LOAN  NO.  07-0004017
                         SUBORDINATED PROMISSORY NOTE B

$2,905,000     August  26,  2002

1.     PROMISE  TO  PAY.
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     FOR  VALUE  RECEIVED,  EMERITUS  PROPERTIES  XIV, LLC, a Washington limited
liability  company  ("MAKER"),  whose address is 3131 Elliott Avenue, Suite 500,
Seattle,  Washington  98121,  promises  to pay to the order of HELLER HEALTHCARE
FINANCE, INC., a Delaware corporation, and its successors and assigns ("HOLDER")
the  sum  of  Two  Million  Nine  Hundred  Five  Thousand  and  No/100  Dollars
($2,905,000.00),  together with all other amounts added thereto pursuant to this
Note  or  otherwise  payable  to Holder under the Loan Documents (as hereinafter
defined), including, but not limited to, the "EXIT FEE" as defined and set forth
in  the  Loan Agreement (as hereinafter defined) (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 (the "LOAN").
Payments  shall  be made to Holder at GEMSA, File 59229, Los Angeles, California
90074-9229  (or  such other address as Holder may hereafter designate in writing
to  Maker).
Simultaneously  with the execution of this Note (this Note is sometimes referred
to  herein  as  "NOTE  B"),  Maker is executing a Promissory Note A of even date
herewith  payable  to  Holder  ("NOTE  A")  in  the amount of Five Million Three
Hundred  Ninety-Five  Thousand  and  No/100  Dollars  ($5,395,000.00).
The repayment of the Loan evidenced by this Note and Note A is secured by, among
other things, the Mortgage and the Assignment of Leases.  This Note, Note A, the
Mortgage,  the  Assignment  of  Leases, the Loan Agreement of even date herewith
between  Maker  and  Holder  (the  "LOAN  AGREEMENT")  and  any  other documents
evidencing  or securing the Loan or executed in connection therewith (other than
the  "Other Loan Instruments" as defined in the Mortgage), and any modification,
renewal  or  extension of any of the foregoing are collectively called the "LOAN
DOCUMENTS".  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.
2.     INTEREST.
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     So  long  as no Event of Default  (as hereinafter defined) exists, interest
shall  accrue  on the principal balance hereof from time to time outstanding and
Maker  shall  pay interest thereon at a rate equal to the greater of (i) a fixed
rate  per  annum  equal  to six and one-half percent (6.50%) and (ii) a floating
rate  per  annum  equal  to three and eighty-five one-hundredths percent (3.85%)
plus  the  Base  Rate  (the  aggregate rate referred to as the "INTEREST RATE").
"BASE  RATE"  shall mean the rate published each business day in the Wall Street
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Journal  for  notes  maturing  three (3) months after issuance under the caption
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"Money  Rates,  London  Interbank Offered Rates (LIBOR)."  The Interest Rate for
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each  calendar  month shall be fixed based upon the Base Rate published prior to
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and  in effect on the first (1st) business day of such month; provided, however,
the  Interest  Rate  from and including the Closing Date through August 31, 2002
shall  be  fixed  based  upon  the  Base  Rate  in  effect  on  the business day
immediately preceding the Closing Date.  Interest shall be calculated based on a
360  day  year  and  charged  for  the  actual  number  of  days  elapsed.
3.     PAYMENT.
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3.1.     INTEREST.  Maker shall make interest payments monthly in arrears on the
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     first  (1st)  day  of each month commencing October 1, 2002 computed on the
outstanding  principal  balance  of  the  Loan  at  the  Interest  Rate.
3.2.     PRINCIPAL  PAYMENTS.  Maker  shall make the principal payments required
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under  Section  3.2  of  Note  A,  which  payments  shall  also  satisfy Maker's
obligation  to  make  monthly  principal  payments  under this Note prior to the
Maturity  Date.
     This  Note  shall  be  due  and payable on or before August 31, 2005 or any
earlier date on which this Note shall be required to be paid in full, whether by
acceleration  or  otherwise  ("MATURITY  DATE").
4.     PREPAYMENT.
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     Other  than  the  principal  payments required under Section 3.2 of Note A,
Maker  may  not  prepay this Note in full or in part prior to February 29, 2004.
Thereafter, Maker may prepay this Note in full (but not in part) without premium
upon  not  less than thirty (30) days prior written notice to Holder and payment
in  full  of Note A and the Exit Fee (as defined in the Loan Agreement), if any,
then  due  to  Holder.
5.     EXIT  FEE.
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     As additional consideration for entering into the Loan Agreement and making
the  Loan  pursuant thereto, Maker shall pay Holder the Exit Fee, if any, due in
accordance  with  the  Loan  Agreement.
6.     DEFAULT.
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6.1.     EVENTS  OF  DEFAULT.
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     Any  of  the  following  shall  constitute an "EVENT OF DEFAULT" under this
Note:  (a)  failure  to  pay  any  amounts  owed pursuant to this Note or Note A
within  ten  (10) calendar days after such payment is due; or (b) the occurrence
of  any  default  under  any  of  the  other  Loan Documents, including, without
limitation,  Note A, after giving effect to any applicable grace or cure period.
6.2.     REMEDIES.
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     So  long  as  an  Event of Default remains outstanding:  (a) interest shall
accrue  at  a  rate  equal to the Interest Rate plus four percent (4%) per annum
(the  "DEFAULT RATE); (b) Holder may, at its option without further notice (such
notice  being expressly waived) or an opportunity to cure, declare this Note and
Note  A  immediately  due  and payable; and (c) Holder may pursue all rights and
remedies  available  under the Deed of Trust and the Assignment of Leases or any
other Loan Documents.  Holder's rights, remedies and powers, as provided in this
Note,  Note  A  and the other Loan Documents, are cumulative and concurrent, and
may  be pursued singly, successively or together against Maker, any guarantor of
the  Loan,  the security described in the Loan Documents, and any other security
given  at  any  time to secure the payment hereof, all at the sole discretion of
Holder.  Additionally,  Holder  may  resort  to  every  other  right  or  remedy
available  at  law or in equity without first exhausting the rights and remedies
contained  herein,  all in Holder's sole discretion.  Failure of Holder, for any
period  of  time  or  on  more  than  one  occasion,  to  exercise its option to
accelerate  the  Maturity  Date  shall  not  constitute a waiver of the right to
exercise  the  same  at  any time during the continued existence of any Event of
Default  or  any  subsequent  Event  of  Default.
If  any  attorney is engaged:  (i) to collect the Loan or any sums due under the
Loan  Documents,  whether  or not legal proceedings are thereafter instituted by
Holder; (ii) to represent Holder in any bankruptcy, reorganization, receivership
or  other  proceedings  affecting  creditors' rights and involving a claim under
this  Note  or  Note  A;  (iii)  to  protect the liens of the Deed of Trust, the
Assignment  of  Leases or any of the Loan Documents; (iv) to represent Holder in
any  other proceedings whatsoever in connection with the Deed of Trust or any of
the  Loan  Documents including post judgment proceedings to enforce any judgment
related to the Loan Documents; or (v) in connection with seeking an out-of-court
workout  or  settlement  of any of the foregoing, then Maker shall pay to Holder
all  costs, attorneys' fees and expenses in connection therewith, in addition to
all  other  amounts  due  hereunder.
7.     LATE  CHARGE.
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     If  payments  of  principal,  interest  due  under  this Note, or any other
amounts  due  under  the  other  Loan  Documents  are not timely made and remain
overdue  for  a  period  of  ten  (10)  days, Maker, without notice or demand by
Holder,  promptly shall pay an amount ("LATE CHARGE") equal to four percent (4%)
of  each  delinquent  payment.
8.     APPLICABLE  LAW;  SEVERABILITY.
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     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.
9.     WAIVER.
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     Maker,  for itself and all endorsers, guarantors and sureties of this Note,
and  their  respective  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 Holder.  Maker, for itself and
all  endorsers, guarantors and sureties of this Note and their respective heirs,
legal  representatives,  successors  and  assigns,  hereby  consents  to  every
extension of time, renewal, waiver or modification that may be granted by Holder
with respect to the payment or other provisions of this Note, and to the release
of  any  makers,  endorsers,  guarantors  or  sureties, and their 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 Maker or to
any  endorser, guarantor or surety and without affecting the liability of any of
them.
10.     SECURITY,  APPLICATION  OF  PAYMENTS.
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     This  Note  is  secured  by the liens, encumbrances and obligations created
hereby and by the other Loan Documents and the terms and provisions of the other
Loan  Documents  are  hereby  incorporated herein.  Payments will be applied, at
Holder's  option,  first to any fees, expenses or other costs Maker is obligated
to  pay  under  this Note, Note A or the other Loan Documents, second to current
interest  due  on  Note  A, third to any past due interest under Note A, if any,
fourth  to  current  interest  due  on this Note, fifth to any past due interest
payable  under  this Note, sixth to the outstanding principal balance of Note A,
seventh to the outstanding principal balance of this Note and eighth to the Exit
Fee.
11.     MISCELLANEOUS.
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11.1.     AMENDMENTS.
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     This  Note  may  not be amended orally, but only by an amendment in writing
signed  by  Holder.
11.2.     LAWFUL  RATE  OF  INTEREST.
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     In  no  event  whatsoever shall the amount of interest paid or agreed to be
paid  to  Holder  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
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lawful  rate  of  interest  permissible  under  such  law and if, for any reason
whatsoever,  Holder  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  Maker  if such Loan have been paid in full.  Neither Maker nor any
guarantor,  endorser  or  surety  nor their successors or assigns shall have any
action  against  Holder for any damages whatsoever arising out of the payment or
collection  of  any  such  Excess  Interest.
11.3.     CAPTIONS.
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     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.
11.4.     NOTICES.
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     Notices  shall  be  given  under this Note in conformity with the terms and
conditions  of  the  Loan  Agreement.
11.5.     JOINT  AND  SEVERAL.
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     The  obligations  of  Maker  under  this  Note  shall  be joint and several
obligations  of  Maker  and of each Maker, if more than one, and of each Maker's
successors  and  assigns.
11.6.     TIME  OF  ESSENCE.
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     Time  is  of  the  essence  of this Note and the performance of each of the
covenants  and  agreements  contained  herein.
12.     SALE  OF  LOAN.
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     Holder,  at  any  time  and  without  the  consent  of  Maker,  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, Note A, the Deed of
Trust  and the Assignment of Leases and the other Loan Documents, any guaranties
given  in  connection with the Loan and any collateral given to secure the Loan.
13.     CONSENT  TO  JURISDICTION.
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     MAKER  HEREBY  CONSENTS  TO  THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED  WITHIN  THE  COUNTY  OF  COOK, STATE OF ILLINOIS AND IRREVOCABLY AGREES
THAT, SUBJECT TO HOLDER'S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING  TO  THIS  NOTE  OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH
COURTS.  MAKER  EXPRESSLY  SUBMITS  AND  CONSENTS  TO  THE  JURISDICTION  OF THE
AFORESAID  COURTS  AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS.  MAKER HEREBY
WAIVES  PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE
OF  PROCESS  MAY  BE  MADE  UPON  MAKER  BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO MAKER, AT THE ADDRESS SET FORTH IN THIS NOTE AND
SERVICE  SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
14.     JURY  TRIAL  WAIVER.
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     TO THE EXTENT PERMITTED BY LAW, MAKER, AND HOLDER BY ITS ACCEPTANCE OF THIS
NOTE,  HEREBY  WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING  BASED  UPON,  OR RELATED TO, THE SUBJECT MATTER OF THIS NOTE AND THE
BUSINESS  RELATIONSHIP  THAT  IS  BEING  ESTABLISHED.  THIS WAIVER IS KNOWINGLY,
INTENTIONALLY  AND  VOLUNTARILY  MADE  BY  MAKER  AND  BY  HOLDER,  AND  MAKER
ACKNOWLEDGES  THAT  NEITHER HOLDER NOR ANY PERSON ACTING ON BEHALF OF HOLDER HAS
MADE  ANY  REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR HAS
TAKEN  ANY  ACTIONS  WHICH  IN  ANY WAY MODIFY OR NULLIFY ITS EFFECT.  MAKER AND
HOLDER  ACKNOWLEDGE  THAT  THIS  WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS  RELATIONSHIP, THAT MAKER AND HOLDER HAVE ALREADY RELIED ON THIS WAIVER
IN  ENTERING  INTO THIS NOTE AND THAT EACH OF THEM WILL CONTINUE TO RELY ON THIS
WAIVER  IN  THEIR RELATED FUTURE DEALINGS.  MAKER AND HOLDER FURTHER ACKNOWLEDGE
THAT  THEY HAVE BEEN REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED)
IN  THE  SIGNING  OF  THIS  NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT
LEGAL  COUNSEL.

<PAGE>
IN  WITNESS  WHEREOF,  Maker has executed this Note or has caused the same to be
executed by its duly authorized representative, under seal, as of the date first
set  forth  above.
MAKER:

EMERITUS  PROPERTIES  XIV,  LLC,  a  Washington  limited  liability  company

By     Emeritus  Corporation,  a  Washington  corporation,  its  sole  member

By /s/ Raymond R. Brandstrom
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Name  Raymond  R.  Brandstrom
Its        CFO