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PROMISSORY NOTE
 
$31,823,552.29                                                                                                                  New
York, New York
                                                                                                                        January
31, 2011
 
FOR VALUE RECEIVED, the undersigned, ESC-ARBOR PLACE, LLC, a Washington limited
liability company and EMERIMESA, LLC, HC3 FT. MYERS LLC, HC3 ORLANDO LLC and HC3
SUNRISE LLC, each a Delaware limited liability company (each a “Borrower,” and
collectively, the “Borrowers”), hereby jointly and severally promise to pay to
the order of General Electric Capital Corporation (the “Lender”), the principal
sum of THIRTY-ONE MILLION EIGHT HUNDRED TWENTY-THREE THOUSAND FIVE HUNDRED FIFTY
TWO AND 29/100 DOLLARS ($31,823,552.29) (the “Principal Amount”), or, if less,
the aggregate unpaid principal amount of the Loans of the Lender to the
Borrowers, payable at such times and in such amounts as are specified in the
Credit Agreement, as defined below.  Each capitalized term used, but not
otherwise defined herein shall have the meaning ascribed to such term in the
Credit Agreement.
 
Each Borrower jointly and severally promises to pay interest on the unpaid
principal amount of the Loans made by the Lender to the Borrowers from the date
made until such principal amount is paid in full, payable at such times and at
such interest rates as are specified in the Credit Agreement together with all
costs, expenses and fees under or related to the Loans.  Demand, diligence,
presentment, protest and notice of non-payment are hereby waived by each
Borrower.
 
Principal, interest and all costs, expenses and fees are payable in Dollars to
the Administrative Agent, at the relevant address listed below, in immediately
available funds.  The loan number must be referenced on all payments.
 
 
Mail payments to:

 
 
 
GEMSA Loan Services, L.P.

 
File 59229

 
Los Angeles, CA  90074-9229

 
 
Overnight payments to:

 

 
 
Bank of America

 
For GEMSA Loan Services, LP, File 59229

 
1000 W. Temple

 
Los Angeles, CA  90012-9229

 
 
Wire payments to:

 

 
 
Deutsche Bank Trust Co.

 
New York, NY

 
ABA #021001033

 
Wire Acct. # 50-256-477

 
 
 

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This Promissory Note is the Note referred to in, and is entitled to the benefits
of, the Amended, Restated and Consolidated Credit Agreement, dated as of January
31, 2011 (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among the Borrowers, the
financial institutions party thereto as “Lenders”, as such term is defined
therein, General Electric Capital Corporation, as Administrative Agent and GE
Capital Markets, Inc., as sole lead arranger.
 
The Credit Agreement, among other things, (a) provides for the making of the
Loans by the Lenders to the Borrowers in an aggregate amount not to exceed
$31,823,552.29, the indebtedness of the Borrowers resulting from each such Loan
being evidenced by this Note and the Florida Note and (b) contains provisions
for acceleration of the maturity of the unpaid principal amount of this Note
upon the happening of certain stated events and also for prepayments on account
of the principal hereof prior to the maturity hereof upon the terms and
conditions specified therein.
 
This Note is a Loan Document, is entitled to the benefits of the Loan Documents
and is subject to certain provisions of the Credit Agreement, including, without
limitation, Sections 1.5 (Interpretation), 11.14(a) (Submission to Jurisdiction)
and 11.15 (Waiver of Jury Trial) thereof.
 
This Note is a registered obligation, transferable only upon notation in the
Register, and no assignment hereof shall be effective until recorded therein.
 
This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York.
 
THIS NOTE IS GIVEN IN PARTIAL REPLACEMENT OF AND AMENDS, RESTATES, COMBINES AND
CONSOLIDATES CERTAIN INDEBTEDNESS UNDER THE PRIOR LOAN AGREEMENTS. AS SUCH, THIS
NOTE CONTINUES TO EVIDENCE SUCH INDEBTEDNESS AND SHALL NOT CONSTITUTE OR
EVIDENCE PAYMENT FOR OR A NOVATION OF SUCH INDEBTEDNESS.
 
[Signature Pages Follow]
 

 
 
 

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IN WITNESS WHEREOF, each Borrower has caused this Note to be executed and
delivered by its duly authorized officer as of the day and year and at the place
set forth above.
 
BORROWERS:
 
EMERIMESA, LLC, HC3 FT. MYERS LLC, HC3 ORLANDO LLC, HC3 SUNRISE LLC, each a
Delaware limited liability company
                         
 
By:         Emeritus Corporation, a Washington
               corporation, its Manager
 

 
By: /s/ Eric
Mendelsohn                                                              
 
Eric Mendelsohn,
      SVP Corporate Development
 

 
ESC-ARBOR PLACE, LLC, a Washington limited liability company
 

 
By:         Emeritus Corporation, a Washington
               corporation, its Manager
 

 
By: /s/ Eric Mendelsohn 
 
Eric Mendelsohn,
            SVP Corporate Development
 

 
 
 

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