Document:

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                                                                    EXHIBIT 4.4.

                         REGISTRATION RIGHTS AGREEMENT

     REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of December 30,
1999, is made and entered into by and among Emeritus Corporation, a Washington
corporation (the "Company"), and Saratoga Partners IV, L.P. ("Saratoga" and
collectively, together with its successors and assigns, the "Holders") of the
Series B Preferred Stock (as defined herein).

     WHEREAS, concurrently with the issuance of the Series B Preferred Stock the
Company is entering into this Agreement to define the rights which exist among
the Holders, on the one hand, and the Company, on the other, with respect to the
Registrable Securities (as defined herein);

     NOW, THEREFORE, in consideration of the mutual premises, agreements and
covenants hereinafter set forth, the parties hereto agree as follows:

                                   ARTICLE I

                                  Definitions
                                  -----------

     For purposes of this Agreement, the following terms shall have the
following respective meanings (each such meaning to be equally applicable to the
singular and plural forms thereof):

     "Agreement" means this Registration Rights Agreement.

     "Commission" shall mean the Securities and Exchange Commission, and any
other similar or successor agency of the federal government at the time
administering the Securities Act or the Securities Exchange Act.

     "Common Stock" means the Company's voting Common Stock, par value $.0001
per share.

     "Company" has the meaning assigned such term in the preamble hereto.

     "Counsel," with respect to any Registration Statement to be filed by the
Company pursuant to this Agreement, shall mean a single law firm selected by a
majority in interest of Holders of Registrable Securities to be included in such
Registration Statement to represent all of the Holders of Registrable Securities
with respect to such Registration Statement.
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     "Holders" has the meaning assigned such term in the first paragraph hereof.

     "Holders of Registrable Securities" shall mean a person who owns
Registrable Securities or has the right to acquire such Registrable Securities,
whether or not such acquisition has actually been effected and disregarding any
legal restrictions upon the exercise of such right.

     "NASD" means the National Association of Securities Dealers, Inc.

     "Prospectus" means the prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement with respect to the
terms of the offering, registering for sale any of the Registrable Securities
and all other amendments and supplements to the Prospectus, including post-
effective amendments, and all material incorporated by reference in such
Prospectus.

     "Registrable Securities" means each share of Common Stock issuable upon
conversion of the Series B Preferred Stock; provided, that any security's status
                                            --------
as a Registrable Security shall cease when the registration rights with respect
to such security shall have terminated pursuant to Section 2.6.

     "Registration Statement" means any registration statement of the Company
which registers for sale any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all material incorporated by reference in such Registration
Statement.

     "Rule 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission.

     "Securities Act" shall mean the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

     "Securities Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.

     "Series B Preferred Stock" means the Company's Series B Convertible
Preferred Stock, $.0001 par value per share, issued to the Holders pursuant to a
Series B Preferred Stock Purchase Agreement, dated as of December 10, 1999,
between the Company, as seller, and the Holders, as purchaser.

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                                   ARTICLE II

                              Registration Rights
                              -------------------

     SECTION 2.1  Registration on Demand

     2.1.1  Demand.  At any time following December 31, 2000, upon the written
            ------
request (each, a "Demand"; collectively, "Demands") of Saratoga  (the "Demand
Holder") that the Company effect the registration under the Securities Act of
the number of Registrable Securities specified by the Demand Holders, the
Company shall, subject to the provisions hereof, use its best efforts to effect,
as soon as practicable and in any event within 120 days after the Demand is
received from the Demand Holder, the registration under the Securities Act of
the Registrable Securities which the Company has been so requested to register
by the Demand Holder; provided, however, that no more than two (2) Demands may
                      --------  -------
be made pursuant to this Section 2.1.1.

     2.1.2  Shelf Registration.  At any time that the Company is eligible to use
            ------------------
a short-form registration statement for registering securities for sale to the
public at large, the Demand Holder may, at their option, request (the "Shelf
Demand") that a registration statement effected pursuant to a Demand pursuant to
Section 2.1.1 be effected on a delayed or continuous basis, pursuant to Rule 415
under the Securities Act (the "Shelf Registration").  The Company agrees to keep
effective such registration statement (the "Shelf Registration Statement") until
the earlier of (i) such date as of which all the Registrable Securities under
the Shelf Registration Statement have been disposed of in the manner described
in such registration statement, and (ii) one year after the date on which such
Shelf Registration Statement is declared effective; provided, however, that no
                                                    --------  -------
more than one (1) Shelf Demand may be made pursuant to this Section 2.1.2.

     2.1.3  Registration Statement Form.  Registrations under this Section 2.1
            ---------------------------
shall be on such appropriate registration form of the Commission as shall be
selected by the Company.  The Company shall include in any such registration
statement all information which, in the opinion of counsel to the Company, is
required to be included.

     2.1.4  Effective Registration Statement.  A registration requested pursuant
            --------------------------------
to this Section 2.1 shall not be deemed to have been effected (i) unless a
registration statement with respect thereto has become effective, (ii) if after
it has become effective, such registration is interfered with by any stop order,
injunction or other order or requirement of the Commission or other governmental
agency or court for any reason not attributable to the Holders and has not
thereafter become effective, or (iii) if the conditions to closing specified in
the underwriting agreement, if any, entered into in

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connection with such registration are not satisfied or waived, other than by
reason of a failure on the part of the Holders, or (iv) if a Shelf Registration
Statement, if such registration statement has not been kept effective until the
earlier of (i) such date as of which all of the Registrable Securities under
such Shelf Registration Statement have been disposed of in the manner described
in such registration statement and (ii) one year after the date on which such
Shelf Registration Statement is declared effective.

     2.1.5  Limitations on Registration on Demand, Shelf Registrations.  The
            ----------------------------------------------------------
Company shall not be required to prepare and file a registration statement
pursuant to this Section 2.1 which would become effective within 120 days (or
such shorter period as may be acceptable to the Company) following the effective
date of a registration statement (other than pursuant to registrations on Form
S-4 or Form S-8 or any successor form or forms) filed by the Company with the
Commission pertaining to an underwritten public offering of convertible debt
securities or equity securities for cash for the account of the Company or
another holder of securities of the Company.  Notwithstanding anything in this
Section 2.1 to the contrary, in no event shall the Company be required to effect
in the aggregate, more than two registrations pursuant to this Section 2.1.

     2.1.6  Holders, Ability to Withdraw Registration Statement.  The Demand
            ---------------------------------------------------
Holder shall have the right to request that the Company not have a registration
statement filed pursuant to a Demand declared effective.  If the Demand Holders
elect to pay or reimburse the Company for the Company's out-of-pocket expenses
incurred in connection with such registration, such withdrawn registration
statement shall not be counted for purposes of the requests for registration to
which such Demanding Holder is entitled pursuant to Section 2.1.5 hereof.

     2.1.7  Selection of Underwriter.  If a registration under this Section 2.1
            ------------------------
is an underwritten offering, the Demand Holder  shall select a managing
underwriter or underwriters of recognized national standing reasonably
acceptable to the Company to administer the offering.  The Company will
cooperate in the customary manner in such underwritten offering.

     2.1.8  Registration of Other Securities.  A registration statement filed
            --------------------------------
pursuant to the request of the Demand Holder may, subject to the provisions of
Section 2.5 hereof, include (i) Registrable Securities of Holders not making a
demand pursuant to this Section 2.1 and (ii) other securities of the Company
with respect to which registration rights have been granted and may include
securities of the Company being sold for the account of the Company.

     2.1.9  Suspension.  The Company may delay, suspend or withdraw the
            ----------
registration of the Registrable Securities required pursuant to this Section 2.1
or the

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preparation or furnishing of a supplemental or amended prospectus pursuant to
Section 2.3(i) for a period not exceeding 90 days if the Company shall in good
faith determine that any such registration would require the Company to include
disclosure that would reasonably be expected to have a detrimental effect on any
proposal, negotiations or plan by the Company or any of its subsidiaries to
engage in any acquisition or disposition of assets or any merger, consolidation,
tender offer, reorganization or similar transaction, or any other material
corporate event contemplated by the Company.

     SECTION 2.2  Incidental Registration

     If the Company, at any time or any one or more occasions after the date of
this Agreement, proposes to register (other than pursuant to Section 2.1) any
shares of Common Stock under the Securities Act for sale to the public, whether
for its own account or for the account of other security holders or both (other
than pursuant to registrations on Form S-4 or Form S-8 or any successor form or
forms) the Company shall give not less than 15 days' nor more than 90 days'
prior written notice to each Holder of Registrable Securities of its intention
to do so.  Upon the written request of any Holder of Registrable Securities
given within 10 days after receipt of such notice from the Company, the Company
will use its best efforts to cause the Registrable Securities requested to be
registered to be so registered under the Securities Act.  A request pursuant to
this Section 2.2 shall state the number of Registrable Securities requested to
be registered and the intended method of distribution thereof.  In connection
with any registration subject to this Section 2.2, the Holders shall enter into
such underwriting, lock-up and other agreements, and shall execute and complete
such questionnaires and other documents, as are reasonably requested by the
representative of the underwriters.  The Company shall have the right to delay,
suspend, terminate or withdraw any registration initiated by it under this
Section 2.2 prior to the effectiveness of such registration for any reason
whether or not any Holder has elected to include any securities in such
registration.  Notwithstanding any other provision of this Agreement, if the
representative of the underwriters advises the Company in writing that marketing
factors require a limitation on the number of shares to be underwritten, the
number of shares to be included in the underwriting or registration shall be
allocated as set forth in Section 2.5 hereof.

     No registration effected under this Section 2.2 shall relieve the Company
of its obligation to effect a registration required under Section 2.1.

     SECTION 2.3  Registration Procedures

     In connection with the registration of any Registrable Securities in
accordance with this Section 2, the Company shall effect such registrations to
permit the sale of

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such Registrable Securities in accordance with the intended method or methods of
disposition thereof, and pursuant thereto the Company shall as expeditiously as
possible:

     (a) prepare and file with the Commission within the time limits prescribed
herein a Registration Statement with respect to such securities and use its best
efforts to cause such Registration Statement to become effective and remain
effective as provided herein;

     (b) prepare and file with the Commission such amendments and post-effective
amendments to each Registration Statement as may be necessary and use its best
efforts to keep such Registration Statement continuously effective; cause the
related Prospectus to be supplemented by any required Prospectus supplement, and
as so supplemented to be filed pursuant to Rule 424 (or any similar provisions
then in force) under the Securities Act; and comply with the provisions of the
Securities Act, the Securities Exchange Act and the rules and regulations of the
Commission promulgated thereunder applicable to it with respect to the
disposition of all securities covered by such Registration Statement as so
amended or in such Prospectus as so supplemented; the Company shall not be
deemed to have used its best efforts to keep a registration statement effective
during a period if it voluntarily takes any action that results in participating
Holders not being able to sell such Registrable Securities during such period,
unless such action (i) is required under applicable law or (ii) is determined in
good faith by the Board of Directors of the Company to be in the Company's best
interest;

     (c) notify the Holders of Registrable Securities and underwriters, if any,
promptly (but in any event within two business days), and confirm such notice in
writing, (i) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of the
issuance (or, to the Company's best knowledge, the threat or contemplation) by
the Commission of any stop order suspending the effectiveness of such
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that purpose,
and (iii) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of a
Registration Statement or any of the Registrable Securities for offer or sale in
any jurisdiction, or the initiation or threatening of any proceeding for such
purpose;

     (d) use every reasonable effort to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the qualification
(or exemption from qualification) of any of the Registrable Securities for sale
in any jurisdiction, and, if any

                                      -6-
<PAGE>

such order is issued, to obtain the withdrawal of any such order at the earliest
possible moment;

     (e) furnish to each seller and to each duly authorized broker or
underwriter of each seller such number of authorized copies of a Prospectus,
including copies of a preliminary Prospectus, in conformity with the
requirements of the Securities Act, and such other customary documents as such
seller, broker or underwriter may reasonably request in order to facilitate the
public sale or other disposition of the Registrable Securities owned by such
seller;

     (f) use its best efforts to register or qualify (and to keep each such
registration and qualification effective, including through new filings,
renewals or amendments, during the period such registration statement is
required to be kept effective) the securities covered by such Registration
Statement under such securities or blue sky laws of such jurisdictions as each
seller shall reasonably request, and do any and all other reasonable acts and
things which may be necessary under such securities or blue sky laws to enable
such seller to consummate the public sale or other disposition in such
jurisdictions of the Registrable Securities to be sold by such seller, except
that the Company shall not for any such purpose be required to qualify to do
business as a foreign corporation, or to consent to the jurisdiction of any
court or subject itself to suit in any jurisdiction wherein it is not qualified;

     (g) before filing the Registration Statement or Prospectus or amendments or
supplements thereto, furnish to Counsel for the Holders of Registrable
Securities included in such Registration Statement copies of all such documents
proposed to be filed, all of which shall be subject to the review and comment of
such Counsel in the exercise of their reasonable judgment;

     (h) use its best efforts to cause such Registrable Securities covered by
such Registration Statement to be registered with or approved by such other
governmental agencies or authorities exercising jurisdiction over the Company as
may be necessary to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities;

     (i) notify each seller of any such Registrable Securities covered by such
Registration Statement, at any time when a Prospectus relating thereto is
required to be delivered under the Securities Act, of the Company's becoming
aware that the Prospectus included in such Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and, at the written request of any such seller, promptly prepare and
furnish to such seller and each underwriter a reasonable

                                      -7-
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number of copies of a Prospectus supplemented or amended (whereupon all previous
versions of the Prospectus shall not be used by such seller or underwriter and
shall be promptly returned to the Company or destroyed) so that, as thereafter
delivered to the purchasers of such Registrable Securities, such Prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;

     (j) comply with all applicable rules and regulations of the Commission, and
make generally available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve
consecutive months beginning with the first day of the Company's first calendar
quarter after the effective date of the Registration Statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder;

     (k) use its best efforts to cause all such Registrable Securities covered
by such Registration Statement to be listed or quoted on the principal
securities exchange (including the Nasdaq National Market) on which similar
securities issued by the Company are then listed or quoted, if the listing or
quoting of such Registrable Securities is then permitted under the rules of such
exchange;

     (l) provide a transfer agent, registrar and/or trustee, as applicable, for
all such Registrable Securities covered by such Registration Statement not later
than the effective date of such Registration Statement;

     (m) cooperate with the selling holders of Registrable Securities and the
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold, which certificates
shall not bear any restrictive legends; and enable such Registrable Securities
to be in such denominations and registered in such names as the underwriters, if
any, or holders may reasonably request at least two business days prior to any
sale of Registrable Securities in a firm commitment underwritten public
offering, or at least ten business days prior to any other such sale;

     (n) enter into such reasonable and customary agreements (including an
underwriting agreement in customary form) and take such other reasonable and
customary actions as the Demand Holder shall reasonably request in order to
expedite or facilitate the registration and disposition of such Registrable
Securities;

     (o) provide copies of any opinions from the Company's counsel and "cold
comfort" letters from the Company's independent public accountants delivered to
the underwriters, if any;

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     (p) upon execution and delivery of such confidentiality agreements as the
Company shall reasonably request (which agreement shall not restrict any such
person's obligations under applicable securities laws), make available for
inspection by any seller of such Registrable Securities covered by such
Registration Statement, by any underwriter participating in any disposition to
be effected pursuant to such Registration Statement and by any attorney,
accountant or other agent retained by the sellers or any such underwriter,
pertinent financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such Registration
Statement, all as necessary to conduct a reasonable investigation within the
meaning of Section 11 of the Securities Act; and

     If any such Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require the insertion therein of language, in form and
substance satisfactory to such Holder, to the effect that the holding by such
Holder of such securities is not to be construed as a recommendation by such
Holder of the investment quality of the Company's securities covered thereby and
that such holding does not imply that such Holder will assist in meeting any
future financial requirements of the Company; provided, that in the event that
                                              --------
such reference to such Holder by name or otherwise is not in the judgment of the
Company, as advised by counsel, required by the Securities Act or any similar
federal statute or any state "blue sky" or securities law then in force, the
Company may delete the reference to such Holder rather than include such
language.

     SECTION 2.4  Expenses

     All expenses incurred in effecting the registrations (whether or not such
registrations are consummated) provided for in this Article II, including
without limitation all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, expenses of any audits incident to or
required by any such registration (including the costs of any comfort letters)
and expenses of complying with the securities or blue sky laws of any
jurisdictions pursuant to Subsection 2.3(f) hereof, transfer taxes, fees of
transfer agents, registrars and trustees, costs of insurance, duplicating fees,
delivery expenses, expenses incurred with the listing of the securities on any
securities exchange, shall be paid by the Company; provided, however, that such
                                                   --------  -------
the Company shall not bear any underwriting discounts and commissions relating
to Registrable Securities.

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     SECTION 2.5  Marketing Restrictions

     If (i)  a Holder of Registrable Securities requests registration of
Registrable Securities as contemplated by  Section 2.1 or 2.2, (ii) the offering
proposed to be made is to be an underwritten public offering, and (iii) the
managing underwriters of such public offering furnish a written opinion that the
total amount of securities to be included in such offering would exceed the
maximum amount of securities (the "Maximum Amount") (as specified in such
opinion) which can be marketed at a price reasonably related to the then current
market value of such securities and without materially and adversely affecting
such offering, then the rights of the Company, the Holders of Registrable
Securities and the holders of other securities having the right to include such
securities in such registration to participate in such offering shall be as
follows:

          If such registration shall have been proposed by the Company, (i) the
     Company shall be entitled to participate in such registration first; and
     (ii) then Holders of Registrable Securities and other holders of securities
     of the Company entitled to participate shall be entitled to participate in
     such registration (pro rata based on the number of shares of Common Stock
     held by each Holder and other holders of securities (on an as converted
     basis) and in accordance with other relative priorities, if any, as shall
     exist among them).  If such registration shall have been requested by the
     Demand Holderof Registrable Securities pursuant to Section 2.1 hereof, (i)
     the Holders of Registrable Securities shall be entitled to participate in
     such registration (pro rata based on the number of Registrable Securities
     (on an as converted basis) held by each) first; and (ii) then the Company
     and other security holders of the Company entitled to participate will be
     entitled to participate in such registration (with the holders of such
     securities being entitled to participate in accordance with the relative
     priorities, if any, as shall exist among them), in each case with further
     pro rata allocations to the extent any such person has requested
     registration of fewer securities than such person is entitled to have
     registered so that the number of securities to be included in such
     registration will not exceed the Maximum Amount.  If such registration
     shall have been requested by the holders of other securities pursuant to a
     right granted by the Company to request such registration, (i) the holders
     requesting such registration shall be entitled to participate in such
     registration (with such holders being entitled to participate in accordance
     with the relative priorities, if any, as shall exist among them) first; and
     (ii) then the Holders of Registrable Securities, the Company and other
     holders of securities of the Company entitled to participate shall be
     entitled to participate in such registration (pro rata based on the number
     of shares of Common Stock held by each Holder, the number of shares
     proposed to be registered by the Company

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<PAGE>

     and the number of shares held by other holders of securities (on an as
     converted basis) and in accordance with the other relative priorities, if
     any, as shall exist among them), in each case with further pro rata
     allocations to the extent any such person has requested registration of
     fewer securities than such person is entitled to have registered so that
     the number of securities to be included in such registration will not
     exceed the Maximum Amount;

and no securities (issued or unissued) other than those registered and included
in the underwritten offering shall be offered for sale or other disposition in a
transaction which would require registration under the Securities Act (but
excluding any issuance of shares pursuant to registrations on Form S-4 or Form
S-8 or any successor form or forms) until the expiration of 90 days after the
effective date of the Registration Statement in which Registrable Securities
were included pursuant to Section 2.2 or such shorter period as may be
acceptable to the Company and the Holders of a majority of the Registrable
Securities who may be participating in such offering.

     SECTION 2.6  Termination of Rights

     Notwithstanding the foregoing provisions of this Article II, the rights to
registration shall terminate as to any particular Registrable Securities when
(a) a Registration Statement covering such Registrable Securities has been
declared effective and such Registrable Securities have been disposed of in
accordance with such effective Registration Statement, (b) written opinion(s),
to the effect that such Registrable Securities may be sold without registration
under the Securities Act or applicable state law and without restriction as to
the volume and timing of such sale, shall have been received from counsel for
the Company reasonably acceptable to the Holders of a majority of such
Registrable Securities sought to be sold, or (c) such Registrable Securities
have been sold in a transaction in which the transferee receives a certificate
without a restrictive legend.

     SECTION 2.7  Rule 144

     The Company shall file the reports required to be filed by it under the
Securities Act and the Securities Exchange Act and the rules and regulations
promulgated thereunder (or, if the Company is not required to file such reports,
it will, upon the written request of any Holder of Registrable Securities as
soon as practicable, make publicly available such information as is necessary to
permit sales under Rule 144), and will take such further actions as any Holder
of Registrable Securities may reasonably request, all to the extent required
from time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemption
provided by Rule 144.  Upon the request of any Holder of Registrable

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<PAGE>

Securities, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements.

     SECTION 2.8  Indemnification

     (a) In the event of any registration of any Registrable Securities under
the Securities Act pursuant to this Agreement, the Company will, and hereby
does, indemnify and hold harmless, to the fullest extent permitted by law, the
seller of any Registrable Securities covered by such Registration Statement, its
directors and officers or general and limited partners (and the directors and
officers thereof) (each, a "Person"), each person who participates as an
underwriter or qualified independent underwriter/pricer ("independent
underwriter"), if any, in the offering or sale of such securities, each officer,
director or partner of such underwriter or independent underwriter, and each
other Person, if any, who controls such seller or any such underwriter within
the meaning of the Securities Act, against any and all losses, claims, damages
or liabilities, joint or several, and expenses (including fees of counsel and
any amounts paid in any settlement approved by the Company (which such approval
shall not be unreasonably withheld or delayed)) to which such seller, any such
director or officer or general or limited partner or any such underwriter or
independent underwriter, such officer, director or partner of such underwriter
or independent underwriter or controlling person may become subject under the
Securities Act, common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof), or expenses arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement under which such securities were registered under the
Securities Act or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary, final or summary Prospectus
(together with the documents incorporated by reference or filed with the
Commission) and any amendment thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (iii) any violation
by the Company of any federal or state rule or regulation applicable to the
Company and relating to action required of or inaction by the Company in
connection with any such registration, and the Company will reimburse as
incurred such seller and each such director, officer, general or limited
partner, underwriter, independent underwriter, director, or officer or partner
of such underwriter or independent underwriter and controlling person for any
legal or any other expenses incurred by any of them in connection with
investigating or defending any such loss, claim, liability, action or
proceeding; provided, that the Company shall not be liable to
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<PAGE>

any such seller or any such director, officer, general or limited partner,
underwriter, independent underwriter, director or officer or partner of such
underwriter or independent underwriter or controlling person in any such case to
the extent that any such loss, claim, damage, liability (or action or
proceeding, whether commenced or threatened, in respect thereof) or expense
arises out of or is based upon (a) any untrue statement or alleged untrue
statement or omission or alleged omission made in such Registration Statement or
amendment thereof or supplement thereto or in any such preliminary, final or
summary Prospectus in reliance upon and in conformity with information furnished
to the Company in writing by or on behalf of any such seller or any such
director, officer, general or limited partner, underwriter, independent
underwriter, director or officer or partner of such underwriter or independent
underwriter or controlling person, expressly for use in the preparation thereof
or (b) the failure of any such seller or any such director, officer, general or
limited partner, underwriter, independent underwriter or controlling person, to
comply with any legal requirement applicable to him to deliver a copy of a
Prospectus or any supplements or amendments thereto after the Company has made
such documents available to such Persons. Such indemnity and reimbursement of
expenses shall remain in full force and effect following the transfer of such
securities by such seller.

     (b) The Company, as a condition to including any Registrable Securities in
any Registration Statement filed in accordance with this Agreement, shall have
received an undertaking reasonably satisfactory to it from the prospective
seller of such Registrable Securities and any underwriter or independent
underwriter, to indemnify and hold harmless (in the same manner and to the same
extent as set forth in paragraph (a) of this Section 2.8) the Company and its
directors and officers and all other prospective sellers and their directors,
officers, general and limited partners and respective controlling Persons
(within the meaning of the Securities Act) with respect to any statement or
alleged statement in or omission or alleged omission from such Registration
Statement, any preliminary, final or summary Prospectus contained therein, or
any amendment or supplement thereto, if such statement or alleged statement or
omission or information has been furnished to the Company or its representative
by or on behalf of such seller or underwriter expressly for use in the
preparation of such Registration Statement, preliminary, final or summary
Prospectus or amendment or supplement; provided, however, that the aggregate
                                       --------  -------
amount which any such seller or prospective seller shall be required to pay
pursuant to such undertaking shall be limited to the amount of the net proceeds
received by such Person upon the sale of the Registrable Securities pursuant to
the Registration Statement giving rise to such claim.  Such indemnity shall
remain in full force and effect following the transfer of such securities by
such seller.

                                      -13-
<PAGE>

     (c) As soon as possible after receipt by an indemnified party hereunder of
written notice of the commencement of any action or proceeding with respect to
which a claim for indemnification may be made pursuant to this Section 2.8, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action; provided, that the failure of any indemnified party to give notice
             --------
as provided herein shall not relieve the indemnifying party of its obligations
under the preceding paragraphs of this Section 2.8, except to the extent that
the indemnifying party is actually and materially prejudiced by such failure to
give notice.  If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein, and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party.  After notice from the indemnifying party to such indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 2.8 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof unless the indemnifying
party has failed to assume the defense of such claim or to employ counsel
reasonably satisfactory to such indemnified party; provided that the indemnified
                                                   --------
parties shall have the right to employ one counsel (in each case together with
appropriate local counsel) (such counsel to be selected by the Holders of a
majority of the Registrable Securities included in such registration) to
represent such indemnified parties if, in such indemnified parties' reasonable
judgment, a conflict of interest between the indemnified parties and the
indemnifying parties exists or may exist in respect of such claim, and in that
event the fees and expenses of such separate counsel shall be paid as incurred
by the indemnifying party.  No indemnifying party will consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimants or plaintiffs to such indemnified party
of an unconditional release from all liability in respect to such claim or
litigation.  No indemnifying party will be liable for any settlement effected
without its prior written consent, which consent will not be unreasonably
withheld or delayed.

     (d) Indemnification similar to that specified in the preceding paragraphs
of this Section 2.8 (with appropriate modifications) shall be given by the
Company and each seller of Registrable Securities with respect to any required
registration or other qualification of securities under any state securities and
"blue sky" laws.

     (e) If the indemnification provided for in this Section 2.8 is unavailable
or insufficient to hold harmless an indemnified party under Section 2.8(a) or
(b) of this Agreement, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of the losses,
claims, damages or

                                      -14-
<PAGE>

liabilities referred to in Section 2.8(a) or (b) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and the indemnified party on the other hand in connection with statements
or omissions which resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or other omission or alleged omission to
state a material fact relates to information supplied by the indemnifying party
or the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statements or
omission. The parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 2.8(e) were to be determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the first sentence of this Section
2.8(e). The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this Section
2.8(e) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim (which shall be limited as provided in Section 2.8(c) if the
indemnifying party has assumed the defense of any such action in accordance with
the provisions thereof) which is the subject of this Section 2.8(e). No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. Promptly after receipt by an
indemnified party under this Section 2.8(e) of notice of the commencement of any
action against such party in respect of which a claim for contribution may be
made against an indemnifying party under this Section 2.8(e), such indemnified
party shall notify the indemnifying party in writing of the commencement thereof
if the notice specified in Section 2.8(c) has not been given with respect to
such action; provided that the omission so to notify the indemnifying party
shall not relieve the indemnifying party from any liability which it may have to
any indemnified party otherwise under this Section 2.8(e), except to the extent
that the indemnifying party is actually and materially prejudiced by such
failure to give notice. Notwithstanding anything in this Section 2.8(e) to the
contrary, no indemnifying party (other than the Company) shall be required
pursuant to this Section 2.8(e) to contribute any amount in excess of the net
proceeds received by such indemnifying party from the sale of Registrable
Securities in the offering to which the losses, claims, damages or liabilities
of the indemnified parties relate.

     (f) The provisions of this Section 2.8 shall be in addition to any other
rights to indemnification or contribution which any indemnified party may have
pursuant to law or contract and shall remain in full force and effect following
the transfer of the Registrable Securities by any such party.

                                      -15-
<PAGE>

     SECTION 2.9  Agreements of Holders

     (a) Each Holder of Registrable Securities shall advise the Company of the
dates on which any disposition of Registrable Securities hereunder is expected
to commence and terminate, the number of Registrable Securities expected to be
sold, the method of disposition, and such other information as the Company may
reasonably request in order to supplement the Prospectus in accordance with the
rules and regulations of the Commission.

     (b) Each Holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of a notice from the Company under
Section 2.3(i) of the Company's becoming aware that the Prospectus included in
the Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, such Holder shall not dispose of,
sell or offer for sale Registrable Securities under the Registration Statement
until such Holder receives (i) copies of the supplemented or amended Prospectus
or until counsel for the Company shall have determined that such disclosure is
not required due to subsequent events, (ii) notice in writing (the "Advice")
from the Company that the use of the Prospectus may be resumed, and (iii) copies
of any additional or supplemental filings that are incorporated by reference in
the Prospectus.

     (c) In the event the Company shall give any such notice, the time period
regarding the effectiveness of the Registration Statement set forth in this
Article II shall be extended by the number of days during the period from and
including the date of the giving of such notice to and including the date when
each selling Holder covered by the Registration Statement shall have received
the copies of the supplemented or amended Prospectus, the Advice and any
additional or supplemental filings that are incorporated by reference in the
Prospectus.

                                  ARTICLE III

                       Changes in Registrable Securities
                       ---------------------------------

     If, and as often as, there is any change in the Registrable Securities by
way of a combination or reclassification, or through a merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof so that the rights and
privileges granted hereby shall continue with respect to the Registrable
Securities as so changed.

                                      -16-
<PAGE>

                                   ARTICLE IV

                 Representations and Warranties of the Company
                 ---------------------------------------------

     The Company represents and warrants to the Holders of the Registrable
Securities as of the date of this Agreement as follows:

     (a) Due Authorization.  The execution, delivery and performance of this
         -----------------
Agreement by the Company has been duly authorized by all requisite action.

     (b) Binding Obligation.  This Agreement has been duly executed and
         ------------------
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company.

     (c) No Violation.  The execution, delivery and performance of this
         ------------
Agreement, and the consummation of the transactions contemplated herein, by the
Company does not violate any provision of law, any order of any court or other
agency of government, any organizational document of the Company or any
provision of any material indenture, agreement or other instrument to which the
Company or any of its properties or assets is bound, or conflict with, result in
a breach of or constitute (with due notice or lapse of time or both) a default
under any such indenture, agreement or other instrument or result in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the properties or assets of the Company which violation,
conflict, breach or default or lien, charge, restriction or encumbrance would
have a material adverse effect on the business, condition (financial or
otherwise) of the Company taken as a whole.

     (d) Government Action.  No action has been taken and no statute, rule or
         -----------------
regulation or order has been enacted, no injunction, restraining order or order
of any nature has been issued by a federal or state court of competent
jurisdiction and no action, suit or proceeding is pending against or affecting
or threatened against, the Company before any court or arbitrator or any
governmental body, agency or official which, if adversely determined, would in
any manner draw into question the validity of this Agreement.  Other than
filings required with the Commission and under state securities laws, no action
or approval by, or filing or registration with, any court or governmental agency
or body is required for the consummation of the transactions contemplated by
this Agreement by the Company.

                                      -17-
<PAGE>

                                   ARTICLE V

                             Benefits of Agreement
                             ---------------------

     The obligations of the Company under this Agreement shall inure to the
benefit of, and be enforceable by, the initial Holders and their successors and
assigns without any further action on the part of any party hereto.

                                   ARTICLE VI

                                 Miscellaneous
                                 -------------

     SECTION 6.1  Notices

     All notices, requests, consents and other communications provided for
herein shall be in writing and shall be effective upon delivery in person, faxed
or telecopied, or mailed by certified or registered mail, return receipt
requested, postage pre-paid, addressed as follows:

     (i) if to the Company, 3131 Elliot Avenue, Suite 500, Seattle, Washington
98121, Attention:  Kelly J. Price; with a copy to Perkins Coie LLP, 1201 Third
Avenue, Seattle, Washington 98101, Attention: Michael E. Stansbury, Esq.;

     (ii) if to an initial Holder of Registrable Securities, at such address as
may have been furnished to the Company in writing by such Holder;

or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of a holder of Registrable Securities) or
to the Holders of Registrable Securities (in the case of the Company) in
accordance with the provisions of this paragraph.

     SECTION 6.2  Waivers: Amendments

     No failure or delay of any Holder of Registrable Securities or the Company
in exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power.  The rights and remedies of such Holder and the Company are
cumulative and not exclusive of any rights or remedies which it would otherwise
have.  The provisions of this Agreement may be amended, modified or waived with
(and only with) the written consent of the Company and a majority of the Holders
of Registrable Securities outstanding (exclusive of Registrable Securities then
owned by the Company or any subsidiary thereof).  No

                                      -18-
<PAGE>

notice or demand on the Company in any case shall entitle the Company to any
other or further notice or demand in similar or other circumstances.

     SECTION 6.3  Governing Law

     This Agreement shall be construed in accordance with and governed by the
laws of the State of New York without regard to principles of conflicts of law.

     SECTION 6.4  Survival of Agreements; Representations and Warranties, etc.

     All warranties, representations and covenants made by the Company herein or
in any certificate or other instrument delivered by it or on its behalf in
connection with this Agreement shall be considered to have been relied upon by
the Holders of Registrable Securities and shall continue in full force and
effect so long as this Agreement is in effect regardless of any investigation
made by such Holders.  All statements in any such certificate or other
instrument shall constitute representations and warranties hereunder.

     SECTION 6.5  Covenants to Bind Successors and Assigns

     All the covenants, stipulations, promises and agreements in this Agreement
contained by or on behalf of the parties hereto shall bind their successors and
assigns, whether so expressed or not.

     SECTION 6.6  Severability

     In case any one or more of the provisions contained in this Agreement shall
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby.  The parties shall endeavor in
good faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

     SECTION 6.7  Section Headings

     The section headings used herein are for convenience of reference only, are
not part of this Agreement and are not to affect the construction of or be taken
into consideration in interpreting this Agreement.

                                      -19-
<PAGE>

     SECTION 6.8  Counterparts

     This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

     SECTION 6.9  Termination

     The obligations of the Company to register the Registrable Securities
hereunder shall terminate in accordance with the terms of this Agreement.

     SECTION 6.10  Complete Agreement

     This document and the documents referred to herein contain the complete
agreement between the parties and supersede any prior understandings, agreements
or representations by or between the parties, written or oral, which may have
related to the subject matter hereof in any way, and any other agreements or
understandings as to securities registration or similar rights among the parties
hereto are hereby terminated.

     SECTION 6.11  No More Favorable Agreements

     The Company has not previously, and will not hereafter, enter into any
agreement with respect to its securities with any person which grants such
person rights that are, taken as a whole, more favorable than the rights granted
to the Holders in this Agreement.

     SECTION 6.12  Submission to Jurisdiction; Venue

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

     (b) The Company hereby irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings

                                      -20-
<PAGE>

arising out of or in connection with this Agreement brought in the courts
referred to in clause (a) above and hereby further irrevocably waives and agrees
not to plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum.

                                      -21-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as
of the date first set forth above.

                                          EMERITUS CORPORATION

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

                                          SARATOGA PARTNERS IV, L.P.

                                          By: SARATOGA ASSOCIATES IV LLC,
                                              as General Partner

                                          By: SARATOGA MANAGEMENT COMPANY LLC,
                                              as Manager

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

                                      -22-<PAGE>

                                                                     EXHIBIT 4.5

                             INVESTMENT AGREEMENT

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

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

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

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

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

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

     The parties agree as follows:

                                   ARTICLE I

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

     (a)  Commencing on January 1, 2007 and continuing until the date of
conversion of the Series B Preferred Stock, the holders of the outstanding
Series B Preferred Stock shall have the exclusive right but not the obligation,
voting separately as a class, to elect a number of directors of the Company at
any meeting of shareholders of the Company called for the purpose of electing
directors such that the directors elected (including any directors previously
elected by the Series B Preferred Stock shareholders
<PAGE>

and currently a member of the board of directors) are one director less than a
majority of the board. Upon the vesting of such right of the holders of the
Series B Preferred Stock, any applicable number of directors of the Company set
forth in the Restated Articles of Incorporation or Restated By-Laws of the
Company, as determined pursuant thereto, shall automatically be increased by the
appropriate number and the vacancy so created shall be filled promptly by vote
of the holders of the outstanding Series B Preferred Stock as hereinabove set
forth.

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

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

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

                                  ARTICLE II

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

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

                                      -2-
<PAGE>

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

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

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

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

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

     SECTION 2.5  Submission to Jurisdiction; Venue

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

                                      -3-
<PAGE>

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

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

                                      -4-
<PAGE>

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

                              EMERITUS CORPORATION

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

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

                              DANIEL BATY

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

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

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

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

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

                                      -5-
<PAGE>

                              Telecopier: (206) 301-4500

                              SARATOGA PARTNERS IV, L.P.

                              By: SARATOGA ASSOCIATES IV LLC,
                                  as General Partner

                              By: SARATOGA MANAGEMENT COMPANY LLC, as Manager

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

                              SARATOGA MANAGEMENT COMPANY LLC

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

                                      -6-

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