EMERITUS CORP\WA\
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>15
<FILENAME>exhibit107513.txt
<TEXT>




                          OPERATIONS TRANSFER AGREEMENT
                          (OUTLOOK POINTE AT HARRISBURG
                                 HARRISBURG, PA)

     THIS  AGREEMENT  is dated as of the 30th day of April, 2003 (the "EXECUTION
DATE"),  by and among Extended Care Operators of Harrisburg, LLC ("TENANT"), BCC
at  Harrisburg,  Inc.  ("MANAGER")  and Balanced Care Corporation ("PARENT", and
together  with  Tenant  and  Manager,  collectively,  "TRANSFEROR") and Emeritus
Corporation  ("NEW  OPERATOR")  and  Capstone  Capital  of  Pennsylvania,  Inc.
("OWNER").

     RECITALS

     A.     Tenant  is  the  licensed  operator of a 65 licensed bed residential
care facility ("RCF") commonly known as Outlook Pointe at Harrisburg and located
at  3560  Progress Avenue, Harrisburg, PA  17110 ("FACILITY"), which Facility is
leased  pursuant  to  the  terms of a Lease Agreement dated as of March 28, 1997
(together  with  any  amendments,  the "LEASE"), between Owner, as landlord, and
Tenant,  as  tenant.

     B.     Tenant  and  Manager  have  entered  into  that  certain  Management
Agreement  dated  as  of  February  6,  1998  (together with any amendments, the
"MANAGEMENT AGREEMENT"), whereby Tenant engaged Manager as the exclusive manager
and  operator  of  the  Facility.

     C.     New  Operator  and  Owner  have  agreed  to  enter  into a Lease and
Security Agreement with respect to the Facility ("NEW LEASE") to be effective on
and  as  of May 1, 2003 ("EFFECTIVE DATE"), assuming (i) receipt of approval for
the  change  in ownership from the Department of Public Welfare ("DH"), (ii) New
Operator  is  satisfied  with  the  results  of  its  Due  Diligence  Review (as
hereinafter  defined)  and (iii) receipt by New Operator prior to the end of the
Due  Diligence  Review  Period  (as  hereinafter defined) of the approval of its
Board  of Directors of the transaction contemplated herein and by the New Lease.

     D.     Assuming  receipt  of DH approval, subject to the provisions of that
certain  Settlement  Agreement  dated  as of May 1, 2003 and the other documents
contemplated therein (collectively, the "TERMINATION AGREEMENT"), executed among
Tenant,  Owner,  Manager  and  the  other  parties named therein, the respective
obligations  of the parties under the Lease and any other documents described in
the  Termination  Agreement  shall  be  terminated  as  of  the  Effective Date.

     E.     In  order  to  facilitate an orderly transfer of Facility operations
and financial responsibility from Transferor to New Operator, Transferor and New
Operator  desire  to  document  certain  terms  and  conditions  relevant to the
transfer  of  operational  and  financial  responsibility  for  the  Facility.

     NOW,  THEREFORE,  in  consideration of the mutual covenants, conditions and
agreements  set  forth  herein,  and  intending  to be legally bound hereby, New
Operator  and  Transferor  hereby  agree  as  follows.

                                    AGREEMENT

     1.     Surrender.  On the Effective Date, Transferor shall surrender to New
            ---------
Operator  possession  of  the  Facility  in  AS  IS,  WHERE  IS  condition.

     2.     Conveyance  of  Tenants'  Personal  Property,  Inventory and Prepaid
            --------------------------------------------------------------------
Expenses;  Excluded  Assets.
    ------------------------

          2.1.     Transferor  acknowledges that Owner owns all right, title and
interest  in  and  to  substantially all of the furniture, machinery, equipment,
appliances,  fixtures  and  other  tangible personal property used in connection
with  the  Facility excluding (i) the personal property and vehicle(s) listed on
Schedule  1  that  are  owned  by  Transferor or Parent (collectively, "TENANT'S
PERSONAL PROPERTY"), (ii) the personal property of the residents, which shall be
and  remain  at  the  Facility  on  the  Effective Date and (iii) all consumable
inventories of every kind and nature whatsoever (specifically including, but not
limited  to,  all  pharmacy  supplies,  medical supplies, office supplies, other
supplies  and  foodstuffs)  owned  by  Transferor  as  of the Effective Date and
located  at the Facility (the "INVENTORY").  Transferor has agreed with Owner to
sell, transfer and convey to Owner all of Transferor's right, title and interest
in  and  to  all  Tenant's Personal Property, except for the items designated on
Schedule  1 as "EXCLUDED PERSONAL PROPERTY," the Inventory, and in the telephone
and  facsimile  numbers of the Facility (the "PHONE AND FAX NUMBERS"), and Owner
has  agreed  to concurrently therewith sell, transfer and convey the same to New
Operator.  The  Tenant's  Personal  Property,  excluding  the  Excluded Personal
Property,  the  Inventory  and  the  Phone  and Fax Numbers shall hereinafter be
referred  to  as  the "TRANSFERRED TENANT'S PERSONAL PROPERTY." It is understood
and  agreed  that  the presence of the Transferred Tenant's Personal Property at
the  Facility on the Effective Date shall constitute delivery thereof; provided,
however, Transferor shall be required to ensure that on the Effective Date there
is  sufficient  Inventory present at the Facility to operate the Facility at its
then  current  occupancy  for a period of one (1) week after the Effective Date.
Transferor  shall execute and deliver to Owner and New Operator on the Effective
Date  a  Bill  of  Sale  in the form attached hereto as Exhibit A confirming the
conveyance of the Transferred Tenant Personal Property to Owner or New Operator,
as  applicable,  as  provided  herein  free  and clear of all liens, charges and
encumbrances  (except for existing purchase money security interests in favor of
third  party  vendors  to  the  extent  New  Operator  agrees to assume the same
pursuant  to  Section  2.5).

          2.2     Attached  hereto as Exhibit B is a list of any and all prepaid
expenses  with  respect  to  the  Facility  (the  "PREPAID  EXPENSES") for which
Transferor is seeking reimbursement from New Operator on the Effective Date (the
"PREPAID  EXPENSE  SCHEDULE").  For and in partial consideration of the Transfer
Consideration,  as  of  the  Effective Date, Transferor shall sell, transfer and
convey  to  New Operator all of Transferor's right, title and interest in and to
the  Prepaid  Expenses. Transferor shall  have the right during the fifteen (15)
days  after  the  Effective Date to provide New Operator with an updated Prepaid
Expense  Schedule  (the  "UPDATED PREPAID EXPENSE SCHEDULE"); provided, however,
New  Operator  shall  have  no  obligation to pay Transferor for any new Prepaid
Expenses  included  in  the  Updated  Prepaid  Expense Schedule (the "ADDITIONAL
PREPAID  EXPENSES")  unless  and  until  New  Operator  approves such Additional
Prepaid Expenses which approval shall be granted or denied in writing within two
(2)  business  days  after New Operator's receipt of the Updated Prepaid Expense
Schedule.  For and in partial consideration of the Transfer Consideration, as of
the  Effective  Date, Transferor shall sell, transfer and convey to New Operator
all  of  Transferor's  right, title and interest in and to the Prepaid Expenses.
If  and  to  the  extent  any  Additional  Prepaid  Expenses are approved by New
Operator  after the Effective Date in accordance with this Section 2.2, then New
Operator  shall  reimburse  Transferor  therefore  as  part  of the Post Closing
Adjustment  Process  (as defined below). Transferor shall execute and deliver to
New  Operator on the Effective Date an Assignment Agreement in the form attached
hereto  as  Exhibit  C confirming the conveyance of the Prepaid Expenses and, if
applicable,  any  Additional  Prepaid  Expenses,  as  provided  herein.

     2.3     Notwithstanding  anything  to  the  contrary  contained  herein,
Transferor  shall  not  sell,  transfer  or  convey  to  New  Operator  any  of
Transferor's  right,  title  and  interest  in and to (i) the technical systems,
methods,  policies,  processes, procedures and controls, and the information and
materials  compiled  or  prepared  in  connection  therewith,  (ii) the trade or
service  names,  associated  marks  and  other intellectual property and related
collateral  marketing materials, including without limitation the names "Outlook
Pointe,"  "Balanced  Gold"  and  "Treasures," in each case used by Transferor in
connection  with  the  marketing and/or operation of the Facility (collectively,
the "INTANGIBLE PROPERTY") or (iii) the petty cash maintained at the Facility as
of  the  Effective  Date  (the "PETTY CASH") (hereinafter, the Excluded Personal
Property,  the  Intangible  Property  and  the  Petty  Cash  may be collectively
referred  to  as the "EXCLUDED ASSETS"); provided, however, that for a period of
ninety  (90)  days  after  the  Effective  Date,  New  Operator  shall  have the
non-exclusive  right  to use certain names used by Transferor in connection with
the  operation of  the Facility, including the names "Outlook Pointe," "Balanced
Gold"  and  "Treasures" and certain related collateral marketing materials which
are located at the Facility on the Effective Date, solely in connection with its
operation of the Facility.  New Operator shall execute and deliver to Transferor
on the Effective Date a License Agreement in the form attached hereto as Exhibit
D  confirming  New  Operator's  right  to  use  the  name  of  the  Facility.
          2.4.     Prior  to the Execution Date, Transferor has delivered to New
Operator  litigation, tax, bankruptcy and lien searches conducted in the name of
Transferor  and  the  Facility  in  the States in which the Facility is located,
Transferor  is  incorporated  and  Transferor  maintains  its principal place of
business  (the "LITIGATION AND LIEN SEARCHES"). New Operator shall have a period
of ten (10) business days after the Effective Date in which to advise Transferor
in  writing of any liens, judgments or other matters reflected in the results of
the  Litigation  and Lien Searches to which New Operator objects (the "OBJECTION
NOTICE"),  it  being understood and agreed that New Operator shall have no right
to  object  to any such lien unless the same affects or relates to the Facility,
the  Inventory  or  the Transferred Tenant's Personal Property. Transferor shall
have a period of thirty (30) days after receipt of the Objection Notice to cause
the  liens,  judgments  or  other  matters described therein (the "OBJECTIONABLE
LIENS")  to be released/resolved; provided, however, in the event Transferor has
not  caused  all  of the Objectionable Liens to be released/resolved within such
thirty  (30)  day  period  but  Transferor  is  diligently  pursuing  the  same,
Transferor  shall  have  an  additional  period  of thirty (30) days in order to
complete  the  release/resolution  of  the  Objectionable  Liens.

     3.     Transfer  Consideration.
            -----------------------

          The  total  consideration (the "TRANSFER CONSIDERATION") to be paid to
Transferor  by  New  Operator  for  the  Prepaid  Expenses  (collectively,  the
"TRANSFERRED ASSETS") shall be an amount equal to the Prepaid Expenses set forth
in the Prepaid Expense Schedule and any Approved Additional Prepaid Expenses set
forth  in  the  Updated  Prepaid  Expense  Schedule.

     4.     Resident  Property.
            ------------------

          4.1.     Transferor  hereby  represents to New Operator that there are
no  resident  trust  funds.

          4.2.     Within  five  (5)  business  days  after  the Effective Date,
Transferor  shall  provide  New  Operator  with  a schedule (the "RENTS AND FEES
SCHEDULE")  of  all  of  the  (i)  prepaid  rents/move in deposits (the "PREPAID
RENTS")  and  (ii)  the  unearned  portion  of  any  entrance/community fees (as
hereinafter  more  fully described) (the "ENTRANCE FEES") being held in trust by
Transferor  for  the  residents  or  prospective  residents  of  the  Facility
(collectively, the "RENTS AND FEES"), which schedule shall set forth the name of
each  resident  or  prospective  resident for whom such Rents and Fees are being
held  and  the amount of the Rents and Fees being held for each such resident or
prospective  resident.  Concurrently  with  the  delivery  of the Rents and Fees
Schedule,  Transferor  shall  remit  the  Rents and Fees to New Operator and New
Operator shall accept the same and shall assume Transferor's obligation to apply
them  to  the rent due from, or to return them to, as applicable, the applicable
resident/prospective  resident.  New  Operator  shall indemnify, defend and hold
harmless  Transferor for any claims or liabilities arising out of New Operator's
assumption  and  application of the Rents and Fees (including any costs, losses,
expenses and reasonable attorneys fees).  Notwithstanding the foregoing, nothing
herein  shall  be  construed as releasing Transferor from liability in the event
the  amount of the Rents and Fees remitted by Transferor to New Operator is less
than  the  amount  of  the  Rents  and  Fees  delivered  to  Transferor  by  the
residents/prospective  residents  of  the  Facility,  as  to  which  liability
(including  any  costs,  losses  and  expenses,  including,  but not limited to,
reasonable  attorneys fees incurred by New Operator) Transferor shall indemnify,
defend  and  hold harmless New Operator. Transferor shall execute and deliver to
New  Operator on the Effective Date an Assignment Agreement in the form attached
hereto  as Exhibit C confirming the conveyance of the Rents and Fees as provided
herein. For purposes hereof, the unearned portion of any entrance/community fees
shall mean the portion of such fees which Transferor could be required to return
to  the applicable resident during any period from and after the Effective Date.

     4.3.     Within thirty (30) days after the Effective Date, Transferor shall
return to the residents of the Facility any and all security deposits being held
by  Transferor  (the  "SECURITY DEPOSITS") after deducting therefrom any amounts
which  Transferor  claims  as  being  due from such residents to Transferor (the
"RETURNED  SECURITY  DEPOSITS").  Transferor shall use its good faith efforts to
deliver  to  New  Operator,  within thirty (30) days after the Effective Date, a
written  acknowledgement  signed by each resident of the Facility confirming the
amount  of the Security Deposit delivered by such resident to Transferor and the
amount  of  the  Returned  Security  Deposit  received  by  such  resident  from
Transferor or evidence that Transferor has advised each resident that by cashing
the  check  provided  by  Transferor  with  the  Returned Security Deposit, such
resident  has  acknowledged  receipt  and  the  accuracy  of the amount thereof.
Transferor  acknowledges and agrees that New Operator shall have no liability to
Transferor  or  the  residents  of  the  Facility  with  respect to the Security
Deposits  or the Returned Security Deposits and shall indemnify, defend and hold
harmless New Operator from and after the Effective Date from and against any and
all claims which may be asserted against it related to the Security Deposits and
the Returned Security Deposits, including any claims that amounts are owing to a
resident  in  excess  of the amount of the Returned Security Deposit received by
such  resident.

     5.     Employees.
            ---------

     5.1     New  Operator  acknowledges  and agrees that prior to the Execution
Date,  Transferor  has  delivered  to New Operator a schedule which reflects the
following  for  the Facility: (i) the names of all of Transferor's employees and
(ii)  such  employees'  positions  and  rates  of pay (the "EMPLOYEE SCHEDULE").
Transferor shall deliver an updated version of the Employee Schedule within five
(5)  business  days  after  the  Effective  Date.

          5.2     On  the  Effective Date, New Operator shall have the right, in
its  sole  and  absolute  discretion, but not the obligation, to offer to employ
Transferor's  employees  that  work  at  the Facility.  Upon request, Transferor
shall  assist  New  Operator  in  its  efforts  to  employ  any  of Transferor's
employees.  On  the Effective Date, Transferor shall terminate the employment of
all employees at the Facility.  New Operator agrees to cooperate with Transferor
to  provide  information  concerning  which employees, if any, are being offered
employment  by  New  Operator  (collectively,  the  "RETAINED  EMPLOYEES").  In
connection  with  the  termination  of  the  employee of the Facility employees,
Transferor  shall  indemnify,  defend  and  hold  harmless New Operator from any
liability,  loss,  costs and expenses, including, but not limited to, reasonable
attorneys  fees,  which  it may incur under the WARN Act or any equivalent State
law.

     5.3     Transferor  shall  remain  liable  for all Employee Liabilities (as
defined  below)  relating to all employees for the period prior to the Effective
Date  (whether  or  not the same arise or accrue prior to or after the Effective
Date),  including  without  limitation  (i)  payroll through the day immediately
preceding  the  Effective Date, which will be paid by Transferor on May 2, 2003,
with respect to pay period ended April 26, 2003 and on May 16, 2003 with respect
to  pay period ending April 30, 2003 (THE "APRIL PAYROLL") and (ii) any Employee
Liabilities  relating to the termination of any employees on the Effective Date.
Transferor shall pay all earned or accrued vacation, holiday or sick pay through
the day immediately preceding the Effective Date to all employees as part of the
April  Payroll.  New  Operator shall be responsible for all Employee Liabilities
relating  to the Retained Employees that relate to the period from and after the
Effective  Date.  For  the  purposes  of  this Agreement, "EMPLOYEE LIABILITIES"
shall mean all wages, salaries, commissions, earned or accrued vacation, holiday
or  sick  pay,  severance  pay  (if  any),  any  contributions required or costs
associated  with any employee welfare benefit plan as defined by Section 3(1) of
ERISA,  any contributions required or costs associated with any employee pension
benefit  plan as defined by Section 3(2) of ERISA, any contributions required or
costs  associated  with  any non-qualified employee benefit plan, federal, state
and/or  local  payroll  taxes,  unemployment  insurance costs, any contributions
required  or  costs  associated  with workers' compensation liabilities, and any
claims  made  by  any  employee  arising  out  of  or  connected with his or her
employment  or  the  termination  thereof.

          5.4     Transferor  shall  offer  and  provide,  as appropriate, group
health  plan  continuation coverage pursuant to the requirements of Section 601,
et seq. of ERISA and Section 4980B of the Internal Revenue Code ("COBRA") to all
of  the employees of the Facility to whom it is required to offer the same under
applicable  law  up  through  and  including  the  day immediately preceding the
Effective  Date.  New  Operator agrees to cooperate with Transferor in providing
information  concerning  the  Retained  Employees,  if  any,  from and after the
Effective  Date,  and  the nature of the benefits offered to each such employee.
As  of  the  Effective  Date,  all  Retained  Employees  shall  be  eligible for
participation  in  a  group  health  plan  (as  defined for purposes of Internal
Revenue  Code  Section 4980B) established and maintained by New Operator for the
general  benefit  of  its  employees and their dependents in accordance with the
terms  and  conditions  of  New  Operator's  employment  policies.

     5.5.     Transferor  represents  and warrants that none of the employees of
the Facility are members of a labor union in connection with their employment at
the Facility and that there are no union organizing activities currently pending
at  the  Facility.

     6.     Accounts  Receivable.
            --------------------

          6.1     Transferor  shall  retain its right, title and interest in and
to all unpaid trade accounts receivable with respect to the Facility that relate
to  the  period  up  through  and  including  the  day immediately preceding the
Effective  Date.  New  Operator  acknowledges  and  agrees  that  prior  to  the
Execution  Date,  Transferor  has  provided New Operator with a schedule setting
forth  by  resident  its  outstanding  trade  accounts  receivable as of the day
immediately  preceding  the  Effective  Date.

          6.2     Payments received by New Operator or Transferor from and after
the  Effective  Date  from third party payors and private pay residents shall be
handled  as  follows:

               6.2.1     If  such  payments  either specifically indicate on the
accompanying remittance advice, or if the parties agree, that they relate to the
period  prior  to  the  Effective  Date,  they shall be retained or forwarded to
Transferor,  along with the applicable remittance advice, in accordance with the
provisions  of  Section  6.2.5  below.

               6.2.2     If  such  payments  indicate  on  the  accompanying
remittance  advice, or if the parties agree, that they relate to the period from
and  after  the  Effective  Date,  they  shall  be  forwarded or retained by New
Operator,  along  with  the applicable remittance advice, in accordance with the
provisions  of  Section  6.2.5  below.

               6.2.3     If  such  payments  indicate  on  the  accompanying
remittance  advice,  or  if  the  parties agree, that they relate to periods for
which  both  parties  are  entitled to reimbursement under the terms hereof, the
portion  thereof  which  relates to the period from and after the Effective Date
shall  be  forwarded  to  or  retained  by New Operator and the balance shall be
retained  by  or  remitted  to  Transferor  in accordance with the provisions of
Section  6.2.5  below.

               6.2.4.  Any  payments received by New Operator from and after the
Effective  Date  from  or  on  behalf  of  private pay patients with outstanding
balances  as  of  the Effective Date which fail to designate the period to which
they  relate,  will  first  be  applied  by New Operator to reduce the patients'
post-Effective Date balances, with any excess applied to reduce any balances due
for  services  rendered  by  Transferor  prior  to  the  Effective  Date.

               6.2.5     All  amounts  owing to Transferor or New Operator under
this  Section 6.2 shall be settled within thirty (30) days after the end of each
month  in  which  the  payment  was  received.

          6.3     In  the  event  the  parties mutually determine that any third
party  payors or private pay residents are entitled to a refund of payments, the
portion  thereof  that  relates  to the period from and after the Effective Date
shall be paid by New Operator and the portion thereof that relates to the period
prior  to  the  Effective  Date  shall be paid by Transferor to such third party
payor  or  private  pay  resident.

          6.4     In  the  event the parties mutually determine that any payment
hereunder  was  misapplied  by the parties, the party which erroneously received
said payment shall remit the same to the other within fifteen (15) business days
after  said  determination  is  made.

          6.5     For  the  six (6) month period following the Effective Date or
until  Transferor  receives payment of all accounts receivable attributed to the
operation  of the Facility prior to the Effective Date, whichever is sooner, New
Operator  shall  provide  Transferor  with an accounting by the 30th day of each
month  setting  forth  all amounts received by New Operator during the preceding
month  with respect to the accounts receivable of Transferor which are set forth
in  the  schedule  provided by Transferor pursuant to Section 6.1.  New Operator
shall  deliver  such  accounting to the following address: Kathy Evans, Balanced
Care  Corporation,  1215  Manor  Drive,  Mechanicsburg,  PA  17055.

          6.6.     Upon  request,  for  a  period  of  six  (6) months after the
Effective Date, Transferor shall provide New Operator with an accounting setting
forth all amounts received by Transferor during the preceding month with respect
to  payments  from  the residents of the Facility which are due and owing to New
Operator  in  accordance  with  the  terms  of  this  Section  6.

6.7.     Each of Transferor and New Operator shall have the right to inspect all
     cash  receipts  of  the  other  party  during  weekday  business  hours  on
reasonable  prior  notice  in  order to confirm such party's compliance with the
obligations  imposed  on  it  under  this  Section  6.

     7.     Prorations;  Liabilities.
            ------------------------

          7.1     As between New Operator and Transferor, revenues and expenses,
utility  charges for the billing period in which the Effective Date occurs, real
and personal property taxes, liabilities under the Assumed Contracts (as defined
in  Section  9  below),  vendor  payables  for  the  billing period in which the
Effective  Date  occurs,  and  other  related  items  of  revenue  or  expense
attributable to the Facility (other than the Prepaid Expenses which are included
in  the  Transfer Consideration and accordingly shall inure fully to the benefit
of  New  Operator after the Effective Date) shall be prorated between Transferor
and New Operator as of the Effective Date.  In general, such prorations shall be
made so that as between New Operator and Transferor, Transferor shall be charged
for  unpaid  expenses  to  the  extent that the same are attributable to periods
prior  to the Effective Date.  The intent of this provision shall be implemented
by  New  Operator  remitting  to  Transferor any invoices that describe goods or
services provided to or expenses incurred by the Facility prior to the Effective
Date and by New Operator assuming responsibility for the payment of any invoices
that describe goods or services provided to or expenses incurred by the Facility
from  and  after  the  Effective  Date.

          7.2     All  such prorations shall be made on the basis of actual days
elapsed  in  the relevant accounting or revenue period and shall be based on the
most  recent  information available to Transferor.  Utility charges that are not
metered  and  read  on  the  Effective  Date  shall  be estimated based on prior
charges,  and  shall  be  re-prorated  upon  receipt  of  statements  therefor.

          7.3     All  amounts  owing  from  one party hereto to the other party
hereto  that require adjustment after the Effective Date shall be settled within
sixty  (60)  days  after  the  Effective  Date  or, in the event the information
necessary  for  such  adjustment  is  not  available  within said sixty (60) day
period,  then  as  soon  thereafter as practicable (the "POST CLOSING ADJUSTMENT
PROCESS").

     8.     Due  Diligence  Review/Access  to  Records.
            ------------------------------------------

     8.1.     New  Operator  and  Transferor  acknowledge and agree that for the
thirty  (30)  days prior to the date hereof (the "DUE DILIGENCE REVIEW PERIOD"),
Transferor  has provided New Operator and its agents with access to the Facility
and  the  books  and records thereof in order to enable New Operator, at its own
cost  and  expense,  to complete its investigations with respect to the Facility
and  the  operation thereof as it deems to be reasonably necessary in connection
with  the  transaction  contemplated  by  this Agreement. Such due diligence has
included,  but  has  not  been  limited to, zoning investigations, soil studies,
environmental  assessments,  seismic  assessments, wetlands reports, appraisals,
investigations  of  Transferor's  and  the  Facility's  books  and  records  and
operations,  dry  rot  and  termite  inspections  and  structural  and  property
condition  inspections,  including  personal  property inspections, provided any
investigations which were physically intrusive on the Facility were consented to
in  advance  by  Transferor  (the  "DUE  DILIGENCE  REVIEW"). New Operator shall
maintain  the  confidentiality  of  any  documents or information obtained by it
during  the  course  of  its  Due  Diligence  Review  and to the extent any such
documents or information are obtained from Transferor, New Operator shall return
the  same  to  Transferor  in  the  event the transaction fails to close for any
reason  whatsoever.  Transferor  and New Operator acknowledge and agree that New
Operator  had  the  right  to  advise Transferor on or before the end of the Due
Diligence  Review  Period  if  New  Operator  was  not  satisfied for any reason
whatsoever with the results of its Due Diligence Review and New Operator has not
done  so  and  accordingly  that  New  Operator  has elected to proceed with the
transaction  provided  for  herein  as  of  the Effective Date.  Notwithstanding
anything to the contrary contained in this Agreement, pursuant to the provisions
of  that  certain Letter of Intent dated as of February 17, 2003, executed among
Parent and its affiliates and Owner and its affiliates (the "LOI"), in the event
New  Operator  and  Transferor do not consummate the transfer of the Facility in
accordance  with  this Agreement on or before May 31, 2003, Owner shall have the
obligation to proceed with, and to accept the assumption of, the transfer of the
Facility  without any further obligation or liability on the part of Transferor.

          8.2.     On  the  Effective  Date,  Transferor  shall  deliver  to New
Operator  possession  of all of the books and records of the Facility maintained
at  the  Facility,  including  resident  and  employee  records but specifically
excluding  Transferor's  corporate  and  regional accounting and proprietary and
confidential  books  and records. In addition on such date or dates prior to the
Effective  Date as may be agreed upon by Transferor and New Operator, Transferor
shall  provide  to  New Operator in an agreed electronic format such information
with  respect to (i) the vendors serving the Facility, (ii) employee payroll and
(iii)  resident  billing  as New Operator may reasonably deem to be necessary in
connection with its operation of the Facility from and after the Effective Date.

          8.3.     Transferor  shall  be entitled, at its sole cost and expense,
to  remove  the originals of any records delivered to New Operator, for purposes
of  litigation  involving a resident or employee to whom such record relates, if
an  officer  of  or  counsel for Transferor certifies that such original must be
produced  in  order  to  comply  with  applicable law or the order of a court of
competent  jurisdiction  in  connection  with  such  litigation.  Any  record so
removed  shall  promptly  be  returned  to  New  Operator following its use, and
nothing  herein  shall  be  interpreted  to prohibit New Operator from retaining
copies  of  any  such  documents.

          8.4.     New  Operator  agrees  to  use good faith efforts to maintain
such  books,  records  and  other  material comprising records of the Facility's
operations  that  have been received by New Operator from Transferor, including,
but  not  limited to, resident records, to the extent required by law, but in no
event  less  than  two  (2) years, and shall allow Transferor and its agents and
representatives  to  have reasonable access to (upon reasonable prior notice and
during  normal  business  hours), and, at Transferor's sole cost and expense, to
make  copies  thereof,  and  shall,  at Transferor's request, allow Transferor a
reasonable  opportunity  to  remove  such documents, at Transferor's expense, at
such  time  after  such record retention period as may be required by law as New
Operator  shall  decide  to dispose of such documents; provided, however, absent
gross  negligence or willful misconduct by New Operator, nothing herein shall be
construed  as  imposing any liability on New Operator to Transferor or any third
party  in  the event such books, records and other material are not available as
and  when  access  thereto  is  requested  by  Transferor.

          8.5.     From and after the Effective Date, Transferor shall allow New
Operator  and  its agents and representatives to have reasonable access to (upon
reasonable  prior  notice and during normal business hours and at New Operator's
sole  cost  and  expense),  and  to  make  copies  of, the books and records and
supporting material relating to the Facility which are not included in the books
and  records  delivered  to  New Operator pursuant to Section 8.2, to the extent
reasonably  necessary  to  enable New Operator to among other things investigate
and defend malpractice, employee or other claims, to file or defend cost reports
and  tax  returns,  to complete/revise, as needed, any patient assessments which
may  be  required  for  New Operator to seek reimbursement for services rendered
from and after the Effective Date, to verify accounts receivable collections due
New  Operator,  to  defend wage and hour audits and to prepare audited financial
statements for the periods prior to and/or from and after the Effective Date, if
and  to the extent such audited financial statements are required to be filed by
New  Operator  under  applicable  securities  laws.

     9.     Contracts.
            ---------

     9.1.     Transferor  and  New  Operator acknowledge and agree that prior to
the  date  hereof  (i)  Transferor  has  provided  New Operator with a list (the
"OPERATING  CONTRACT  SCHEDULE")  and  copies  of  all vendor, service and other
agreements,  other  than the Master Operating Contracts (as hereinafter defined)
relating  to  the  Facility  (the  "OPERATING CONTRACTS") and with a list of the
Master  Operating  Contracts (the "MASTER OPERATING CONTRACT SCHEDULE") and (ii)
New  Operator has informed Transferor in writing of any Operating Contract which
New  Operator  wishes  to  have  assigned  to  it  as of the Effective Date (the
"DESIGNATED  OPERATING CONTRACTS"). A list of the Designated Operating Contracts
is  attached  hereto  as  Schedule  2.

9.2.     New Operator acknowledges and agrees that the Operating Contracts shall
     not  include  the  Master  Operating  Contracts,  that the Master Operating
Contract  Schedule is being provided for informational purposes only and that in
no  event  will  the New Operator have the right to designate a Master Operating
Contract  to be assigned to New Operator. For purposes hereof a Master Operating
Contract  shall  be  a  contract  in  the name of Balanced Care or any affiliate
thereof  and  which  covers  equipment  or  services  located  at or provided to
facilities operated by Transferor or its affiliates in addition to the Facility,
and  which  prohibits  the  equipment  or services relating to the Facility from
being  assigned  or  assumed without the assignment and assumption of all of the
equipment  and  services  covered  by  the  contract.

9.3.     Transferor  shall  use  its  commercially  reasonable  efforts,  with
cooperation  by  New  Operator,  to secure any third party consents which may be
required in connection with the assignment of the Designated Operating Contracts
     to  New  Operator,  it  being  understood  and  agreed that there can be no
assurances  that  Transferor  will  be  able  to secure any third party consents
needed  to  assign  to  New  Operator  any  or  all  of the Designated Operating
Contracts.  New  Operator  agrees  to  provide  and  execute  and  deliver  such
documents  as  are  reasonably  necessary  in  order  to  secure any third party
consents  with respect to the Designated Operating Contracts, including, without
limitation, New Operator's financial statements, vendor credit applications, and
vendor  assignment  and  assumption  agreements.

9.4.     Transferor  shall terminate all of the Operating Contracts not assigned
to  New  Operator  and  shall  have  the  right  to remove from the Facility any
equipment which is subject to such unassigned Operating Contracts or to a Master
     Operating  Contract;  provided,  however,  New  Operator  and  Transferor
acknowledge  and  agree  that certain of the Operating Contracts not assigned to
New  Operator relate to the copiers, fax machines and/or phone system (excluding
the  nurse  call  system  which  shall remain at the Facility and not be removed
despite  removal  of  the  phone  system)  at  the  Facility  (the  "DESIGNATED
EQUIPMENT")  and  that  Transferor  shall  leave the Designated Equipment at the
Facility until New Operator advises Transferor that the Designated Equipment may
be removed from the Facility and during the period that the Designated Equipment
remains  in the Facility, which period shall not exceed sixty (60) days from the
Effective  Date  (the  "DESIGNATED EQUIPMENT USE PERIOD"), New Operator shall be
required  to pay to Transferor the amounts set forth in Exhibit E hereto for the
use  thereof  (the "DESIGNATED EQUIPMENT PAYMENTS"). New Operator and Transferor
agree  that  the  amount  due from New Operator to Transferor for the Designated
Equipment Payments shall be settled through the Post Closing Adjustment Process.
In  the  event  New  Operator  has  not  advised  Transferor  by  the end of the
Designated Equipment Use Period that it desires to have the Designated Equipment
removed  from  the  Facility,  Transferor  shall  have the right in any event to
remove the same from the Facility during normal business hours and on reasonable
advance  notice to New Operator.  Transferor shall be solely responsible for any
costs  incurred  by  it  in removing the Designated Equipment from the Facility.

9.5.     Nothing  herein  shall  be  construed  as imposing any liability on New
Operator  with  respect  to any obligations under Designated Operating Contracts
which  relate to the period prior to the Effective Date even if the same are not
payable  until  after  the  Effective Date, it being specifically understood and
agreed  that New Operator's liability shall be limited to its acts and omissions
thereunder  from  and  after  the  Effective  Date.

     9.6.     In  addition  to the foregoing rights granted to New Operator with
respect  to  the  Designated  Operating  Contracts,  Transferor agrees that upon
request  and  to  the  extent  permitted or required by applicable law, from and
after  the  Effective Date New Operator shall have the right to provide services
to the residents located at the Facility and to bill for such services under any
applicable  third  party  payor  provider numbers or provider agreements held by
Transferor  (the  "Provider  Agreement")  until  such  time  as  a  new Provider
Agreement  is  issued  to,  and  in  the  name  of,  New  Operator.

     10.     Representations  and  Warranties  of  Transferor.  Transferor
             ------------------------------------------------
represents  and  warrants  to  New  Operator  as  follows:

          10.1.     Transferor  has  all  necessary power and authority to enter
into  this  Agreement  and  to execute all documents and instruments referred to
herein  or  contemplated  hereby and to consummate the transactions provided for
herein  and  all  necessary  action  has been taken to authorize the individuals
executing  this  Agreement  to  do so.  This Agreement has been duly and validly
executed  and  delivered  by Transferor and is enforceable against Transferor in
accordance  with  its  terms,  except  as  such enforceability may be limited by
applicable  bankruptcy  laws  and  general principals of equity.  This Agreement
does  not  conflict with Transferor's Articles of Incorporation or Bylaws or any
contract,  document  or  instrument  to  which Transferor is a party or by which
Transferor  or  any  of  its assets may be bound or affected.  Transferor is not
required  to  secure the consent of any third party to enter into this Agreement
or  to  carry  out  the terms hereof, other than the consents from Owner and the
consents  specifically  contemplated  by  the  terms  hereof with respect to the
assignment  of  the Designated Operating Contracts. Transferor is not in default
under  any  of  the  Operating  Contracts  or  the  Master  Operating Contracts.

          10.2.     Transferor  has not received any notice that the transaction
provided  for herein has been challenged by any governmental agency or any other
person,  nor  does  Transferor  know  or have reasonable grounds to know, of any
basis  for  any  such  actions,  suits  or  proceedings.

          10.3.     Transferor has not received any notice from any governmental
body  claiming  a violation of any licensure, certification, building, zoning or
environmental  laws  or  ordinances  with  respect  to  the Facility ("VIOLATION
NOTICES"),  which  would  have  a  material  adverse  effect  on  the leasing or
operation  of  the  Facility  or  which  would  prevent  the consummation of the
transactions  contemplated  by  the  terms  of  this  Agreement.  Transferor has
delivered  to  New  Operator prior to the Execution Date copies of any Violation
Notices  received  by  Transferor  within  the  twelve  (12)  months immediately
preceding  the  Execution  Date.

          10.4.     To Transferor's knowledge, (v)      during the time in which
Transferor  has  leased  and  operated  the  Facility,  Transferor has not used,
generated,  transported,  treated,  constructed,  deposited,  stored,  disposed,
placed  or  located at, on, under or from the Facility any flammable explosives,
radioactive  materials,  hazardous  or  toxic  substances,  materials or wastes,
pollutants  or  contaminants defined, listed or regulated by any local, state or
federal  environmental  laws  other  than hazardous wastes used/generated in the
ordinary  course of the operation of the Facility, all of which have been  used,
generated,  handled,  stored,  transported  and/or  disposed of by Transferor in
compliance  with  applicable  law.

               10.5.     Transferor  has  not  received  any  notice  that  (vi)
there  is  presently  pending or contemplated or threatened, condemnation of the
Facility  or  any  part  thereof.

          10.6.     There  is  no  litigation, investigation or other proceeding
pending  or,  to  Transferor's  knowledge,  threatened  against  or  relating to
Transferor,  its  properties  or business (the "PENDING/THREATENED LITIGATION"),
which  would  have  a material adverse effect on the leasing or operation of the
Facility  or  which  would  prevent  the  consummation  of  the  transactions
contemplated  by  the  terms  of this Agreement. Transferor has delivered to New
Operator  prior  to  the  Execution  Date  a  summary  of all Pending/Threatened
Litigation  and  will  update  such  list  as  additional litigation is filed or
threatened  between  the  Execution  Date  and the Effective Date. Upon request,
Transferor  will  also provide New Operator with copies of any and all pleadings
related  to  the  Pending/Threatened  Litigation.

          10.7.     No  attachments,  execution proceedings, assignments for the
benefit  of  creditors,  insolvency,  bankruptcy,  reorganization,  or  other
proceedings  are  pending  or,  to  Transferor's  knowledge,  threatened against
Transferor,  nor  are  any  such  proceedings  contemplated  by  Transferor.

          10.8     Transferor  has  not  received  any  notices  of violation or
advisory  action  by regulatory agencies regarding environmental control matters
or  environmental  permit  compliance  with  respect  to  the  Facility.

          10.9     Transferor  has  not  received any notice of any proceedings,
governmental  administrative  actions,  or  judicial  proceedings  pending  or
contemplated  under any federal, state or local laws regulating the discharge of
hazardous  or toxic materials or substances into the environment relating to the
Facility.

10.10     Transferor  has  no  actual  knowledge  of any material physical plant
deficiencies  with  respect  to  the Facility, which, for purposes hereof, shall
include  but  not  be  limited  to,  roof leaks, settling, structural defects or
malfunctioning  HVAC systems (the "MATERIAL PHYSICAL PLANT DEFECTS"). Nothing in
this  Section  10.10  shall be construed as imposing liability on Transferor for
Physical  Plant Defects other than those which were actually known to Transferor
and  not  disclosed  to  New  Operator  prior  to  the  Effective Date, it being
understood  and  agreed  that  (i)  New  Operator  has  specifically agreed that
Transferor  shall  have  no liability for any matters which New Operator asserts
Transferor "should have" had knowledge about prior to the Effective Date as long
     as  Transferor did not, in fact, have actual knowledge thereof prior to the
Effective  Date  and  (ii) New Operator has been advised that Transferor did not
conduct  any  inspections  of  the  Facilities  prior  to  making  the foregoing
representation  and  warranty  with  respect  to  the  Physical  Plant  Defects.

     10.11     Transferor  agrees  to cooperate with New Operator and Owner from
and  after the Effective Date to cause the liens on title described in Exhibit F
to  be  released.  The  matters  set forth in this Section 10.11 are hereinafter
referred  to  as  the  "Title  and  Survey  Issues."

          10.12.     As  of  the  Effective Date, Transferor has not billed, and
shall  not  bill,  the  residents  of  the  Facility  for their occupancy of the
Facility  during  the month of May, 2003 and as of the Effective Date Transferor
maintains,  and  at  all  times  prior  to  the  Effective  Date  Transferor has
maintained, the Security Deposits in a segregated account established solely for
the  purpose  of  depositing  therein  and releasing therefrom resident security
deposits  and  such  account  is  maintained  by  Transferor fully separate from
Transferor's  general  working  capital  account(s).

     11.     Representations  and  Warranties  of  New  Operator.  New  Operator
             ---------------------------------------------------
represents  and  warrants  to  Transferor  as  follows:

          11.1     New  Operator  has all necessary power and authority to enter
into  this  Agreement  and  to execute all documents and instruments referred to
herein  or  contemplated  hereby and to consummate the transactions provided for
herein  and  all  necessary  action  has been taken to authorize the individuals
executing  this  Agreement  to  do so.  This Agreement has been duly and validly
executed  and  delivered by New Operator and is enforceable against New Operator
in  accordance  with  its terms, except as such enforceability may be limited by
applicable bankruptcy laws and general principals of equity. This Agreement does
not  conflict  with  New  Operator's  Articles of Incorporation or Bylaws or any
contract,  document  or  instrument to which New Operator is a party or by which
New Operator or any of its assets may be bound or affected.  New Operator is not
required  to  secure the consent of any third party to enter into this Agreement
or  to  carry  out  the  terms  hereof, other than the consents by Owner and the
consents  specifically  contemplated  by  the  terms  hereof with respect to the
assignment  of  the  Designated  Operating  Contracts.

          11.2     There  is  no  litigation,  investigation or other proceeding
pending  or,  to New Operator's knowledge, threatened against or relating to New
Operator,  its  properties  or business, which would prevent the consummation of
the  transactions  contemplated  by  the  terms  of  this  Agreement

          11.3     No  attachments,  execution  proceedings, assignments for the
benefit  of  creditors,  insolvency,  bankruptcy,  reorganization,  or  other
proceedings are pending or, to  New Operator's knowledge, threatened against New
Operator,  nor  are  any  such  proceedings  contemplated  by  New  Operator.

     12.     Indemnification.
             ----------------

          12.1     Transferor  hereby  indemnifies and agrees to defend and hold
harmless New Operator and its directors, officers, employees, agents, successors
and  assigns  from  and  against  any and all demands, claims, causes of action,
fines,  penalties,  damages  (but  specifically  excluding  lost  profits  and
consequential  damages),  losses,  liabilities  (including  strict  liability),
judgments,  and  expenses  (including, without limitation, reasonable attorneys'
and other professionals' fees and court costs) (collectively, a "Loss") incurred
in  connection  with  or  arising  from:  (i)  a  breach  by  Transferor  of its
representations,  warranties  and  obligations under this Agreement which is not
cured  within  ten  (10)  days after receipt of written notice from New Operator
setting  forth  in reasonable detail the nature of such breach, (ii) the acts or
omissions  of  Transferor  under  the Operating Contracts prior to the Effective
Date,  (iii)  the  leasing,  occupancy or operation of the Facility prior to the
Effective  Date,  (iv)  any  acts,  omissions or negligence of Transferor or any
person  claiming  under  Transferor,  or  the  contractors,  agents,  employees,
invitees  or  visitors  of  Transferor with respect to the Facility prior to the
Effective  Date,  (v)  any  failure  by  Transferor  to  pay  any liabilities in
connection with the Facility attributable to periods prior to the Effective Date
whether  they  arise  prior to or after the Effective Date or (vi) the Title and
Survey  Issues  even  if,  in the case of the Title and Survey issues, such Loss
does not arise from a breach of Transferor's representations and warranties with
respect  to  the  Title  and  Survey Issues, it being understood and agreed that
Transferor's representations and warranties with respect to the Title and Survey
Issues  are  limited,  in  certain  instances, to Transferor's knowledge but its
indemnity  with respect to the Title and Survey Issues is intended to be without
such  limitation.

          12.2     New Operator hereby indemnifies and agrees to defend and hold
harmless  Transferor  and its directors, officers, employees, agents, successors
and  assigns  from and against any and all Losses incurred in connection with or
arising  from:  (i)  a breach by New Operator of its representations, warranties
and  obligations  under  this  Agreement which is not cured within ten (10) days
after  receipt  of  written  notice  from Transferor setting forth in reasonable
detail  the  nature  of  such breach, (ii) the acts or omissions of New Operator
under  the  Designated  Operating  Contracts  or  the  Provider  Agreement,  if
applicable,  from  and after the Effective Date, (iii) the leasing, occupancy or
operation  of  the  Facility  from  and after the Effective Date, (iv) any acts,
omissions  or  negligence  of  New  Operator  or  any  person claiming under New
Operator,  or  the  contractors,  agents, employees, invitees or visitors of New
Operator  with  respect to the Facility from and after the Effective Date or (v)
any  failure  by  New  Operator  to  pay  any liabilities in connection with the
Facility  attributable  to  periods  from  and  after  the  Effective  Date.

          12.3     The  foregoing indemnification obligations shall survive this
Agreement.  All  matters  arising  from an indemnified party's negligence, gross
negligence  or  willful  misconduct  are  excluded  from  the  scope  of  the
indemnification  owing  to  such  party  set  forth  in  Sections 12.1 and 12.2.

     13.     RESERVED
             --------

     14.     Further  Assurances.  Each  of the parties hereto agrees to execute
             -------------------
and  deliver any and all further agreements, documents or instruments reasonably
necessary  to  effectuate this Agreement and the transactions referred to herein
or  contemplated hereby or reasonably requested by the other party to perfect or
evidence  their  rights  hereunder.

     15.     Notices  and Demands.  All notices and demands, requests, consents,
             --------------------
approvals,  and  other  similar  communications under this Agreement shall be in
writing  and  shall  be sent by personal delivery or by either (a) United States
certified  or registered mail, return receipt requested, postage prepaid, or (b)
Federal  Express  or  similar  generally  recognized overnight carrier regularly
providing proof of delivery or (c) facsimile transmission, addressed as follows:
To  Transferor  or  BCC:

Balanced  Care  Corporation
1215  Manor  Drive
Mechanicsburg,  PA  17055
Attention:  Legal  Department
Facsimile:  (717)  796-6294

With  Copy  To:

Kirkpatrick  &  Lockhart,  LLP
Henry  W.  Oliver  Building
535  Smithfield  Street
Pittsburgh,  PA  15222
Attention:  Steven  Adelkoff,  Esq.
Facsimile:  (412)  355-6501

To  New  Operator:

c/o  Emeritus  Corporation
3131  Elliott  Avenue
Suite  500
Seattle,  WA  98121
Attention:  Chief  Financial  Officer
Facsimile:  (206)  301-4500

With  Copy  To:

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

Any notice so given by mail shall be deemed to have been given as of the date of
delivery  (whether  accepted  or refused) established by U.S. Post Office return
receipt  or  the  overnight  carrier's  proof  of  delivery  or  the  facsimile
transmission  report, as the case may be, whether accepted or refused.  Any such
notice  not so given shall deemed given upon receipt of the same by the party to
whom  the  same  is  to  be  given.  Any  party hereto may designate a different
address  for itself by notice to the other party in accordance with this Section
15.

     16.     Payment  of  Expenses.  Each party hereto shall bear its own legal,
             ---------------------
accounting  and  other  expenses incurred in connection with the preparation and
negotiation  of  this  Agreement  and  the  consummation  of  the  transaction
contemplated  hereby,  whether  or  not  the  transaction  is  consummated.

     17.     Entire  Agreement;  Amendment;  Waiver.  This Agreement constitutes
             --------------------------------------
the  entire understanding between the parties hereto with respect to the subject
matter  hereof,  superseding all negotiations, prior discussions and preliminary
agreements  between  the  parties hereto.  This Agreement may not be modified or
amended  except in writing signed by the parties hereto.  No waiver of any term,
provision  or  condition of this Agreement in any one or more instances shall be
deemed to be or be construed as a further or continuing waiver of any such term,
provision  or condition of this Agreement.  No failure to act shall be construed
as  a  waiver  of  any  term,  provision, condition or rights granted hereunder.

     18.     Assignment.  Neither  this  Agreement  nor  the  rights,  duties or
             ----------
obligations  arising hereunder shall be assignable or delegable by Transferor or
New  Operator without the prior written consent of the other party, which may be
granted,  denied or conditioned in such party's reasonable discretion; provided,
however,  New  Operator  may  assign this Agreement to a wholly owned subsidiary
with  notice  to,  but  without  the  need  to secure the consent of, Transferor
provided  further  such  assignment shall not relieve New Operator of any of its
duties  or  obligations  under  this Agreement.  This Agreement shall be binding
upon,  and  inure  to  the  benefit  of, the respective successors and permitted
assigns  of  Transferor  and  New  Operator.

     19.     Joint Venture; Third Party Beneficiaries.  Nothing contained herein
             ----------------------------------------
shall be construed as forming a joint venture or partnership between the parties
hereto  with  respect  to  the subject matter hereof.  The parties hereto do not
intend  that  any  third  party  shall  have  any  rights  under this Agreement.

     20.     Announcements.  The  parties  hereto acknowledge and agree that any
             -------------
communications  to  the  employees  of  the Facility regarding the terms of this
Agreement  and  the  transactions  contemplated  hereunder  shall  be  mutually
acceptable to the parties hereto unless required to made pursuant to court order
or  law.

     21.     Captions.  The  section  headings  contained  herein  are  for
             --------
convenience  only  and  shall  not  be  considered  or  referred to in resolving
questions  of  interpretation.

     22.     Counterparts.  This  Agreement  may  be  executed and delivered via
             ------------
facsimile  and  in  one  or  more  counterparts  and all such counterparts taken
together  shall  constitute  a  single  original  Agreement.

     23.     Governing Law.  This Agreement shall be governed in accordance with
             -------------
the  laws  of the Commonwealth of Pennsylvania without regard to the conflict of
rules  of  such  State.


                       [SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
          [SIGNATURE PAGE FOR OUTLOOK POINTE AT HARRISBURG OPERATIONS TRANSFER
                                   AGREEMENT]

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

TRANSFEROR:     EXTENDED  CARE  OPERATORS  OF  HARRISBURG,  LLC

By:     BCC  AT  HARRISBURG,  INC.,  its  sole  member  and  manager

                    By:     /s/  Robin  L.  Barber
                            ----------------------
                         Robin  L.  Barber
                         Vice  President  and  Secretary


MANAGER:               BCC  AT  HARRISBURG,  INC.

     By:     /s/  Robin  L.  Barber
             ----------------------
                         Robin  L.  Barber
                         Vice  President  and  Secretary



OWNER:               CAPSTONE  CAPITAL  OF  PENNSYLVANIA,  INC.

     By:     /s/  John M. Bryant, Jr.
             ----------------------
     Name:   John M. Bryant, Jr.
             ----------------------

     Its:     Vice  President
              ---------------



NEW  OPERATOR:          EMERITUS  CORPORATION

By:     /s/  Raymond  R.  Brandstrom
        ----------------------------
     Raymond  R.  Brandstrom
     -----------------------
Its:     Chief  Financial  Officer
         -------------------------



PARENT:               BALANCED  CARE  CORPORATION

     By:     /s/  Robin  L.  Barber
             ----------------------
                         Robin  L.  Barber
                         Senior  Vice  President,  Legal  Counsel
                         And  Secretary

<PAGE>

                                    EXHIBIT A
                              FORM OF BILL OF SALE

                        BILL OF SALE, BLANKET CONVEYANCE
                                 AND ASSIGNMENT
     This Bill of Sale, Blanket Conveyance and Assignment (this "Assignment") is
                                                                 ----------
executed  by  [INSERT  NAME  OF  APPLICABLE  BCC TENANT], a Delaware corporation
            --------------------------------------------
("Tenant") and ______________[insert name of applicable BCC manager], a Delaware
     ---
corporation ("Manager", and together with Tenant, collectively,  "Assignor"), to
              -------                                             --------
and  for  the  benefit  of,  a  [insert  name of applicable HCRT Landlord]("HCRT
                                                                            ----
Assignee")  and  Emeritus  Corporation,  a  Washington  corporation  ("Emeritus
      --                                                               --------
Assignee",  and  together  with  HCRT  Assignee,  collectively,  "Assignee").
      --                                                          --------
                                    RECITALS
     WHEREAS,  Tenant  leases  the  property  described  on Exhibit "A" attached
                                                            -----------
hereto (the "Property") from HCRT Assignee pursuant to the Lease Agreement dated
             --------
as  of,,  (as  the  same  has  been amended from time to time, collectively, the
"Lease");  and
     -
WHEREAS, Tenant operates an assisted living facility (the "Facility") located on
                                                           --------
the  Property,  which  Facility  is  managed  by  Manager;  and
WHEREAS,  Tenant  desires HCRT Assignee to terminate the Lease and HCRT Assignee
desires  for  Assignor to sell, assign and convey unto HCRT Assignee or Emeritus
Assignee,  as  the  case  may  be,  the  Assigned Properties (as defined below).
NOW,  THEREFORE,  in  consideration  of the foregoing and Ten and No/100 Dollars
($10.00)  and  other good and valuable consideration in hand paid by Assignee to
Assignor,  the  receipt  and  sufficiency  of  which are hereby acknowledged and
confessed  by  Assignor,  Assignor and Assignee hereby act and agree as follows:
1.     CONVEYANCE  TO HCRT ASSIGNEE.  Assignor does hereby GRANT, BARGAIN, SELL,
       ----------------------------
CONVEY, ASSIGN, TRANSFER, SET OVER and DELIVER to and VEST in HCRT Assignee, its
successors  and  assigns,  the  following  properties  (collectively,  the "HCRT
                                                                            ----
Assigned  Properties"),  excluding,  however, (i) the items set forth on Exhibit
      --------------                                                     -------
"B"  attached  hereto  (collectively,  the  "Emeritus  Assigned  Properties" and
  -                                          ------------------------------
together  with  the  HCRT  Assigned  Properties,  collectively,  the  "Assigned
  -                                                                    --------
Properties"),  which  Emeritus  Assigned  Properties  shall  be  transferred  to
  -     --
Emeritus  Assignee  in  accordance  with Section 2 below, and (ii) the items set
  -
forth  on  Exhibit  C  attached  hereto,  which  shall  be retained by Assignor:
  -        ----------
     (a)     Any  and all personal property, tangible and intangible, equipment,
appliances,  furniture, furnishings, building materials, improvements, and other
personalty  of  whatever  kind  or  character owned by Assignor, lying and being
situated  at, incidental to, appurtenant to, or associated or used in connection
with  the  ownership,  use,  operation,  repair and maintenance of the Property,
including  all  fixtures  and  other  property affixed thereto, all heating, air
conditioning,  plumbing,  lighting,  communications,  elevators  and  kitchen,
medical,  dental  or  rehabilitation  fixtures,  all  gas and electric fixtures,
appliances  and  wiring,  engines, boilers, elevators, escalators, incinerators,
motors,  dynamos,  heating and air conditioning equipment, sinks, water closets,
basins,  pipes,  electrical  systems, faucets, fire prevention and extinguishing
apparatus,  central  music  and public address systems, burglar alarms, security
systems  and  equipment, and other furnishings and decor equipment, spare parts,
materials,  and  supplies  for  the  ownership, use, operation, maintenance, and
repair  of  the  Property  or  the personal property referred to herein or both,
tools,  supplies,  and  all  other  personal  property owned by Assignor that is
located  on  or  is  used  in  connection  with  the  ownership, use, operation,
maintenance,  or  repair  of  the  Property or the personal property referred to
herein  or both, whether tangible or intangible, paving, curbing, trees, shrubs,
plants  and  other  improvements,  and  landscaping  of  every  kind  and nature
(collectively,  the  "Personalty").
                      ----------
(b)     To  the  extent  assignable,  all of Assignor's rights in and to (i) all
licenses,  permits,  approvals  and  similar documents relating to the Property,
(ii)  all  plans,  drawings,  specifications,  surveys, engineering reports, and
other  technical descriptions relating to the Property, (iii) all warranties and
guaranties  (express or implied) issued in connection with or arising out of (a)
the  purchase  or  repair  of  all  fixtures,  fittings,  appliances, apparatus,
equipment,  machinery and other personal property owned by Assignor, if any, and
affixed  or  attached  to  or  placed  or  situated upon, or used or acquired in
connection  with  the Property, or (b) the construction, alteration, maintenance
and  repair  of  any  of  the improvements located on the Property, and (iv) all
other property (real, personal or mixed), owned or held by Assignor which relate
in  any  way  to the design, construction, use, leasing, maintenance, service or
operation  of  the  Property  or  the  Personalty.
     2.     CONVEYANCE  TO  EMERITUS  ASSIGNEE.  Assignor  does  hereby  GRANT,
            ----------------------------------
BARGAIN,  SELL,  CONVEY,  ASSIGN,  TRANSFER, SET OVER and DELIVER to and VEST in
Emeritus Assignee, its successors and assigns, the Emeritus Assigned Properties.
3.     REPRESENTATION  REGARDING TITLE.  Assignor hereby represents and warrants
       -------------------------------
to  Assignee  that Assignor is the owner of all right, title and interest in and
to  the  Assigned Properties, that the Assigned Properties are free and clear of
all  liens,  charges  and  encumbrances  other  than  those  created in favor of
Assignee  and  those  created  in  favor of Town and Country Leasing, LLC and GE
Capital (previously Phoenixcor, Inc.) in connection with motor vehicle financing
and  that  Assignor  has  full  right,  power and authority to sell the Assigned
Properties  Property  and  to  make this Assignment.  Assignor shall warrant and
forever  defend  title  to  the  Property  unto  Assignee.
4.     ACKNOWLEDGMENTS  OF  ASSIGNEE.  Notwithstanding  the  warranty  as  to
       -----------------------------
merchantable title, Assignor sells and conveys the Assigned Properties hereunder
       -
to  Assignee  in  its  present  condition,  AS  IS,  WHERE  IS,  AND WITHOUT ANY
REPRESENTATION  OR  WARRANTY  WHATSOEVER.
5.     COUNTERPARTS;  GOVERNING  LAW;  SUCCESSORS  AND ASSIGNS; AUTHORITY.  This
       ------------   ---------------------------------------------------
Assignment  may  be executed in any number of counterparts, and each counterpart
hereof  shall  be deemed to be an original instrument, but all such counterparts
shall  constitute  but  one  instrument.  This Assignment shall be construed and
enforced  in  accordance  with and governed by the internal laws of the state or
commonwealth  where  the  Property  is  located.  This Assignment shall bind and
inure  to  the  benefit of Assignor and Assignee and their respective successors
and assigns.  Each of Assignor and Assignee represents and warrants to the other
that  it  is  fully  empowered  and  authorized  to  execute  and  deliver  this
Assignment,  and  the  individuals  signing  this  Assignment each represent and
warrant  that  he  or  she  is  fully  empowered  and  authorized  to  do  so.
6.     FURTHER  ASSURANCES.  The  parties agree to take all such further actions
       -------------------
and  execute,  acknowledge  and  deliver  all  such  further  documents that are
reasonably  necessary or useful in carrying out the purposes of this Assignment.
IN  WITNESS  WHEREOF,  this  Assignment  is executed by the parties as of, 2003.
ASSIGNOR:
---------
WITNESSES:                              [TENANT],  INC.


     By:
     Name:

                                   Title:
WITNESSES:                              [MANAGER],  INC.


     By:
     Name:

                                   Title:
HCRT  ASSIGNEE:
---------------

     By
J.D.  Carter  Steele
Senior  Vice  President



EMERITUS  ASSIGNEE:
-------------------



     By

                                   Name:
                                   Title:
<PAGE>

                           EXHIBIT "A" TO BILL OF SALE
                        LEGAL DESCRIPTION OF THE PROPERTY

<PAGE>
                           EXHIBIT "B" TO BILL OF SALE

                          EMERITUS ASSIGNED PROPERTIES

1.     List  year,  make,  model,  VIN#  of  van

2.     All  consumable  inventories  of  every  kind  and  nature  whatsoever
(including,  without limitation, all pharmacy supplies, medical supplies, office
supplies,  other  supplies  and foodstuffs) owned by Assignor and located at the
Facility.
3.     Telephone  and  facsimile  numbers  of  the  Facility.
4.     All  books  and  records  of  the  Facility  maintained  at the Facility,
including  resident  and  employee records but specifically excluding Assignor's
corporate  and  regional  accounting  and proprietary and confidential books and
records.






<PAGE>

                           EXHIBIT "C" TO BILL OF SALE
                   ITEMS EXCLUDED FROM THE ASSIGNED PROPERTIES
1.     All  accounts  receivable,  petty  cash,  minute  books,  stock  records,
corporate seals, provider or vendor billing numbers, tax, corporate and regional
accounting  and  financial  books  and  records,  technical  systems,  methods,
policies,  processes,  procedures,  controls,  policy and procedure manuals, and
trade or service names, associated marks and other intellectual property used in
connection  with the marketing and/or operation of the Property by Balanced Care
Corporation,  including  the names "Balanced Care",  "Outlook Pointe", "Balanced
Gold"  and  "Treasures".
2.     All  phone  systems  (excluding  Nurse  Call  System(s))  located  at the
Facility  leased  by  Assignor.
3.     All  photocopiers  located  at  the  Facility  leased  by  Assignor.
4.     All  facsimile  machines  located  at  the  Facility  leased by Assignor.
5.     All  computer  equipment  located  at  the  Facility, including software.
6.     All  collateral  marketing  materials  located  at  the  Facility.

<PAGE>
                                    EXHIBIT B
                            PREPAID EXPENSE SCHEDULE


<PAGE>
                                    EXHIBIT C
                   FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT


                       ASSIGNMENT AND ASSUMPTIONAGREEMENT
                       ----------------------------------

THIS  ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement") is made as of April
___________,  2003  by  and  among _____________ (the "Tenant"), _______________
(the "Manager", and together with the Tenant, collectively, the "Assignor"), and
Emeritus  Corporation  (the  "Assignee").

                                    RECITALS:

     WHEREAS,  Assignor,  Balanced Care Corporation, a Delaware corporation (the
"Parent"),  Assignee  and  ________________[need  to  insert  name  of  HCRT
landlord]entered  into  that  certain  Operations Transfer Agreement dated as of
April  30, 2003 (the "OTA"), under which Assignor agreed to transfer to Assignee
the operational and financial responsibility of the Facility as of the Effective
Date.  Any  term  used  but not defined in this Agreement shall have the meaning
ascribed  to  such  term  in  the  OTA.

     NOW  THEREFORE,  for and in consideration of the Transfer Consideration and
other  valuable  consideration  to  Assignor  in  hand paid by Assignee, and the
mutual  covenants herein contained, the receipt and sufficiency of the foregoing
consideration  being  hereby  acknowledged, the parties hereto agree as follows:

     1.     ASSIGNMENT:  Assignor  hereby  assigns,  transfers,  sets  over  and
            ----------
conveys  to  Assignee  all of Assignor's right, title and interest in and to (A)
the Prepaid Expenses and (B) the Rents and Fees. Assignor represents to Assignee
that  it  is the holder of interest in and to the Prepaid Expenses and the Rents
and  Fees  and  Assignor  has  not  assigned, hypothecated, pledged or otherwise
transferred  all or any portion of its interest in and to the Designated Prepaid
Expenses  or  the  Rents  and  Fees;  provided, however, nothing herein shall be
construed  as  releasing Assignor from any liability with respect to the Prepaid
Expenses  and  the  Rents  and  Fees  to the extent such liability relates to or
arises  from  the  acts  or  omissions  of Assignor prior to the date hereof and
whether  or  not  a claim with respect thereto is asserted prior to or after the
date  hereof.

     2.     ASSUMPTION:  Assignee does hereby assume and agree to perform all of
            ----------
Assignor's  obligations  with  respect to the Prepaid Expenses and the Rents and
Fees;  provided,  however,  nothing  herein  shall  be construed as imposing any
liability on Assignee with respect to the Prepaid Expenses or the Rents and Fees
to  the extent such liability relates to or arises from the acts or omissions of
Assignor  prior  to  the  date  hereof.

     3.     SUCCESSORS  AND  ASSIGNS:  This  Agreement shall be binding upon and
            ------------------------
inure  to  the  benefit of Assignor and Assignee and their respective successors
and  permitted  assigns.

     4.     COUNTERPARTS:  This  Agreement  may  be  executed  in  two  or  more
            ------------
counterparts,  each  of  which  shall  be  deemed  an original, but all of which
together  shall  constitute  one  and  the  same  instrument.

     5.     CAPTIONS:  The  captions  of  this Agreement are for convenience and
            --------
reference  only,  and  in  no way define, describe, extend or limit the scope or
intent  of  this  Agreement  or  the  intent  of  any  provisions  hereof.

     6.     JOINT  EFFORT:  The preparation of this Agreement has been the joint
            -------------
effort  of  the  parties, and the resulting document shall not be construed more
severely  against  one  of  the  parties  than  the  other.

     7.     PARTIAL  INVALIDITY:  If  any  provision  of this Agreement shall be
            -------------------
invalid  or unenforceable, the remainder of this Agreement shall not be affected
thereby.  Notwithstanding  the  foregoing,  it  is  the intention of the parties
hereto  that  if  any  provision  of  this  Agreement  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.

     8.     AMENDMENTS:  This  Agreement  may  not  be  amended  in  any respect
            ----------
whatsoever  except  by a further agreement, in writing, fully executed by all of
the  parties.

     9.     GOVERNING  LAW:  This  Agreement  including the validity thereof and
            --------------
the  rights  and  obligations  of the parties hereunder shall be governed by and
construed  in  accordance  with  the  laws  of the Commonwealth of Pennsylvania.

     10.     TIME  OF  THE  ESSENCE:  Time  is  of the essence of each and every
             -----------------------
term,  condition,  covenant  and  warranty  set  forth  herein.

     11.     NO  THIRD  PARTY  BENEFICIARIES:  This  Agreement is solely for the
             -------------------------------
benefit  of  Assignee and Assignor and their respective successors and permitted
assigns  and  nothing  contained  herein 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 relating to the Prepaid Expenses and the
Rents  and  Fees.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

     IN  WITNESS  WHEREOF,  intending  to  be  legally bound hereby, the parties
hereto  have  executed this Agreement on and as of the date first written above.
     ASSIGNOR:
     --------
                              [                         ]


     By:
            Name:
                                     Title:
                              [                         ]


     By:
            Name:
                                     Title:

                              ASSIGNEE:
                              --------
                              EMERITUS  CORPORATION

                              By:
            Name:
                                     Title:

Assignment  and  Assumption  Agreement.2


<PAGE>
                                    EXHIBIT D
                            FORM OF LICENSE AGREEMENT

                                LICENSE AGREEMENT


          THIS  AGREEMENT, effective as of the _____ day of __________, 2003, is
entered  by  and  between  Balanced  Care  Corporation,  a  Delaware corporation
(hereinafter  "Balanced  Care"),  and  Emeritus  Corporation  (hereinafter, "New
Operator").
                                    RECITALS:
          WHEREAS,  Balanced  Care is the owner of the registered trademarks and
service  marks  listed  on  Schedule B-1:  Master Marks (hereinafter the "Master
Marks"),  attached  hereto  and  made  a  part  hereof,  together  with  certain
collateral  marketing  materials  using  the  Master  Marks  (hereinafter  the
"Collaterals"  and,  together  with  the Master Marks, collectively, the "Master
Materials");  and
          WHEREAS, New Operator is desirous of using the Master Materials at the
Facilities  listed (and defined) on Schedule B-1 attached hereto and made a part
hereof,  in  connection  with  its  business  at  the indicated Facilities only.
          NOW,  THEREFORE,  in  consideration of the foregoing and of the mutual
promises  hereinafter  set  forth and for other good and valuable consideration,
the  receipt  and  sufficiency  of  which  are hereby acknowledged, the parties,
intending  to  be  legally  bound  hereby,  agree  as  follows:
          1.     GRANT  OF  TRADEMARK  AND/OR  SERVICE  MARK  LICENSE
               Balanced  Care hereby grants to New Operator a license to use the
Master  Materials  in  connection with New Operator's business at the respective
indicated  Facilities,  and  New  Operator  accepts  such license subject to the
following  terms  and  conditions.  New  Operator  acknowledges  and agrees that
Balanced  Care  will continue to use the Master Materials in connection with its
other business operations but Balanced Care acknowledges and agrees that it will
not grant to any other party the right to use the Master Materials in connection
with  the  operation  of  the  Facilities.
          2.     OWNERSHIP
               New  Operator  acknowledges the ownership of the Master Materials
in  Balanced  Care,  agrees  that  it  will  do  nothing  inconsistent with such
ownership and that all rights arising from or relating to such use of the Master
Materials by New Operator shall inure to the benefit of and be binding on behalf
of Balanced Care.  New Operator agrees that nothing in this Agreement shall give
New Operator any right, title or interest in the Master Materials other than the
right  to  use  the  Master Materials in accordance with this Agreement, and New
Operator agrees that it will not attack the title of Balanced Care to the Master
Materials  or  attack  the  validity  of  this  Agreement.
          3.     QUALITY  STANDARDS  AND  MAINTENANCE
               a.     New  Operator  agrees  that  the nature and quality of all
services  rendered  and/or  goods  sold  by  New Operator in connection with the
Master  Materials  shall conform to prudent and customary practice and standards
applicable  to  the  assisted  living/personal  care  industry.
               b.     New  Operator  agrees,  at  no  cost  or  expense  to  New
Operator,  upon  receipt  of  a  request  from  Balanced  Care  setting forth in
reasonable  detail  the  action  requested,  to  cooperate with Balanced Care in
protecting the nature and quality of the Master Materials and to supply Balanced
Care  with  specimens  of  use  of  the  Master Materials upon request to permit
reasonable  inspection  by  Balanced  Care  from  time  to  time.
          5.     FORM  OF  USE
               New  Operator agrees to use the Master Materials only in the form
and  manner and with appropriate legends as prescribed by Balanced Care, and New
Operator  agrees  not to alter the Master Materials and use the Master Materials
in  combination with any other trademark or service mark in such manner that may
disparage  or  cause  confusion  with  respect  to  the  Master  Materials.
          5.     REPRESENTATIONS  AND  WARRANTIES
               To  Balanced  Care's  knowledge,  Balanced  Care has the right to
grant  the  license to use the Master Materials, as set forth in this Agreement.
          7.     TERM
               a.     This  Agreement  shall  continue in force and effect for a
period  of 90-days from the date hereof (unless terminated earlier in accordance
with  the  provisions  of  the  Agreement).
               b.     Balanced  Care  shall  have  the  right  to terminate this
Agreement  upon  ten  (10)  days prior written notice to New Operator (i) in the
event  of any breach of this Agreement by New Operator which is not cured within
ten  (10)  days after receipt of written notice from Balanced Care setting forth
in  reasonable  detail  the  nature  of  such  breach  or upon the taking by New
Operator  of  any affirmative act of insolvency, or (ii) upon the appointment of
any  receiver or trustee to take possession of the properties of New Operator or
upon  the  winding-up,  sale,  consolidation,  merger  or  any  sequestration by
governmental  authority  of  New  Operator.
          9.     EFFECT  OF  TERMINATION
               Upon termination of this Agreement whether upon expiration of the
term  provided for herein or sooner termination pursuant to Section 6(b) hereof,
New  Operator  agrees  to  immediately  discontinue,  or  cause  the  immediate
discontinuance  of,  all  use  of  the Master Materials and any term confusingly
similar thereto, to cooperate with Balanced Care or its appointed agent to apply
to  the  appropriate  authorities to cancel recording of this Agreement from all
government  records,  to  destroy  all  printed  and other materials, goods, and
advertising  bearing  the  Master  Materials  other than any unused Collaterals,
which  shall be returned to Balanced Care at New Operators cost and expense, and
that  all  rights  in  the Master Materials and the goodwill connected therewith
shall remain the property of Balanced Care. In the event upon the termination of
this Agreement whether upon expiration of the term provided for herein or sooner
termination  pursuant  to Section 6(b) hereof Balanced Care advises New Operator
that  it wants to retain any of the signage located at any of the Facilities, it
shall  be required within a reasonable time thereafter to remove the same at its
sole cost and expense. If Balanced Care does not elect to remove such signage or
if  it  fails  to  do  so  within a reasonable time after electing to do so, New
Operator  shall  be entitled to remove and dispose of the same in such manner as
it  deems  appropriate.
          8.     REMEDIES
     In addition to any other remedies set forth in this Agreement, in the event
of any breach by New Operator of the terms of the Agreement, Balanced Care shall
be  entitled  to  any  and  all  remedies  available  to it at law or in equity,
including  without limitation injunctive relief.  The parties hereto acknowledge
and  agree  that  in  the event of any breach of this Agreement by New Operator,
Balanced Care will be harmed and unable to be made whole by monetary damages and
it  is  accordingly agreed that Balanced Care shall be entitled to an injunction
or  injunctions  to  remedy  breaches  of  this Agreement and/or compel specific
performance  of  this  Agreement.
          9.     ASSIGNABILITY
               This  Agreement is freely transferable and assignable by Balanced
Care.  This  Agreement  is not transferable or assignable by New Operator except
to a wholly-owned subsidiary of New Operator; provided, however, notwithstanding
any  assignment,  New  Operator  will  remain  obligated  hereunder.
          10.     INDEMNIFICATION
               New  Operator  hereby  indemnifies  and agrees to defend and hold
harmless  Balanced  Care  and  its  directors,  officers,  employees,  agents,
successors  and  assigns from and against any and all demands, claims, causes of
action,  fines,  penalties,  damages  (including consequential damages), losses,
liabilities  (including  strict  liability), judgments, and expenses (including,
without  limitation,  reasonable  attorneys'  and  other professionals' fees and
court  costs)  incurred in connection with or arising from: (iv) a breach by New
Operator  of  its  obligations  under  this  Agreement  or  (ii) the transfer or
sublicense  of  New  Operator's  rights  under  this  Agreement.
          11.     SEVERABILITY
               In  the  event  any  provision  of this Agreement (or any portion
thereof)  is  determined  by  a  Court  of competent jurisdiction to be invalid,
illegal, or otherwise unenforceable, such provision shall be deemed to have been
deleted  from this Agreement, while the remainder of this Agreement shall remain
in  full  force  and  effect  according  to  its  terms.
          12.     COUNTERPARTS
               This  Agreement  may  be  executed in counterparts, each of which
shall  be  deemed  to  be  an  original,  but  all of which taken together shall
constitute  but  one  and  the  same  instrument.

I.
<PAGE>
CAPTIONS
               The  section  headings  are included for convenience of reference
only  and  shall  not  be construed so as to define or limit any of the terms or
provisions  hereof.
II.     GOVERNING  LAW
               This  Agreement  shall be governed by and construed in accordance
with  the  laws  of  the  Commonwealth  of  Pennsylvania.
III.     ENTIRETY
               This  Agreement  represents the entire and final agreement of the
parties  hereto  with  respect  to  the subject matter hereof and supersedes all
prior negotiations, discussions or writings with respect thereto. This Agreement
may  not  be  amended  nor  may any provision hereof be waived except by written
instrument  signed by the parties hereto, in the case of an amendment, or by the
party  granting  the  waiver,  in  the  case  of  a  waiver.

               [THIS PORTION OF THE PAGE INTENTIONALLY LEFT BLANK]



          IN  WITNESS  WHEREOF, the parties hereto have caused this Agreement to
be  executed  by  and  through  their  duly  authorized  representatives.
     NEW  OPERATOR:
BALANCED  CARE:
     Emeritus  Corporation,  a  Washington  corporation
Balanced  Care  Corporation,  a  Delaware  corporation
     By:
By:
     Title:
Title:
     Date:       ___________
          ------------------
Date:




<PAGE>

                           SCHEDULE B-1:  MASTER MARKS
                           ---------------------------

The  following  Master Marks may be used only at the Facilities set forth in the
Table  below:


           SERIAL      DATE      REGISTRATION
 MARK      DATE  FILED      NUMBER      REGISTERED      NUMBER
                           -------     -----------     -------

Balanced  Gold     June  25,  1997     75/314,967     May 12, 1998     2,156,972
--------------     ---------------     ----------     ------------     ---------

Outlook  Pointe     September  13,  1996     75/165,341     August  11,  1998
---------------     --------------------     ----------     -----------------
2,181,226
---------

Treasures     September  24,  1999     75/808,191     October  9,  2001
---------     --------------------     ----------     -----------------
2,496,986
---------


 MARK      FACILITIES  USING  MARK
-----     ------------------------

Balanced  Gold     NC  -  Greensboro;  OH - Ravenna; PA - Bloomsburg, Creekview,
--------------     -------------------------------------------------------------
Harrisburg,  VA  -  Danville,  Harrisonburg,  Roanoke
-----------------------------------------------------

Outlook  Pointe     NC  -  Greensboro; OH - Ravenna; PA - Bloomsburg, Creekview,
---------------     ------------------------------------------------------------
Harrisburg,  VA  -  Danville,  Harrisonburg,  Roanoke
-----------------------------------------------------

Treasures     PA  -  Creekview
---------     ----------------




<PAGE>
                                    EXHIBIT E
                          DESIGNATED EQUIPMENT PAYMENTS


<PAGE>
                                    EXHIBIT F
                             TITLE AND SURVEY ISSUES



   Creekview, Harrisburg, Bloomsburg - Capstone Capital of Pennsylvania, Inc.
      Harrisonburg, Danville, Roanoke - Capstone Capital of Virginia, Inc.
               Greensboro, Ravenna - HR Acquisition I Corporation


</TEXT>
</DOCUMENT>
