PROMISSORY
NOTE





$30,000,000


March
31, 2008


Newport
Beach, California








1.           Principal.





For value
received, in installments as herein provided,EMERITUS CORPORATION, a
Washington corporation (as “Maker”), promises to pay to
the order of NATIONWIDE HEALTH
PROPERTIES, INC., a Maryland corporation (as “Holder”), by wire transfer or
ACH (Automated Clearing House) only, the principal sum of Thirty Million Dollars
($30,000,000)(the
“Loan”), or so much
thereof as shall from time to time be outstanding hereunder, together with
accrued interest from the date hereof on the unpaid principal at a per annum
rate equal to Seven and one-quarter percent (7.25%) (the “Basic Interest”).





2.
            Disbursements.





Concurrently
with Maker’s execution and delivery of this Note, the principal amount of One
Million Nine Hundred Eighty-Two Thousand Seven Hundred Seventy-Six and 84/100ths
Dollars ($1,982,776.84) shall be disbursed by Holder on behalf of Maker directly
to the payment of the prepayment premiums due from Maker under the Purchase
Agreement (as hereinafter defined) in connection with the payoff of certain
indebtedness encumbering the facilities known as Loyalton of Cape May and
Loyalton of Joliet (the “Initial
Advance”).  Provided that there is no Event of Default existing
under this Note, Holder shall disburse the remaining principal amount of
Twenty-Eight Million Seventeen Thousand Two Hundred Twenty-Three and 16/100ths
Dollars ($28,017,223.16) to Maker on March 31, 2008 in accordance with the wire
transfer instructions delivered by Maker to Holder (the “Supplemental
Advance”).





3.
            Maturity
      Date.





(a)           The
unpaid principal balance hereof, together with all unpaid interest accrued
thereon, and all other amounts payable by Maker hereunder, shall be due and
payable on the fourth anniversary of the Closing Date (the “Maturity Date”).





(b)           In
the event that the Closing has not occurred by April 4, 2008, the Supplemental
Advance, together with any accrued and unpaid interest thereon, shall be due and
payable by Maker to Holder within one (1) business day of Holder’s written
demand therefore (the “Supplemental Advance Payment
Date”); provided, however, so long as the Closing occurs on or before
June 30, 2008, Holder shall be required to re-advance the Supplemental Advance
to Maker on a date specified by written notice from Maker to Holder, which date
shall be no later than one (1) Business Day prior to the agreed upon closing
date.


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(c)           In
the event that the Closing has not occurred by June 30, 2008, the Initial
Advance, together with all unpaid interest accrued thereon, and all other
amounts payable by Maker hereunder, shall be due and payable by Maker to Holder
within one (1) business day of Holder’s written demand therefor, after which
neither Maker nor Holder shall have any further rights or obligations hereunder
(the “Initial Advance Payment
Date”).





(d)           As
used herein, “Purchase
Agreement” means that certain Purchase and Sale Agreement dated as of
February 6, 2008 by and among Maker, as buyer, and Holder and its affiliates, as
seller, as amended by that certain First Amendment to Purchase and Sale
Agreement dated as of March 25, 2008.  As used herein, “Closing” means the closing of
the purchase and sale transaction contemplated under the Purchase Agreement. As
used herein, “Closing
Date” means the date on which the Closing occurs.





(e)           If
any of the Maturity Date, the Initial Advance Payment Date or the Supplemental
Advance Payment Date should fall on a day that is not a Business Day, payment of
the outstanding principal shall be made on the next succeeding Business Day and
such extension of time shall be included in computing any interest in respect of
such payment.





4.
            Prepayment.





Provided
that Maker has provided Holder with not less than one hundred eighty (180) nor
more than two hundred forty (240) days’ prior written notice of its election to
prepay principal amounts outstanding under this Note, Maker shall have the right
prepay the Loan, in whole or in part, together with all accrued but unpaid
interest and other sums owed to Holder hereunder, at any time prior to the
Maturity Date. The provisions of this Section 4 shall not apply with respect to
any prepayment of the Initial Advance or the Supplemental Advance on the Initial
Advance Payment Date or the Supplemental Advance Payment Date,
respectively,  in accordance with Section 3 hereof.





5.
            Payments
      of Principal and Interest.





(a)
            Commencing
      on the date hereof and continuing through the Maturity Date, the unpaid
      principal balance of the Loan shall accrue Basic
  Interest.





(b)
            Commencing
      on the first day of the first month after the Closing Date and continuing
      on the 1st
      day of each calendar month thereafter until the Maturity Date, Maker shall
      make monthly payments of accrued Basic Interest
  only.





(c)
            Except
      as otherwise provided in Section 3, the unpaid principal amount of this
      Note, together with all accrued and unpaid interest thereon, shall be all
      due and payable on the Maturity
Date.





(d)
            All
      payments of principal and interest due hereunder shall be made without
      deduction of any present and future taxes, levies, imposts, deductions,
      charges or withholdings from or on payments due from Maker (excluding
      taxation of the overall


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net
      income of Holder), which amounts shall be paid by Maker.  Maker
      will pay the amounts necessary such that the gross amount of the principal
      and interest received by Holder is not less than that required by this
      Note.  All stamp and documentary taxes, if any, shall be paid by
      Maker.  If, notwithstanding the foregoing, Holder pays such
      taxes, Maker will reimburse Holder for the amount paid.  Maker
      will furnish Holder official tax  re­ceipts or other
      evidence of payment of all taxes.





(e)
            Throughout
      the term of this Note, interest shall be calculated on the basis of a
      360-day year with twelve (12) thirty day months.  If any payment
      of interest to be made by Maker hereunder shall become due on a day which
      is not a Business Day, such payment shall be made on the next succeeding
      Business Day and such extension of time shall be included in computing any
      interest in respect of such
payment.





6.
            Lawful
      Money.





Principal
and interest are payable in lawful money of the United States of
America.





7.
            Applications
      of Payments; Late Charges.





(a)
            Any
      payments received by Holder pursuant to the terms hereof shall be applied
      first to sums, other than principal and interest, due Holder pursuant to
      this Note, next to the payment of all interest accrued to the date of such
      payment, and the balance, if any, to the payment of
    principal.





(b)
            Maker
      acknowledges that the late payment of any amount due hereunder will cause
      Holder to lose the use of such money and incur costs and expenses not
      contemplated under this Note, including, without limitation,
      administrative and collection costs and processing and accounting
      expenses, the exact amount of which is extremely difficult to
      ascertain.  Therefore, (a) if any installment of interest and/or
      principal is not received by Holder within five (5) calendar days after
      the due date for such payment, then, in addition to the remedies conferred
      upon Holder pursuant to Paragraph 10
      hereof, Maker shall thereafter pay to Holder on demand a late charge equal
      to five percent (5%) of the amount of all installments of interest and/or
      principal due under this Note and not paid on the due date; and (b) if any
      installment of interest and/or principal is not received by Holder within
      ten (10) calendar days after the due date thereof, then the amount due and
      unpaid shall bear interest at the lesser of the highest annual rate which
      may lawfully be charged and collected under applicable law on the
      obligation evidenced by this Note or an annual rate which shall be four
      percent (4%) higher than the Basic Interest (the “Agreed Rate”), computed
      from the date on which the amount was due and payable until
      paid.





8.
            Event
      of Default.





The
occurrence of any of the following shall be deemed to be an event of default
(“Event of Default”)
hereunder:


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(a)
            default
      in the payment of principal or interest (i) when due on the Maturity Date,
      or (ii) with respect to any other payment due, within five (5) days after
      the due date pursuant to the terms hereof;
or





(b)
            the
      occurrence of an Event of Default under that certain Second Amended and
      Restated Loan Agreement dated as of March 3, 2005 by and between Maker, as
      borrower, and Holder, as lender (as successor to Healthcare Realty Trust
      Incorporated, a Maryland corporation), as subsequently amended, pursuant
      to the terms and conditions of which a loan in the principal amount of
      Twenty-One Million Four Hundred Twenty-Six Thousand Dollars ($21,426,000)
      is due from Maker to Holder; or





(c)
            the
      occurrence of an Event of Default under that certain Master Lease dated as
      of October 2, 2006 by and among Holder and its affiliates, as landlord,
      and Summerville at Camelot Place LLC, a Delaware limited liability
      company, Summerville at Hillen Vale LLC, a Delaware limited liability
      company, Summerville at Lakeview LLC, a Delaware limited liability
      company, Summerville at Ridgewood Gardens LLC, a Delaware limited
      liability company, Summerville at North Hills LLC, a Delaware limited
      liability company, and The Inn at Medina LLC, a Delaware limited liability
      company, collectively, as tenant; as amended by (i) that certain First
      Amendment to Master Lease dated as of December 1, 2006, (ii) that certain
      Second Amendment to Master Lease dated as of January 2, 2007, and (iii)
      that certain Third Amendment to Master Lease dated as of March 3, 2008;
      or





(d)
            the
      occurrence, prior to the Closing Date, of a material default by Maker of
      its obligations under the Purchase Agreement and the expiration of any
      applicable notice and/or cure period
thereunder.





9.
            Remedies.





Upon the
occurrence of an Event of Default and the expiration of any applicable cure
period, then at the option of Holder, the entire outstanding balance of
principal together with all accrued interest thereon shall, without demand or
notice, immediately become due and payable.  Upon the occurrence of an
Event of Default (beyond any applicable notice and/or cure period provided
herein, as applicable, and so long as such Event of Default shall continue), the
entire outstanding balance of principal together with all unpaid accrued
interest shall bear interest at the Agreed Rate.  No delay or omission
on the part of the Holder hereof in exercising any right under this Note shall
operate as a waiver of such right.





10.
            Waiver;
      Time is of the Essence.





Maker
hereby waives diligence, presentment, protest and demand, notice of protest,
dishonor and nonpayment of this Note, and expressly agrees that, without in any
way affecting the liability of Maker hereunder, Holder may extend any maturity
date or the time for payment


4


of any
installment due hereunder, accept additional security, release any party liable
hereunder and release any security now or hereafter securing this
Note.  Maker further waives, to the full extent permitted by law, the
right to plead any and all statutes of limitations as a defense to any demand on
this Note, or on any mortgage, security agreement, lease assignment, guaranty or
other agreement now or hereafter securing this Note.  Time is of the
essence in the payment of all obligations due under this Note.





11.
            Notice.





Any
notice, request or other communication to be given by any party hereunder shall
be in writing and shall be sent by registered or certified mail, postage
prepaid, by overnight courier guaranteeing overnight delivery or by facsimile
transmission (if confirmed verbally or in writing by mail as aforesaid), to the
following address:





If to
      Maker:
            Emeritus
      Corporation


3131
      Elliott Avenue, Suite 500


Seattle,
      Washington  98121


Attention:  Mr.
Eric Mendelsohn


Senior VP -
Corporate Development


Facsimile:  (206)
357-7388





With
      a copy to:
            The
      Nathanson Group PLLC


One
      Union Square


600
      University Street, Suite 2000


Seattle,
      Washington  98101-1195


Attention:  Randi
S. Nathanson, Esq.


Facsimile:  (206)
623-1738





If to
Holder:                                                      Nationwide
Health Properties, Inc.


610 Newport Center Drive, Suite
1150


Newport Beach,
California  92660


Attn:  President and
CFO


Facsimile:  (949)
759-6876





With a copy
to:                                           Sherry
Meyerhoff Hanson & Crance LLP


610 Newport Center Drive, Suite
1200


Newport Beach,
California  92660


Attn:  Kevin L. Sherry,
Esq.


Facsimile:  (949)
719-1212





Notice
shall be deemed given on actual receipt or refusal of receipt regardless of the
method of delivery used.  Each of such parties shall have the right to
designate from time to time another address or facsimile number for purposes of
this Note by written notice to the other parties sent in the manner set forth in
this Paragraph 11.


5


12.           Attorneys’
Fees.





If this
Note is not paid when due on the Maturity Date or if any other Event of Default
occurs, Maker promises to pay all costs of enforcement and collection, including
but not limited to, reasonable attorneys’ fees in connection with any action or
proceeding brought to enforce the provisions hereof.





13.
            Severability.





Every
provision of this Note is intended to be severable.  In the event any
term or provision hereof is declared by a court of competent jurisdiction, to be
illegal or invalid for any reason whatsoever, such illegality or invalidity
shall not affect the balance of the terms and provisions hereof, which terms and
provi­sions shall remain binding and enforceable.





14.
            Interest
      Rate Limitation.





Holder
and Maker stipulate and agree that none of the terms and provisions contained
herein or in any of the loan instruments shall ever be construed to create a
contract for the use, forbearance or detention of money requiring payment of
interest or finance charge at a rate in excess of the maximum interest rate or
finance charge permitted to be charged by the laws of the State of
California.  In such event, if any Holder of this Note shall collect
monies which are deemed to constitute interest or finance charge which would
otherwise increase the effective interest rate or finance charge on this Note to
a rate in excess of the maximum rate permitted to be charged by the laws of the
State of California, all such sums deemed to constitute interest or finance
charge in excess of such maximum rate shall, at the option of Holder, be
credited to the payment of the sums due hereunder or returned to
Maker.





15.
            Number
      and Gender.





In this
Note the singular shall include the plural and the masculine shall include the
feminine and neuter gender, and vice versa, if the context so
requires.





16.
            Headings.





Headings
at the beginning of each numbered Paragraph of this Note are intended solely for
convenience and are not to be deemed or construed to be a part of this
Note.





17.
            Choice
      of Law.





THIS NOTE
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES.


6


18.           Waiver
of Jury Trial.





MAKER AND HOLDER, BY ITS ACCEPTANCE
OF THIS NOTE, EACH HEREBY AGREESTO WAIVE ITS RIGHTS TO A JURY TRIAL
IN ANY ACTION, PROCEEDINGS OR COUNTERCLAIM BROUGHT BY THE OTHER PARTY HERETO IN
CONNECTION WITH ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED
WITH THIS NOTE.  The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including without limitation
contract claims, tort claims, breach of duty claims, and all other common law
and statutory claims. Each of  Maker and Holder acknowledges that this
waiver is a material induce­ment for the making of the loan evidenced by
this Note by Holder and the execution and delivery of this Note by
Maker.  Maker and Holder will continue to rely on this waiver in their
related future dealings.  Each of  Maker and Holder further
warrants and represents that it has reviewed this waiver with its legal counsel,
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel.  THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS NOTE.  In the event of litigation, this waiver may be
filed as a written consent to a trial by the court.








[SIGNATURE
PAGE TO FOLLOW]


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IN
WITNESS WHEREOF, Maker has executed and delivered this Note as of the date first
above written.





“MAKER”





EMERITUS CORPORATION,


a
Washington corporation








By:           /s/ Eric
Mendelsohn


Name:                      Eric
Mendelsohn


Title:                      SVP Corporate
Dvelopment





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