EMERITUS CORP\WA\
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>exhibit105212.txt
<TEXT>

                     THIRDAMENDMENT TO MANAGEMENT AGREEMENT
                     --------------------------------------
                             WITH OPTION TO PURCHASE
                             -----------------------
                        (AL 1- Emeritrust 25 Facilities)

     This  Third Amendment to Management Agreement with Option to Purchase (this
"Amendment") is effective as of the 30th day of June, 2003 by and among Emeritus
Management  LLC, a Washington limited liability company ("Emeritus Management"),
Emeritus  Management  I  LP,  a Washington limited partnership ("Texas Manager;"
together  with  Emeritus  Management  referred to herein as "Manager"), Emeritus
Corporation,  a Washington Corporation ("Emeritus), AL Investors LLC, a Delaware
limited  liability  company  ("AL  Investors"),  for itself and as sole managing
member  or  sole  managing member of the general partner of each of the Facility
Entities  set  forth  on  Exhibit  A to the Management Agreement (as hereinafter
defined).

Recitals

     A. Emeritus Management, Texas Manager, Emeritus, AL Investors, ESC I, L.P.,
a  Washington  limited  partnership  ("ESC"), and Emeritus Properties I, Inc., a
Washington  corporation  ("EPI")  entered into that certain Management Agreement
with  Option  to  Purchase  (Emeritrust 25) dated December 30, 1998, pursuant to
which,  among  other  things,  AL  Investors  and  the Facility Entities engaged
Manager to manage certain Facilities described therein (as subsequently amended,
the  "Management Agreement"). Pursuant to the terms of the Management Agreement,
ESC  and  EPI  have  ceased  to  be Managers under the Management Agreement. The
Management  Agreement  has  been  previously  amended  by (1) First Amendment to
Management  Agreement  with Option to Purchase, dated March 22, 2001 (the "First
Amendment"),  (2)  Second  Amendment  to  Management  Agreement  with  Option to
Purchase dated January 1, 2002 (the "Second Amendment"), and (3) Waiver, Consent
and Amendment to Management Agreement dated May 1, 2002 ("Laurel Place Waiver").
Pursuant to the Laurel Place Waiver, the Facility known as Laurel Place was sold
and  has  been  deleted from the Management Agreement. In addition, AL Investors
and  Manager  have agreed to the sale of the Facility known as Park Place, which
closed  on  August  11,  2003  and  such  Facility will then be deleted from the
Management  Agreement.

     B.     In connection with an extension of the Senior Loan pursuant to Third
Amendment  to  Loan  Agreement for the Senior Loan ("Third Loan Amendment"), the
parties  now  desire  to amend the Management Agreement to extend the Management
Agreement for the Third Extension Period (i.e., July 1, 2003 to August 31, 2003,
as  defined  in  the  Third  Loan Amendment) and for the Fourth Extension Period
(i.e.,  September  1,  2003  to  January  2,  2004, as defined in the Third Loan
Amendment)  on  the  terms  and  conditions  contained  herein.

     NOW,  THEREFORE, in consideration of Ten and No/100 Dollars, the agreements
contained  herein,  and  other  good and valuable consideration, the receipt and
sufficiency  of  which  is  hereby  acknowledged,  the  parties  hereby agree as
follows:

     1.     Defined  Terms.     All  terms  capitalized  herein  but not defined
            ---------------
shall  have  the  meanings  given  them  in  the  Management  Agreement.




<PAGE>
     2.     Extension of Management Agreement.     Section 2.3 of the Management
            ----------------------------------
Agreement  (as  added  under  the  First  Amendment  and  amended  by the Second
Amendment)  is  hereby  replaced  with  the  following:
     2.3 Additional Extension Term. Under the Third Loan Amendment, AL Investors
is  currently eligible for a loan extension from July 1, 2003 to August 31, 2003
in  accordance  with  the  terms  and  conditions  contained  in  the Third Loan
Amendment  (the "Third Extension Period"), and at the end of the Third Extension
Period,  may be eligible for an additional loan extension from September 1, 2003
to  January 2, 2004 in accordance with the terms and conditions contained in the
Third  Loan  Amendment  (the  "Fourth  Extension  Period").  If  AL Investors is
entitled  to  exercise  its  extension  rights  under  the  terms  of the Fourth
Extension  Period,  it  hereby  agrees  that  it  will  do  so.

The  parties  hereby  acknowledge  that AL Investors has exercised its extension
rights for the Third Extension Period, and agree that the term of the Management
Agreement is hereby extended to August 31, 2003 to make it co-terminous with the
Third  Extension  Period. If AL Investors exercises its rights to extend for the
Fourth Extension Period under the Third Loan Amendment, the Management Agreement
shall  be  extended  to  January 2, 2004 to make it co-terminous with the Fourth
Extension  Period.  All  of the terms and provisions of the Management Agreement
(as  modified  by this Amendment) shall continue to be applicable throughout the
extended  Term,  including, without limitation, the obligation to fund Operating
Deficits  and the right to exercise the Purchase Option. If during any Extension
Period  the  Management  Agreement  is terminated for any reason (other than the
failure  to  qualify  for  extension rights for the Fourth Extension Period), at
Owner's  election  in its sole discretion Manager may be required to continue to
provide  management  services  for  the  Facilities  for  up  to  90 days (until
terminated  by  Owner  upon  not less than 30 days prior written notice) and the
management  fee  payable  during  such period shall be 3% of Total Revenues from
each  Facility  then  managed.

     If  AL Investors is not eligible to exercise its extension rights under the
Third  Loan  Amendment  for the Fourth Extension Period, then AL Investors shall
have  the right to terminate the Management Agreement.  However, if AL Investors
does  not  terminate  the Management Agreement and obtains alternative financing
for  the  Facilities  or further modifies the existing Senior Loan to extend the
term,  Manager's  obligation  to  fund  Operating  Deficits shall not exceed the
Operating  Deficits  that  would have been required to be paid during the Fourth
Extension  Period  had  it  been  exercised  or  permitted  to be exercised. For
purposes  of  calculating  Operating  Deficits pursuant to this section, Manager
shall  have  the  benefit  of  any  interest  rate  caps  in effect, but Manager
understands  there  are  none  currently  in  effect.

     If  AL  Investors  elects  to terminate the Management Agreement because it
does  not qualify for the Fourth Extension Period, then Owner shall be deemed to
have notified Manager of its intent to extend beyond such maturity date pursuant
and  subject to the terms of section 2.2 of the Management Agreement. During the
first  90  days  of such extension Owner shall notify Manager of the duration of
the  extension  and  the Facilities to which such extension is applicable, which
extension  may  be  up to 12 months from the date of termination, subject to any




<PAGE>
earlier  termination  rights  contained  in  the  Management  Agreement  or this
Amendment.  The  extension  exercised  pursuant to section 2.2 of the Management
Agreement  in  accordance with this paragraph shall not be subject to the 90 day
prior  notice  requirement  contained in section 2.2 of the Management Agreement
but  shall  be  for  a  Management  Fee  of 5% of gross revenues as set forth in
Section 2.2 and Manager shall not be obligated to fund Operating Deficits during
such  period.

     The  extension  of  the  Purchase  Option  shall continue to be governed by
Section  4.2  of  the  First  Amendment.

     3.     Management  Fee.The  parties  agree  that  in  connection  with  the
            ----------------
extension  of the Senior Loan being exercised in connection with this Agreement,
AL  Investors  has  agreed  to  pay  from funds held by Emeritus on behalf of AL
Investors  (i)  all  extension fees charged by the Senior Lender with respect to
the Third and Fourth Extension Periods (which amounts are $127,509 and $255,019,
respectively),  and  (ii)  all  closing  costs  related  to the Third and Fourth
Extension Periods, including, without limitation, all costs and fees incurred by
the  Senior  lender,  title insurance fees, UCC search costs, attorneys fees and
costs  to  AL  Investors  and  Senior  Housing  Partners  I,  L.P. and all other
reasonable  out  of pocket costs and expenses (collectively, the "Loan Extension
Closing  Costs").  AL  Investors  shall be entitled to recoup all Loan Extension
Closing  Costs  out  of  Operating Profit from the Facilities, without interest,
after payment of a management fee of 3% of Total Revenues from the Facilities to
Emeritus.  To  the  extent  not modified by this Paragraph 3, Paragraph 9 of the
First  Amendment  governing prior loan restructure fees and Paragraph 7.2 of the
Second  Amendment  governing  Loan  Extension Closing Costs shall continue to be
applicable  with  respect  to the Pooled Expenses and the Loan Extension Closing
Costs  related  to  the  prior Senior Loan Restructure and extensions as defined
therein.  To  memorialize the foregoing agreement, Section 7.2 of the Management
Agreement  (as replaced by Paragraph 5 of the First Amendment) is hereby deleted
and  replaced  in  its  entirety  with  the  following:

     7.2  Reimbursement  of  Loan Extension Closing Costs; Additional Management
Fee.  Any  Operating  Profit  in  excess of the Base Management Fee (i.e., 3% of
Total  Revenues)  and  any  Accrued Base Management Fee at the end of each month
shall  be  paid  first  to  Owner  until  Owner has been reimbursed for all Loan
Extension  Closing  Costs  under  this  Amendment and under the Second Amendment
relating  to  the  prior  Senior  Loan Extension, then 50% to Manager and 50% to
Owners  until  Manager  has  received  (i) an additional management fee of 4% of
Total  Revenues  from  all Facilities In the aggregate subject to this Agreement
(the  "Additional  Management  Fee") plus (ii) any Accrued Additional Management
Fee  (as  hereinafter  defined). If there is insufficient Operating Profit after
payment  of  the  Base Management Fee, Accrued Base Management Fee, and any Loan
Extension  Closing  Costs during any month to pay the Additional Management Fee,
the  unpaid  portion  shall accrue and be added to any accrued amounts for prior
months  commencing  January  1,  2002 (the" Accrued Additional Management Fee").
The  Base  Management  Fee,  any  Accrued  Base  Management  Fee, the Additional
Management  Fee and any Accrued Additional Management Fee are sometimes referred
to  herein  as  the  "Management  Fee".

     In  addition,  as  provided  in  the  Second  Amendment, Section 8.2 of the
Management  Agreement  (as  replaced  pursuant  to  paragraph  6  of  the  First
Amendment),  is  hereby  amended  to (i) exclude Capital Improvements from Fixed
Operating  Expenses  for  purposes  of  subsection




<PAGE>
(b)  thereof, and (ii) add a new section (e) as follows: "(e) Any Loan Extension
Closing Costs to be reimbursed to Owner", such that Loan Extension Closing Costs
under this Amendment and the Second Amendment are paid after the Base Management
Fee  and Accrued Base Management Fee, but prior to any Additional Management Fee
or  Accrued  Additional  Management Fee. The following conforming amendments are
hereby  made:  the  prior  subsection (e) of Section 8.2 shall become subsection
(f),  the prior subsection (f) shall become subsection (g), and the reference to
"Section  8.2(e)" in Section 9.9 (as added by the First Amendment) shall instead
refer  to  "Section  8.2(f)".

     Emeritus acknowledges that is has no right to reimbursement for any amounts
deposited  on  account  of Section 4.12 of the Senior Loan loan documents or any
additional  amounts  funded by Manager to cover any deferred Tranche A interest.

     4.     Failure  to  Achieve  Financial  Performance.     As provided in the
            ---------------------------------------------
Second Amendment and extended to this Amendment, new subsection 9.8(d) is hereby
added  as  follows:

     (d)  For  purposes  of calculating Cash Available for Distribution actually
distributed  to Owner pursuant to this Section 9.8, Manager shall be entitled to
include  as  part  of such distribution any amounts reimbursed to Owner for Loan
Extension  Closing Costs pursuant to this Amendment or the Second Amendment, but
such aggregate distribution of Cash Available for Distribution shall not be less
than  $90,000  per  month  as  provided  in  Section  9.8(c).

     5.     Senior Loan.The Senior Loan, as defined in the Management Agreement,
            ------------
is  further  amended  to  acknowledge and include the amended interest rates set
forth  in  the  Third  Loan  Amendment and which are applicable during the Third
Extension  Period  and  the  Fourth  Extension  Period.

     6.  Ratification.The Management Agreement, as amended by this Agreement, is
         -------------
hereby  ratified  and  confirmed.

     7.     Understandings and Agreements.     This Amendment,     together with
            ------------------------------
the  Management  Agreement, constitutes all of the understandings and agreements
between  the  parties  with  respect  to  the  management  of  the  Facilities.

     8.  Headinqs.The headings contained herein are for convenience of reference
         ---------
only  and  are  not intended to define, limit or describe the scope or intent of
any  provision  of  this  Agreement.

     9.  Applicable Law.This Agreement shall be construed and interpreted and be
         ---------------
governed  by  the  laws  of  the  State  of  Washington.




<PAGE>
     IN  WITNESS WHEREOF, the parties have executed and delivered this Agreement
as  of  the  date  and  year  first  above  written.

EMERITUS  MANAGEMENT
--------------------
EMERITUS  MANAGEMENT  LLC,  a  Washington
limited  liability  company

By:  Emeritus  Corporation,
        a  Washington  corporation

By:  /s/  William  M.  Shorten

Name:  William  M.  Shorten
Title:  Director  of  Real  Estate  Finance

EMERITUS  MANAGEMENT  I  LP
---------------------------

EMERITUS  MANAGEMENT  I  LP,  a  Washington  limited  partnership

By:  EM  I,  LLC,  a  Washington  limited  liability  company

By:  Emeritus  Corporation,  a  Washington  corporation

By:  /s/  William  M.  Shorten

Name:  William  M.  Shorten
Title:  Director  of  Real  Estate  Finance

EMERITUS
--------
EMERITUS  CORPORATION,  a  Washington
corporation

By:  /s/  William  M.  Shorten

Name:  William  M.  Shorten
Title:  Director  of  Real  Estate  Finance



<PAGE>
AL  Investors
-------------
AL  Investors  LLC, a Delaware limited liability company, for itself and as sole
managing  member on behalf of each of the Owners, or in the case where the Owner
is  a  limited  partnership,  as  sole  managing member on behalf of the general
partner  thereof

By:   /s/  Norman  L.  Brendan
    ---------------------------

Name:  Norman  L.  Brendan
Title:  Manager

The  undersigned  lenders in connection with the Senior Loan and the Junior Loan
have executed this Agreement for the sole purpose of consenting to the foregoing
Amendment.
GMAC  Commercial  Mortgage  Corporation,
a  California  corporation

By:  /s/  William  E.  Shine

Name:  William  E.  Shine
Title:  EVP

Senior  Housing  Partners  l,  L.P.,  a  Delaware  limited  partnership

By:  /s/  Noah  R.  Levy

Name:  Noah  R.  Levy
Title:  Vice  President






<PAGE>
The  undersigned  has  executed  this  Agreement  for  the  sole  purpose of (i)
acknowledging  and  consenting  to  the foregoing Amendment, (ii) ratifying that
certain  Guaranty  of Management Agreement and Shortfall Funding Agreement dated
December 30, 1998, as amended by Amendment dated March 22, 2001, and ratified in
the  Second Amendment, entered into by Emeritus in favor of AL Investors and the
Facility  Entities  (the  "Guaranty"),  and  (Hi)  confirming  and agreeing that
foregoing  Amendment  does not alter, modify, amend or waive any terms contained
in  the  Guaranty.

Emeritus  Corporation,
a  Washington  corporation

By:  /s/  William  M.  Shorten

Name:  William  M.  Shorten
Title:  Director  of  Real  Estate  Finance






</TEXT>
</DOCUMENT>
