LOAN  NO.  07-0004017


                     HAZARDOUS MATERIALS INDEMNITY AGREEMENT

     This  HAZARDOUS MATERIALS INDEMNITY AGREEMENT (this "AGREEMENT") is made as
of  August  26,  2002  by  and  among EMERITUS PROPERTIES XIV, LLC, a Washington
limited  liability  company ("BORROWER"), and EMERITUS CORPORATION, a Washington
corporation  ("GUARANTOR"),  in  favor  of  HELLER  HEALTHCARE  FINANCE, INC., a
Delaware  corporation,  whose  address  is  2 Wisconsin Circle, Suite 400, Chevy
Chase,  Maryland  20815.
                                    RECITALS
A.     Borrower is the owner in fee simple of that certain real property legally
     described  in  Exhibit  A  attached hereto (said property together with all
                    ----------
rights  and  appurtenances  thereto  and  all  improvements presently located or
hereafter  constructed  thereon  are  hereinafter  collectively  called  the  "
PROJECT").
B.     Concurrently  herewith,  Lender  is  making  a  loan  to  Borrower in the
principal  amount  of  Eight  Million  Three Hundred Thousand and No/100 Dollars
($8,300,000.00)  (the  "LOAN").
C.     To  evidence  the  Loan, Borrower has executed and delivered to Lender, a
Promissory Note A of even date herewith in the face amount of Five Million Three
     Hundred  Ninety-Five  Thousand  and  No/100  Dollars  ($5,395,000.00) and a
Subordinated  Promissory  Note B of even date herewith in the face amount of Two
Million  Nine  Hundred  Five  Thousand and No/100 Dollars ($2,905,000.00) (which
notes  and  any  and  all  renewals,  amendments,  modifications,  increases and
extensions  thereof  are hereinafter collectively called the "NOTES") and a Loan
Agreement of even date herewith (as amended, modified, extended or restated from
time  to  time,  the  "LOAN AGREEMENT").  Capitalized terms used but not defined
herein  shall  have  the  meanings  given  to  them  in  the  Loan  Agreement.
D.     Concurrently  herewith,  Borrower  has granted to Lender a first priority
Mortgage and Security Agreement (as amended, modified, extended or restated from
     time  to  time,  the  "MORTGAGE"), encumbering the Project.  The Notes, the
Loan Agreement, the Mortgage, and any other documents evidencing or securing the
Loan  or  executed  in  connection  therewith  (other  than  the  "Other  Loan
Instruments"  as  defined  in  the  Mortgage),  and any modification, renewal or
extension  of any of the foregoing are collectively called the "LOAN DOCUMENTS."
E.     Guarantor  owns one hundred percent (100%) of the membership interests in
Borrower.
F.     Lender,  as  a  condition to making the Loan, has requested that Borrower
and  the  Guarantor  enter  into  this  Agreement  to  indemnify  Lender against
liabilities  arising  from  Hazardous Materials (as hereinafter defined) used or
located  on,  or  affecting  the  Project,  and  that Borrower and the Guarantor
acknowledge  and  agree  that their execution and delivery of this Agreement and
their performance of the covenants contained herein are material inducements for
     Lender's  agreement  to  make  the  Loan.
                                   AGREEMENTS
     NOW,  THEREFORE,  in  consideration of the foregoing and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, Borrower and the Guarantor hereby represent, warrant, covenant and
agree  as  follows:
1.     NO  HAZARDOUS MATERIALS ON PROJECT.  Borrower and the Guarantor represent
       ----------------------------------
and  warrant  to the best of their knowledge, after all appropriate inquiry, and
covenant  that  there are no, nor will there be, for as long as any indebtedness
or  obligations  remain  outstanding  under  the  Loan,  any Hazardous Materials
generated,  released,  stored, buried or deposited over, beneath, in or upon the
Project  or  on  or  beneath  the  surface  of adjacent property, except as such
Hazardous  Materials may be generated, used, stored or transported in connection
with  the permitted uses of the Project and then only to the extent permitted by
law  after  obtaining  all  necessary permits and licenses therefor.  "HAZARDOUS
MATERIALS" shall mean and include any pollutants, flammables, explosives, molds,
     petroleum  (including  crude  oil)  or  any  fraction  thereof, radioactive
materials, hazardous wastes, dangerous or toxic substances or related materials,
including  substances  defined  as  or  included  in  the definition of toxic or
hazardous  substances,  wastes  or  materials  under any federal, state or local
laws,  ordinances,  regulations  or  guidances  which  relate  to pollution, the
environment  or  the  protection  of  public  health  and  safety,  or limiting,
prohibiting  or  otherwise regulating the presence, sale, recycling, generation,
manufacture,  use,  transportation, disposal, release, storage, treatment of, or
response  or  exposure  to,  toxic or hazardous substances, wastes or materials.
Such  laws,  ordinances  and regulations, now or hereafter in effect, and as the
same  may be amended from time to time, are hereinafter collectively referred to
as  the  "HAZARDOUS  MATERIALS  LAWS."
2.     COMPLIANCE  WITH  LAWS.  For  as  long as any Indebtedness or Obligations
       ----------------------
remain  outstanding  under the Loan Documents, Borrower and the Guarantor shall,
and  shall  cause  their  respective employees, agents, tenants, contractors and
subcontractors,  and any other persons from time to time present on or occupying
the  Project to, keep and maintain the Project in compliance with, and not cause
or  knowingly permit the Project to be in violation of, any applicable Hazardous
Materials  Laws.  None  of  Borrower,  Guarantor  or  any  of  their  respective
employees,  agents, tenants, contractors or subcontractors, or any other persons
occupying  or  present on the Project shall generate, use, store, manufacture or
dispose  of  on,  under or about the Project or transport to or from the Project
any  Hazardous  Materials,  except such Hazardous Materials as may be generated,
used, stored or transported in connection with the permitted uses of the Project
and  then  only  to  the  extent  permitted by law after obtaining all necessary
permits  and  licenses  therefor.
3.     HAZARDOUS MATERIALS CLAIMS.  Borrower and the Guarantor shall immediately
       --------------------------
advise  Lender  in  writing  of:  (a)  any  notices  received by Borrower or the
Guarantor (whether such notices are from the Environmental Protection Agency, or
any  other  federal,  state  or  local  governmental  agency  or regional office
thereof)  of  the  violation  or potential violation of any applicable Hazardous
Materials  Laws  occurring  on,  under  or  about  the  Project; (b) any and all
enforcement,  cleanup,  removal  or  other  governmental  or  regulatory actions
instituted,  completed  or threatened against Borrower, Guarantor or the Project
pursuant  to  any Hazardous Materials Laws; (c) all claims made or threatened by
any  third  party against Borrower, Guarantor or the Project relating to damage,
contribution,  cost  recovery,  compensation,  loss or injury resulting from any
Hazardous Materials (the matters set forth in clauses (a), (b) and (c) above are
hereinafter  referred to as "HAZARDOUS MATERIALS CLAIMS"); and (d) the discovery
by  Borrower  or  Guarantor of any occurrence or condition on the Project or any
real  property  adjoining or in the vicinity of the Project that could cause the
Project  or  any  part  thereof to be subject to any Hazardous Materials Claims.
Lender  shall  have the right but not the obligation to join and participate in,
as  a  party  if  it  so  elects,  any legal proceedings or actions initiated in
connection  with  any  Hazardous Materials Claims and Borrower and the Guarantor
shall  pay to Lender, upon demand, all attorneys' and consultants' fees incurred
by  Lender  in  connection  therewith.
4.     OTHER  HAZARDOUS  MATERIALS  LAWS.  Borrower  and  the  Guarantor  hereby
       ---------------------------------
represent,  warrant  and  certify to the best of their knowledge, that except as
disclosed  in  that certain Phase I Environmental Site Assessment, dated May 30,
2002,  prepared  by  Commercial  Inspectors,  LLC,  (a) there are no underground
storage  tanks  located  on,  under or about the Project that are subject to the
notification requirements under Section 9002 of the Solid Waste Disposal Act, as
now  or  hereafter  amended  (42  U.S.C.   6991);  and  (b) there is no facility
located  on the Project that is subject to the reporting requirements of Section
312  of  the  Federal Emergency Planning and Community Right to Know Act of 1986
and  the  Federal  regulations  promulgated  thereunder  (42  U.S.C.   11022).
5.     INSPECTION  AND  TESTING.  Lender may require Borrower and the Guarantor,
       ------------------------
at  their  sole  cost  and  expense, from time to time to perform or cause to be
performed,  such studies or assessments of the Project, as Lender may reasonably
deem  necessary,  appropriate  or  desirable,  to  determine  the  status  of
environmental  conditions  on,  under  and  about the Project, which studies and
assessments  shall  be  for  the  benefit  of  Lender  and  shall be prepared in
accordance  with  the  specifications  established by Lender; provided, however,
unless  an  Event of Default has occurred and is continuing or Lender has a good
faith  belief  that  Hazardous  Material  exist at such Property in violation of
Hazardous  Materials  Laws,  such studies shall not be performed more often than
one  time  per  year.
6.     REMOVAL  OF  HAZARDOUS  MATERIALS.  Borrower  and the Guarantor, at their
       ---------------------------------
sole  cost and expense, shall, with due care, in a safe manner and in accordance
with  all  Hazardous Materials Laws, detain the spread of, ameliorate and remove
from  the  Project  (and  from  any  other property as required by any Hazardous
Materials Laws) any Hazardous Materials contamination located on, under or about
any  such  property and monitor or cause to be monitored the levels of Hazardous
Materials  on,  under  or  about  any  such  property  or in the ground water in
accordance  with the terms and procedures required by any federal, state, county
or  local governmental agency having jurisdiction including, without limitation,
any  Regional  Water  Quality  Control  Board  and  the Environmental Protection
Agency.
7.     INDEMNIFICATION.  Borrower  and the Guarantor shall jointly and severally
       ---------------
indemnify,  defend  and  save  harmless Lender and Lender's officers, directors,
shareholders, agents, attorneys, representatives and employees, their successors
and  assigns  (individually and collectively "INDEMNITEE"), from and against any
and  all  claims,  demands, causes of action, damages, costs, expenses, lawsuits
and  liabilities,  at  law  or  in  equity,  of every kind or nature whatsoever,
directly  or  indirectly  arising out of or attributable to the generation, use,
storage,  release,  threatened  release,  discharge,  disposal  or  presence  of
Hazardous  Materials  on, under or about the Project (whether occurring prior to
or  during  or after the term of the Loan or otherwise and regardless of by whom
caused,  whether  by  Borrower, the Guarantor or any predecessor in title or any
owner of land adjacent to the Project or any other third party, or any employee,
agent,  tenant,  contractor  or  subcontractor of Borrower, the Guarantor or any
predecessor  in  title  or  any  such  adjacent  land owner or any third person)
(collectively,  the  "LIABILITIES")  including,  without  limitation:
(a)     Claims  of third parties (including governmental agencies) for injury to
or  death  of  any  person  or  for  damage  to  or destruction of any property;
(b)     Claims for response costs, clean-up costs, costs and expenses of removal
and  restoration,  including reasonable fees of attorneys and experts, and costs
of  determining  the  existence of Hazardous Materials and reporting same to any
governmental  agency;
(c)     Any  and  all  other  claims  for  expenses  or  obligations,  including
attorneys'  fees,  costs,  and other expenses related to Hazardous Materials and
the  Project;
(d)     Any  and  all  penalties  threatened,  sought or imposed on account of a
violation  of  any  Hazardous  Materials  Laws;
(e)     All  reasonable  fees  of  attorneys and all fees of any consultants and
engineering  firms  retained  in  connection  with monitoring the obligations of
Borrower  and  the  Guarantor  under  this Agreement and the Loan Documents; and
(f)     Any  loss  occasioned  by  diminution  in the value of the Project which
Lender  is  reasonably  able  to demonstrate resulted from any of the foregoing.
     Notwithstanding  the  foregoing or any other provision of this Agreement to
the  contrary,  if,  through  the  exercise  of  Lender's  rights under the Loan
Documents or otherwise, Lender or an agent of Lender shall assume control of any
Property,  Borrower  and  Guarantor  shall  not  be liable to Indemnitee for any
Liabilities  relating  solely  to  such  Property  if  and  to  the  extent such
Liabilities  are  a  direct  result  of  Lender's  gross  negligence  or willful
misconduct, or if and to the extent (x) such Liabilities first arose after title
to  the Property was vested in Lender or any other party after the completion of
foreclosure  proceedings  or  the granting of a deed-in-lieu of foreclosure, (y)
neither  Borrower  nor  Guarantor, nor any of their respective affiliates, shall
have  contributed to the cause, existence or occurrence of such Liabilities, and
(z)  the  events  or  state  of  facts  resulting  (or  with the passage of time
eventually  resulting)  in  any such Liabilities did not exist or occur prior to
the  time  of  such  assumption  of  control  of  the  Property.
8.     DEFENSE  OR  SETTLEMENT  OF  CLAIMS.
       -----------------------------------
(a)     To  assert  an  indemnity  claim  under this Agreement, Indemnitee shall
notify  Borrower  and  the  Guarantor in writing as soon as reasonably practical
under  the  circumstances  stating  the facts which entitle Indemnitee to make a
claim  for  indemnification.
(b)     Borrower  and  the Guarantor shall, at their own cost, expense and risk:
(i)     defend  all suits, actions, or other legal or administrative proceedings
that  may  be threatened, brought or instituted against an Indemnitee on account
of  any  matter  or  matters  described  in  Section  7  above;
                                             ----------
(ii)     pay  or satisfy any judgment, decree or settlement that may be rendered
against or agreed to by an Indemnitee in any such suit, action or other legal or
administrative  proceeding;
(iii)     reimburse  Indemnitee  for any and all reasonable expenses, including,
without  limitation,  all  legal expenses incurred in connection with any of the
matters  described  in  Section  7  above  or  in connection with enforcing this
                        ----------
Agreement;  and
(iv)     reimburse  Indemnitee  for any loss occasioned by the diminution in the
value  of  the Project which Lender is reasonably able to demonstrate was caused
by  the  presence  of  Hazardous  Materials or the breach of any representation,
warranty  or  obligation  of  Indemnitor  hereunder.
(c)     Any  law  firm  selected  by  Borrower  or  the  Guarantor  to defend an
indemnified  claim shall be subject to the approval of Indemnitee which approval
shall  not  be  unreasonably withheld or delayed; provided that upon thirty (30)
                                                  --------
days  prior  written  notice,  Indemnitee  may elect to defend, using a law firm
selected  by  such  Indemnitee,  any  such  claim,  loss,  action,  legal  or
administrative proceeding at the cost and expense of Borrower and the Guarantor,
     if,  in  the  reasonable  judgment  of  Indemnitee:  (i) the defense is not
proceeding  or  being  conducted  in  a  satisfactory manner or  (ii) there is a
conflict  of  interest between any of the parties to such lawsuit, action, legal
or  administrative  proceeding.
(d)     If  Indemnitee  exercises its right to designate counsel pursuant to the
preceding  clause,  all  reasonable  costs and expenses thereof shall be paid by
Borrower and the Guarantor within ten (10) days following written demand by such
Indemnitee.
(e)     In the event Borrower or the Guarantor shall pay to Indemnitee any claim
under  this  Agreement,  then Borrower or the Guarantor (as applicable) shall be
subrogated  to  any  rights  of  such  Indemnitee  relating  thereto,  and  such
Indemnitee  will  cooperate  with  Borrower  and  the Guarantor, at the cost and
expense  of Borrower and the Guarantor, in enforcing such rights; provided, that
                                                                  --------
such  subrogation  shall  not  be  in derogation of any rights of the Indemnitee
under  this  Agreement,  and  shall not be construed to limit the obligations of
Borrower  or  the  Guarantor  hereunder.
9.     BINDING  EFFECT.  All  the  covenants  and  agreements of Borrower or the
       ---------------
Guarantor  contained  in this Agreement shall apply to and bind their respective
heirs, executors, representatives, successors and assigns and shall inure to the
     benefit  of  each  Indemnitee  and  its  successors  and  assigns.
10.     INDEMNIFICATION  SEPARATE  FROM  THE  LOAN.
        ------------------------------------------
(a)     Borrower  and  the  Guarantor  agree  that  this  Agreement is separate,
independent of and in addition to the undertakings of Borrower and the Guarantor
     pursuant  to  the  Loan,  the  Notes, the Loan Agreement and the other Loan
Documents.  A  separate  action may be brought to enforce the provisions hereof,
which shall in no way be deemed to be an action on the Notes, whether or not the
Loan  have  been  repaid  and  whether  or  not  Lender  would  be entitled to a
deficiency  judgment  following  a  judicial  foreclosure, trustee's sale or UCC
sale.  The  obligations  of  Borrower  and  the Guarantor hereunder shall not be
affected  by  any  exculpatory  provisions  contained  in  the  Notes,  the Loan
Agreement  or  any  of the other Loan Documents.  This Agreement, and all rights
and  obligations  hereunder,  shall  survive  performance  and  repayment of the
obligations  evidenced by and arising under the Loan Documents, surrender of the
Notes,  reconveyance  of  the  Mortgage,  release  of other security provided in
connection  with  the  Loan,  trustee's  sale or foreclosure under the Mortgage,
and/or  any  of the other Loan Documents (whether by deed or other assignment in
lieu  of  foreclosure,  or  otherwise) acquisition of the Project by Lender, any
other  transfer  of  the  Project, and transfer of all of Lender's rights in the
Loan,  the  Loan  Documents,  and  the  Project.
(b)     Borrower  and  the  Guarantor  waive all rights to require Lender to (i)
proceed  against  or exhaust any security for the Loan or (ii) pursue any remedy
in  Lender's  power  whatsoever.  Borrower  waives all defenses by reason of any
disability  or  other  defense under the Loan or by reason of the cessation from
any  cause whatsoever of its liability under the Loan, or that it may acquire by
reason  of  Lender's  election  of  any  remedy  against  it  including, without
limitation,  Lender's  exercise of its  respective rights to foreclose under the
Mortgage.
11.     GOVERNING LAW.  This Agreement shall be construed in accordance with and
        -------------
     governed  by  the  laws  of  the  State  of  Illinois.
12.     AMENDMENTS.  This  Agreement  may  not  be modified, amended,  waived or
        ----------
terminated,  except  by  a  written  instrument  executed by the parties hereto.
13.     PARTIES  IN  INTEREST.  Except as expressly set forth herein, nothing in
        ---------------------
this  Agreement, whether express or implied, is intended to confer any rights or
remedies  under  or  by  reason  of this Agreement on any persons other than the
parties  to  it  and their respective successors and assigns, nor is anything in
this  Agreement  intended to relieve or discharge the obligation or liability of
any  third  persons to any party to this Agreement, nor shall any provision give
any  third  persons any right of subrogation or action over or against any party
to  this  Agreement.
14.     PERSONAL  LIABILITY.  Borrower  and the Guarantor hereby acknowledge and
        -------------------
agree  that  notwithstanding  any other provisions of this Agreement, the Notes,
the  Loan Agreement or the other Loan Documents to the contrary, the obligations
of  Borrower  and Guarantor under this Agreement shall be the unlimited personal
obligations  of  Borrower  and  Guarantor.
15.     JOINT  AND  SEVERAL  OBLIGATIONS.  The  obligations  of  each  of  the
        --------------------------------
undersigned  hereunder  shall  be  joint  and  several.
        -
16.     COUNTERPARTS.  This  Agreement  may  be  executed  in  two  or  more
        ------------
counterparts.
        ---
17.     CONSENT  TO  JURISDICTION.  BORROWER AND GUARANTOR HEREBY CONSENT TO THE
        -------------------------
JURISDICTION  OF  ANY  STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF COOK,
STATE  OF ILLINOIS AND IRREVOCABLY AGREE THAT, SUBJECT TO LENDER'S ELECTION, ALL
ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER
LOAN  DOCUMENTS  SHALL  BE  LITIGATED  IN  SUCH  COURTS.  BORROWER AND GUARANTOR
EXPRESSLY  SUBMIT  AND  CONSENT  TO THE JURISDICTION OF THE AFORESAID COURTS AND
WAIVE  ANY DEFENSE OF FORUM NON CONVENIENS.  BORROWER AND GUARANTOR HEREBY WAIVE
PERSONAL  SERVICE  OF  ANY  AND  ALL  PROCESS AND AGREE THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE UPON BORROWER AND GUARANTOR BY CERTIFIED OR REGISTERED MAIL,
RETURN  RECEIPT  REQUESTED,  ADDRESSED TO BORROWER AND GUARANTOR, AT THE ADDRESS
SET  FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS
AFTER  THE  SAME  HAS  BEEN  POSTED.
18.     JURY TRIAL WAIVER.  BORROWER AND GUARANTOR, AND LENDER BY ITS ACCEPTANCE
        -----------------
OF  THIS  AGREEMENT,  HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY IN
ANY  ACTION  OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS
AGREEMENT  AND THE BUSINESS RELATIONSHIP THAT IS BEING ESTABLISHED.  THIS WAIVER
IS  KNOWINGLY,  INTENTIONALLY  AND  VOLUNTARILY MADE BY BORROWER, GUARANTOR, AND
LENDER,  AND  BORROWER  AND  GUARANTOR  ACKNOWLEDGE  THAT NEITHER LENDER NOR ANY
PERSON ACTING ON BEHALF OF LENDER HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE
THIS WAIVER OF TRIAL BY JURY OR HAS TAKEN ANY ACTIONS WHICH IN ANY WAY MODIFY OR
NULLIFY ITS EFFECT.  BORROWER, GUARANTOR AND LENDER ACKNOWLEDGE THAT THIS WAIVER
IS  A  MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT BORROWER,
GUARANTOR  AND  LENDER  HAVE ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS
AGREEMENT  AND  THAT  EACH OF THEM WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR
RELATED  FUTURE  DEALINGS.  BORROWER,  GUARANTOR  AND LENDER FURTHER ACKNOWLEDGE
THAT  THEY HAVE BEEN REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED)
IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT
LEGAL  COUNSEL.

         [Remainder of page intentionally blank; signature page follows]


<PAGE>
Borrower  and the Guarantor have executed this Agreement or have caused the same
to  be  executed  as  of  the  date  first  set  forth  above.
BORROWER:

EMERITUS  PROPERTIES  XIV,  LLC,  a  Washington  limited  liability  company
By     Emeritus  Corporation,  a  Washington  corporation,  its  sole  member


By:      /s/  Raymond  R.  Brandstrom
         ----------------------------
Name:         Raymond  R.  Brandstrom
Its:          CFO

GUARANTOR:


EMERITUS  CORPORATION,  a  Washington  corporation


By:          /s/  Raymond  R.  Brandstrom
            -----------------------------
Name:             Raymond  R.  Brandstrom
Its:              CFO