PREPARED  BY:
JOHN  A.  GUPTON,  III
BAKER,  DONELSON,  BEARMAN  &  CALDWELL
211  COMMERCE  SUITE  1000
NASHVILLE,  TN  37201

                          LEASEHOLD DEED OF TRUST WITH
                   SECURITY AGREEMENT AND ASSIGNMENT OF RENTS
              LOCATION: GREENSBORO, GUILFORD COUNTY, NORTH CAROLINA
THIS  LEASEHOLD  DEED  OF  TRUST WITH SECURITY AGREEMENT AND ASSIGNMENT OF RENTS
("Deed  of  Trust"),  shall  be  effective  as  of the first day of May, 2003 by
Emeritus  Corporation,  a  Washington  corporation whose address is 3131 Elliott
Avenue,  Suite  500,  Seattle,  WA  98121  (hereinafter  "Grantor"), in favor of
Lawyers  Title  Insurance  Corporation, a                          whose mailing
address is                               (hereinafter "Trustee") for the benefit
of  HR  Acquisition I Corporation, a Maryland corporation, whose address is 3310
West  End  Avenue,  Suite  700,  Nashville,  Tennessee  37203  (hereinafter
"Beneficiary").
                                WITNESSETH THAT:
WHEREAS,  pursuant  to the terms of that Lease Agreement dated as of May 1, 2003
by  and  between  Beneficiary,  as  Lessor,  and  Grantor, as Lessee (the "Lease
Agreement")  Beneficiary  agreed  to  make  a  loan  to  Grantor in the original
principal  amount  of  Six  Hundred  Thousand and no/100 Dollars ($600,000); and
WHEREAS,  on  or  about  May  1,  2003,  Beneficiary  made  the  loan to Grantor
contemplated  by  the terms of the Lease Agreement and Grantor executed in favor
of  Beneficiary  its  Term  Note in the original principal amount of Six Hundred
Thousand  and  no/100  Dollars  ($600,000)  (the  "Note");  and
WHEREAS,  the  Note, if not sooner due and payable in accordance with its terms,
is  due  and  payable  in  full  by  April 1, 2013 (the "Maturity Date"), unless
modified,  extended  or  renewed;  and
WHEREAS,  the  Lease  Agreement  requires  that the Grantor execute this Deed of
Trust  as  security  for  its  obligations  under  the  Note;
NOW,  THEREFORE,  in  consideration of the loan made to the Borrower pursuant to
the  Lease  Agreement,  as  evidenced  by  the Note, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Grantor  by these presents does grant, bargain, sell and convey unto Trustee and
Trustee's successors and assigns, for the benefit of Beneficiary, the following:
Grantor's  leasehold  estate  created  pursuant  to  the Lease Agreement and all
extensions,  renewals,  and new leasehold estates hereafter obtained by Grantor,
and  all  options  and  rights to purchase now or hereafter existing in favor of
Grantor,  pertaining  to those tracts, parcels of land, and lease spaces set out
in  Exhibit  A  attached  hereto  and incorporated herein by this reference (the
"Land");
TOGETHER  with  all other right, title and interest Grantor may now or hereafter
have  in  the  Land  and  Premises  (as  hereinafter  defined) including any fee
interest  the  Grantor  may  now own or hereafter obtain therein (or in any part
thereof);
TOGETHER  with  all  right,  title  and  interest  of  Grantor in all buildings,
structures,  and  other  improvements  (the  buildings,  structures  and  other
improvements being collectively referred to herein as the "Improvements") now or
hereafter  located  on  the  Land  or  any  portion  thereof;
TOGETHER  WITH  all right, title and interest of Grantor, now owned or hereafter
acquired,  in  all  easements,  rights-of-way  and  rights  (including  without
limitation  parking and riparian rights) used in connection with the Land or the
Improvements  or as a means of access thereto, and all tenements, hereditaments,
and  appurtenances  thereof  and  thereto  whether  now  or  hereafter existing;
TOGETHER  WITH  all right, title and interest of Grantor, now owned or hereafter
acquired,  in  and to any land lying within the right-of-way of any street, open
or  proposed, relating to or adjoining the Land and the Improvements, and in any
and  all  sidewalks,  parking lots, alleys, strips and gores of land adjacent to
and/or  used  in  connection  with  the  Land  and  the  Improvements;
TOGETHER  with  all  right,  title  and  interest  of  Grantor in all machinery,
apparatus,  equipment,  fittings, fixtures, and other property of every kind and
nature  whatsoever (hereinafter collectively referred to as the "Equipment") now
or hereafter located in, upon or under the Land and the Improvements or any part
thereof and/or used or usable in connection with any present or future operation
of  the  Land  or  Improvements,  all whether now owned or hereafter acquired by
Grantor,  and  including,  but without limiting the generality of the foregoing,
all  heating,  air-conditioning,  plumbing,  lighting,  water  heating, cooking,
refrigerating,  incinerating,  ventilating  and similar equipment, furniture and
furnishings,  cash  registers,  bars, brewing equipment and other trade fixtures
and  equipment,  freezers,  coolers  and  related  equipment,  and  all building
materials  and  equipment  now  or  hereafter  delivered  to  the  Land  and the
Improvements  and intended to be installed therein or thereon, and all additions
thereto  and  replacements  thereof;
TOGETHER  with  all  of  Grantor's  interest  and rights as lessor in and to all
leases, subleases, warehouse agreements and other storage agreements (written or
oral)  now  or  hereafter  affecting  the  Premises  or any part thereof (herein
collectively  called  the  "Leases")  and  any  and  all rents, issues, security
deposits,  guarantees,  proceeds  and profits which are now due or may hereafter
become due by reason of the renting, leasing and bailment of the Premises or any
part  thereof,  and  the  storage  of  property on the Premises, whether payable
pursuant  to a present or future Lease or otherwise growing out of any occupancy
or  use  of  the  Premises  (the  "Rents") and all other general intangibles and
accounts  now  or  hereafter  existing  with  respect  to  the  Premises;
TOGETHER  with  all  of  Grantor's  documents,  instruments,  contract  rights,
accounts,  general  intangibles,  and other intangible property now or hereafter
existing  relating  to  the  Premises including, but not limited to, any and all
construction  contracts,  development  contracts,  architectural  contracts,
engineering  contracts,  plans,  specifications,  drawings,  surveys,  bonds,
licenses,  permits,  and  other  governmental  approvals, and also including all
general  intangibles  and  contract  rights under all leases now or hereafter in
effect  including  all  rights  to  return  of security deposits and credits and
payments  relating  to  tenant  finish  improvements;
TOGETHER  with, to the extent permitted by the Lease Agreement, all the estates,
interests,  rights, titles, other claims or demands, including claims or demands
with respect to the proceeds of, and refunds of premiums on, insurance in effect
with  respect thereto, which Grantor now has or may hereafter acquire in or with
respect  to  the  Premises,  and  any  and  all  rights  that Grantor now has or
hereafter  may  acquire  in  awards  made  for  the  taking by eminent domain or
condemnation,  or by any proceeding or purchase in lieu thereof, of the whole or
any  part of the Premises, including any awards resulting from a change of grade
of  streets  and  awards  for  severance  damages;  and
TOGETHER  with  all  other  proceeds and products of any of the foregoing of any
nature  or  type.
TO  HAVE  AND  TO  HOLD all of Grantor's right, title and interest in and to the
aforesaid  Land,  Improvements, Equipment, Rents, property, property rights, and
other  interests  (all  of  which  are  collectively  referred  to herein as the
"Premises")  to  the use and benefit of the Trustee and Trustee's successors and
assigns.
Grantor  covenants  that  it is the lawful leasehold owner of the Premises being
conveyed  hereby,  has  a good right to convey it, and the same is unencumbered,
except  for  the  liens  granted  in favor of Beneficiary under the terms of the
Lease  Agreement.  Grantor  further represents and covenants that as of the date
hereof: (i) the Lease Agreement, a memorandum of which is recorded in the Office
of the Recorder of Deeds in Guilford County, North Carolina is in full force and
effect,  (ii)  there  are  no  conditions or events that exist or that, with the
passage  of time or notice or both, would exist, that would entitle Beneficiary,
in  its capacity as the lessor under the Lease Agreement, to terminate the Lease
Agreement  and  that all rents and other amounts due and payable under the Lease
Agreement have been paid in full to the extent they were payable before the date
of  this  Deed  of  Trust;  (iii) neither Grantor, in its capacity as the lessee
under  the Lease Agreement, nor Beneficiary, in its capacity as the lessor under
the Lease Agreement has commenced any action or given or received any notice for
the  purpose of terminating the Lease Agreement; (iv) the interest of the tenant
under  the  Lease  Agreement  is  vested  in  the Grantor; and (v) the quiet and
peaceful  possession  of  the  Premises is vested in the Grantor under the Lease
Agreement.  Grantor  further  covenants and binds itself, its heirs, successors,
and  assigns,  to  warrant  and  defend the title to the Premises to Trustee and
Trustee's  successors  and  assigns  forever  against  the  lawful claims of all
persons  whomsoever.
THIS  CONVEYANCE  IS  MADE  UPON  THIS  SPECIAL  TRUST,  that  if Grantor shall:
          (a)     Pay  the  indebtedness,  obligations  (including,  without
limitation,  reimbursement  obligations  relating  to  letters  of  credit)  and
liabilities  of  Grantor  with  interest thereon (including, without limitation,
interest  that, but for the filing of a petition in bankruptcy with respect to a
Borrower,  would  accrue) now or hereafter evidenced by or outstanding under the
Note,  which  is incorporated herein by reference, including all future advances
thereunder  regardless  of  class,  which  such  indebtedness,  obligations  and
liabilities  if  not  sooner  due and payable are due and payable in full on the
Maturity  Date  and  any  and  all  modifications,  extensions,  renewals  and
replacements  of  any  of  the  foregoing;
          (b)     Perform all obligations of Borrower now or hereafter contained
in  this  Deed  of  Trust, the Note and in any other instrument now or hereafter
given  to  evidence  or  further  secure  the  payment  and  performance  of any
obligations  secured hereby, and any and all modifications, extensions, renewals
and  replacements  thereof  (hereinafter collectively referred to as the "Credit
Documents").
          (c)     Pay all sums advanced by Trustee or Beneficiary to protect the
Premises  or  this  Deed  of  Trust,  with  interest thereon at the Default Rate
provided in the Note (all of the foregoing being collectively referred to herein
as  the "Secured Indebtedness"); provided, however, that upon payment in full of
the  portion  of the Secured Indebtedness required to be paid in accordance with
the  terms  of  the  Note,  this  conveyance shall be cancelled of record at the
request  and  at  the  cost  of  Grantor.  This conveyance is made to secure the
payment  and  performance  of  all  of  the  Secured  Indebtedness.
          (d)     Nothing  in  this  Deed  of Trust or any other Credit Document
shall  constitute  the  agreement  by  Beneficiary  to assume any obligations of
Grantor  with  respect  to  the  Premises  including,  without  limitation,  any
obligations  under  the Lease Agreement, and Grantor shall defend, indemnify and
hold  Beneficiary  harmless  against  any  claims,  demands,  damages,  losses,
liabilities,  costs, expenses, or other obligations incurred with respect to the
Premises  as  a  result  of  this  Deed  of  Trust  or  the  Note, or any of the
transactions described herein or therein (this covenant to survive the repayment
of the Secured Indebtedness, the termination of this Deed of Trust, the exercise
of  any  rights hereunder and the acceptance of any deeds in lieu of foreclosure
or  similar documents, and shall continue until the expiration of any applicable
periods  of  limitation  with  respect  to  any  of  the  foregoing  matters).
TO  PROTECT  THE  SECURITY  OF  THIS DEED OF TRUST, GRANTOR HEREBY COVENANTS AND
AGREES  UNTO  TRUSTEE  AND  BENEFICIARY  AS  FOLLOWS:
Payment  of  Secured  Indebtedness.  Grantor  shall pay and perform when due the
Secured  Indebtedness  in  accordance  with  the terms of the Note and the other
Credit  Documents.
Compliance  with  Lease  Agreement.
     Grantor  shall:  (i) pay all rents and other amounts required to be paid by
Grantor,  as  a  tenant  under  and  pursuant  to  the  provisions  of the Lease
Agreement,  as  and when those rents and other amounts are payable or within any
applicable  cure  period  provided  for  in the Lease Agreement; (ii) diligently
perform  and  observe  all  of  the terms, covenants and conditions of the Lease
Agreement  when  due  or  within any applicable cure periods provided for in the
Lease Agreement; and (iii) in the event Beneficiary is not also the lessor under
     the  Lease  Agreement,  promptly  notify  Beneficiary  of the giving of any
notice  by  Grantor  or the landlord under the Lease Agreement of any default of
the  other  in  the  performance or observance of any of the terms, covenants or
conditions of the Lease Agreement and promptly provide Beneficiary a copy of any
such  notices  or  any other requests or other materials at any time provided by
the  Grantor  to such lessor or by such lessor to the Grantor. Grantor shall not
surrender  the  leasehold  estate created by the Lease Agreement except upon the
expiration  of  the  term  provided for therein or terminate or cancel the Lease
Agreement  prior  to  the  expiration  of  the  term provided for therein or, at
anytime  that  Beneficiary  is  not  also  the lessor under the Lease Agreement,
modify,  change, supplement, alter or amend the Lease Agreement, in any respect,
either  orally  or  in  writing, without the consent of Beneficiary, and Grantor
hereby  assigns  to  Beneficiary  as  further  security  for  the  payment  and
performance  of  the  Secured  Indebtedness,  the right to exercise on behalf of
Grantor  from and after the occurrence of an Event of Default hereunder or under
any  of  the  other  Credit  Documents,  all  of  the  rights,  privileges  and
prerogatives  of  Grantor, as tenant under the Lease Agreement, to surrender the
leasehold estate created by the Lease Agreement or to terminate, cancel, modify,
change,  supplement, alter, or amend the Lease Agreement, and any such surrender
of  the  leasehold  estate  or  termination, cancellation, modification, change,
supplement,  alteration  or  amendment  of the Lease Agreement without the prior
written consent of Beneficiary at a time when Beneficiary is not also the lessor
under  the Lease Agreement shall be null and void and of no force and effect. At
any  time  that  Beneficiary  is  not also the lessor under the Lease Agreement,
Grantor  shall  not  waive  any  material  default by the lessor under the Lease
Agreement without the prior written consent of Beneficiary. If the Grantor shall
default  in  the performance or observance of any term, covenant or condition in
the  Lease  Agreement  and shall fail to cure such default within any applicable
cure  period set forth in the Lease, then without limiting the generality of the
other  provision of this Deed of Trust, and without waiving or releasing Grantor
from  any  of  its  obligations hereunder, Beneficiary shall have the right, but
shall be under no obligation, to pay any sums and to perform any act or take any
action as may be appropriate to cause all the terms, covenants and conditions of
the  Lease  Agreement  on  the part of Grantor to be performed or observed to be
promptly  performed  or observed on behalf of Grantor to the end that the rights
of  Grantor  in,  to  and under the Lease Agreement shall be kept unimpaired and
free  from default, even if the existence of such Event of Default or its nature
is  questioned  or  denied  by  Grantor or by any party on behalf of Grantor. If
Beneficiary  shall  make  any  payment  or perform any act or take any action in
accordance  with  the  preceding  provisions,  then  the payment, performance or
action  shall not remove or waive, as between Grantor and Beneficiary, the Event
of  Default  hereunder,  and Grantor shall immediately reimburse Beneficiary for
all amounts paid with interest thereon at the Default Rate provided in the Note,
which amount shall be secured by this Deed of Trust. Upon request by Beneficiary
or  as  otherwise required, in the event that Beneficiary is not also the lessor
under  the Lease Agreement, then Grantor shall provide Beneficiary with receipts
and  other  evidence  of  payment  of the rents and other sums payable under the
Lease  Agreement.  At any time that Beneficiary is not also the lessor under the
Lease Agreement, Grantor will not subordinate or consent to the subordination of
the  Lease  Agreement to any mortgage, deed of trust, lease or other interest on
or in the landlord's interest in all or any part of the Premises unless, in each
such  case,  the  written  consent  of Beneficiary shall have been first had and
obtained.  Grantor  shall not knowingly take any other action which would have a
material  effect  on  the  terms  of  the  Lease  Agreement  or otherwise affect
Grantor's  rights  in  and  to  the  Premises.
     Beneficiary  and any persons authorized by Beneficiary shall have the right
to  enter  and  inspect  the  Premises  on  reasonable advance notice and at all
reasonable  times  and  access  thereto  shall  be  permitted  for that purpose.
Possession  of  Premises;  No  Assignments  or  Liens.  Grantor  shall not sell,
exchange,  assign, loan, deliver, lease, transfer, mortgage or otherwise dispose
of  or  encumber  all  or any portion of the Premises, other than sales or other
dispositions  of  the  personal  property  or  fixtures  located  thereat in the
ordinary  course of business, assignments of the Lease or any portion thereof or
subletting  of  the Premises or any portion thereof in accordance with the terms
of  the  Lease Agreement and encumbrances of the Premises or any portion thereof
permitted  by  the terms of the Lease Agreement. Without limiting the generality
of the foregoing, Grantor agrees not to assign the Lease Agreement or any of its
rights  or  obligations  thereunder  or  sublet the Premises or any part thereof
without  the  concurrent  payment  in  full  of  the  portion  of  the  Secured
Indebtedness  required to be prepaid upon such assignment in accordance with the
terms  of  the  Note.  Grantor  further  agrees  not to create, incur, assume or
permit  to  exist  any  mortgage,  pledge,  hypothecation,  assignment, security
interest,  encumbrance,  lien  (statutory or otherwise), preference, priority or
charge of any kind on Grantor's rights and interests in the Premises or any part
thereof  (other  than  liens  allowed  pursuant  to  the  Lease  Agreement).
Environmental  Matters.
     Grantor  shall indemnify and hold Trustee and Beneficiary harmless from and
against  any  and  all losses, costs, damages, claims, liabilities and expenses,
including attorneys' fees, incurred by either Beneficiary or Trustee arising out
     of  or relating to (i) the presence as a result of the acts or omissions of
Grantor of any Hazardous Materials on the Premises or on any other real property
now  or  hereafter  securing  payment  of  the Secured Indebtedness and (ii) any
violation  or  alleged  violation  of  Applicable  Law  attributable  to  events
occurring  from  and after Grantor's acquisition of any interest in the Premises
(including  Grantor's  leasehold  interest or the exacerbation of prior existing
conditions by the acts, omissions or negligence of Grantor). Grantor understands
and  agrees  that  the  indemnity  provided herein shall survive the payment and
performance  of the Secured Indebtedness, the termination of this Deed of Trust,
the  exercise of any rights hereunder and the acceptance of any deeds in lieu of
foreclosure  or  similar  documents, and shall continue in full force and effect
until the expiration of any applicable periods of limitation with respect to any
loss  or  liability  covered  by  such  indemnity.
     As  used  in  this Deed of Trust, the term "Hazardous Materials" shall mean
all  materials  defined  as  a  hazardous  or toxic waste or substance under any
Applicable  Law,  and  petroleum,  petroleum  products,  oil  and  asbestos.
     The  representations, covenants and indemnities contained in this Section 7
are  to  be  in  addition  to  and  not  in lieu of any similar representations,
covenants  or  indemnities  contained  in  any  other  Credit  Document.
Default.  Each  of  the  following events shall constitute an "Event of Default"
under  this  Deed  of  Trust:
     should  Grantor fail to pay or perform the Secured Indebtedness or any part
thereof  when  and  as  the  same  shall  become due and payable (subject to any
applicable  cure  periods  provided  in  the  Credit  Documents);
     should any warranty or representation of Grantor contained herein or in any
of  the  other  Credit  Documents  prove  untrue  in  any  material  aspect;  or
     should  Grantor  fail  to keep, observe, perform, carry out and execute the
covenants, agreements, obligations and conditions set out herein or in any other
Credit  Document  when  due  or  within  any  applicable  cure  period.
Remedies  Upon  Default;  Power  of  Sale.  Upon  the occurrence of any Event of
Default,  Trustee  or Beneficiary may declare all Secured Indebtedness to be due
and  payable  and  the  same  shall thereupon become due any payable without any
presentment,  demand,  protest  or  notice  of any kind. Thereafter, Trustee and
Beneficiary  may:
     Either  in  person  or  by  agent,  with  or without bringing any action or
proceeding, enter upon and take possession of the Premises, or any part thereof,
     in  its  own name, and do any acts which it deems necessary or desirable to
preserve  the  value,  marketability  or  rentability  of  the Premises, or part
thereof  or  interest  therein,  increase  the  income  therefrom or protect the
security  hereof and, with or without taking possession of the Premises, sue for
or  otherwise  collect  the  Rents,  including  those  past  due and unpaid. The
entering  upon  and  taking  possession  of the Premises, the collection of such
Rents,  and  the  application  thereof as aforesaid, shall not cure or waive any
Event of Default or invalidate any act done in response to such Event of Default
and,  notwithstanding  the  continuance  in  possession  of  the Premises or the
collection,  receipt  and application of Rents, Beneficiary shall be entitled to
exercise  every  right  provided for in any of the Credit Documents or by law or
equity  upon occurrence of any Event of Default, including the right to exercise
the  power  of  sale  herein  provided.
     Proceed  to  foreclose this leasehold Deed of Trust by judicial proceedings
or  may,  at the option of Trustee or Beneficiary, proceed to advertise the sale
of  the  Premises  in  the  way and manner required by law in the State of North
Carolina  for  foreclosure sales under power of sale, giving the time, terms and
place  of  sale,  and  dispose of the Premises at public auction in front of the
Courthouse  of  the County in which the Premises or any part are located, to the
highest  and  best  bidder  for  cash in hand or for such other consideration as
Trustee  or  Beneficiary may elect to accept. Trustee need not personally attend
or  conduct  such sale and may, at its option, cause the sale to be conducted by
an  agent or attorney selected by it. Trustee, Beneficiary may bid at such sale.
Trustee is hereby authorized to make to the purchaser at such sale all necessary
title  papers  and  place the purchaser in peaceable possession of the Premises.
Trustee  shall  collect  the  proceeds  of  such sale, applying such proceeds as
provided  in  Section  14. Grantor agrees that possession of the Premises during
the  existence  of  the  Secured Indebtedness by Grantor, or any person claiming
under Grantor, shall be that of tenant under Trustee, and, in case of a sale, as
herein  provided,  Grantor  or any person in possession under Grantor shall then
become  and  be  tenants holding over, and shall forthwith deliver possession to
the  purchaser at such sale, or be summarily dispossessed in accordance with the
provisions  of  law  applicable  to  tenants  holding over. The power and agency
hereby  granted  are  coupled  with  an  interest and are irrevocable and are in
addition  to any and all other remedies which Trustee or Beneficiary may have at
law  or  in  equity.
Assignment  of Leases and Rents. The assignment of Leases and Rents contained in
this  Deed  of Trust, shall constitute an absolute assignment of such Leases and
Rents  to Trustee for the benefit of Beneficiary and to Beneficiary, and Grantor
hereby  assigns  and  transfers to Trustee and to Beneficiary all of such Leases
and  Rents  as  security  for  the  prompt payment and performance of all of the
Secured  Indebtedness.  Notwithstanding  the  assignment  of  Leases  and  Rents
contained  in  this  Deed of Trust, so long as no Event of Default has occurred,
Grantor  shall  have  a  license  (such  license  to  be deemed revoked upon the
occurrence  of  an  Event  of  Default)  to  collect, retain and enjoy all Rents
(provided  such  are  paid  no  more than 30 days in advance), provided that the
existence  or  exercise  of  any  such  right  of  Grantor  shall not operate to
subordinate  the  assignment of Leases and Rents contained in this Deed of Trust
to  any  subsequent  assignment,  in  whole  or  in  part,  by  Grantor, and any
subsequent  assignment  by Grantor shall be subject to the rights of Trustee and
Beneficiary hereunder. The assignment of Leases and Rents contained in this Deed
of  Trust  shall not be deemed or construed to constitute Trustee or Beneficiary
as  a  mortgagee  in  possession nor obligate Trustee or Beneficiary to take any
action  or to incur any expenses or perform or discharge any obligation, duty or
liability  or  to  permit  Grantor to enter into any Leases except in accordance
with  the  terms  of  this  Deed  of  Trust.
Uniform  Commercial  Code.  For the purpose of noting the names and addresses of
the  debtor and the secured party under the Uniform Commercial Code of the State
of  North  Carolina,  it  is  hereby  acknowledged and agreed that the Grantor's
(debtor's)  name is Emeritus Corporation and the Beneficiary's (secured party's)
                    --------------------
name  is HR Acquisition I Corporation, and the addresses of the Grantor (debtor)
and  Beneficiary  (secured  party) are set forth above. In addition to all other
remedies  set forth in this Deed of Trust, the parties expressly agree that with
respect  to  the  portion  of  the  Premises  constituting fixtures and personal
property  (tangible and intangible) which are the property of Grantor, this Deed
of  Trust  is  hereby made and declared to be a security agreement in compliance
with  the provisions of Uniform Commercial Code as enacted in the State of North
Carolina,  and  Grantor  hereby  grants  to  Beneficiary  a  continuing security
interest  in  the Premises as security for the prompt payment and performance of
all  of  the  Secured  Indebtedness. Upon the occurrence of any Event of Default
hereunder,  in  addition  to all other remedies contained in this Deed of Trust,
Beneficiary shall have all remedies available to a secured party pursuant to the
Uniform  Commercial  Code  as  enacted  in  North  Carolina.
Payment  of  Costs  of  Exercising Remedies. Grantor covenants and agrees to pay
Trustee  and  Beneficiary  all reasonable expenditures and expenses which may be
paid  or incurred by or on behalf of Trustee or Beneficiary for attorneys' fees,
appraiser's  fees,  outlays  for documentary and expert evidence, stenographers'
charges,  publication  costs,  costs  (which  may be estimated as to items to be
expanded  after  entry  of the decree) of procuring all such abstracts of title,
title  searches  and  examinations,  title  insurance  policies, certificates of
title,  and  similar  data  and  assurances with respect to title, environmental
audits  and  other items as Trustee or Beneficiary may deem reasonably necessary
either  to  prosecute  such  suit or to evidence to bidders at any sale the true
condition  of  the  title  to  or the value of the Premises and other reasonable
expenditures  and expenses incurred by or on behalf of Beneficiary in connection
with  the  exercise of any remedy under this Deed of Trust. All expenditures and
expenses  of  the nature in this paragraph mentioned, and such expenses and fees
as  may  be  reasonably  incurred  in  the  protection  of  the Premises and the
maintenance  of  the  interest  of this Deed of Trust, including the fees of any
attorney  employed  by  Trustee  or  Beneficiary in any litigation or proceeding
affecting  this  Deed of Trust or the Premises, including probate and bankruptcy
proceedings,  or  in  preparations  for  the  commencement  or  defense  of  any
proceeding  or  threatened  suit  or  proceeding,  shall  be immediately due and
payable  by  Grantor,  with interest thereon at the Default Rate provided in the
Note  and  shall  be  secured  by  this  Deed  of  Trust.
Grantor's  Waiver  of Certain Rights. Grantor waives the benefit of all laws now
existing  or  that  hereafter  may be enacted providing for (i) any appraisement
before  sale  of  any portion of the Premises, and (ii) in any way extending the
time  for the enforcement of the collection under the Note or the debt evidenced
thereby  or  any other Secured Indebtedness or creating or extending a period of
redemption  from  any  sale made in collecting said Secured Indebtedness. To the
full  extent Grantor may do so, Grantor agrees that Grantor will not at any time
insist  upon,  plead,  claim  or take the benefit or advantage of any law now or
hereafter in force providing for any appraisement, valuation, stay, extension or
redemption,  and Grantor, for Grantor, Grantor's representatives, successors and
assigns, and for any and all persons ever claiming any interest in the Premises,
to  the  extent  permitted  by  law,  hereby  waives  and releases all rights of
redemption  (including,  without  limitation, the statutory rights of redemption
and the equity of redemption) homestead, dower, valuation, appraisement, stay of
execution,  notice of election to mature or declare due the whole of the Secured
Indebtedness,  and  marshalling  in the event of foreclosure of the liens hereby
created.
Proceeds of Foreclosure. The proceeds of any foreclosure sale of the Premises or
from  the exercise of other rights hereunder shall be distributed and applied in
the  following  order  of  priority: First, on account of all costs and expenses
incident  to  the  execution  of  this  trust  and  incident  to the foreclosure
proceedings,  including  all  such  items as are mentioned in Section 12 hereof;
Second,  all  other  items  which  under  the  terms  hereof  constitute Secured
Indebtedness  additional  to the principal amount evidenced by the Note or under
any other Secured Indebtedness, with interest thereon as herein provided; Third,
all  principal  and  interest remaining unpaid on the Note and the other Secured
Indebtedness in such manner as Beneficiary may elect in its sole discretion (and
subject  to  the  provisions  of  the Note); Fourth, any overage to the order of
Grantor,  its successors or assigns, as their rights may appear or to such other
persons  that  may  lawfully  be  entitled  thereto.
Appointment of Receiver. Trustee and Beneficiary in any action to foreclose this
Deed  of  Trust,  or upon any Event of Default, shall be at liberty to apply for
appointment  of a receiver of the Premises. Such appointment may be made without
notice,  without  regard to the solvency or insolvency of Grantor at the time of
application  for  such  receiver  and  without  regard  to the then value of the
Premises  or  whether the same shall be then occupied as a homestead or not, and
Beneficiary  may  be appointed as such receiver. Such receiver shall have power:
(a) to collect the Rents subject, however, to the rights of the lessor under the
Lease Agreement (in the event Beneficiary is not also the lessor under the Lease
Agreement);  (b)  to  extend  or  modify any then existing leases (including the
Lease Agreement) and to make new leases, which extensions, modifications and new
leases  may provide for terms to expire, or for options to lessees or lessors to
extend  or  renew  terms  to  expire,  beyond  the  maturity date of the Secured
Indebtedness  and  beyond  the  date  of  the  issuance  of a deed or deeds to a
purchaser  or purchasers at a foreclosure sale; provided, however, that any such
leases,  and the options or other such provisions to be contained therein, shall
only be binding upon Grantor and all persons whose interests in the Premises are
subject  to this Deed of Trust to the extent that they do not increase or extend
the  obligations imposed on Grantor under the Lease Agreement at the time of the
appointment  of the receiver; and (c) all other powers which may be necessary or
are  usual in such cases for the protection, possession, control, management and
operation  of  the  Premises.  The  court  from  time  to time may authorize the
receiver  to  apply  the net income in its hands in payment in whole or part of:
(i) the Secured Indebtedness, or any tax, special assessment or other lien which
may be or become superior to this Deed of Trust or of such decree, provided such
application  is  made prior to foreclosure sale; and (ii) the deficiency in case
of  a  sale  and  deficiency.
Rights  of  Enforcement.
     Trustee  and  Beneficiary  shall  be  entitled  to  enforce  payment  and
performance  of  any  Secured Indebtedness and to exercise all rights and powers
under  this  Deed of Trust or under any other Credit Document or any laws now or
hereafter in force, notwithstanding some or all of the Secured Indebtedness, may
     now  or  hereafter  be  otherwise  secured, whether by deed to secure debt,
mortgage,  pledge, lien, assignment or otherwise. Neither the acceptance of this
Deed of Trust nor its enforcement whether by court action or other powers herein
contained,  shall  prejudice  or  in  any  manner affect the right of Trustee or
Beneficiary  to realize upon or enforce any other security now or hereafter held
by Trustee or Beneficiary, it being agreed that Trustee and Beneficiary shall be
entitled  to  enforce this Deed of Trust and any other security now or hereafter
held  by  Trustee  or  Beneficiary  in  such  order  and manner as it may in its
absolute  discretion  determine.  No remedy herein conferred upon or reserved to
Trustee or Beneficiary is intended to be exclusive of any other remedy herein or
by  law  provided  or  permitted,  but  each shall be in addition to every other
remedy  given  hereunder or now or hereafter existing at law or in equity. Every
power  or  remedy  given  by  any  of  the  other Credit Documents to Trustee or
Beneficiary  or  to  which  it  may  be  otherwise  entitled,  may be exercised,
concurrently  or  independently,  from  time  to  time and as often as it may be
deemed  expedient  by  Trustee  and  Beneficiary and Trustee and Beneficiary may
pursue  inconsistent  remedies. No delay by Trustee or Beneficiary in exercising
any  right  or remedy hereunder or under any other Credit Document, or otherwise
afforded  by  law,  shall  operate  as a waiver thereof or preclude the exercise
thereof  upon  the  occurrence  of an Event of Default. No failure by Trustee or
Beneficiary  to  insist  upon  the strict performance by Grantor under the Note,
this Deed of Trust or any other Credit Document shall constitute a waiver of any
such covenant or agreement, and no waiver by Trustee or Beneficiary of any Event
of  Default  shall  constitute a waiver of or consent to any subsequent Event of
Default.  No  failure  of  Trustee  or Beneficiary to exercise the option herein
granted  to  accelerate  the  maturity  of  the  Secured  Indebtedness,  nor any
forbearance  by  Trustee  or  Beneficiary  before  or after the exercise of such
option,  nor  any  withdrawal  or  abandonment  by Trustee or Beneficiary of the
exercise  of  the  power  of  sale  herein  granted  or  any  of  Trustee's  or
Beneficiary's  rights  under  such  power, shall be construed as a waiver of any
option,  power  or  right  of  Trustee  or  Beneficiary  hereunder.
     In  case  of any sale under this Deed of Trust by virtue of the exercise of
the  power  herein granted, or pursuant to any order in any judicial proceedings
or  otherwise,  at  the  election of Trustee or Beneficiary, the Premises or any
part  thereof  may be sold in one parcel and as an entirety, or in such parcels,
manner  or order as Trustee or Beneficiary in its sole discretion may elect, and
one  or  more  exercises  of  the  powers herein granted shall not extinguish or
exhaust  the  power  unless  the  entire  Premises  are  sold  or  the  Secured
Indebtedness  paid  in  full.
No  Merger  of  Fee  and  Leasehold  Estates;  Rejection  of  Lease  Agreement.
     So  long  as any portion of the Secured Indebtedness shall remain unpaid or
unperformed  or  any  obligations  of Grantor exist in connection therewith, and
unless  Beneficiary  shall  otherwise consent, the fee title to the Premises and
the leasehold estate therein created by the provisions of the Lease Agreement or
     other lease shall not merge but shall always be kept separate and distinct,
notwithstanding  the  union  of such estate in Grantor, Trustee, Beneficiary, or
any  other  person  by  purchase,  operation  of  law  or otherwise. Beneficiary
reserves  the right, at any time, to release portions of the Premises including,
but not limited to, the leasehold estate created by the Lease Agreement, with or
without  consideration,  at Beneficiary's election, without waiving or affecting
any  of its rights hereunder or under any of the other Credit Documents, and any
such  release  shall  not  affect  Beneficiary's  rights  in connection with the
portion  of the Premises not so released. If Grantor should become the owner and
holder  of  the  fee  title to the Premises and the Secured Indebtedness related
thereto  shall  not  have been prepaid in accordance with the terms of the Note,
the  lien of this Deed of Trust shall spread to cover Grantor's fee title to the
Premises  and  the  fee  title  shall  be deemed to be included in the Premises.
     if  the  Lease  Agreement  is terminated for any reason in the event of the
rejection  or disaffirmance of the Lease Agreement pursuant to the United States
Bankruptcy  Code,  11  U.S.C.   101  et  seq.  ~ as the same may be amended (the
"Code")  or  any other law affecting creditors' rights: (i) Grantor, immediately
after  obtaining  notice thereof, shall give notice thereof to Beneficiary; (ii)
Grantor,  without  the  prior written consent of Beneficiary, shall not elect to
treat  the  Lease Agreement as terminated pursuant to Section 365(h) of the Code
or  any  comparable federal or state statute or law, and any election by Grantor
made without such consent shall be void; and (iii) this Deed of Trust and all of
the liens, terms, covenants and conditions of this Deed of Trust shall extend to
and  cover  Grantor's  possessory rights under Section 365(h) of the Code and to
any  claim  for  damages  due  to  the rejection of the Lease Agreement or other
termination  of  the  Lease  Agreement.  In  addition,  Grantor  hereby  assigns
irrevocably  to  Beneficiary  Grantor's  rights  to treat the Lease Agreement as
terminated  under Section 365(h) of the Code and to offset rents under the Lease
Agreement in the event that any case, proceeding or other action is commenced by
or  against  the  landlord  under  the  Code  or any comparable federal or state
statute  or  law,  provided  that Beneficiary shall not exercise such rights and
shall  permit  Grantor to exercise such rights with the prior written consent of
Beneficiary,  not  to  be  unreasonably  withheld or delayed, unless an Event of
Default  shall  have  occurred  and  be  continuing.  Grantor  hereby assigns to
Beneficiary  Grantor's  right to reject the Lease Agreement under Section 365 of
the  Code  or any comparable federal or state statute or law with respect to any
case,  proceeding or other action commenced by or against Grantor under the Code
or  comparable  federal or state statute or law, provided that Beneficiary shall
not  exercise  such  right, and shall permit Grantor to exercise such right with
the  prior  written  consent  of Beneficiary, not to be unreasonably withheld or
delayed,  unless  an  Event  of  Default  shall have occurred and be continuing.
Grantor  hereby  assigns to Beneficiary, Grantor's right to seek an extension of
the 60-day period within which Grantor must accept or reject the Lease Agreement
under  Section 365 of the Code or any comparable federal or state statute or law
with  respect  to  any  case, proceeding or other action commenced by or against
Grantor  under  the Code or comparable federal or state statute or law, provided
the  Beneficiary  shall  not  exercise  such  right, and shall permit Grantor to
exercise  such  right  with  the prior written consent of Beneficiary, not to be
unreasonably withheld or delayed, unless an Event of Default shall have occurred
and  be  continuing;  and  provided,  further,  that the assignment provided for
herein  shall only be effective at such time, if any, as Beneficiary is not also
the  lessor  under  the  Lease Agreement. Further, if Grantor shall desire to so
reject  the  Lease  Agreement  at a time when Beneficiary is not also the lessor
under  the  Lease  Agreement, at the Beneficiary's request, Grantor shall assign
its  interest  in  the  Lease  Agreement to Beneficiary in lieu of rejecting the
Lease  Agreement  as  described  above.  Grantor hereby agrees that if the Lease
Agreement  is  terminated  for  any  reason  in  the  event  of the rejection or
disaffirmance  of  the Lease Agreement under the Code or any other law affecting
creditor's  rights, any property not removed by Grantor as permitted or required
by  the  Lease  Agreement shall, at the option of Beneficiary and subject to any
rights  thereunder  granted  to  lessor  under  the  Lease  Agreement, be deemed
abandoned  by  Grantor,  provided  that Beneficiary may remove any such property
required  to  be  removed  by  Grantor  pursuant to the Lease Agreement, and all
reasonable  expenses  and  costs  associated  with such removal shall be paid by
Grantor  within  five days of receipt by Grantor of an invoice for such expenses
and costs associated with such removal together with interest thereon until paid
at  the  Default  Rate  provided  in  the  Note.
Periodic  Enforcement. Beneficiary shall have the right from time to time to sue
for  any sums, whether interest, principal or any installment of either or both,
taxes,  penalties, or any other sums required to be paid under the terms of this
Deed  of  Trust, as the same become due, without regard to whether or not all of
the  Secured  Indebtedness  shall be due on demand, and without prejudice to the
right  of  Beneficiary  thereafter to enforce any appropriate remedy against the
Grantor,  including an action of foreclosure, or any other action, for a default
or  defaults  by Grantor existing at the time such earlier action was commenced.
Notice.  Every  provision  for  notice  and  demand  or  request shall be deemed
fulfilled  if  complied  with  as  set  forth  in  the  Note.
Time  of the Essence. Time is of the essence of this Deed of Trust and the other
Credit  Documents.
Governing  Law. The terms and provisions of this Deed of Trust shall be governed
by  and  construed  in accordance with the laws of the State of Tennessee (other
than  actions  with  respect  to  the enforcement of the rights and remedies set
forth in this Deed of Trust, which shall be governed by the laws of the State in
which  the  Premises  are located notwithstanding any provisions to the contrary
contained  in  this  Deed  of  Trust).
Captions; Convenience. The captions or headings at the beginning of each Section
hereof are for the convenience of the parties and are not a part of this Deed of
Trust.
Further  Assurances.  Grantor  shall  execute  and deliver (and pay the costs of
preparation  and  recording  thereof)  to  Beneficiary any further instrument or
instruments, including, but not limited to, security deeds, security agreements,
financing  statements,  assignments and renewal and substitution notes, so as to
reaffirm,  to  correct  and  to  perfect  the  evidence of the obligation hereby
secured  and  the legal security title of Trustee for the benefit of Beneficiary
to  all  or any part of the Premises intended to be hereby conveyed, whether now
conveyed, later substituted for, or acquired subsequent to the date of this Deed
of  Trust  and  extensions  or  modifications  thereof.
Severability.  If  this Deed of Trust is invalid or unenforceable as to any part
of  the  Secured  Indebtedness,  or if the interest created hereby is invalid or
unenforceable as to any part of the Premises, the unsecured or partially secured
portion  of  the  debt  shall  be  completely  paid  prior to the payment of the
remaining and secured or partially secured portion of debt and all payments made
on  the debt, whether voluntary or under foreclosure or other enforcement action
or  procedure, shall be considered to have been first paid on and applied to the
full  payment  of that portion of the debt which is not secured or fully secured
by  this  Deed  of  Trust.  In  any  action  or proceeding involving bankruptcy,
insolvency,  reorganization  or  other  law  affecting  the  rights of creditors
generally,  if  this  Deed  of Trust would otherwise be held or determined to be
void,  invalid  or  unenforceable  on  account  of  the  amount  of  the Secured
Indebtedness  secured  hereby,  then notwithstanding any provision hereof to the
contrary,  the  amount  of  Secured Indebtedness secured hereby (for purposes of
this  Deed  of Trust only) shall be limited to the highest amount which is valid
and enforceable as determined in any such action or proceeding. If any provision
of  this  Deed of Trust or the application thereof to any person or circumstance
shall  be  invalid  or  unenforceable  to  any  extent:  (i)  the  validity  and
enforceability  of  the  remainder  of  this Deed of Trust, and the validity and
enforceability  of  that  provision  with  respect  to  other  persons  and
circumstances,  shall not be affected; (ii) such provision, as to such person or
circumstance  shall  be  deemed modified to the minimum extent necessary to make
such provision consistent with applicable law; and (iii) such provision shall be
valid,  enforceable  and enforced in its modified form against such person or in
such  circumstance.
Successors  and  Assigns. This Deed of Trust shall be binding upon and inures to
the benefit of and shall be enforceable by the successors and assigns of Grantor
and  Beneficiary;  provided  that  Grantor may not assign or transfer any of its
interests  or  obligations  hereunder  without  the  prior  written  consent  of
Beneficiary. Without limiting the generality of the foregoing, Grantor expressly
acknowledges  that  this  Deed of Trust is for the benefit of Beneficiary as the
holder  of  the  Note  and  to  any  successor  holder  of  the  Note.
Acceptance  of Trust. Trustee accepts this Trust when this Deed of Trust is made
public  record  as provided by law. Except as otherwise provided by law, Trustee
is  not  obligated to notify any party hereto of pending sale under this Deed of
Trust  or  of  any action or proceeding in which Grantor, Beneficiary or Trustee
shall  be  a  party,  unless brought by Trustee. The necessity of Trustee herein
named  or  any  successor  in  trust,  making  oath or giving bond, is expressly
waived.  This  Deed of Trust may be amended by written agreement between Grantor
and  Beneficiary  without  joinder  by  Trustee.
Successor  Trustee.  Grantor  agrees  that  Beneficiary  may, from time to time,
without  notice  to Grantor and with or without cause, substitute a successor or
successors  to  any  Trustee  named  herein  or acting hereunder to execute this
Trust.  Upon  such appointment, and without conveyance to the successor Trustee,
the  latter shall be vested with all title, powers and duties conferred upon any
Trustee herein named or acting hereunder. Each such appointment and substitution
shall  be made by written Deed of Appointment executed by Beneficiary containing
reference  to this Deed of Trust and its place of record, which, when duly filed
for  record  in the proper office of the county or counties in which the Land is
situated,  shall  be  conclusive  proof  of  proper appointment of the successor
Trustee.
     [SIGNATURE  PAGE  FOLLOWS]

<PAGE>

IN  WITNESS  WHEREOF, this Deed of Trust has been duly executed and delivered by
Grantor  as  of  the  date  first  above  written.
GRANTOR:
EMERITUS  CORPORATION

By:/s/  Raymond  R.  Brandstrom
   ----------------------------
     Raymond  R.  Brandstrom
     -----------------------
Its:     Chief  Financial  Officer
         -------------------------
 STATE  OF  WASHINGTON
COUNTY  OF  KING
Before  me,                      a  Notary  Public  of  the  state  and  county
aforesaid,  personally  appeared                         ,  with  whom  I  am
personally  acquainted  (or proved to me on the basis of satisfactory evidence),
and  who,  upon  oath,  acknowledged  himself  to  be the                     of
Emeritus Corporation, the within named bargainor, a corporation, and that he, as
such  officer,  executed  the  foregoing  instrument  for  the  purposes therein
contained,  by  signing  the name of the corporation by himself as such officer.

                                        Notary  Public
My  Commission  Expires:

<PAGE>
                                   EXHIBIT "A"
                              PROPERTY DESCRIPTION