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

                             LEASEHOLD MORTGAGE WITH
                   SECURITY AGREEMENT AND ASSIGNMENT OF RENTS
                     LOCATION: RAVENNA, PORTAGE COUNTY, OHIO
THIS  LEASEHOLD  MORTGAGE  WITH  SECURITY  AGREEMENT  AND  ASSIGNMENT  OF  RENTS
("Mortgage"),  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 "Mortgagor"), for the benefit of HR
Acquisition I Corporation, a Maryland corporation whose address is 3310 West End
Avenue,  Suite  700,  Nashville,  Tennessee  37203  (hereinafter  "Mortgagee").
                                WITNESSETH THAT:
WHEREAS,  pursuant  to the terms of that Lease Agreement dated as of May 1, 2003
by  and  between  Mortgagee,  as  Lessor,  and  Mortgagor, as Lessee (the "Lease
Agreement")  Mortgagee  agreed  to  make  a  loan  to  Mortgagor in the original
principal  amount  of  Six  Hundred  Thousand and no/100 Dollars ($600,000); and
WHEREAS,  on  or  about  May  1,  2003,  Mortgagee  made  the  loan to Mortgagor
contemplated by the terms of the Lease Agreement and Mortgagor executed in favor
of  Mortgagee  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 Mortgagor execute this Mortgage
as  security  for  its  obligations  under  the  Note;
NOW,  THEREFORE,  in consideration of the loan made to the Mortgagor 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
Mortgagor  by these presents does grant, bargain, sell and convey unto Mortgagee
and  Mortgagee's  successors  and  assigns,  for  the  benefit of Mortgagee, the
following:
Mortgagor's  leasehold  estate  created  pursuant to the Lease Agreement and all
extensions, renewals, and new leasehold estates hereafter obtained by Mortgagor,
and  all  options  and  rights to purchase now or hereafter existing in favor of
Mortgagor, 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 Mortgagor may now or hereafter
have  in  the  Land  and  Premises  (as  hereinafter  defined) including any fee
interest  the  Mortgagor may now own or hereafter obtain therein (or in any part
thereof);
TOGETHER  with  all  right,  title  and  interest of Mortgagor 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 Mortgagor, 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 Mortgagor, 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 Mortgagor 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
Mortgagor,  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  Mortgagor'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  Mortgagor'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  Mortgagor now has or may hereafter acquire in or
with  respect  to the Premises, and any and all rights that Mortgagor 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 Mortgagor'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 Mortgagee and Mortgagee's successors
and  assigns.
Mortgagor  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 Mortgagee under the terms of the Lease
Agreement.  Mortgagor  further  represents  and  covenants  that  as of the date
hereof: (i) the Lease Agreement, a memorandum of which is recorded as Instrument
Number               ,  Office  of Recorder of Deeds, Portage County, Ohio 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  Mortgagee,  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  Mortgage;  (iii) neither Mortgagor, in its
capacity as the lessee under the Lease Agreement, nor Mortgagee, 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 Mortgagor; and
(v) the quiet and peaceful possession of the Premises is vested in the Mortgagor
under  the  Lease  Agreement.  Mortgagor further covenants and binds itself, its
heirs,  successors, and assigns, to warrant and defend the title to the Premises
to  Mortgagee  and Mortgagee's successors and assigns forever against the lawful
claims  of  all  persons  whomsoever.
THIS  CONVEYANCE  IS  MADE  UPON  THIS  SPECIAL  TRUST, that if Mortgagor shall:
          (a)     Pay  the  indebtedness,  obligations  (including,  without
limitation,  reimbursement  obligations  relating  to  letters  of  credit)  and
liabilities  of  Mortgagor 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  Mortgagor  now  or  hereafter
contained  in  this  Mortgage,  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 Mortgagee or Mortgagee to protect the
Premises or this Mortgage, 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 Mortgagor. This conveyance is made to secure the payment and
performance  of  all  of  the  Secured  Indebtedness.
          (d)     Nothing  in  this  Mortgage or any other Credit Document shall
constitute  the  agreement  by  Mortgagee to assume any obligations of Mortgagor
with  respect  to  the  Premises  including, without limitation, any obligations
under  the  Lease  Agreement,  and  Mortgagor  shall  defend, indemnify and hold
Mortgagee  harmless  against  any claims, demands, damages, losses, liabilities,
costs, expenses, or other obligations incurred with respect to the Premises as a
result of this Mortgage 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 Mortgage, 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 MORTGAGE, MORTGAGOR HEREBY COVENANTS AND AGREES
UNTO  MORTGAGEE  AND  MORTGAGEE  AS  FOLLOWS:
Payment  of  Secured  Indebtedness. Mortgagor 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.
     Mortgagor shall: (i) pay all rents and other amounts required to be paid by
     Mortgagor,  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 Mortgagee is not also the lessor under
the  Lease  Agreement,  promptly notify Mortgagee of the giving of any notice by
Mortgagor  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 Mortgagee a copy of any such notices or
any  other  requests or other materials at any time provided by the Mortgagor to
such  lessor  or  by such lessor to the Mortgagor. Mortgagor 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
Mortgagee  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 Mortgagee, and Mortgagor hereby assigns to
Mortgagee  as  further  security  for the payment and performance of the Secured
Indebtedness,  the  right  to exercise on behalf of Mortgagor 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 Mortgagor, 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 Mortgagee
at  a time when Mortgagee is not also the lessor under the Lease Agreement shall
be  null  and void and of no force and effect. At any time that Mortgagee is not
also  the  lessor  under  the  Lease  Agreement,  Mortgagor  shall not waive any
material  default  by  the  lessor  under  the Lease Agreement without the prior
written  consent of Mortgagee. If the Mortgagor 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
Mortgage, and without waiving or releasing Mortgagor from any of its obligations
hereunder,  Mortgagee 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 Mortgagor to be performed or observed to be promptly performed or observed on
behalf of Mortgagor to the end that the rights of Mortgagor 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
Mortgagor  or  by  any party on behalf of Mortgagor. If Mortgagee 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  Mortgagor  and  Mortgagee,  the  Event  of  Default  hereunder, and
Mortgagor  shall  immediately  reimburse  Mortgagee  for  all  amounts paid with
interest thereon at the Default Rate provided in the Note, which amount shall be
secured by this Mortgage. Upon request by Mortgagee or as otherwise required, in
the  event that Mortgagee is not also the lessor under the Lease Agreement, then
Mortgagor shall provide Mortgagee with receipts and other evidence of payment of
the  rents  and  other  sums payable under the Lease Agreement. At any time that
Mortgagee  is  not also the lessor under the Lease Agreement, Mortgagor will not
subordinate  or  consent  to  the  subordination  of  the Lease Agreement to any
mortgage,  Mortgage, 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  Mortgagee  shall  have  been  first  had  and  obtained. Mortgagor shall not
knowingly  take any other action which would have a material effect on the terms
of  the  Lease  Agreement  or  otherwise affect Mortgagor's rights in and to the
Premises.
     Mortgagee  and  any persons authorized by Mortgagee 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. Mortgagor 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, Mortgagor 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.  Mortgagor  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 Mortgagor's rights and interests in the Premises or any
part  thereof  (other  than  liens  allowed  pursuant  to  the Lease Agreement).
Environmental  Matters.
     Mortgagor  shall  indemnify  and hold Mortgagee and Mortgagee harmless from
and  against  any  and  all  losses,  costs,  damages,  claims,  liabilities and
expenses,  including  attorneys' fees, incurred by either Mortgagee or Mortgagee
arising  out  of  or  relating  to  (i)  the presence as a result of the acts or
omissions  of  Mortgagor  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 Mortgagor's acquisition of any
interest  in  the  Premises  (including  Mortgagor's  leasehold  interest or the
exacerbation  of  prior existing conditions by the acts, omissions or negligence
of  Mortgagor).  Mortgagor  understands  and  agrees that the indemnity provided
herein  shall  survive  the payment and performance of the Secured Indebtedness,
the  termination  of this Mortgage, 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  Mortgage, 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  Mortgage:
     should  Mortgagor  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 Mortgagor contained herein or in
any  of  the  other  Credit  Documents  prove  untrue in any material aspect; or
     should  Mortgagor 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,  Mortgagee  or Mortgagee 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, Mortgagee and
Mortgagee  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, Mortgagee 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 Mortgage by judicial proceedings or
may,  at  the option of Mortgagee or Mortgagee, proceed to advertise the sale of
the  Premises  in  the  way  and manner required by law in the State of Ohio 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 Mortgagee or
Mortgagee  may  elect to accept. Mortgagee 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. Mortgagee, Mortgagee may bid at such sale. Mortgagee 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.
Mortgagee  shall  collect  the  proceeds of such sale, applying such proceeds as
provided  in Section 14. Mortgagor agrees that possession of the Premises during
the  existence  of the Secured Indebtedness by Mortgagor, or any person claiming
under  Mortgagor,  shall  be  that  of tenant under Mortgagee, and, in case of a
sale,  as herein provided, Mortgagor or any person in possession under Mortgagor
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 Mortgagee or Mortgagee
may  have  at  law  or  in  equity.
Assignment  of Leases and Rents. The assignment of Leases and Rents contained in
this  Mortgage, shall constitute an absolute assignment of such Leases and Rents
to Mortgagee for the benefit of Mortgagee and to Mortgagee, and Mortgagor hereby
assigns and transfers to Mortgagee and to Mortgagee 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 Mortgage, so long as no Event of Default has occurred, Mortgagor 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 Mortgagor shall not operate to subordinate the assignment of Leases and
Rents  contained  in  this Mortgage to any subsequent assignment, in whole or in
part,  by Mortgagor, and any subsequent assignment by Mortgagor shall be subject
to the rights of Mortgagee and Mortgagee hereunder. The assignment of Leases and
Rents  contained in this Mortgage shall not be deemed or construed to constitute
Mortgagee  or  Mortgagee  as a mortgagee in possession nor obligate Mortgagee or
Mortgagee  to  take  any action or to incur any expenses or perform or discharge
any  obligation,  duty  or  liability  or  to permit Mortgagor to enter into any
Leases  except  in  accordance  with  the  terms  of  this  Mortgage.
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  Ohio,  it  is hereby acknowledged and agreed that the Mortgagor's (debtor's)
name  is  Emeritus  Corporation  and  the  Mortgagee's (secured party's) name is
          ---------------------
Capstone  Capital of Ohio, Inc., and the addresses of the Mortgagor (debtor) and
Mortgagee (secured party) are set forth above. In addition to all other remedies
set forth in this Mortgage, 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 Mortgagor, this Mortgage 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 Ohio, and Mortgagor hereby
grants  to  Mortgagee 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 Mortgage, Mortgagee shall have all remedies available
to  a  secured party pursuant to the Uniform Commercial Code as enacted in Ohio.
Payment  of  Costs of Exercising Remedies. Mortgagor covenants and agrees to pay
Mortgagee  and  Mortgagee  all reasonable expenditures and expenses which may be
paid  or incurred by or on behalf of Mortgagee or Mortgagee 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 Mortgagee or Mortgagee 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 Mortgagee in connection
with  the  exercise  of  any  remedy  under  this Mortgage. 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 Mortgage, including the fees of any attorney
employed  by  Mortgagee  or  Mortgagee in any litigation or proceeding affecting
this  Mortgage 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 Mortgagor, with
interest  thereon  at the Default Rate provided in the Note and shall be secured
by  this  Mortgage.
Mortgagor's  Waiver  of Certain Rights. Mortgagor 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 Mortgagor may do so, Mortgagor agrees that Mortgagor 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  Mortgagor,  for  Mortgagor,  Mortgagor'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 Mortgagee may elect in its sole discretion (and
subject  to  the  provisions  of  the Note); Fourth, any overage to the order of
Mortgagor,  its  successors  or  assigns,  as their rights may appear or to such
other  persons  that  may  lawfully  be  entitled  thereto.
Appointment of Receiver. Mortgagee and Mortgagee in any action to foreclose this
Mortgage,  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 Mortgagor 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
Mortgagee 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 Mortgagee 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 Mortgagor and all persons whose interests in the Premises
are  subject  to this Mortgage to the extent that they do not increase or extend
the  obligations  imposed  on Mortgagor 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 Mortgage 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.
     Mortgagee  and  Mortgagee  shall  be  entitled  to  enforce  payment  and
performance  of  any  Secured Indebtedness and to exercise all rights and powers
under  this  Mortgage  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
Mortgage  nor  its  enforcement  whether  by court action or other powers herein
contained,  shall  prejudice  or  in any manner affect the right of Mortgagee or
Mortgagee to realize upon or enforce any other security now or hereafter held by
Mortgagee  or  Mortgagee,  it being agreed that Mortgagee and Mortgagee shall be
entitled  to  enforce this Mortgage and any other security now or hereafter held
by  Mortgagee  or  Mortgagee  in such order and manner as it may in its absolute
discretion  determine.  No remedy herein conferred upon or reserved to Mortgagee
or  Mortgagee  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 Mortgagee or Mortgagee 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
Mortgagee  and  Mortgagee  and  Mortgagee  and Mortgagee may pursue inconsistent
remedies.  No  delay by Mortgagee or Mortgagee 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 Mortgagee or Mortgagee to
insist upon the strict performance by Mortgagor under the Note, this Mortgage or
any  other  Credit  Document  shall  constitute a waiver of any such covenant or
agreement, and no waiver by Mortgagee or Mortgagee of any Event of Default shall
constitute a waiver of or consent to any subsequent Event of Default. No failure
of  Mortgagee  or  Mortgagee to exercise the option herein granted to accelerate
the  maturity  of  the Secured Indebtedness, nor any forbearance by Mortgagee or
Mortgagee  before  or  after  the exercise of such option, nor any withdrawal or
abandonment  by  Mortgagee  or  Mortgagee  of  the exercise of the power of sale
herein  granted  or  any  of Mortgagee's or Mortgagee's rights under such power,
shall  be  construed  as  a waiver of any option, power or right of Mortgagee or
Mortgagee  hereunder.
     In  case  of  any sale under this Mortgage 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 Mortgagee or Mortgagee, the Premises or any part
thereof may be sold in one parcel and as an entirety, or in such parcels, manner
or  order as Mortgagee or Mortgagee 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 Mortgagor exist in connection therewith, and
unless  Mortgagee 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 Mortgagor, Mortgagee, Mortgagee, or
any  other person by purchase, operation of law or otherwise. Mortgagee 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 Mortgagee'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 Mortgagee's rights in connection with the portion of
the Premises not so released. If Mortgagor 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
Mortgage shall spread to cover Mortgagor'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) Mortgagor, immediately
after  obtaining  notice  thereof,  shall give notice thereof to Mortgagee; (ii)
Mortgagor,  without  the  prior written consent of Mortgagee, 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 Mortgagor
made  without such consent shall be void; and (iii) this Mortgage and all of the
liens,  terms,  covenants  and  conditions  of this Mortgage shall extend to and
cover  Mortgagor'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,  Mortgagor hereby assigns
irrevocably  to  Mortgagee  Mortgagor'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 Mortgagee shall not exercise such rights and shall
permit  Mortgagor  to  exercise  such  rights  with the prior written consent of
Mortgagee,  not  to  be  unreasonably  withheld  or  delayed, unless an Event of
Default  shall  have  occurred  and  be  continuing. Mortgagor hereby assigns to
Mortgagee  Mortgagor'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 Mortgagor under the
Code  or  comparable  federal  or  state statute or law, provided that Mortgagee
shall not exercise such right, and shall permit Mortgagor to exercise such right
with  the prior written consent of Mortgagee, not to be unreasonably withheld or
delayed,  unless  an  Event  of  Default  shall have occurred and be continuing.
Mortgagor hereby assigns to Mortgagee, Mortgagor's right to seek an extension of
the  60-day  period  within  which  Mortgagor  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  Mortgagor  under the Code or comparable federal or state statute or
law,  provided  the  Mortgagee  shall  not exercise such right, and shall permit
Mortgagor  to  exercise  such right with the prior written consent of Mortgagee,
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 Mortgagee
is  not  also  the lessor under the Lease Agreement. Further, if Mortgagor shall
desire to so reject the Lease Agreement at a time when Mortgagee is not also the
lessor  under  the  Lease Agreement, at the Mortgagee's request, Mortgagor shall
assign its interest in the Lease Agreement to Mortgagee in lieu of rejecting the
Lease  Agreement  as  described above. Mortgagor 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  Mortgagor  as permitted or
required by the Lease Agreement shall, at the option of Mortgagee and subject to
any  rights  thereunder  granted  to lessor under the Lease Agreement, be deemed
abandoned  by  Mortgagor,  provided  that Mortgagee may remove any such property
required  to  be  removed  by Mortgagor pursuant to the Lease Agreement, and all
reasonable  expenses  and  costs  associated  with such removal shall be paid by
Mortgagor  within  five  days  of  receipt  by  Mortgagor 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.  Mortgagee  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
Mortgage,  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 Mortgagee thereafter to enforce any appropriate remedy against the Mortgagor,
including  an  action  of  foreclosure,  or  any  other action, for a default or
defaults  by  Mortgagor  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 Mortgage and the other
Credit  Documents.
Governing  Law.  The  terms and provisions of this Mortgage 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  Mortgage,  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  Mortgage).
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
Mortgage.
Further  Assurances.  Mortgagor  shall execute and deliver (and pay the costs of
preparation  and  recording  thereof)  to  Mortgagee  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 Mortgagee for the benefit of Mortgagee
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
Mortgage  and  extensions  or  modifications  thereof.
Severability. If this Mortgage 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 Mortgage. In any action or proceeding involving bankruptcy, insolvency,
reorganization or other law affecting the rights of creditors generally, if this
Mortgage  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 Mortgage 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 Mortgage 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  Mortgage,  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 Mortgage shall be binding upon and inures to the
benefit  of  and shall be enforceable by the successors and assigns of Mortgagor
and  Mortgagee;  provided  that  Mortgagor may not assign or transfer any of its
interests  or  obligations  hereunder  without  the  prior  written  consent  of
Mortgagee. Without limiting the generality of the foregoing, Mortgagor expressly
acknowledges that this Mortgage is for the benefit of Mortgagee as the holder of
the  Note  and  to  any  successor  holder  of  the  Note.
Acceptance  of  Trust.  Mortgagee  accepts this Trust when this Mortgage is made
public record as provided by law. Except as otherwise provided by law, Mortgagee
is  not obligated to notify any party hereto of pending sale under this Mortgage
or  of any action or proceeding in which Mortgagor, Mortgagee or Mortgagee shall
be a party, unless brought by Mortgagee. The necessity of Mortgagee herein named
or any successor in trust, making oath or giving bond, is expressly waived. This
Mortgage  may  be  amended  by written agreement between Mortgagor and Mortgagee
without  joinder  by  Mortgagee.
Successor  Mortgagee.  Mortgagor  agrees  that Mortgagee may, from time to time,
without notice to Mortgagor and with or without cause, substitute a successor or
successors  to  any  Mortgagee  named herein or acting hereunder to execute this
Trust. Upon such appointment, and without conveyance to the successor Mortgagee,
the  latter shall be vested with all title, powers and duties conferred upon any
Mortgagee  herein  named  or  acting  hereunder.  Each  such  appointment  and
substitution  shall be made by written Deed of Appointment executed by Mortgagee
containing  reference to this Mortgage 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  Mortgagee.
     [SIGNATURE  PAGE  FOLLOWS]

<PAGE>

IN  WITNESS  WHEREOF,  this  Mortgage  has  been  duly executed and delivered by
Mortgagor  as  of  the  date  first  above  written.
MORTGAGOR:
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