**Loan
      No. 07-0004235**




**PROMISSORY
      NOTE**




$15,930,000 ______________,
      2005




|**1.** | **Promise
              to Pay**.
|------ | ---------------------------------



FOR
      VALUE
      RECEIVED, EMERITUS PROPERTIES-ARKANSAS, LLC, a Delaware limited liability
      company (" **Borrower** ")
      whose
      address is c/o Emeritus Corporation, 3131 Elliott Avenue, Suite 500, Seattle,
      Washington 98121 promises to pay to the order of GENERAL
      ELECTRIC CAPITAL CORPORATION, INC .,
      a
      Delaware corporation, and its successors and assigns (in its individual
      capacity, " **GECC** ",
      and as
      agent for Lenders (as defined below), **** " **Agent** "),
      the
      sum of Fifteen Million Nine Hundred Thirty Thousand and No/100 Dollars
      ($15,930,000), together with all other amounts added thereto pursuant to this
      Note or otherwise payable to GECC under the Loan Documents (as hereinafter
      defined), including, but not limited to, any Prepayment Premium **** as
      defined and set forth in the Loan Agreement of even date herewith among GECC
      and
      the other financial institutions who are or hereafter become parties to the
      Loan
      Agreement (together with GECC, collectively or individual, as the context may
      require, " **Lender** "),
      Borrower and Agent (as amended, modified, supplemented or restated from time
      to
      time, the " **Loan
      Agreement** ")
      (or so
      much thereof as may from time to time be outstanding), together with interest
      thereon as hereinafter set forth, all payable in lawful money of the United
      States of America. Payments shall be made at the offices of Agent at GEMSA,
      File
      59229, Los Angeles, California 90074-9229 (or such other address as Agent may
      hereafter designate in writing to Borrower). Except as otherwise provided
      herein, capitalized terms used in this Note shall have the same meanings as
      are
      assigned to such terms in the Loan Agreement.




This
      Note
      is evidenced and secured by, among other things, the Loan Documents and
      those **** certain
      Security Documents encumbering, among other things, the Projects. ". Reference
      is hereby made to the Loan Agreement for a statement of all of the terms and
      conditions under which the Loan evidenced hereby is made and to be
      repaid.






|**2.** | **Payments**.
|------ | -------------



The
      principal amount of the indebtedness evidenced hereby shall be payable in the
      amounts and on the dates specified in the Loan Agreement, the terms of which
      are
      hereby incorporated herein by reference. Interest thereon shall be paid until
      such principal amount is paid in full at such interest rates and at such times,
      and pursuant to such calculations, as are specified in the Loan Agreement.
      If
      any payment on this Note becomes due and payable on a day other than a Business
      Day, the maturity thereof shall be extended to the next succeeding Business
      Day,
      and, with respect to payments of principal, interest thereon shall be payable
      at
      the then applicable rate during such extension. Payments will be applied in
      accordance with the terms of the Loan Agreement. Borrower may prepay or defease
      this Note, if at all, only to the







extent
      permitted by and in accordance with the provisions of the Loan Agreement,
      including the payment of any applicable Prepayment Premium then due.




|**3.** | **Default**.
|------ | ------------



Upon
      and
      after the occurrence of and during the continuance of any Event of Default,
      this
      Note may, as provided in the Loan Agreement, and without demand, notice or
      legal
      process of any kind, be declared, and immediately shall become, due and payable.




|**4.** | **APPLICABLE
              LAW; SEVERABILITY**.
|------ | -----------------------------------------------



THIS
      NOTE
      SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
      THE
      INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAW
      PRINCIPLES. THE INVALIDITY, ILLEGALITY OR UNENFORCEABILITY OF ANY PROVISION
      OF
      THIS NOTE SHALL NOT AFFECT OR IMPAIR THE VALIDITY, LEGALITY OR ENFORCEABILITY
      OF
      THE REMAINDER OF THIS NOTE, AND TO THIS END, THE PROVISIONS OF THIS NOTE ARE
      DECLARED TO BE SEVERABLE.




|**5.** | **Waiver**.
|------ | -----------



Borrower,
      for itself and all endorsers, guarantors and sureties of this Note, and their
      heirs, legal representatives, successors and assigns, hereby waives presentment
      for payment, demand, notice of nonpayment, notice of dishonor, protest of any
      dishonor, notice of protest and protest of this Note, and all other notices
      in
      connection with the delivery, acceptance, performance, default or enforcement
      of
      the payment of this Note, and agrees that their respective liability shall
      be
      unconditional and without regard to the liability of any other party and shall
      not be in any manner affected by any indulgence, extension of time, renewal,
      waiver or modification granted or consented to by Agent. Borrower, for itself
      and all endorsers, guarantors and sureties of this Note, including but not
      limited to Guarantor,
      and their heirs, legal representatives, successors and assigns, hereby consents
      to every extension of time, renewal, waiver or modification that may be granted
      by Agent with respect to the payment or other provisions of this Note, and
      to
      the release of any makers, endorsers, guarantors or sureties, and their
      respective heirs, legal representatives, successors and assigns, and of any
      collateral given to secure the payment hereof, or any part hereof, with or
      without substitution, and agrees that additional makers, endorsers, guarantors
      or sureties and their heirs, legal representatives, successors and assigns,
      may
      become parties hereto without notice to Borrower or to any endorser, guarantor
      or surety and without affecting the liability of any of them.




|**6.** | **Miscellaneous**.
|------ | ------------------



**6.1.**  **Amendments** .




This
      Note
      may not be terminated or amended orally, but only by a termination or amendment
      in writing signed by Agent.




**6.2.**  **Lawful
      Rate of Interest** .




In
      no
      event whatsoever shall the amount of interest paid or agreed to be paid pursuant
      to this Note or any of the Loan Documents exceed the highest lawful rate of
      interest permissible under applicable law. If, from any circumstances
      whatsoever, fulfillment of any provision of this Note and the other Loan
      Documents shall involve exceeding the lawful rate of interest which a court
      of
      competent jurisdiction may deem applicable hereto (" **Excess
      Interest** "),
      then ipso
      facto ,
      the
      obligation to be fulfilled shall be reduced to the highest lawful rate of
      interest permissible under such law and if, for any reason whatsoever, Agent
      or
      Lender shall receive, as interest, an amount which would be deemed unlawful
      under such applicable law, such interest shall be applied to the Loan (whether
      or not due and payable), and not to the payment of interest, or refunded to
      Borrower if such Loan has been paid in full. None of Borrower, Guarantor, nor
      any guarantor, endorser or surety nor their heirs, legal representatives,
      successors or assigns shall have any action against Agent or Lender for any
      damages whatsoever arising out of the payment or collection of any such Excess
      Interest.




**6.3.**  **Captions** .




The
      captions of the Paragraphs of this Note are for convenience of reference only
      and shall not be deemed to modify, explain, enlarge or restrict any of the
      provisions hereof.




**6.4.**  **Notices** .




Notices
      shall be given under this Note in conformity with the terms and conditions
      of
      the Loan Agreement.




**6.5.**  **Time
      of Essence** .




Time
      is
      of the essence of this Note and the performance of each of the covenants and
      agreements contained herein.




|**7.** | **Sale
              of Loan**.
|------ | -------------------------------



Subject
      to the terms and conditions set forth in the Loan Agreement, Agent
      or
      Lender, at any time and without the consent of Borrower, may grant
      participations in or sell, transfer, assign and convey all or any portion of
      its
      right, title and interest in and to the Loan, this Note, the Security Documents
      and the other Loan Documents, any guaranties given in connection with the Loan
      and any collateral given to secure the Loan.







IN
      WITNESS WHEREOF, Borrower has executed this Senior Note or has caused the same
      to be executed by its duly authorized representatives as of the date first
      set
      forth above.




**BORROWER**:
              
              **EMERITUS
                PROPERTIES-ARKANSAS, LLC**,
                a
                Delaware limited liability company
              
              By:EMERITUS
                CORPORATION, a Washington corporation, its sole member
              
              By:
                /s/ Raymond R. Brandstrom
              Name:Raymond R. Brandstrom
              Its:Vice
                President of Finance