the Leased Property provided 
such suit for specific performance is commenced within one (1) 
year after the applicable Purchase Option Date on which such sale 
was supposed to occur.

ARTICLE 19

SUBLETTING AND ASSIGNMENT

	19.1	SUBLETTING AND ASSIGNMENT.  Lessee may not, 
without the prior written consent of Lessor, which consent may be withheld 
in Lessor's sole and absolute discretion, assign or pledge all or any portion 
of its interest in this Lease or any of the other Lease Documents (whether 
by operation of law or otherwise) or sublet all or any part of the Leased 
Property.  For purposes of this Section 19.1, the term "assign" shall be 
deemed to include, but not be limited to, any one or more sales, pledges, 
hypothecations or other transfers (including, without limitation, any transfer 
by operation of law) of any of the capital stock of or partnership interest in 
Lessee or sales, pledges, hypothecations or other transfers (including, 
without limitation, any transfer by operation of law) of the capital or the 
assets of Lessee.  Any such assignment, pledge, sale, hypothecation or other 
transfer made without Lessor's consent shall be void and of no force and 
effect.  Notwithstanding the foregoing, Lessors consent shall not be 
unreasonably withheld with respect to an assignment or pledge of an 
interest of Lessee in this Lease or a sublet of all or a part of the Leased 
Property to a  Meditrust/Emeritus Transaction Affiliate.

	19.2	ATTORNMENT.  Lessee shall insert in each Sublease 
approved by Lessor, provisions to the effect that (a) such Sublease is 
subject and subordinate to all of the terms and provisions of this Lease and 
to the rights of Lessor hereunder, (b) in the event this Lease shall terminate 
before the expiration of such Sublease, the Sublessee thereunder will, at 
Lessor's option, attorn to Lessor and waive any right the Sublessee may 
have to terminate the Sublease or to surrender possession thereunder, as a 
result of the termination of this Lease and (c) in the event the Sublessee 
receives a written notice from Lessor stating that Lessee is in default under 
this Lease, the Sublessee shall thereafter be obligated to pay all rentals 

accruing under said Sublease directly to Lessor or as Lessor may direct.  All 
rentals received from the Sublessee by Lessor shall be credited against the 
amounts owing by Lessee under this Lease.
    

ARTICLE 20

TITLE TRANSFERS AND LIENS GRANTED BY LESSOR

	20.1	NO MERGER OF TITLE.  Except as otherwise provided 
in Section 18.3.10, there shall be no merger of this Lease or of the leasehold 
estate created hereby with the fee estate in the Leased Property by reason of 
the fact that the same Person may acquire, own or hold, directly or 
indirectly (a) this Lease or the leasehold estate created hereby or any 
interest in this Lease or such leasehold estate and (b) the fee estate in the 
Leased Property.

	20.2	TRANSFERS BY LESSOR.  If the original Lessor named 
herein or any successor in interest shall convey the Leased Property in 
accordance with the terms hereof, other than as security for a debt, and the 
grantee or transferee of the Leased Property shall expressly assume all 
obligations of Lessor hereunder arising or accruing from and after the date 
of such conveyance or transfer, the original Lessor named herein or the 
applicable successor in interest so conveying the Leased Property shall 
thereupon be released from all future liabilities and obligations of Lessor 
under this Lease arising or accruing from and after the date of such 
conveyance or other transfer as to the Leased Property and all such future 
liabilities and obligations shall thereupon be binding upon the new owner.  

	20.3	LESSOR MAY GRANT LIENS.  Without the consent of 
Lessee, but subject to the terms and conditions set forth below in this 
Section 20.3, Lessor may, from time to time, directly or indirectly, create or 
otherwise cause to exist any lien, encumbrance or title retention agreement 
upon the Leased Property or any interest therein ("Encumbrance"), whether 
to secure any borrowing or other means of financing or refinancing, 
provided that Lessee shall have no obligation to make payments under such 
Encumbrances.  Lessee shall subordinate this Lease to the lien of any such 
Encumbrance, on the condition that the beneficiary or holder of such 
Encumbrance executes a non-disturbance agreement in conformity with the 
provisions of Section 20.4.  To the extent that any such Encumbrance 
consists of a mortgage or deed of trust on Lessor's interest in the Leased 
Property the same shall be referred to herein as a "Fee Mortgage" and the 
holder thereof shall be referred to herein as a "Fee Mortgagee".

	20.4	SUBORDINATION AND NON-DISTURBANCE.  
Concurrently with the execution and delivery of any Fee Mortgage entered 
into after the date hereof, provided that the Lessee executes and delivers an 
agreement of the type described in the following paragraph, Lessor shall 
obtain and deliver to Lessee an agreement by the holder of such Fee 
Mortgage, pursuant to which, (a) the applicable Fee Mortgagee consents to 
this Lease and (b) agrees that, notwithstanding the terms of the applicable 
Fee Mortgage held by such Fee Mortgagee, or any default, expiration, 
termination, foreclosure, sale, entry or other act or omission under or 
pursuant to such Fee Mortgage or a transfer in lieu of foreclosure, (i) Lessee 
shall not be disturbed in peaceful enjoyment of the Leased Property nor 
shall this Lease be terminated or cancelled at any time, except in the event 
that Lessor shall have the right to terminate this Lease under the terms and 
provisions expressly set forth herein, (ii) Lessee's option to purchase the 
Leased Property shall remain in force and effect pursuant to the terms 
hereof and (iii) in the event that Lessee elects its option to purchase the 
Leased Property and performs all of its obligations hereunder in connection 
with any such election, the holder of the Fee Mortgage shall release its Fee 
Mortgage upon payment by Lessee of the purchase price required 
hereunder, provided, that (1) such purchase price is paid to the holder of the 
Fee Mortgage, in the event that the Indebtedness secured by the applicable 
Fee Mortgage is equal to or greater than the purchase price or (2) in the 
event that the purchase price is greater than the Indebtedness secured by the 
Fee Mortgage, a portion of the purchase price equal to the Indebtedness 
secured by the Fee Mortgage is paid to the Fee Mortgagee and the 
remainder of the purchase price is paid to Lessor.

	At the request from time to time by any Fee Mortgagee, Lessee 
shall (a) subordinate this Lease and all of Lessee's rights and estate 
hereunder to the Fee Mortgage held by such Fee Mortgagee and (b) agree 
that Lessee will attorn to and recognize such Fee Mortgagee or the 
purchaser at any foreclosure sale or any sale under a power of sale 
contained in any such Fee Mortgage as Lessor under this Lease for the 
balance of the Term then remaining.  To effect the intent and purpose of the 
immediately preceding sentence, Lessee agrees to execute and deliver such 
instruments in recordable from as are reasonably requested by Lessor or the 
applicable Fee Mortgagee; provided, however, that such Fee Mortgagee 
simultaneously executes, delivers and records a written agreement of the 
type described in the preceding paragraph.

ARTICLE 21

LESSOR OBLIGATIONS

	21.1	QUIET ENJOYMENT.  As long as Lessee shall pay all 
Rent and all other sums due under any of the Lease Documents as the same 
become due and shall fully comply with all of the terms of this Lease and 
the other Lease Documents and fully perform its obligations thereunder, 
Lessee shall peaceably and quietly have, hold and enjoy the Leased 
Property throughout the Term, free of any claim or other action by Lessor 
or anyone claiming by, through or under Lessor, but subject to all the 
Permitted Encumbrances and such Liens as may hereafter be consented to 
by Lessee.  No failure by Lessor to comply with the foregoing covenant 
shall give Lessee any right to cancel or terminate this Lease, or to fail to 
perform any other sum payable under this Lease, or to fail to perform any 
other obligation of Lessee hereunder.  Notwithstanding the foregoing, 
Lessee shall have the right by separate and independent action to pursue 
any claim it may have against Lessor as a result of a breach by Lessor of the 
covenant of quiet enjoyment contained in this Article 21.

	21.2	MEMORANDUM OF LEASE.  Lessor and Lessee shall, 
promptly upon the request of either, enter into a short form memorandum of 
this Lease, in form suitable for recording under the laws of the State, in 
which reference to this Lease and all options contained herein shall be 
made.  Lessee shall pay all recording costs and taxes associated therewith. 

	21.3	DEFAULT BY LESSOR.  Lessor shall be in default of its 
obligations under this Lease only if Lessor shall fail to observe or perform 
any term, covenant or condition of this Lease on its part to be performed 
and such failure shall continue for a period of thirty (30) days after notice 
thereof from Lessee (or such shorter time as may be necessary in order to 
protect the health or welfare of any residents of the Facility or to ensure the 
continuing compliance of the Facility with applicable Legal Requirements), 
unless such failure cannot with due diligence be cured within a period of 
thirty (30) days, in which case such failure shall not be deemed to continue 
if Lessor, within said thirty (30) day period, proceeds promptly and with 
due diligence to cure the failure and diligently completes the curing thereof 
within one hundred twenty (120) days after notice thereof.

ARTICLE 22

NOTICES

	Any notice, request, demand, statement or consent made hereunder 
or under any of the other Lease Documents shall be in writing and shall be 
deemed duly given if personally delivered, sent by certified mail, return 
receipt requested, or sent by a nationally recognized commercial overnight 
delivery service with provision for a receipt, postage or delivery charges 
prepaid, and shall be deemed given when so personally delivered, three (3) 
business days following the date postmarked or the next business day when 
placed in the possession of such mail delivery service and addressed as 
follows:

If to Lessee:			c/o Emeritus Corporation
  			           3131 Elliott Avenue, Suite 500
		            		Seattle, WA  98121-2162
		            		Attention:	Daniel R. Baty, Chief 
                           Executive Officer

With a copy to:			The Nathanson Group
              				1411 Fourth Avenue, Suite 905
			              	Seattle, WA  98101
	              			Attn:  Randi S. Nathanson, Esquire

If to the Guarantor:	  Emeritus Corporation
                   				Market Place One
			                   	3131 Elliott Avenue, Suite 500
                   				Seattle, WA  98121-2162
                   				Attention:	Daniel R. Baty, Chief 
                                  Executive Officer

With a copy to:			The Nathanson Group
              				1411 Fourth Avenue, Suite 905
              				Seattle, WA  98101
              				Attn:  Randi S. Nathanson, Esquire

If to Lessor:			Meditrust Acquisition Corporation I
            				197 First Avenue
            				Needham Heights, Massachusetts  02194
            				Attn:  President

With copies to:			Meditrust Acquisition Corporation I
              				197 First Avenue
              				Needham Heights, Massachusetts  02194
              				Attn:  General Counsel

   	and	Mintz, Levin, Cohn, Ferris, Glovsky
    and Popeo, P.C.
				One Financial Center
				Boston, MA  02111
				Attn:  Joshua Davis, Esquire

or such other address as Lessor, Lessee or the Guarantor shall hereinafter 
from time to time designate by a written notice to the others given in such 
manner.  Any notice given to Lessee or the Guarantor by Lessor at any time 
shall not imply that such notice or any further or similar notice was or is 
required.

ARTICLE 23

LIMITATION OF MEDITRUST LIABILITY

	The Declaration of Trust establishing the sole shareholder of 
Lessor, Meditrust, a Massachusetts business trust ("Meditrust"), dated 
August 6, 1985 (the "Declaration"), as amended, a copy of which is duly 
filed in the office of the Secretary of State of the Commonwealth of 
Massachusetts, provides that the name "Meditrust" refers to the trustees 
under the Declaration collectively as trustees, but not individually or 
personally; and that no trustee, officer, shareholder, employee or agent of 
Meditrust or any of its Subsidiaries shall be held to any personal liability, 
jointly, or severally, for any obligation of, or claim against Meditrust or any 
of its Subsidiaries.  All Persons dealing with Meditrust or Lessor, in any 
way, shall look only to the assets of Meditrust or Lessor, as applicable, for 
the payment of any sum or the performance of any obligation.  
Furthermore, in no event shall Meditrust or Lessor ever be liable to Lessee 
or any other Person for any indirect or consequential damages incurred by 
Lessee or such other Person resulting from any cause whatsoever.  
Notwithstanding the foregoing, Lessee hereby acknowledges and agrees 
that Meditrust is not a party to this Lease and that Lessee shall look only to 
the assets of Lessor for the payment of any sum or performance of any 
obligation due by or from Lessor pursuant to the terms and provisions of 
the Lease Documents.

ARTICLE 24

MISCELLANEOUS PROVISIONS

	24.1	BROKER'S FEE INDEMNIFICATION.  Lessee and 
Lessor each shall and hereby agrees to indemnify, defend (with counsel 
acceptable to the other) and hold the other harmless from and against any 
and all claims for premiums or other charges, finder's fees, taxes, brokerage 
fees or commissions and other similar compensation due to a broker or 
finder allegedly employed or retained by it in connection with any of the 
transactions contemplated by the Lease Documents.  Notwithstanding the 
foregoing, the indemnified party shall have the option of conducting its 
own defense against any such claims with counsel of such party's choice, 
but at the expense of the indemnifying party, as aforesaid.  This 
indemnification shall include all reasonable attorneys' fees and expenses 
and court costs reasonably incurred by the indemnified party in connection 
with the defense against any such claims and the enforcement of this 
indemnification agreement and shall survive the termination of this Lease.

	24.2	NO JOINT VENTURE OR PARTNERSHIP.  Neither 
anything contained in any of the Lease Documents, nor the acts of the 
parties hereto, shall create, or be construed to create, a partnership or joint 
venture between Lessor and Lessee.  Lessee is not the agent or 
representative of Lessor and nothing contained herein or in any of the other 
Lease Documents shall make, or be construed to make, Lessor liable to any 
Person for goods delivered to Lessee, services performed with respect to the 
Leased Property at the direction of Lessee or for debts or claims accruing 
against Lessee.

	24.3	AMENDMENTS, WAIVERS AND MODIFICATIONS.  
None of the terms, covenants, conditions, warranties or representations 
contained in this Lease or in any of the other Lease Documents may be 
renewed, replaced, amended, modified, extended, substituted, revised, 
waived, consolidated or terminated except by an agreement in writing 
signed by all parties to this Lease or the other Lease Documents, as the case 
may be, in the case of any renewal, replacement, amendment, modification, 
extension, substitution, revisions, consolidation or termination and by the 
Person against whom enforcement is sought in the case of a waiver or 
except as otherwise expressly provided for herein or in any other Lease 
Document.  The provisions of this Lease and the other Lease Documents 
shall extend and be applicable to all renewals, replacements, amendments, 
extensions, substitutions, revisions, consolidations and modifications of any 
of the Lease Documents, the Management Agreements, the Related Party 
Agreements, the Permits and/or the Contracts.  References herein and in the 
other Lease Documents to any of the Lease Documents, the Management 
Agreements, the Related Party Agreements, the Permits and/or the 
Contracts shall be deemed to include any renewals, replacements, 
amendments, extensions, substitutions, revisions, consolidations or 
modifications thereof.

	Notwithstanding the foregoing, any reference contained in any of 
the Lease Documents, whether express or implied, to any renewal, 
replacement, amendment, extension, substitution, revisions, consolidation 
or modification of any of the Lease Documents or any Management 
Agreement, Related Party Agreement, Permit and/or the Contract is not 
intended to constitute an agreement or consent by Lessor to any such 
renewal, replacement, amendment, substitution, revision, consolidation or 
modification; but, rather as a reference only to those instances where Lessor 
may give, agree or consent to any such renewal, replacement, amendment, 
extension, substitution, revision, consolidation or modification as the same 
may be required pursuant to the terms, covenants and conditions of any of 
the Lease Documents.

	24.4	CAPTIONS AND HEADINGS.  The captions and 
headings set forth in this Lease and each of the other Lease Documents are 
included for convenience and reference only, and the words contained 
therein shall in no way be held or deemed to define, limit, describe, explain, 
modify, amplify or add to the interpretation, construction or meaning of, or 
the scope or intent of, this Lease, any of the other Lease Documents or any 
parts hereof or thereof.

	24.5	TIME IS OF THE ESSENCE.  Time is of essence of each 
and every term, condition, covenant and warranty set forth herein and in the 
other Lease Documents.

	24.6	COUNTERPARTS.  This Lease and the other Lease 
Documents may be executed in one or more counterparts, each of which 
taken together shall constitute an original and all of which shall constitute 
one in the same instrument.

	24.7	ENTIRE AGREEMENT.  This Lease and the other Lease 
Documents set forth the entire agreement of the parties with respect to the 
subject matter and shall supersede in all respect the letter of intent, dated 
January 31, 1996 (and all prior iterations thereof), from Meditrust to 
Lessee.

	24.8	WAIVER OF JURY TRIAL.  TO THE MAXIMUM 
EXTENT PERMITTED BY APPLICABLE LAW, LESSOR AND 
LESSEE HEREBY MUTUALLY, KNOWINGLY, VOLUNTARILY AND 
INTENTIONALLY WAIVE ANY RIGHT WHICH ANY PARTY 
HERETO MAY NOW OR HEREAFTER HAVE TO A TRIAL BY JURY 
IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING 
OUT OF OR RELATING TO THE LEASE OR ANY OF THE LEASE 
DOCUMENTS.  Lessee hereby certifies that neither Lessor nor any of 
Lessor's representatives, agents or counsel has represented expressly or 
otherwise that Lessor would not, in the event of any such suit, action or 
proceeding seek to enforce this waiver to the right of trial by jury and 
acknowledges that Lessor has been induced by this waiver (among other 
things) to enter into the transactions evidenced by this Lease and the other 

Lease Documents and further acknowledges that Lessee (a) has read the 
provisions of this Lease, and in particular, the paragraph containing this 
waiver, (b) has consulted legal counsel, (c) understands the rights that it is 
granting in this Lease and the rights that it waiving in this paragraph in 
particular and (d) makes the waivers set forth herein knowingly, voluntarily 
and intentionally.

	24.9	SUCCESSORS AND ASSIGNS.  This Lease and the 
other Lease Documents shall be binding upon and inure to the benefit of (a) 
Lessee and Lessee's legal representatives and permitted successors and 
assigns and (b) Lessor and any other Person who may now or hereafter hold 
the interest of Lessor under this Lease and their respective successors and 
assigns.  

	24.10	NO THIRD PARTY BENEFICIARIES.  This Lease and 
the other Lease Documents are solely for the benefit of Lessor, its 
successors, assigns and participants (if any), the Meditrust Entities, Lessee, 
the Guarantor, the other members of the Leasing Group and their respective 
permitted successors and assigns, and, except as otherwise expressly set 
forth in any of the Lease Documents, nothing contained therein shall confer 
upon any Person other than such parties any right to insist upon or to 
enforce the performance or observance of any of the obligations contained 
therein.  All conditions to the obligations of Lessor to advance or make 
available proceeds of insurance or Awards, or to release any deposits held 
for Impositions or insurance premiums are imposed solely and exclusively 
for the benefit of Lessor, its successors and assigns.  No other Person shall 
have standing to require satisfaction of such conditions in accordance with 
their terms, and no other Person shall, under any circumstances, be a 
beneficiary of such conditions, any or all of which may be freely waived in 
whole or in part by Lessor at any time, if, in Lessor's sole and absolute 
discretion, Lessor deems it advisable or desirable to do so.

	24.11	GOVERNING LAW.  This Lease shall be construed and 
the rights and obligations of Lessor and Lessee shall be determined in 
accordance with the laws of the State.

	Lessee hereby consents to personal jurisdiction in the courts of the 
State and the United States District Court for the District in which the 
Leased Property is situated as well as to the jurisdiction of all courts from 
which an appeal may be taken from the aforesaid courts, for the purpose of 
any suit, action or other proceeding arising out of or with respect to any of 
the Lease Documents, the negotiation and/or consummation of the 
transactions evidenced by the Lease Documents, the Lessor's relationship of 
any member of the Leasing Group in connection with the transactions 
evidenced by the Lease Documents and/or the performance of any 
obligation or the exercise of any remedy under any of the Lease Documents 
and expressly waives any and all objections Lessee may have as to venue in 
any of such courts.

	24.12	GENERAL.  Anything contained in this Lease to the 
contrary notwithstanding, all claims against, and liabilities of, Lessee or 
Lessor arising prior to any date of termination of this Lease or any of the 
other Lease Documents shall survive such termination.

	If any provision of this Lease or any of the other Lease Documents 
or any application thereof shall be invalid or unenforceable, the remainder 
of this Lease or the other applicable Lease Document, as the case may be, 
and any other application of such term or provision shall not be affected 
thereby.  Notwithstanding the foregoing, it is the intention of the parties 
hereto that if any provision of any of this Lease is capable of two (2) 
constructions, one of which would render the provision void and the other 
of which would render the provision valid, then such provision shall be 
construed in accordance with the construction which renders such provision 
valid.

	If any late charges provided for in any provision of this Lease or 
any of the other Lease Documents are based upon a rate in excess of the 
maximum rate permitted by applicable law, the parties agree that such 
charges shall be fixed at the maximum permissible rate.

	Lessee waives all presentments, demands for performance, notices 
of nonperformance, protests, notices of protest, notices of dishonor, and 
notices of acceptance and waives all notices of the existence, creation, or 
incurring of new or additional obligations, except as to all of the foregoing 
as expressly provided for herein.

ARTICLE 25

SUBSTITUTION OF PROPERTY

	25.1	SUBSTITUTION OF PROPERTY FOR THE LEASED 
PROPERTY. Provided that no Event of Default has occurred under this 
Lease (excluding any Event of Default which has been waived, in writing, 
by the Lessor), nor any event which, with the giving of notice or the 
passage of time or both, would constitute such an Event of Default, Lessee 
shall have the right from time to time (referred to herein as the "Substitution 
Right"), exercisable upon not less than ninety (90) days' prior written notice 
to Lessor (referred to herein as a "Substitution Notice") to substitute, on a 
date specified in such Substitution Notice (such date, as the same may be 
extended by express written agreement of lessor, shall be referred to herein 
as a "Substitution Date"), the Leased Property with a Comparable Facility.  
As used herein, the term "Comparable Facility" shall be defined as a health 
care facility or facilities which Lessor determines (a) has an appraised Fair 
Market Value greater than or equal to the greater of (i) the appraised Fair 
Market Value of the Leased Property as of the Completion Date or (ii) the 
appraised Fair Market Value of the Leased Property at the time that the 
applicable Substitution Notice is furnished to Lessor (based on appraisal 
criteria then in effect), (b) has a Facility Debt Coverage Ratio greater than 
or equal to the greater of (i) the Facility Debt Coverage Ratio of the Leased 
Property as of the Commencement Date, (ii) the Facility Debt Coverage 
Ratio of the Leased Property at the time that the applicable Substitution 
Notice is furnished to Lessor, (c) provides a mix of services similar to the 
Leased Property and (d) is otherwise reasonably acceptable, in all respects, 
to Lessor (based on Lessor's usual and customary property evaluation 
criteria then in effect). Lessee may not exercise its Substitution Right more 
than once in any calendar year.

	25.2	CONDITIONS TO SUBSTITUTION. Without limiting 
the foregoing, as conditions precedent to the consummation of any 
proposed substitution:

	(a)	as of the applicable Substitution Date, no Event of Default 
shall have occurred under the Lease (excluding any Event of Default which 
has been waived, in writing, by Lessor), nor any event which with the 
giving of notice or the passage of time or both would constitute such an 
Event of Default;

	(b)	Lessor shall have received engineering and inspection 
reports relating to the assisted living facility identified by Lessee in the 
applicable Substitution Notice (referred to herein as a "Proposed Facility"), 
reasonably satisfactory in all respects to Lessor;

	(c)	Lessee shall have delivered to Lessor (i) an MAI appraisal 
of the Proposed Facility (prepared by an appraiser selected by Lessee and 
approved by Lessor), in form and substance reasonably satisfactory to 
Lessor and (ii) an instrument survey of the premises upon which the 
Proposed Facility is located acceptable to Lessor and the title insurance 
company providing insurance with respect to the Proposed Facility;

	(d)	Lessor shall be satisfied as to compliance of Lessee, the 
Proposed Facility, the owner of the Proposed Facility (to the extent such 
owner is not Lessee as provided in subsection (l) below) and/or the 
proposed substitution, as the case may be, with (i) all applicable land use, 
zoning, subdivision and environmental laws and regulations, (ii) all 
applicable assisted living licensure laws and regulations and (iii) such other 
matters as Lessor reasonably deems relevant (including, without limitation, 
whether the conveyance of the property to Lessor in connection with the 
proposed substitution may be avoided under the Bankruptcy Code);

	(e)	Lessee shall have delivered to Lessor a valid and binding 
owner's or lessee's (as applicable) title insurance commitment issued by a 
title insurer reasonably acceptable to Lessor (the "Title Company"), in an 
amount equal to the Fair Market Value of the Proposed Facility, with such 
endorsements and affirmative coverages, and in such form, as Lessor may 
reasonably require insuring Lessor's fee title or leasehold title to the 
Proposed Facility, subject to no Liens except those approved or assumed by 
Lessor and arrangements satisfactory to Lessor shall have been made for the 
issuance of a title insurance policy on the Substitution Date in accordance 
with such title insurance commitment;

	(f)	Lessee shall have delivered an environmental site 
assessment report relating to the Proposed Facility, in form and substance 
reasonably acceptable to Lessor and prepared by an environmental 
consultant reasonably acceptable to Lessor;

	(g)	Lessor shall have obtained, at Lessee's cost, an opinion of 
Lessor's counsel, in form and substance acceptable to Lessor, confirming 
that (i) the substitution of the Proposed Facility for the Leased Property will 
qualify as an exchange solely of property of a like-kind under Section 1031 
of the Code, in which, generally, except for "boot" such as cash needed to 
equalize exchange values or discharge indebtedness, no gain or loss is 
recognized to Lessor, (ii) the substitution or sale will not result in ordinary 
recapture income to Lessor pursuant to Code Section 1250(d)(4) or any 
other Code provision, (iii) the substitution or sale will result in income, if 
any, to Lessor of a type described in Code Section 856(c)(2) or (3) and will 
not result in income of the types described in Code Section 856(c)(4) or 
result in the tax imposed under Code Section 857(b)(6) and (iv) the 
substitution or sale, together with all other substitutions and sales made or 
requested by Lessee or any Affiliate of Lessee or of any Guarantor pursuant 
to any other leases with Lessor (or any of its Affiliates) or any other 

transfers of the Leased Property or the properties leased under other such 
leases, during the relevant time period, will not jeopardize the qualification 
of Lessor as a real estate investment trust under Code Sections 856-860;

	(h)	Lessor shall have received opinions of Lessee's counsel as 
to (i) the compliance of the Proposed Facility with land use, zoning, 
subdivision and environmental laws and regulations, (ii) the compliance of 
Lessee, the owner of the Proposed Facility (to the extent such owner is not 
Lessee as provided in subsection (l) below), the proposed substitution and 
the Proposed Facility with applicable assisted living laws and regulations, 
(iii) the due authorization, execution and enforceability of the Substitution 
Documents and (iv) such other matters as are reasonably requested; in form 
and substance reasonably acceptable to Lessor;

	(i)	Lessee and each Guarantor shall have executed and 
delivered, or caused to be executed and delivered, such documents as are 
reasonably required by Lessor to effectuate the substitution (collectively, 
the "Substitution Documents"), including, without limitation, (i) a deed with 
full warranties or assignment of a leasehold estate with full warranties (as 
applicable) conveying to Lessor title to the Proposed Facility free and clear 
of all Liens, except those approved or assumed by Lessor, (ii) a facility 
lease (the "Substitution Lease") duly executed, acknowledged and delivered 
by Lessee, containing the same terms and conditions as are contained herein 
except that (1) the legal description of the land shall refer to the Proposed 
Facility, (2) the Minimum Repurchase Price of the Proposed Facility shall 
be an amount equal to the Minimum Repurchase Price of the Leased 
Property increased by any Cash Adjustment paid by Lessor, (3) the Rent 
under the Substitution Lease in all respects shall provide Lessor with a 
substantially equivalent yield at the time of the substitution (i.e., annual 
return on its equity in such Proposed Facility) to that received (and 
reasonably expected to be received thereafter) from the Leased Property, 
taking into account the Cash Adjustment, if any, paid by Lessor and any 
other relevant factors and (4) such other changes therein as may be 
necessary or appropriate under the circumstances shall be made; (iii) a 
collateral assignment of permits, licenses, approvals and contracts relating 
to the Proposed Facility, substantially in the form of the Permits 
Assignment; (iv) UCC financing statements; (v) a guaranty substantially in 
the form of the Guaranty of Lease Obligations shall be executed by 
Guarantor, (vi) an affiliated party subordination agreement, substantially in 
the form of the Affiliated Party Subordination Agreement, shall be executed 
by the Lessee, and such other Affiliates of the Lessee as are deemed 
necessary or appropriate by the Lessor and (vii) the Agreement Regarding 
Related Transactions shall be amended to reflect the substitution of the 
Proposed Facility.  The Substitution Documents shall be based upon and 
contain the same terms and conditions as are set forth in Lessee Documents 
in effect prior to the substitution, except that such changes shall be made as 
may be necessary or reasonably appropriate under the circumstances to 
effectuate the substitution and secure the protection and priority of the 
property and security interests conveyed and/or granted to Lessor;

	(j)	without limiting any other provision contained herein, 
Lessee shall have delivered to Lessor such other information and materials 
relating to Lessee, the owner of the Proposed Facility (to the extent that 
such owner is not Lessee as provided in subsection (l) below) and the 
Proposed Facility as Lessor may reasonably request, including, without 
limitation, leases, receipted bills, management agreements and other 
Contracts, Provider Agreements, cost reports, Permits, evidence of legal 
and actual access to the Proposed Facility, evidence of the availability and 
sufficiency of utilities servicing the Proposed Facility, historical and current
operating statements, detailed budgets and financial statements and Lessor 
shall have found the same to be satisfactory in all respects;

	(k)	Lessee or an Affiliate of Lessee shall be the licensed 
operator of the Proposed Facility as of the date of the consummation of the 
substitution;

	(l)	the Proposed Facility shall be owned or leased by Lessee 
or an Affiliate of Lessee; provided, however that in the event that the 
Proposed Facility is owned by any such Affiliate, (i) said Affiliate shall 
execute and deliver to Lessor such Substitution Documents as may be 
reasonably required by Lessor and (ii) Lessor shall be provided with such 
evidence as it may require to determine that the conveyance of the Proposed 
Facility (or a leasehold interest therein) to Lessor does not constitute a 
fraudulent conveyance (under applicable federal or state law);

	(m)	Lessee shall have delivered to Lessor an insurance 
certificate evidencing compliance with all of the insurance requirements set 
forth in the Substitution Documents;

	(n)	Lessee shall have delivered to Lessor an Officer's 
Certificate certifying as of the Substitution Date that (i) the Proposed 
Facility has been accepted by Lessee for all purposes of the Substitution 
Lease and there has been no material damage to the improvements located 
on the Proposed Facility, nor is any condemnation or eminent domain 
proceeding pending with respect thereto; (ii) all Permits (including, but not 
limited to, a permanent, unconditional certificate of occupancy and all 
certificates of need, licenses and Provider Agreements) which are necessary 
to permit the use of the Proposed Facility in accordance with the provisions 
of the Substitution Lease have been obtained and are in full force and 
effect; (iii) under applicable zoning and use laws, ordinances, rules and 
regulations, the Proposed Facility may be used for the purposes 
contemplated by Substitution Documents and all necessary subdivision 
approvals have been obtained; (iv) to the best knowledge of Lessee, there 
exists no Event of Default under this Lease, and no defense, offset or claim 
exists with respect to any sums to be paid by Lessee hereunder, and (v) any 
exceptions to Lessor's title to the Proposed Facility do not materially 
interfere with the intended use of the Proposed Facility by Lessee;

	(o)	Lessor shall have determined that the Proposed Facility 
constitutes a Comparable Facility, and

	(p)	Lessor shall have received all Rent due and payable 
hereunder through the Substitution Date.

	In the event that the equity value of the Proposed Facility (i.e., the 
Fair Market Value of the Proposed Facility minus the Liens to which Lessor 
will take the Proposed Facility subject) as of the Substitution Date is greater 
than the equity value of the Leased Property (i.e., the Fair Market Value of 
the Leased Property minus the Liens to which Lessee will take the Leased 
Property subject other than those Liens which Lessee is obligated to pay or 
discharge pursuant to the terms of this Lease) as of the Substitution Date, 
subject to the limitation set forth below, Lessor shall pay an amount equal 
to the difference to Lessee; provided, however, that Lessor shall not be 
obligated to consummate such substitution if Lessor would be required to 
make a payment to Lessee of an amount equal to or in excess of fifteen 
percent (15%) of said Fair Market Value of the Leased Property (the 
amount of cash paid by Lessor to Lessee being referred to herein as the 
"Cash Adjustment"). Without limiting the generality or effect of the 
preceding sentence, in the event that, on the Substitution Date, Lessor is 
obligated to pay a Cash Adjustment to Lessee and Lessor does not have 
sufficient funds available, or elects not to make such payment in cash, 
Lessor shall provide Lessee with (and Lessee shall accept) a purchase 
money note and mortgage for a term not to exceed eighteen (18) months 
from the Substitution Date and bearing interest, payable monthly, at the rate 
described in Section 10.2.

	25.3	CONVEYANCE TO LESSEE. If the Lessor shall have 
determined that the Proposed Facility constitutes a Comparable Facility, on 
the Substitution Date, after the consummation of a substitution in 
accordance with the terms hereof, Lessor will convey the Leased Property 
to Lessee in accordance with the provisions of Article 18 (except as to 
payment of any expenses in connection therewith which shall be governed 
by Section 22.4 below) and this Lease shall thereupon terminate as to the 
Leased Property. Upon completion of the purchase of the Leased Property, 
no Rent shall thereafter accrue with respect thereto.

	25.4	EXPENSES. Whether or not any proposed substitution is 
consummated, Lessee shall pay all of the out-of-pocket expenses and other 
costs incurred or expended by Lessor in connection with any proposed 
substitution (collectively referred to herein as "Substitution Closing Costs"), 
including, without limitation, reasonable attorneys' fees and expenses, 
engineering costs, consultants' fees, appraisal costs, audit and tax review 
costs, out-of-pocket travel expenses, inspection fees, title insurance 
premiums and other title fees, survey expenses, mortgage taxes, transfer, 
documentary stamp and other taxes, search charges of any nature, 
recording, registration and filing costs, broker's fees and commissions, if 

any, escrow fees, fees and expenses, if any, incurred in qualifying Lessor 
and maintaining its right to do business in the state where the Proposed 
Facility is located, the cost of obtaining, preparing and recording a release 
of the Leased Property from the lien of any Fee Mortgage on the Facility 
(other than the amount necessary to payoff such Fee Mortgage) and any 
other costs expended or incurred by Lessor in connection with the 
preparation for and the documentation and/or the closing of the proposed 
substitution. The Substitution Closing Costs shall be a demand obligation of 
Lessee to Lessor and, if not paid within ten (10) days after demand, shall 
thereafter (to the extent permitted by applicable law) bear interest at the 
Overdue Rate until the date of payment.

	25.5  LIMITATION.  In the event that Lessee exercises its right to 
construct the Project pursuant to the Leasehold Improvement Agreement, 
no Substitution Right may be exercised earlier than the fifth anniversary of 
the Completion Date.

	[INTENTIONALLY LEFT BLANK]

	IN WITNESS WHEREOF, the parties have caused this Lease to be 
executed and attested by their respective officers thereunto duly authorized.

WITNESS:			LESSEE: EMERITUS PROPERTIES I, 
           INC., a Washington 
           corporation

/s/ Catherine L. Pasquan	          By: /s/ Kelly J. Price
- -----------------------------		------------------------				
Name: Catherine L. Pasquan           Name: Kelly J. Price
				Title:  Secretary

WITNESS:			LESSOR: MEDITRUST 
                   ACQUISITION 
                   CORPORATION I, a 
                   Massachusetts corporation

/s/ Kim M. Priesing	          By: /s/ Michael S. Benjamin	
- -------------------------     ---------------------------------  
Name: Kim M. Priesing		       Name: Michael S. Benjamin, ESQ.
                              Title:   Senior Vice President

 

Basic Info X:

Name: Colonial Park Club Original Meditrust
Type: trust
Date: Nov. 14, 1996
Company: EMERITUS CORP\WA\
State: Washington

Other info:

Date:

  • August 20 , 1996
  • October 1 , 1996
  • September 30 , 2007
  • August , 1996
  • August 21 , 1996
  • March 31 , 2008
  • March 31 , 2028
  • Saturday
  • Sunday
  • January 1st , April 1st , July 1st
  • October 1st
  • December 31st
  • March 31st
  • March 31 , 1997
  • September 1 , 1996
  • September 1 , 1998
  • first day of the first fiscal quarter
  • the first day of April
  • last day
  • eighteen 18
  • the end of the first month
  • December 31 , 1999
  • thirty 30
  • August 6 , 1985
  • January 31 , 1996

Organization:

  • Colonial Park Club Original Meditrust Investment
  • Mainlands $ 924,530.37 Fairhaven Estates Original Meditrust Investment
  • Highland Hills Original Meditrust Investment
  • Anderson Place Original Meditrust Investment
  • Mainlands $ 9,405,192 Fairhaven Estates $ 3,677,423 Highland Hills
  • Fair Market Added Value of Capital Additions
  • Related Party Default
  • Restated Agreement Regarding Related Transactions Acquisition
  • Related Lease or Related Party Agreement
  • Urban Wage Earners
  • U.S. Department of Labor
  • Bureau of Labor Statistics
  • Consolidated Financial Statements
  • Deposit Pledge Agreement
  • Management Subordination Agreement
  • Base Gross Revenues
  • Governmental Agencies or Third Party Payors
  • The Guaranty of Lease Obligations
  • United States Treasury Securities
  • Federal Reserve Board
  • Environmental Indemnity Agreement
  • Net Award Amounts
  • The Group Two Negative Pledge Agreement Acquisition
  • Related Party Obligations
  • Board of Directors
  • Pension Benefit Guaranty Corporation
  • Accreditation Body or Third Party Payor
  • Fleet Bank of Connecticut
  • The Group Two Acquisition Facility
  • American House Sarasota Limited Partnership
  • Managed Care Plans
  • United States Federal Reserve Bank
  • Project Funds as Lessor
  • Excess Gross Revenues
  • Additional Rent Accrual Date
  • Facility 's Gross Revenues
  • Monthly Deposit Date
  • Collateral Assignment of Permits
  • Tangible Personal Property
  • Leasehold Improvement Agreement
  • the Insurance Requirements
  • Legal Requirements and Insurance Requirements
  • the Leasing Group
  • Internal Revenue Service
  • Board of Governors of the Federal Reserve System
  • National Labor Relations Board
  • State Commission on Human Rights
  • State Department of Labor
  • Lessee 's Debt Coverage Ratio
  • Securities Exchange Commission
  • Group Two Acquisition Facilities
  • Affiliate of Lessee
  • Third Party Payor Programs
  • Principal Place of Business
  • Annual Facility Upgrade Expenditure on Upgrade Renovations
  • MeditrustEmeritus Transaction Documents
  • U.S. Department of Housing and Urban Development
  • A.M. Best Co.
  • Board of Fire Underwriters
  • Date of Taking
  • Fair Market Value
  • Lessee 's Election Notice
  • Working Capital Loan
  • Affiliate of Lessor
  • Governmental Authorities and Third Party Payors
  • American Institute of Real Estate Appraisers
  • American Arbitration Association
  • Time of Closing
  • Lessee delivers Lessee 's Purchase Option Notice
  • MeditrustEmeritus Transaction Affiliate
  • Emeritus Corporation 3131 Elliott Avenue
  • Nathanson Group 1411 Fourth Avenue
  • Meditrust Acquisition Corporation
  • First Avenue Needham Heights
  • Related Party Agreements
  • United States District Court
  • Facility Debt Coverage Ratio
  • Event of Default
  • Minimum Repurchase Price of the Proposed Facility
  • Affiliated Party Subordination Agreement

Location:

  • Fairhaven Estates
  • Highland Hills
  • Michigan
  • United States of America
  • 3131 Elliott Avenue
  • U.S.
  • Seattle
  • Ferris
  • Boston
  • Lessor
  • Lessee
  • Washington
  • Massachusetts

Money:

  • $ 3,360,000
  • $ 10,669,705
  • $ 7,841,931
  • $ 100,000.00
  • $ 50,000.00
  • TWENTY MILLION DOLLARS
  • $ 20,000,000
  • $ 200,000
  • FIVE MILLION DOLLARS $ 5,000,000
  • $ 3,000,000
  • TEN MILLION DOLLARS $ 10,000,000
  • $ 25,000
  • $ 250,000
  • $ 500,000
  • $ 1,000,000

Person:

  • Lien Lessee
  • Lessor
  • Daniel R. Baty
  • Randi S. Nathanson
  • Mintz
  • Levin
  • Cohn
  • Glovsky
  • Popeo
  • Joshua Davis
  • Catherine L. Pasquan
  • Kim M. Priesing
  • Michael S. Benjamin

Percent:

  • 9.9 %
  • twenty percent 120 %
  • eighteen percent
  • 18 %
  • hundredths percent
  • 9.83 %
  • five percent 5 %
  • twenty-five percent 125 %
  • ten percent 110 %
  • one percent 1 %
  • fifteen percent 115 %
  • thirty percent
  • 30 %
  • eighty percent
  • 80 %
  • fifty percent
  • 50 %
  • fifteen percent 15 %