FIRST AMENDMENT TO UNDERTAHING AND INDEMNITY AGREEMENT THIS AGREEMENT is made and entered into effective as of the 1st day of January, 1997 (the "Effective Date") by and between Painted Post Partners, as successor in interest to P. Jules Patt and...

   FIRST AMENDMENT TO UNDERTAHING AND INDEMNITY
                     AGREEMENT
     
     THIS AGREEMENT is made and entered into
effective as of the 1st day of January, 1997 (the
"Effective Date") by and between Painted Post
Partners, as successor in interest to P. Xxxxx
Xxxx and Xxxxxx Xxxx (the "Partnership") and
Emeritus Corporation (the "Emeritus").
                         
                     RECITALS
     
     A. The Partnership and Emeritus are parties
to that Undertaking and Indemnity Agreement dated
October 23,1995 (the "Indemnity Agreement")
pursuant to which Emeritus agreed to provide
certain indemnities to the Partnership in
connection with the operation of that assisted
living facility located at I 00 Xxxxxxxxx Xxxxx,
Xxxxxxx Xxxx, Xxx Xxxx and known as Green Xxxxxxx-
Painted Post (the "Facility").
     
     B. The Partnership has determined that it is
appropriate to provide Emeritus with certain
consideration in exchange for the risks and
obligations assumed by Emeritus under the
Indemnity Agreement.
     
     C.  The Indemnity Agreement provides that it
may be amended by written instrument signed by the
parties thereto.
     
     NOW, THEREFORE, in consideration of the
foregoing premises and the mutual covenants of the
parties set forth herein, IT IS HEREBY AGREED AS
FOLLOWS:
                         
                     AGREEMENT
     
     
     1. Paragraph I is hereby amended to insert
     the following language at the end thereof:
     
     In consideration for the obligations assumed
     by Emeritus hereunder, the Partnership does
     hereby agree to remit to Emeritus from time
     to time as and when determined appropriate by
     the Partnership's partners an amount equal to
     the net profits (as determined in accordance
     with generally accepted accounting
     principles), if any, of the Facility. The
     Partnership and Emeritus acknowledge and


     
     agree that nothing herein shall be construed
     as a representation or warranty by the
     Partnership that the Facility will generate
     any or a specified amount of net profits at
     any time during the term of this Agreement.
     
     2.  Except as specifically set forth herein,
the Indemnity Agreement shall remain in full force
and effect as originally executed by the parties
thereto.
     
     IN WITNESS WHEREOF, the parties hereby
execute this Agreement as of the day and year
first set forth above.
     
     
                    PAINTED POST PARTNERS
     
                    By:  /s/ Xxxxxxx X. Xxxxxxxxxx
                        --------------------------
                    Its:  Partner
     
                    By:  /s/ Xxxxxx X. Xxxx
                        --------------------------
                    Its:  Partner
     
     
                    EMERITUS CORPORATION
     
                    By:  Xxxxxxx X. Xxxxxxxxxx
                         -------------------------
                    Its:  President