<PAGE>
 
                                                                    EXHIBIT 10.2

                      AMENDMENT NO. 1 TO PLEDGE AGREEMENT

     THIS AMENDMENT, dated as of March 27, 1997, by (i) each of the Pledgors
which is a party to the Pledge Agreement referred to below (the "ORIGINAL
PLEDGORS"); and (ii) the following additional Subsidiaries of the Borrower,
namely, ATRIA COMMUNITIES SOUTHEAST, INC., a Delaware corporation which is the
surviving corporation of a merger with American ElderServe Corporation, a
Georgia corporation, AMERICAN ELDERSERVE OF TEXAS, INC., a Texas corporation,
AMERICAN ELDERSERVE OF ALABAMA, INC., a Georgia corporation, and SOUTHERN CARE,
INC., a Georgia corporation (each, together with its successors and assigns, an
"ADDITIONAL PLEDGOR", and collectively, the "ADDITIONAL PLEDGORS"); with (iii)
PNC BANK, NATIONAL ASSOCIATION, a national banking association, as Collateral
Agent under the Credit Agreement (herein, together with its successors and
assigns in such capacity, the "PLEDGEE"):

     PRELIMINARY STATEMENTS:

     (1)  The Original Pledgors have heretofore entered into the Pledge
Agreement, dated as of August 15, 1996, in favor of the Collateral Agent as the
Pledgee thereunder (the "PLEDGE AGREEMENT"; with the terms defined therein, or
the definitions of which are incorporated therein, being used herein as so
defined).

     (2)  The parties hereto desire to amend certain of the terms and provisions
of the Pledge Agreement, all as more fully set forth below.

     NOW, THEREFORE, the parties hereby agree as follows:

     1.   JOINDER OF ADDITIONAL PLEDGORS.  Effective upon the execution and
delivery of this Amendment, each Additional Pledgor hereby joins in and becomes
a party to the Pledge Agreement, as amended hereby, as a Pledgor thereunder as
fully as if it had been an original signatory to the Pledge Agreement. All
representations, warranties, covenants, agreements and waivers contained in the
Pledge Agreement, as amended hereby, applicable to Pledgors thereunder shall
apply to the Additional Pledgors from and after the date of execution and
delivery of this Amendment.

     2.   REPLACEMENT OF SECTIONS 2 AND 3 OF PLEDGE AGREEMENT.  In order, among
other things, to incorporate terms and provisions applicable to the pledge of
interests in limited liability companies, sections 2 and 3 of the Pledge
Agreement are amended and restated to read in their entirety as follows:
<PAGE>
 
          2.   DEFINITION OF STOCK, NOTES, SECURITIES,
               PARTNERSHIP INTERESTS, MEMBERSHIP INTERESTS, ETC.

          As used herein, (i) the term "STOCK" shall mean all of the issued and
     outstanding shares of stock at any time owned by any Pledgor of any
     corporation; (ii) the term "NOTES" shall mean all promissory notes from
     time to time issued to, or held by, any Pledgor other than Cash
     Equivalents; (iii) the term "SECURITIES" shall mean all of the Stock and
     Notes; (iii) the term "PARTNERSHIP INTERESTS" shall mean the entire
     partnership interest at any time owned by any Pledgor in any general or
     limited partnership (a "PLEDGED PARTNERSHIP"); (iv) the term "MEMBERSHIP
     INTEREST" shall mean the entire membership interest at any time owned by
     any Pledgor in any limited liability company (a "PLEDGED LLC"); and (v) the
     term "PLEDGED ENTITY" shall mean either a Pledged Partnership or a Pledged
     LLC, as applicable.

          Each Pledgor represents and warrants that on the date hereof: (a) each
     Subsidiary of such Pledgor and the direct ownership thereof is listed on
     Annex A hereto; (b) the Stock consists of the number and type of shares of
     the stock of the corporations as described in Annex B hereto; (c) such
     Pledgor is the holder of record with respect to any Subsidiary and sole
     beneficial owner of such Stock; (d) such Stock constitutes that percentage
     of the issued and outstanding capital stock of the issuing corporation as
     is set forth in Annex B hereto; (e) the Notes held by such Pledgor consist
     of the promissory notes described in Annex C hereto; (f) the Partnership
     Interests and Membership Interests, as the case may be, held by such
     Pledgor constitutes that percentage of the entire interest of each Pledged
     Partnership and Pledged LLC, as the case may be, as is set forth on Annex D
     hereto; and (g) on the date hereof, no Pledgor owns or possesses any other
     Securities or Partnership Interests or Membership Interests.


          3.   PLEDGE OF SECURITIES, GRANT OF SECURITY INTERESTS, ETC.

          3.1. PLEDGE.  To secure the Obligations and for the purposes set forth
     in section 1, each Pledgor hereby pledges and grants to the Pledgee a first
     priority continuing security interest in, and as part of such grant and
     pledge, hereby transfers and assigns to the Pledgee all of the following
     whether now existing or hereafter acquired (the "COLLATERAL"):

               (a)  such Pledgor's (x) Partnership Interest and all of such
          Pledgor's right, title and interest in each Pledged Partnership and
          (y) Membership Interest and all of such Pledgor's right, title and
          interest in each Pledged LLC, in each case including, without
          limitation:

                    (i)    all the capital thereof and its interest in all
               profits, losses and other distributions to which such Pledgor
               shall at any time be entitled in respect of such Partnership
               Interest and/or Membership Interest;

                    (ii)   all other payments due or to become due to such
               Pledgor in respect of such Partnership Interest and/or Membership
               Interest, whether under any partnership agreement, limited
               liability company agreement or otherwise, whether as contractual
               obligations, damages, insurance proceeds or otherwise;

                    (iii)  all of its claims, rights powers, privileges,
               authority, options security interest, liens and remedies, if any,
               under any partnership agreement or limited liability company
               agreement or at law or otherwise in respect of such Partnership
               Interest and/or Membership Interest;

                    (iv)   all present and future claims if any, of the Pledgor
               against any Pledged Partnership  and any Pledged LLC for moneys
               loaned or advanced, for services rendered or otherwise;

                    (v)    all of such Pledgor's rights under any partnership
               agreement, limited liability company agreement or at law to
               exercise and enforce every right, power, remedy, authority,
               option and privilege of such Pledgor relating to the Partnership
               Interest and/or Membership Interest including any power to
               terminate, cancel or modify any partnership agreement or limited
               liability company agreement, to execute any instruments and to
               take any and all other action on behalf of and in the name of
               such Pledgor in respect of the Partnership Interest and any
               Pledged Partnership and the Membership Interest or any Pledged
               LLC, to make determinations, to exercise any election (including,
               but not limited to, election of remedies) or option or to give or
               receive any notice, consent, amendment, 

                                       2
<PAGE>
 
               waiver or approval, together with full power and authority to
               demand, receive, enforce, collect or receipt for any of the
               foregoing, to enforce or execute any checks, or other instruments
               or orders, to file any claims and to take any action in
               connection with any of the foregoing;

                    (vi)   all other property hereafter delivered in
               substitution for or in addition to any of the foregoing, all
               certificates and instruments representing or evidencing such
               other property and all cash, securities, interest, dividends,
               rights and other property at any time and from time to time
               received, receivable or otherwise distributed in respect of or in
               exchange for any or all thereof; and

                    (vii)  to the extent not otherwise included, all proceeds of
               any or all of the foregoing;

               (b)  all Securities owned by such Pledgor on the date hereof, if
          any, and such Pledgor hereby pledges and deposits as security with the
          Pledgee and delivers to the Pledgee certificates or instruments
          therefor duly endorsed in blank in the case of Notes and accompanied
          by undated stock powers duly executed in blank by such Pledgor in the
          case of Stock, or such other instruments of transfer as are acceptable
          to the Pledgee; and

               (c)  all of such Pledgor's right, title and interest in and to
          such Securities (and in and to all certificates or instruments
          evidencing such Securities), which such Pledgor hereby assigns,
          transfers, hypothecates, mortgages, charges and sets over to the
          Pledgee, to be held by the Pledgee, upon the terms and conditions set
          forth in this Agreement.

          3.2. SUBSEQUENTLY ACQUIRED SECURITIES, PARTNERSHIP INTERESTS AND
     MEMBERSHIP INTERESTS.  If a Pledgor shall acquire (by purchase, stock
     dividend or otherwise) any additional Securities, Partnership Interests
     and/or Membership Interests at any time or from time to time after the date
     hereof which are represented by certificates or instruments, such Pledgor
     will forthwith pledge and deposit such Securities, Partnership Interests
     and/or Membership Interests as security with the Pledgee and deliver to the
     Pledgee certificates or instruments thereof, duly endorsed in blank in the
     case of Notes and accompanied by undated stock powers duly executed in
     blank in the case of Stock, by such Pledgor or such other instruments of
     transfer as are acceptable to the Pledgee, and will promptly thereafter
     deliver to the Pledgee a certificate executed by a principal executive
     officer of such Pledgor describing such Securities, Partnership Interests
     and/or Membership Interests and certifying that the same have been duly
     pledged with the Pledgee hereunder.

          3.3. UNCERTIFICATED SECURITIES, PARTNERSHIP INTERESTS AND/OR
     MEMBERSHIP INTERESTS.  Notwithstanding anything to the contrary contained
     in sections 3.1 and 3.2, if any Securities, Partnership Interests and/or
     Membership Interests (whether or not now owned or hereafter acquired) are
     uncertificated securities, a Pledgor shall promptly notify the Pledgee
     thereof, and shall promptly take all actions required to perfect the
     security interest of the Pledgee under applicable law (including, in any
     event, under sections 8-313 and 8-321 of the Uniform Commercial Code if
     applicable). Each Pledgor further agrees to take such actions as the
     Pledgee deems reasonably necessary or desirable to effect the foregoing and
     to permit the Pledgee to exercise any of its rights and remedies hereunder,
     and agrees to provide an opinion of counsel reasonably satisfactory to the
     Pledgee with respect to any such pledge of uncertificated securities,
     Partnership Interests and/or Membership Interests promptly upon the request
     of the Pledgee.

          3.4. DEFINITIONS OF PLEDGED STOCK, PLEDGED NOTES, AND PLEDGED
     SECURITIES AND COLLATERAL.  All Stock at any time pledged or required to be
     pledged hereunder is hereinafter called the "PLEDGED STOCK"; all Notes at
     any time pledged or required to be pledged hereunder are hereinafter called
     the "PLEDGED NOTES"; and all Pledged Stock and Pledged Notes together are
     called the "PLEDGED SECURITIES".

     3.   DIVIDENDS AND OTHER DISTRIBUTIONS.  Section 5 of the Pledge Agreement
is amended by inserting ", membership interests" after the words "partnership
interests" in each place where such words appear in clause (i), (ii) and (iii)
of section 5 of the Pledge Agreement.

     4.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS.  Clauses
(v) through (xiii) of section 15(a) of the Pledge Agreement are deleted and
replaced by the following:

               (v)    it will defend the Pledgee's right, title and interest in
          and to the Partnership Interests, the Membership Interests and in and
          to the Collateral pledged by it pursuant hereto or in which it has
          granted a security interest pursuant hereto against the claims and
          demands of all other 

                                       3
<PAGE>
 
          persons whomsoever, and such Pledgor covenants and agrees that it will
          have like title to and right to pledge any other property at any time
          hereafter pledged to the Pledgee as Collateral hereunder and will
          likewise defend the right thereto and security interest therein of the
          Pledgee and the Secured Creditors;

               (vi)   it is the legal and beneficial owner of and has good title
          to its Partnership Interests and Membership Interests and has good
          title to all of the other Collateral pledged by it pursuant hereto or
          in which it has granted a security interest pursuant hereto, free and
          clear of all claims, pledges, liens, encumbrances and security
          interests of every nature whatsoever, except such as are created
          pursuant to this Agreement, and has the unqualified right to pledge
          and grant a security interest in the same as herein provided without
          the consent of any other person, firm, association or entity which has
          not been obtained;

               (vii)  it has full power, authority and legal right to pledge the
          Partnership Interests and the Membership Interests pledged by it
          pursuant to this Agreement and such Partnership Interests and
          Membership Interests have been validly acquired and are fully paid for
          and are duly and validly pledged hereunder;

               (viii) it is not in default in the payment of any portion of
          any mandatory capital contribution, if any, required to be made under
          any partnership agreement or limited liability company agreement to
          which such Pledgor is a party, and such Pledgor is not in violation of
          any other material provisions of any partnership agreement or limited
          liability company agreement to which such Pledgor is a party, or
          otherwise in default or violation thereunder, no Partnership Interest
          or Membership Interest is subject to any defense, offset or
          counterclaim, nor have any of the foregoing been asserted or alleged
          against such Pledgor by any person with respect thereto and as of the
          date of pledge hereunder, there are no certificates, instruments,
          documents or other writings (other than the partnership agreements and
          certificates, if any, and limited liability company agreements
          delivered to the Collateral Agent) which evidence any Partnership
          Interest or Membership Interest of such Pledgor;

               (ix)   the pledge and assignment of the Partnership Interests and
          the Membership Interests pursuant to this Agreement, together with the
          relevant filings, consents or recordings (which filings and recordings
          have been made or obtained), creates a valid, perfected and continuing
          first security interest in such Partnership Interests and membership
          Interests and the proceeds thereof, subject to no prior lien or
          encumbrance or to any agreement purporting to grant to any third party
          a lien or encumbrance on the property or assets of such Pledgor which
          would include the Collateral;

               (x)    there are no currently effective financing statements
          under the UCC covering any property which is now or hereafter may be
          included in the Collateral and such Pledgor will, without the prior
          written consent of the Pledgee, execute and, until the Termination
          Date, there will not ever be on file in any public office any
          enforceable financing statement or statements covering any or all of
          the Collateral, except financing statements filed or to be filed in
          favor of the Pledgee as secured party;

               (xi)   it shall give the Pledgee prompt notice of any written
          claim relating to the Collateral and shall deliver to the Pledgee a
          copy of each other demand, notice or document received by it which may
          adversely affect the Pledgee's interest in the Collateral promptly
          upon, but in any event within 10 days after, such Pledgor's receipt
          thereof;

               (xii)  it shall not withdraw as a partner of any Pledged
          Partnership or member of any Pledged LLC, or file or pursue or take
          any action which may, directly or indirectly, cause a dissolution or
          liquidation of or with respect to any Pledged Partnership or Pledged
          LLC or seek a partition of any property of any Pledged Partnership or
          Pledged LLC, except as permitted by the Credit Agreement;

               (xiii) a notice in the form set forth in Annex E attached hereto
          and by this reference made a part hereof (such notice the "PARTNERSHIP
          NOTICE"), appropriately completed, notifying each Pledged Partnership
          of the existence of this Agreement and a certified copy of this
          Agreement have been delivered by such Pledgor to the relevant Pledged
          Partnership, and such Pledgor has received and delivered to the
          Pledgee an acknowledgment in the form set forth in Annex E attached
          hereto (such acknowledgement, the "PARTNERSHIP ACKNOWLEDGEMENT"), duly
          executed by the relevant Pledged Partnership; and

                                       4
<PAGE>
 
               (xiv)  a notice in the form set forth in Annex F attached hereto
          and by this reference made a part hereof (such notice the "LLC
          NOTICE"), appropriately completed, notifying each Pledged LLC of the
          existence of this Agreement and a certified copy of this Agreement
          have been delivered by such Pledgor to the relevant Pledged LLC, and
          such Pledgor has received and delivered to the Pledgee an
          acknowledgment in the form set forth in Annex F attached hereto (such
          acknowledgement, the "LLC ACKNOWLEDGEMENT"), duly executed by the
          relevant Pledged LLC.

     5.   ADDITION OF ANNEX F.  The Pledge Agreement is amended by adding as an
Annex thereto Annex F attached hereto.

     6.   ADDITIONS TO ANNEX A.  Annex A to the Pledge Agreement is amended by
the addition of the following information:

<TABLE>
<CAPTION>
====================================================================================================================== 
   NAME OF        JURISDICTION        PERCENTAGE OF          NAMES AND        JURISDICTIONS      JURISDICTIONS
 SUBSIDIARY           WHERE          OUTSTANDING STOCK       ADDRESSES            WHERE               WHERE    
     AND           ORGANIZED          OR OTHER EQUITY       OF MINORITY        QUALIFIED AS        SUBSTANTIAL 
   TYPE OF                            INTERESTS OWNED         HOLDERS,          A FOREIGN            ASSETS   
ORGANIZATION                        (INDICATING WHETHER        IF ANY           CORPORATION          LOCATED   
                                        OWNED BY THE                                OR
                                        BORROWER OR A                            OTHER ENTITY
                                    SPECIFIED SUBSIDIARY)                           
---------------------------------------------------------------------------------------------------------------------- 
<S>               <C>               <C>                     <C>               <C>                <C>                   
Atria              Delaware          100%, owned by the       N/A              to be qualified    Georgia
Communities                          Borrower                                  in Alabama,
Southeast, Inc.,                                                               Florida and
a corporation                                                                  Georgia upon
                                                                               merger of
                                                                               American
                                                                               ElderServe
                                                                               Corporation
                                                                               into Atria
                                                                               Communities,
                                                                               Southeast, Inc.
----------------------------------------------------------------------------------------------------------------------  
American           Georgia           100%, owned by Atria     N/A              N/A                Georgia
ElderServe                           Communities 
Management,                          Southeast, Inc.
Inc., a
corporation
----------------------------------------------------------------------------------------------------------------------  
American           Texas             100%, owned by Atria     N/A              N/A                Texas
ElderServe of                        Communities 
Texas, Inc., a                       Southeast, Inc.
corporation
----------------------------------------------------------------------------------------------------------------------  
Southern Care,     Georgia           100%, owned by Atria     N/A              N/A                Georgia
Inc., a                              Communities 
corporation                          Southeast, Inc.
----------------------------------------------------------------------------------------------------------------------  
Southeast          Georgia           100%, owned by Atria     N/A              N/A                Georgia
Assisted                             Communities 
Living                               Southeast, Inc.
Residences,
Inc., a
corporation
----------------------------------------------------------------------------------------------------------------------  
American           Georgia           100%, owned by Atria     N/A              Alabama            Alabama
ElderServe of                        Communities 
Alabama, Inc.,                       Southeast, Inc.

====================================================================================================================== 
</TABLE> 

                                       5
<PAGE>
 
<TABLE>
<CAPTION>
====================================================================================================================== 
   NAME OF        JURISDICTION        PERCENTAGE OF          NAMES AND        JURISDICTIONS      JURISDICTIONS
 SUBSIDIARY           WHERE          OUTSTANDING STOCK       ADDRESSES            WHERE               WHERE    
     AND           ORGANIZED          OR OTHER EQUITY       OF MINORITY        QUALIFIED AS        SUBSTANTIAL 
   TYPE OF                            INTERESTS OWNED         HOLDERS,          A FOREIGN            ASSETS   
ORGANIZATION                        (INDICATING WHETHER        IF ANY           CORPORATION          LOCATED   
                                        OWNED BY THE                                OR
                                        BORROWER OR A                          OTHER ENTITY
                                    SPECIFIED SUBSIDIARY)                           
----------------------------------------------------------------------------------------------------------------------  
<S>               <C>               <C>                     <C>               <C>                <C>                   
a corporation
----------------------------------------------------------------------------------------------------------------------  
American           North             100%, owned by Atria     N/A              N/A                North Carolina
ElderServe         Carolina          Communities            
of North                             Southeast, Inc.
Carolina, Inc.,
a corporation
----------------------------------------------------------------------------------------------------------------------  
American           Florida           100%, owned by Atria     N/A              N/A                Florida
ElderServe                           Communities 
of Florida, Inc.,                    Southeast, Inc.
a corporation
----------------------------------------------------------------------------------------------------------------------  
Plantation         Texas             67% General              N/A              N/A                Texas
South on                             Partnership Interest
Cypresswood                          held by American
Limited                              ElderServe of Texas
Partnership, a                       Inc.
limited     
partnership                          33% Limited
                                     Partnership Interest 
                                     held by Atria
                                     Communities 
                                     Southeast, Inc.
----------------------------------------------------------------------------------------------------------------------  
Plantation         Alabama           51% General              N/A              N/A                Alabama
South at                             Partnership Interest
Auburn                               held by American
Partnership, a                       ElderServe of 
general                              Alabama, Inc.
partnership 
                                     49% General
                                     Partnership Interest 
                                     held by Atria
                                     Communities 
                                     Southeast, Inc.
===============================================================================================================
</TABLE>

     7.   ADDITIONS TO ANNEX B.  Annex B to the Pledge Agreement is amended by
the addition of the following information:

<TABLE>
<CAPTION>
================================================================================
  NAME OF               TYPE          NUMBER
  ISSUING                OF             OF         CERTIFICATE       PERCENTAGE
 CORPORATION           SHARES         SHARES            NO.             OWNED
--------------------------------------------------------------------------------
<S>                    <C>            <C>          <C>               <C>        
Atria Communities                                                    100%
Southeast, Inc.
================================================================================
</TABLE> 

                                       6
<PAGE>
 
<TABLE>
<CAPTION>
================================================================================
  NAME OF               TYPE          NUMBER
  ISSUING                OF             OF         CERTIFICATE       PERCENTAGE
 CORPORATION           SHARES         SHARES            NO.             OWNED
--------------------------------------------------------------------------------
<S>                    <C>            <C>          <C>               <C>        
American                                                              100%
ElderServe 
Management, Inc. 
--------------------------------------------------------------------------------
Southern Care, Inc.    Common Stock,  1,000                           100%
                       $1 par value
--------------------------------------------------------------------------------
American               Common Stock,  500                             100%
ElderServe of          $1 par share
Alabama, Inc.      
--------------------------------------------------------------------------------
American               Common Stock,  500                             100%
ElderServe of          $1 par share
Texas, Inc.        
--------------------------------------------------------------------------------
Southeast Assisted                                                    100%
Living Residences,
Inc.
--------------------------------------------------------------------------------
American ElderServe                                                   100%
of North Carolina,
Inc.
--------------------------------------------------------------------------------
American ElderServe                                                   100%
of Florida, Inc.
================================================================================
</TABLE>

     8.   ADDITIONS TO ANNEX C.  Annex C to the Pledge Agreement is amended by
the addition of the following information:

<TABLE>
<CAPTION>
===========================================================================================================
   ISSUER                PAYEE               PRINCIPAL AMOUNT       INTEREST RATE           MATURITY DATE
----------------------------------------------------------------------------------------------------------- 
<S>                    <C>                  <C>                   <C>                     <C>
Atria Communities,     Atria Communities    any advances;         weighted average        on demand
Inc.                   Southeast, Inc.      subordinated as       borrowing rate or
                                            provided therein      specified alternative
-----------------------------------------------------------------------------------------------------------  
Atria Communities,     American             any advances;         weighted average        on demand
Inc.                   ElderServe           subordinated as       borrowing rate or
                       Management, Inc.     provided therein      specified alternative
-----------------------------------------------------------------------------------------------------------  
Atria Communities,     Southern Care, Inc.  any advances;         weighted average        on demand
Inc.                                        subordinated as       borrowing rate or
                                            provided therein      specified alternative
-----------------------------------------------------------------------------------------------------------  
Atria Communities,     American             any advances;         weighted average        on demand
Inc.                   ElderServe           subordinated as       borrowing rate or
                       of Alabama, Inc.     provided therein      specified alternative
-----------------------------------------------------------------------------------------------------------  
Atria Communities,     American             any advances;         weighted average        on demand
Inc.                   ElderServe           subordinated as       borrowing rate or
                       of Texas, Inc.       provided therein      specified alternative
-----------------------------------------------------------------------------------------------------------  
Atria Communities,     Southeast Assisted   any advances;         weighted average        on demand
Inc.                   Living Residences,   subordinated as       borrowing rate or
                       Inc.                 provided therein      specified alternative
===========================================================================================================
</TABLE> 

                                       7
<PAGE>
 
<TABLE> 
<CAPTION> 
============================================================================================================================
      ISSUER               PAYEE                  PRINCIPAL AMOUNT                INTEREST RATE              MATURITY DATE       
---------------------------------------------------------------------------------------------------------------------------- 
<S>                     <C>                      <C>                           <C>                         <C>  
 Atria Communities,     American                 any advances;                 weighted average            on demand         
 Inc.                   ElderServe               subordinated as               borrowing rate or                             
                        of North Carolina,       provided therein              specified alternative                         
                        Inc.                                                                                                  
---------------------------------------------------------------------------------------------------------------------------- 
 Atria Communities,     American                 any advances;                 weighted average            on demand         
 Inc.                   ElderServe               subordinated as               borrowing rate or                             
                        of Florida, Inc.         provided therein              specified alternative                          
---------------------------------------------------------------------------------------------------------------------------- 
 Atria Communities,     Plantation South         any advances;                 weighted average            on demand         
 Inc.                   on Cypresswood           subordinated as               borrowing rate or                             
                        Limited                  provided therein              specified alternative                         
                        Partnership                                                                                           
---------------------------------------------------------------------------------------------------------------------------- 
 Atria Communities,     Plantation South         any advances;                 weighted average            on demand         
 Inc.                   at                       subordinated as               borrowing rate or                             
                        Auburn Partnership       provided therein              specified alternative                         
---------------------------------------------------------------------------------------------------------------------------- 
 Atria Communities      Atria Communities,       any advances                  weighted average            on demand         
 Southeast, Inc.        Inc.                                                   borrowing rate or                             
                                                                               specified alternative                          
---------------------------------------------------------------------------------------------------------------------------- 
 Atria Communities      American                 any advances                  weighted average            on demand         
 Southeast, Inc.        ElderServe                                             borrowing rate or                             
                        Management, Inc.                                       specified alternative                          
---------------------------------------------------------------------------------------------------------------------------- 
 Atria Communities      Southern Care, Inc.      any advances                  weighted average            on demand         
 Southeast, Inc.                                                               borrowing rate or                             
                                                                               specified alternative                          
---------------------------------------------------------------------------------------------------------------------------- 
 Atria Communities      American                 any advances                  weighted average            on demand         
 Southeast, Inc.        ElderServe                                             borrowing rate or                             
                        of Alabama, Inc.                                       specified alternative                          
---------------------------------------------------------------------------------------------------------------------------- 
 Atria Communities      American                 any advances                  weighted average            on demand         
 Southeast, Inc.        ElderServe                                             borrowing rate or                             
                        of Texas, Inc.                                         specified alternative                          
---------------------------------------------------------------------------------------------------------------------------- 
 Atria Communities      Southeast Assisted       any advances                  weighted average            on demand         
 Southeast, Inc.        Living Residences,                                     borrowing rate or                             
                        Inc.                                                   specified alternative                          
---------------------------------------------------------------------------------------------------------------------------- 
 Atria Communities      American                 any advances                  weighted average            on demand         
 Southeast, Inc.        ElderServe                                             borrowing rate or                             
                        of NorthCarolina,                                      specified alternative                         
                        Inc.                                                                                                  
---------------------------------------------------------------------------------------------------------------------------- 
 Atria Communities      American                 any advances                  weighted average            on demand         
 Southeast, Inc.        ElderServe                                             borrowing rate or                             
                        of Florida, Inc.                                       specified alternative                          
---------------------------------------------------------------------------------------------------------------------------- 
 Atria Communities      Plantation South         any advances                  weighted average            on demand         
 Southeast, Inc.        on Cypresswood                                         borrowing rate or                             
                        Limited                                                specified alternative                         
                        Partnership                                                                                           
---------------------------------------------------------------------------------------------------------------------------- 
 Atria Communities      Plantation South         any advances                  weighted average            on demand          
 Southeast, Inc.        at                                                     borrowing rate or                             
                        Auburn Partnership                                     specified alternative                          
---------------------------------------------------------------------------------------------------------------------------- 
 American ElderServe    Atria Communities,       any advances                  weighted average            on demand          
 Management, Inc.       Inc.                                                   borrowing rate or                             
                                                                               specified alternative                          
---------------------------------------------------------------------------------------------------------------------------- 
 American               Atria Communities        any advances                  weighted average            on demand          
 ElderServe             Southeast, Inc.                                        borrowing rate or           
</TABLE> 

                                       8
<PAGE>
 
<TABLE> 
<CAPTION> 
====================================================================================================================
      ISSUER                  PAYEE              PRINCIPAL AMOUNT         INTEREST RATE              MATURITY DATE             
--------------------------------------------------------------------------------------------------------------------  
<S>                     <C>                     <C>                  <C>                           <C>  
Management, Inc.                                                     specified alternative                 
--------------------------------------------------------------------------------------------------------------------         
 Southern Care, Inc.    Atria Communities,      any advances          weighted average             on demand                 
                        Inc.                                          borrowing rate or                                      
                                                                      specified alternative                                   
--------------------------------------------------------------------------------------------------------------------         
 Southern Care, Inc.    Atria Communities       any advances          weighted average             on demand                 
                        Southeast, Inc.                               borrowing rate or                                      
                                                                      specified alternative                                   
--------------------------------------------------------------------------------------------------------------------        
 American ElderServe    Atria Communities,      any advances          weighted average             on demand                 
 of Alabama, Inc.       Inc.                                          borrowing rate or                                      
                                                                      specified alternative                                   
--------------------------------------------------------------------------------------------------------------------        
 American ElderServe    Atria Communities       any advances          weighted average             on demand                 
 of Alabama, Inc.       Southeast, Inc.                               borrowing rate or                                      
                                                                      specified alternative                                   
--------------------------------------------------------------------------------------------------------------------        
 American ElderServe    Atria Communities,      any advances; may     weighted average             on demand                 
 of Texas, Inc.         Inc.                    be subordinated       borrowing rate or                                      
                                                to obligations        specified alternative                                  
                                                under Lease                                                                  
                                                Agreement with                                                               
                                                Health Care REIT                                                              
--------------------------------------------------------------------------------------------------------------------        
 American ElderServe    Atria Communities       any advances; may     weighted average             on demand                 
 of Texas, Inc.         Southeast, Inc.         be subordinated to    borrowing rate or                                      
                                                obligations           specified alternative                                  
                                                under Lease                                                                  
                                                Agreement with                                                               
                                                Health Care REIT                                                              
--------------------------------------------------------------------------------------------------------------------        
 Southeast Assisted     Atria Communities,      any advances          weighted average             on demand                 
 Living Residences,     Inc.                                          borrowing rate or                                      
 Inc.                                                                 specified alternative                                   
--------------------------------------------------------------------------------------------------------------------        
 Southeast Assisted     Atria Communities       any advances          weighted average             on demand                 
 Living Residences,     Southeast, Inc.                               borrowing rate or                                      
 Inc.                                                                 specified alternative                                   
--------------------------------------------------------------------------------------------------------------------        
 American ElderServe    Atria Communities,      any advances; may     weighted average             on demand                 
 of North Carolina,     Inc.                    be subordinated to    borrowing rate or                                      
 Inc.                                           obligations           specified alternative                                  
                                                under Lease                                                                  
                                                Agreement with                                                               
                                                Health Care REIT,                                                            
                                                Inc.                                                                          
--------------------------------------------------------------------------------------------------------------------        
 American ElderServe    Atria Communities       any advances; may     weighted average             on demand                 
 of North Carolina,     Southeast, Inc.         be subordinated to    borrowing rate or                                      
 Inc.                                           obligations           specified alternative                                  
                                                under Lease                                                                  
                                                Agreement with                                                               
                                                Health Care REIT,                                                            
                                                Inc.                                                                          
--------------------------------------------------------------------------------------------------------------------        
 American ElderServe    Atria Communities,      any advances; may     weighted average             on demand                 
 of Florida, Inc.       Inc.                    be subordinated to    borrowing rate or                                      
                                                obligations           specified alternative                                  
                                                under Lease                                                                  
                                                Agreement with                                                               
                                                Health Care REIT,                                                            
                                                Inc.                                                                          
--------------------------------------------------------------------------------------------------------------------        
 American               Atria Communities       any advances; may     weighted average             on demand                      
 ElderServe of                                  be subordinated to    borrowing rate or                                            
</TABLE> 

                                      9
<PAGE>
 
<TABLE> 
<CAPTION> 
====================================================================================================================== 
      ISSUER                 PAYEE            PRINCIPAL AMOUNT            INTEREST RATE             MATURITY DATE    
----------------------------------------------------------------------------------------------------------------------         
<S>                     <C>                  <C>                      <C>                        <C> 
 Florida, Inc.          Southeast, Inc.      obligations under        specified alternative                                 
                                             Lease Agreement                                                         
                                             with Health Care                                                    
                                             REIT, Inc.                                                          
----------------------------------------------------------------------------------------------------------------------           
 Plantation South on    Atria Communities,   any advances; may        weighted average           on demand                     
 Cypresswood            Inc.                 be subordinated to       borrowing rate or                                        
 Limited                                     obligations              specified alternative                                    
 Partnership                                 under Lease                                                                      
                                             Agreement with                                                                   
                                             Health Care REIT,                                                                
                                             Inc.                                                                              
----------------------------------------------------------------------------------------------------------------------           
 Plantation South on    Atria Communities    any advances; may        weighted average           on demand                     
 Cypresswood            Southeast, Inc.      be subordinated to       borrowing rate or                                        
 Limited                                     obligations              specified alternative                                    
 Partnership                                 under Lease                                                                      
                                             Agreement with                                                                   
                                             Health Care REIT,                                                                
                                             Inc.                                                                              
----------------------------------------------------------------------------------------------------------------------           
 Plantation South on    American             any advances; may        weighted average           on demand                     
 Cypresswood            ElderServe           be subordinated to       borrowing rate or                                        
 Limited                of Texas, Inc.       obligations              specified alternative                                    
 Partnership                                 under Lease                                                                      
                                             Agreement with                                                                   
                                             Health Care REIT,                                                                
                                             Inc.                                                                              
----------------------------------------------------------------------------------------------------------------------           
 Plantation South at    Atria Communities,   any advances             weighted average           on demand                     
 Auburn Partnership     Inc.                                          borrowing rate or                                        
                                                                      specified alternative                                     
----------------------------------------------------------------------------------------------------------------------           
 Plantation South at    Atria Communities    any advances             weighted average           on demand                     
 Auburn Partnership     Southeast, Inc.                               borrowing rate or                                        
                                                                      specified alternative                                     
----------------------------------------------------------------------------------------------------------------------            
 Plantation South at    American             any advances             weighted average           on demand                     
 Auburn Partnership     ElderServe                                    borrowing rate or                                       
                        of Alabama, Inc.                              specified alternative                                   
----------------------------------------------------------------------------------------------------------------------
 Elder Healthcare       Atria Communities,   any advances             25 bp over weighted        up to approximately          
 Developers, LLC        Inc.                                          average borrowing          3 years 
                                                                      rate or specified                                  
                                                                      alternative                                             
======================================================================================================================
</TABLE> 

     9.   ADDITIONS TO ANNEX D.  Annex D to the Pledge Agreement is amended by
the addition of the following information:

<TABLE>
<CAPTION>
======================================================================================================================  
 <S>                                                           <C> 
 NAME OF PLEDGED ENTITY                                                   TYPE OF ORGANIZATION
----------------------------------------------------------------------------------------------------------------------       
 Elder Healthcare Developers, LLC                              Georgia limited liability company
----------------------------------------------------------------------------------------------------------------------            
 Plantation South on Cypresswood Limited Partnership           Texas limited partnership
----------------------------------------------------------------------------------------------------------------------            
 Plantation South at Auburn Partnership                        Alabama general partnership
----------------------------------------------------------------------------------------------------------------------            
Roswell ALC Limited Partnership                                Georgia limited partnership
======================================================================================================================
</TABLE>

                                      10
<PAGE>
 
     10.  RATIFICATIONS. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions set forth in
the Security Agreement, and except as expressly modified and superseded by this
Amendment, the terms and provisions of the Pledge Agreement are ratified and
confirmed and shall continue in full force and effect.

     11.  MISCELLANEOUS. The terms and provisions of sections 20 [Waiver;
Amendment], 22 [Miscellaneous] and 23 [Waiver of Jury Trial] of the Pledge
Agreement are hereby incorporated into this Amendment as if set forth in full
herein, except that references in such incorporated terms and provisions to
"this Agreement", "herein", "hereby" and words of similar import shall be deemed
to refer to this Amendment instead of the Pledge Agreement. This Amendment may
be executed by the parties hereto separately in counterparts, each of which
shall be an original and all of which together shall constitute one and the same
agreement.


              [The balance of this page is intentionally blank.]

                                      11
<PAGE>
 
     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.


                         ATRIA COMMUNITIES, INC.


                         BY:________________________________________
                              CHIEF FINANCIAL OFFICER AND
                              VICE PRESIDENT FOR DEVELOPMENT


                         LANTANA PARTNERS, LTD.
                              BY: HILLHAVEN PROPERTIES, LTD.,
                                    A GENERAL PARTNER
                         PHILLIPPE ENTERPRISES, INC.
                         HILLHAVEN PROPERTIES, LTD.
                         CASTLE GARDENS RETIREMENT CENTER
                              BY: HILLHAVEN PROPERTIES, LTD.,
                                    A GENERAL PARTNER
                         HILLCREST RETIREMENT CENTER, LTD.
                              BY: FAIRVIEW LIVING CENTERS, INC.,
                                    A GENERAL PARTNER
                         SANDY RETIREMENT CENTER LIMITED PARTNERSHIP
                              BY: HILLHAVEN PROPERTIES, LTD.,
                                    A GENERAL PARTNER
                         TOPEKA RETIREMENT CENTER, LTD.
                              BY: HILLHAVEN PROPERTIES, LTD.,
                                    A GENERAL PARTNER
                         EVERGREEN WOODS, LTD.
                              BY: ATRIA COMMUNITIES, INC.,
                                    A GENERAL PARTNER
                         FAIRVIEW LIVING CENTERS, INC.
                         TWENTY-NINE HUNDRED ASSOCIATES, LTD.
                              BY: TWENTY-NINE HUNDRED CORPORATION,
                                    A GENERAL PARTNER
                         TWENTY-NINE HUNDRED CORPORATION
                         WOODHAVEN PARTNERS, LTD.
                              BY: HILLHAVEN PROPERTIES, LTD.,
                                    A GENERAL PARTNER
                         TUCSON RETIREMENT CENTER LIMITED
                                    PARTNERSHIP
                              BY: HILLHAVEN PROPERTIES, LTD.,
                                    A GENERAL PARTNER


                         BY: _________________________________
                              VICE PRESIDENT

                         ATRIA COMMUNITIES SOUTHEAST, INC.


                         BY: _________________________________
                              VICE PRESIDENT


                         AMERICAN ELDERSERVE OF TEXAS, INC.


                         BY:__________________________________
                              VICE PRESIDENT

                                      12
<PAGE>
 
                         AMERICAN ELDERSERVE OF ALABAMA, INC.


                         BY:__________________________________
                              VICE PRESIDENT


                         SOUTHERN CARE, INC.


                         BY:___________________________________
                              VICE PRESIDENT



                         PNC BANK, NATIONAL ASSOCIATION,
                              AS COLLATERAL AGENT AND PLEDGEE


                         BY: _________________________________
                              VICE PRESIDENT

                                      13
<PAGE>
 
                                    ANNEX F
                                      to
                               Pledge Agreement


                                  LLC NOTICE

                            [Letterhead of Pledgor]

                                                                 [Date]

TO:[NAME OF LLC]

     Notice is hereby given that, pursuant to a Pledge Agreement (a true and
correct copy of which is attached hereto), dated as of August 15, 1996 (as
amended, modified or supplemented from time to time in accordance with the terms
thereof, the "PLEDGE AGREEMENT"), among the pledgors party thereto, including
the undersigned (the "PLEDGOR") and PNC Bank, National Association, as
Collateral Agent (herein, together with its successors and assigns in such
capacity, the "PLEDGEE") for the Secured Creditors described therein, the
Pledgor has pledged and assigned to the Pledgee for the benefit of the Secured
Creditors, and granted to the Pledgee for the benefit of the Secured Creditors a
continuing security interest in, all right, title and interest of the Pledgor,
whether now existing or hereafter arising or acquired, as a member in [NAME OF
LLC] (the "LLC"), and in, to and under the [TITLE OF APPLICABLE LLC AGREEMENT]
(the "LLC AGREEMENT"), including, without limitation:

               (i)   all the capital of the LLC and the Pledgor's interest in
     all profits, losses and other distributions to which the Pledgor shall at
     any time be entitled in respect of such membership interest ("MEMBERSHIP
     INTEREST");

               (ii)  all other payments due or to become due to the Pledgor in
     respect of such Membership Interest, whether under the LLC Agreement or
     otherwise, whether as contractual obligations, damages, insurance proceeds
     or otherwise;

               (iii) all of its claims, rights, powers, privileges, authority,
     options, security interest, liens and remedies, if any, under the LLC
     Agreement or at law or otherwise in respect of such Membership Interest;

               (iv)  all present and future claims, if any, of the Pledgor
     against the LLC for moneys loaned or advanced, for services rendered or
     otherwise;

               (v)   all of the Pledgor's rights under the LLC Agreement or at
     law to exercise and enforce every right, power, remedy, authority, option
     and privilege of the Pledgor relating to the Membership Interest, including
     any power to terminate, cancel or modify the LLC Agreement, to execute any
     instruments and to take any and all other action on behalf of and in the
     name of the Pledgor in respect of the Membership Interest and the LLC, to
     make determinations, to exercise any election (including, but not limited,
     election of remedies) or option or to give or receive any notice, consent,
     amendment, waiver or approval, together with full power and authority to
     demand, receive, enforce, collect or receipt for any of the foregoing or to
     enforce or execute any checks, or other instruments or orders, to file any
     claims and to take any action in connection with any of the foregoing;

               (vi)  all other property hereafter delivered in substitution for
     or in addition to any of the foregoing, all certificates and instruments
     representing or evidencing such other property and all cash, securities,
     interest, dividends, rights and other property at any time and from time to
     time received, receivable or otherwise distributed in respect of or in
     exchange for any or all thereof; and


               (vii) to the extent not otherwise included, all proceeds of any
     or all of the foregoing.

     Pursuant to the Pledge Agreement, the LLC is hereby authorized and directed
to register the Pledgor's pledge to the Pledgee on behalf of the Secured
Creditors of the interest of the Pledgor on the LLC's books.

     The Pledgor and the LLC each hereby consents, notwithstanding anything to
the contrary contained in the LLC Agreement or any other agreement for the
benefit of the Pledgor or the LLC relating thereto, to (i) the grant by any
other Pledgor of a security interest to the Pledgee in its Membership Interest,
its interest in the LLC Agreement and its other rights and interests relating
thereto, as described above, pursuant to the Pledge Agreement; and (ii) any
sale, 
<PAGE>
 
transfer or other disposition by the Pledgee of any Membership Interest of the
Pledgee or any other Pledgor any or other rights or interests in connection with
the foreclosure of such security interest or the exercise of any other remedies
available to the Pledgee under or in connection with the Pledge Agreement in
respect thereof.

     The Pledgor hereby requests the LLC to indicate the LLC's acceptance of
this Notice and consent to and agreement with its terms and provisions by
signing a copy hereof where indicated on the attached page and returning the
same to the Pledgee on behalf of the Secured Creditors.

                                    [NAME OF PLEDGOR]



                                    By:______________________________________
                                         Title:

                                       2
<PAGE>
 
                                ACKNOWLEDGMENT


     [NAME OF LLC] (the "LLC") hereby (i) acknowledges receipt of a copy of the
assignment by [NAME OF PLEDGOR] (the "PLEDGOR") of its interest under the [TITLE
OF APPLICABLE LLC AGREEMENT] (the "LLC AGREEMENT") pursuant to the terms of the
Pledge Agreement, dated as of August 15, 1996 (as amended, modified or
supplemented from time to time in accordance with the terms thereof, the "PLEDGE
AGREEMENT"), among the Pledgors party thereto, including the Pledgor, and PNC
Bank, National Association, as Collateral Agent (herein, together with its
successors and assigns, the "PLEDGEE") on behalf of the Secured Creditors
described therein; (ii) confirms its agreement to all of the terms and
provisions of the letter to which this acknowledgment is attached; and (iii)
confirms the registration of the Pledgor's pledge of its interest to the Pledgee
on behalf of the Secured Creditors on the LLC's books.



Dated:    __________ , 1997


                                  [NAME OF LLC]                            
                                                                           
                                                                           
                                                                           
                                  By: ____________________________________ 
                                       Title:                               

                                       3