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                                                                     EXHIBIT 4.5


                             INVESTMENT AGREEMENT


     INVESTMENT AGREEMENT, dated as of December 30, 1999 (the "Agreement"), by
and among Emeritus Corporation, a Washington corporation (the "Company"), Daniel
R. Baty and B.F., Limited Partnership (collectively, "Baty"), Saratoga Partners
IV, L.P., a Delaware limited partnership ("Saratoga") and Saratoga Management
Company LLC.

                               R E C I T A L S:
                               - - - - - - - -

     A.   The Company and Saratoga are parties to a Series B Preferred Stock
Purchase Agreement, dated as of December 10, 1999, between the Company, as
seller, and Saratoga, as purchaser (the "Purchase Agreement"), pursuant to which
the Company is issuing and Saratoga is acquiring 40,000 shares of the Company's
Series B Convertible Preferred Stock, par value $.0001 per share (the "Series B
Preferred Stock"), pursuant to which Saratoga may assign all of its rights and
obligations under the Purchase Agreement to certain Saratoga co-investors with
respect to up to 10,000 shares of Series B Preferred Stock.

     B.   The parties hereto are parties to a Shareholders' Agreement to be
entered into upon the closing of the sale of the Series B Preferred Stock (the
"Shareholders' Agreement") which provides for, among other things, certain
matters relating to the management of the Company, the ownership and transfer of
the Series B Preferred Stock and the rights and remedies of Saratoga.

     C.   The parties hereto desire to provide for, among other things, certain
matters relating to the management of the Company.

                              A G R E E M E N T:
                              - - - - - - - - -

     The parties agree as follows:

                                   ARTICLE I

     SECTION 1.1   Board Change.
                   ------------

     (a)  Commencing on January 1, 2007 and continuing until the date of
conversion of the Series B Preferred Stock, the holders of the outstanding
Series B Preferred Stock shall have the exclusive right but not the obligation,
voting separately as a class, to elect a number of directors of the Company at
any meeting of shareholders of the Company called for the purpose of electing
directors such that the directors elected (including any directors previously
elected by the Series B Preferred Stock shareholders
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and currently a member of the board of directors) are one director less than a
majority of the board. Upon the vesting of such right of the holders of the
Series B Preferred Stock, any applicable number of directors of the Company set
forth in the Restated Articles of Incorporation or Restated By-Laws of the
Company, as determined pursuant thereto, shall automatically be increased by the
appropriate number and the vacancy so created shall be filled promptly by vote
of the holders of the outstanding Series B Preferred Stock as hereinabove set
forth.

     (b)  Upon any conversion or redemption of the Series B Preferred Stock such
that the Series B Preferred Stock is no longer outstanding, the term of office
of any director then in office elected by the holders of Series B Preferred
Stock voting pursuant to this Section 5(c) as a class shall terminate
immediately.

     (c)  If the office of any director elected by the holders of the Series B
Preferred Stock voting as a class becomes vacant by reason of death,
resignation, retirement, disqualification, removal from office or otherwise, the
holders of the Series B Preferred Stock voting separately as a class may elect a
successor who shall hold office for the unexpired term in respect of which such
vacancy occurred.  Whenever the term of office of the Director elected by the
holders of the Series B Preferred Stock voting as a class shall end and the
special voting powers vested in the holders of the Series B Preferred Stock as
herein provided shall have expired, the number of directors shall be such a
number as may be provided for in the Restated Articles of Incorporation or
Restated By-Laws of the company, or determined pursuant thereto, irrespective of
any increase made pursuant to the foregoing provisions.

     SECTION 1.2.  Management and Advisory Services Fee.  Commencing on January
                   -------------------------------------
1, 2007 and continuing until the date of conversion or redemption of the Series
B Preferred Stock such that the Series B Preferred Stock is no longer
outstanding, Saratoga may, at its option, require the Company to retain Saratoga
Management Company LLC to provide management and advisory services for which
Saratoga Management Company LLC would receive fees of no less than $3.2 million
per annum payable in advance quarterly.  Such services shall include, but shall
not be limited to, evaluation of the Company's strategy related to enhancing
shareholder value, real estate and corporate financing, and other strategic
initiatives related to the Company's business.

                                  ARTICLE II

                                 MISCELLANEOUS
                                 -------------

     SECTION 2.1.  Amendments and Waivers.  Any provision of this Agreement may
                   ----------------------
be amended if, but only if, such amendment is in writing and is signed by all of
the parties hereto.  Any provision of this Agreement may be waived if, but only
if, such waiver is in writing and is signed by each of the parties hereto.

                                      -2-
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     SECTION 2.2.  Successors and Assigns.  The provisions of this Agreement
                   ----------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that no assignment of
                                   --------  -------
rights under this Agreement will be valid unless made in connection with a
contemporaneous transfer of Capital Stock (as defined in the Shareholders'
Agreement) which is not prohibited by the Shareholders' Agreement.  The Company
may not assign or otherwise transfer any of its rights or obligations under this
Agreement.

     SECTION 2.3.  Counterparts; Effectiveness.  This Agreement may be signed in
                   ---------------------------
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.

     SECTION 2.4.  GOVERNING LAW.  (a) THIS AGREEMENT SHALL BE GOVERNED BY AND
                   -------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAWS.

     (b)  THE COMPANY HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE NOW OR
HEREAFTER TO A JURY TRIAL IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT.

     (c)  Upon breach or default by the Company with respect to any obligation
hereunder, Saratoga (or its agents) shall be entitled to protect and enforce
their rights at law, or in equity or by other appropriate proceedings for
specific performance of such obligation, or for an injunction against such
breach or default, or in aid of the exercise of any power or remedy granted
hereby or thereby or by law.

     SECTION 2.5  Submission to Jurisdiction; Venue

     (a)  Any legal action or proceeding with respect to this Agreement may be
brought in the courts of the State of New York or of the United States for the
Southern District of New York, and, by execution and delivery of this Agreement,
the Company hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the nonexclusive jurisdiction of the
aforesaid courts.  The Company further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to CT Corporation Systems at its address at 1633 Broadway, New York,
New York 10019, such service to become effective 30 days after such mailing.
Nothing herein shall affect the right of any party to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against the Company in any other jurisdiction.

                                      -3-
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     (b)  The Company hereby irrevocably waives any objection which it may now
or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement brought in the
courts referred to in clause (a) above and hereby further irrevocably waives and
agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.

     SECTION 2.6.  Severability.  Any term or provision of this Agreement which
                   ------------
is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement, or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.

                                      -4-
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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.

                              EMERITUS CORPORATION


                              By: /s/ KELLY J. PRICE
                                  --------------------------------------------
                              Name:  Kelly J. Price
                              Title:  Vice President of Finance

                              Emeritus Corporation
                              3131 Elliot Avenue, Suite 500
                              Seattle, Washington  98121
                              Attn: Kelly J. Price
                              Telephone:  (206) 298-2909
                              Telecopier: (206) 301-4500

                              DANIEL BATY

                              /s/ DANIEL BATY
                              -----------------------------------------------
                              Daniel R. Baty

                              3131 Elliot Avenue, Suite 500
                              Seattle, Washington  98121
                              Telephone:  (206) 298-2909
                              Telecopier: (206) 301-4500

                              B.F., LIMITED PARTNERSHIP
                              By Columbia-Pacific Group, Inc. General Partner

                              By: /s/ DANIEL BATY
                                  --------------------------------------------
                              Name: Daniel R. Baty
                              Title:  Chairman

                              B.F., Limited Partnership
                              3131 Elliot Avenue, Suite 500
                              Seattle, Washington  98121
                              Attn: Daniel R. Baty
                              Telephone:  (206) 298-2909

                                      -5-
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                              Telecopier: (206) 301-4500

                              SARATOGA PARTNERS IV, L.P.

                              By: SARATOGA ASSOCIATES IV LLC,
                                  as General Partner

                              By: SARATOGA MANAGEMENT COMPANY LLC, as Manager



                              By: /s/ DAVID NIEMIEC
                                  --------------------------------------------
                              Name: David Niemiec
                              Title:

                              SARATOGA MANAGEMENT COMPANY LLC


                              By: /s/ DAVID NIEMIEC
                                  --------------------------------------------
                              Name: David Niemiec
                              Title:

                                      -6-