**Loan      Agreement**

**Agreement**
**Lender**
**Borrower**

**RECITALS**

| A. | Lender                has agreed, on the terms and conditions set forth in this Agreement,                to                make to Borrower a loan (the “**Loan**”)                for the purposes of financing Borrower’s acquisition of certain membership                interests (the “Interest”) in Fretus Investors LLC, a Washington limited                liability company (the “Company”) and to provide Borrower with working                capital. |
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**AGREEMENTS**

**1.**
**THE      LOAN**

**2.**
**LOAN      DOCUMENTS**

|   | In                addition to this Agreement, the Loan is evidenced by a promissory                note                made of even date herewith from Borrower to Lender. |
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**3.**
**PAYMENT      TERMS**

**4.**
**PREPAYMENT      PRIVILEGE**

|   | The                Loan may be prepaid, in whole or part, without premium or penalty                in                accordance with the terms and provisions of the                Note. |
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**5.**
**LENDER’S      EXPENSES**

|   | Borrower                agrees to pay on demand reasonable attorneys fees incurred by Lender                in                connection with the Loan and/or the enforcement of Lender’s rights and/or                Borrower’s obligations under the Loan                Documents. |
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**6.**
**DEFAULT**

|   | A                breach by Borrower of the terms of this Agreement that continues                beyond                the expiration of any applicable grace, notice, or cure period set                forth                in the Note shall be a default hereunder and under the Note, and                shall                entitle Lender to exercise any and all remedies available to it under                the                Loan Documents. |
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**7.**
**GOVERNING      LAW**

|   | This                Agreement and the commitments thereunder shall be governed in all                respects                by the internal laws of the State of Washington applicable to contracts                executed and to be performed in such                state. |
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**ORAL      AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR FORBEAR FROM      ENFORCING REPAYMENT OF A DEBT ARE UNENFORCEABLE UNDER WASHINGTON      LAW.**

**BORROWER**
**:**

**EMERITUS      CORPORATION, **
** **

**LENDER**
**:**

**CP      ’02 POOL LLC, **

** **