***PROMISSORY
      NOTE***





**$18,000,000.00**


**February
      28, 2007**  **Seattle,
      Washington**








FOR
      VALUE
      RECEIVED, the undersigned , EMERITUS
      CORPORATION ,
      a
      Washington corporation (“ **Borrower** ”),
      hereby promises to pay to the order of CP
’02
      POOL LLC, a Washington limited liability company (“ **Lender** ”)
      at 600
      University St., Suite 2500, Seattle, Washington 98101, or to
      such other person or at such other place as the holder of this Promissory Note
      (this “ **Note** ”)
      may
      from time to time designate in writing, the principal sum of Eighteen Million
      and No/100 Dollars ($ 18,000,000.00 ) ,
      together with interest on the unpaid balance from time to time and costs, fees
      and expenses payable under this Note (collectively, the “ **Loan** ”)
      as set
      forth below.





***Definitions
      and Interpretation*** ***.*** All
      capitalized terms not otherwise defined herein shall have the meaning ascribed
      to them in the Loan Agreement and such definitions are incorporated herein
      by
      reference.





***Repayment*** .
      Borrower may
      prepay all or any portion of this Note at any time without penalty in accordance
      with Section 4 below, but shall in any event repay this Note as
      follows:





***2.1*** Beginning
      on the first day of the month following the date hereof and continuing on the
      first day of each month thereafter, Borrower shall make monthly accrued interest
      payments.





***2.2*** In
      addition, all principal, interest and all other amounts due under this Note,
      or
      that certain Loan Agreement (herein so called) dated of even date herewith
      (collectively, the “ **Loan
      Documents** ”)
      shall
      be due and payable on such day as Emeritus closes any public offering or
      equivalent capital raising event.




***2.3*** Notwithstanding anything to the contrary contained in the Loan Documents, all
      principal, interest and all other amounts due under the Loan Documents shall
      be
      due and payable on February 28, 2009 (the “ **Maturity
      Date** ”).





All
      payments hereunder shall be first applied to late payment fees, attorneys’ fees
      and costs of collection, then to accrued interest, and then to reduction of
      principal.





***Interest
      Rate*** .
      All
      principal outstanding on the Loan shall bear interest at nine percent (9%)
      per
      annum. If an Event of Default (as defined below) shall have occurred and be
      continuing, interest shall thereupon accrue daily on the aggregate outstanding
      principal balance until such amount is paid in full at twelve percent (12%)
      per
      annum (the “Default Rate”). Notwithstanding
      any other provision of the Loan Agreement or this Note, interest, fees, and
      expenses payable by reason of the indebtedness evidenced hereby shall not exceed
      the maximum amount, if any, permitted by applicable law.










***4.***  ***Prepayment*** .
      Prepayment of the Loan, in whole or in part, shall be permitted at any time,
      without penalty or prepayment fees with thirty (30) days’ prior written notice
      to Lender. Prepayments shall be applied first toward interest and other
      non-principal fees and expenses and second toward reduction of
      principal.





***5.***  ***Late
      Payment Fee*** .
      If
      Borrower fails to pay any sum due under this Note in full when due and such
      failure continues for a period of five (5) days, a late charge of (i) five
      cents
      for each dollar so overdue or (ii) Five Hundred Dollars ($500.00), whichever
      is
      greater.




***6.***  ***Default*** ***.*** The
      occurrence of any of the following shall be an “ **Event
      of Default** ”
under
      this Note: (a) if Borrower fails
      to
      pay any sum due under this Note in full when due; (b) if
      Borrower fails to perform any non-monetary obligation set forth in this Note
      and
      such failure continues for thirty (30) days after written notice thereof from
      Lender; or (c) if any default occurs under the Loan Agreement. Upon
      the
      occurrence of any Event of Default, Lender will have the option to declare
      the
      entire amount of principal and interest due under this Note immediately due
      and
      payable without notice or demand, and Lender may exercise any other remedies
      which may arise at law, in equity, or as described in this Note or the other
      Loan Documents. All reasonable fees, costs and expenses incurred by Lender
      in
      exercising any remedies, in the
      preservation of Lender’s rights and interests in property, in investigating
      Events of Default, and determining relative rights and obligations arising
      under
      the Loan Documents upon the occurrence of an Event of Default, shall become
      a
      part of the indebtedness evidenced by this Note and shall bear interest at
      the
      applicable rate hereunder from time to time.





This
      Note
      shall be governed by, and construed in accordance with the laws of the State
      of
      Washington without reference to choice of law rules.





Lender’s
      failure to exercise its option to accelerate this Note upon a default or to
      exercise any other rights to which Lender may be entitled in the event of a
      default, will not constitute a waiver of the right to exercise such option
      or
      any other rights in the event of any subsequent default, whether of the same
      or
      a different nature.





Borrower
      and all endorsers, guarantors and all persons liable or becoming liable on
      this
      Note waive presentment, protest and demand, notice of protest, demand and
      dishonor and nonpayment of this Note, and consent to any and all renewals and
      extensions in the time of payment hereof, and further agree that, at any time
      and from time to time and without notice, the terms of payment hereof may be
      modified by written agreement of Borrower and Lender without in any way
      affecting the liability of any guarantor or endorser to this Note or any other
      person liable or to become liable with respect to this Note.











*Page* *-* *2* *-*


**ORAL
      AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR
      FROM
      ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
      LAW.**





**EMERITUS
      CORPORATION** ,
      a
      Washington corporation








_/s/
      Raymond R. Brandstrom ___________


Raymond
      R. Brandstrom, Vice President, Finance








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