**PROMISSORY
      NOTE**




$10,800,000.00 June
      30,
      2005


Seattle,
      Washington




FOR
      VALUE
      RECEIVED, EMERITUS CORPORATION, a corporation organized under the laws of the
      State of Washington (“Borrower”), shall pay to the order of HEALTHCARE REALTY
      TRUST INCORPORATED, a corporation organized under the laws of the State of
      Maryland (“Lender”), the principal sum of Ten Million Eight Hundred Thousand and
      00/100 Dollars ($10,800,000.00), with interest on so much thereof as shall
      from
      time to time be outstanding at the rate of interest set forth below, until
      fully
      paid. This Note is given pursuant to that certain Loan Agreement of even date
      herewith among Borrower and Lender, as amended from time to time (the “Loan
      Agreement”) and is subject to the provisions thereof. The definitions in the
      Loan Agreement shall be applicable to any capitalized terms herein that are
      not
      otherwise defined.




1.  Definitions.




“Business
      Day” means any day which is not a Saturday or Sunday or a public holiday under
      the laws of the United States of America or the State of
      Washington.




“Closing
      Date” means the date of this Note.




“Collateral
      Document” or “Collateral Documents” means individually and collectively the
      Mortgage and any other document providing security for or guarantee of repayment
      of this Note.




“Commencement
      Date” means [i] the Closing Date if the Closing Date occurs on the first day of
      a month or [ii] the first day of the month after the Closing Date if the Closing
      Date occurs on any day other than the first day of the month.




“Default
      Rate” means 12.50%, subject to the provisions of §21.




“Event
      of
      Default” has the meaning set forth in §8.




“Lease”
      has the meaning set forth in the Loan Agreement.




“Loan”
      means all indebtedness evidenced by this Note or otherwise due pursuant to
      the
      Loan Agreement or the Collateral Document.




“Maturity
      Date” means June 30, 2008.




“Mortgage”
      means the Leasehold Mortgage/Deed of Trust, Security Agreement, Assignment
      of
      Leases and Rents, Financing Statement and Fixture Filing of even date herewith
      granted by Borrower to secure the indebtedness evidenced by this Note.




“State”
      means the State of Washington.


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2.  Interest
      Rate.




(a)  Initial
      Rate. Interest
      shall accrue on the principal amount outstanding hereunder at the rate of 10%
      per annum.




(b)  Default
      Rate. After
      the occurrence and during the continuance of an Event of Default, Borrower
      shall
      pay interest on this Note, and on any judgment on this Note, at the Default
      Rate.




(c)  Computation
      Method. All
      interest rates shall be calculated based on the actual number of days elapsed
      over a 365-day year (365/365 method).




3.  Payments.




(a)  Commencing
      on the Commencement Date and on the first day of each month thereafter, Borrower
      shall make monthly payments of interest only in arrears sufficient to pay all
      interest accrued pursuant to §2 hereof; provided, however, if the Commencement
      Date is the first day of a month then, the first payment shall not be due until
      the first day of the first month after the Commencement Date.




(b)On
      the
      Maturity Date, Borrower shall make a balloon payment equal to the outstanding
      balance of this Note including the outstanding principal balance, all accrued
      and unpaid interest, and all charges, expenses and other amounts payable by
      Borrower to Lender hereunder.




4.  Method
      and Place of Payment. Borrower
      shall make all payments on this Note to Healthcare Realty Trust Incorporated,
      P.O. Box 100894, Atlanta, GA 30384-0894, or at such other place as the holder
      hereof may designate in writing to Borrower in accordance with the provisions
      of
      Section 17, or by wire transfer as hereinafter provided. The failure of Lender
      to provide such written notice to Borrower will not relieve Borrower of its
      obligations under this Note. Borrower shall make all payments in lawful money
      of
      the United States of America, and may make payments by wire transfer of
      immediately available funds to :




Name:    Healthcare
      Realty Trust Incorporated





Bank:    Bank
      of
      America, N.A.





ABA
      NO.:   111-000-012





Account
      No.:   3751
      1997
      46





Attention:   Rick
      Langreck (615) 269-8175


2





Address:   Bank
      of
      America, N.A.


901
      Main
      Street


Dallas,
      TX 75202





Bank
      of
      America, N.A.


TX1-099-03-04


PO
      Box
      831153


Dallas,
      TX 75283







5.  Prepayment. Borrower
      shall have the privilege of prepaying this Note in whole or in part at any
      time
      upon at least 9 months prior written notice to Lender; provided, however, no
      such prepayment shall be permitted prior to January 1, 2007 without the prior
      written consent of Lender, which consent may be withheld in the sole discretion
      of Lender.




6.  Late
      Charge. Borrower
      acknowledges that any default in any payment due under this Note will result
      in
      loss and additional expense to Lender in handling such delinquent payments
      and
      meeting Lender’s other financial obligations. Because such loss and additional
      expense is extremely difficult and impractical to ascertain, Borrower agrees
      that if any payment hereunder (other than the final payment on maturity) is
      not
      paid within 10 days after the due date, Borrower shall pay, as a reasonable
      estimate of such loss and expense, and in addition to other amounts due
      hereunder, a late charge equal to the lesser of [i] 5% of the amount of the
      overdue payment, or [ii] the maximum amount permitted by applicable
      law.




7.  Application
      of Payments. Unless
      Lender elects otherwise, in its sole discretion, all payments and other amounts
      received by Lender pursuant to this Note shall be credited as follows: [i]
      first
      to any charges, costs, expenses and fees payable by Borrower under this Note,
      the Loan Agreement, the Mortgage, or incurred by Lender for the protection
      of
      any collateral securing the payment of this Note, if not paid by Borrower by
      the
      due date after the expiration of any applicable grace period; [ii] second to
      interest on the foregoing amounts at the Default Rate from the due date or
      date
      of payment by Lender, as the case may be; [iii] third to accrued but unpaid
      interest on this Note; [iv] fourth, to the principal amount outstanding; and
      [v]
      the balance, if any, to Borrower.




8.  Default. Failure
      to pay any amount owed under this Note within ten (10) days after such payment
      is due shall constitute an Event of Default hereunder. The occurrence of an
      Event of Default under the Loan Agreement or Mortgage shall be an Event of
      Default hereunder.




9.  Acceleration. Upon the
      occurrence of any Event of Default, in addition to all other remedies under
      the
      Loan Agreement, Mortgage, any other security for or guarantee of this Note,
      and
      at law or in equity, at the option of Lender [i] the outstanding principal
      balance of this Note and all accrued and unpaid interest thereon


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and
      all
      other amounts payable by Borrower to Lender shall be immediately due and
      payable, and [ii] all such amounts shall bear interest at the Default Rate
      from
      the date of the Event of Default until paid. Lender may exercise either or
      both
      options without notice or demand of any kind.




10.  Governing
      Law. This
      Note shall be governed by and construed in accordance with the internal laws
      of
      the State, without giving effect to the conflict of laws rules
      thereof.




11.  Time
      is of the Essence. Time is
      of the essence in the payment of this Note. All grace periods in the Loan
      Agreement and any Collateral Document that apply to a default shall run
      concurrently.




12.  Holidays. If any
      installment of this Note becomes due on a day which is not a Business Day,
      Borrower may pay the installment on the next succeeding Business
      Day.




13.  Waivers;
      Cumulative Rights and Remedies. None of
      the following shall be a course of dealing, estoppel, waiver or the like on
      which Borrower, Lender or any party to any Collateral Document may rely: [i]
      Lender’s acceptance of one or more late or partial payments; [ii] Lender’s
      forbearance from exercising any right or remedy under this Note or any
      Collateral Document; or [iii] Lender’s forbearance from exercising any right or
      remedy under this Note or any Collateral Document on any one or more occasions.
      Lender’s exercise of any rights or remedies or a part of a right or remedy on
      one or more occasions shall not preclude Lender from exercising the right or
      remedy at any other time. Lender’s rights and remedies under this Note, the
      Collateral Documents, and the law and equity are cumulative to, but independent
      of, each other.




14.  Representations .
      Borrower: [i] acknowledges that Lender would not have extended the credit
      evidenced by this Note but for the obligations of Borrower hereunder and under
      the Collateral Document; [ii] warrants that it has executed this Note or
      Collateral Document to induce Lender to extend and to continue to extend the
      credit; and [iii] warrants that it has received good and valuable consideration
      for executing this Note or any Collateral Document.




15.  Indulgences. Without
      notice, Lender may do or refrain from doing anything affecting this Note or
      any
      Collateral Document, as many times as Lender desires, including the following:
      [i] granting or not granting any indulgences to anyone liable for payment of
      this Note or to anyone liable under any Collateral Document; [ii] releasing
      any
      security or anyone or any property from liability on this Note or any Collateral
      Document; [iii] amending this Note or any Collateral Document, including
      extending the time for payment of this Note, in accordance with the terms of
      Section 25 or 30 of this Note and as provided in the Collateral
      Documents.




16.  No
      Release of Liability. No
      obligations of Borrower shall be affected by [i] any default in this Note or
      any
      Collateral Document which default is


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waived
      by
      Lender; [ii] the unenforceability of or defect in this Note or in any Collateral
      Document or any interest conveyed by any Collateral Document; [iii] any decline
      in the value of any interest in any property conveyed by any Collateral
      Document; or, [iv] the death, incompetence, insolvency, dissolution, liquidation
      or winding up of affairs of Borrower, Lender or any party to this Note or any
      Collateral Document or the start of insolvency proceedings by or against any
      such party. **BORROWER
      WAIVES ALL SURETYSHIP AND** ****** **OTHER
      SIMILAR DEFENSES.** Neither
      Borrower nor any party to any Collateral Document may enforce any right of
      subrogation or contribution unless and until this Note is paid in full and
      not
      subject to recovery as a preference under applicable insolvency law, and waives
      all rights of subrogation against any party that is subject to insolvency
      proceedings unless and until this Note is so paid in full.




17.  Notices. All
      notices, demands, requests and consents (hereinafter “notices”) given pursuant
      to this Note shall be in writing, and shall be served by [i] personal delivery,
      [ii] United States Mail, certified mail, return receipt requested; or [iii]
      nationally recognized overnight courier to the following addresses:




To
      Borrower:  Emeritus
      Corporation




3131
      Elliott Avenue, Suite 500




Seattle,
      Washington 98121


Attention:
      William M. Shorten




To
      Lender:  Healthcare
      Realty Trust Incorporated


3310
      West
      End Avenue, Suite 700


Nashville,
      Tennessee 37203


Attention:
      Asset Administration.





With
      a
      copy to:  Healthcare
      Realty Trust Incorporated


3310
      West
      End Avenue, Suite 700


Nashville,
      Tennessee 37203


Attention:
      John M. Bryant, Jr.


Senior
      Vice President and General Counsel










All
      notices shall be deemed to be given upon the earlier of actual receipt or three
      days after deposit in the United States mail or one business day after deposit
      with the overnight courier. Lender and Borrower may change their notice address
      at any time by giving the other party written notice of such change in
      accordance with the foregoing provisions.




18.  Representation
      and Warranty Regarding Business Purpose. Borrower
      represents and warrants that the loan evidenced by this Note is for business
      purposes only and not for personal, family, household, or agricultural
      purposes.




19.  Security. This
      Note is secured by the Collateral Documents.


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20.  Protest. Except
      as otherwise expressly provided in the Loan Agreement, Borrower waives protest,
      notice of protest, demand, dishonor or default, presentment for payment, notice
      of intent to declare this Note immediately due and payable, notice of
      declaration that this Note is immediately due and payable in full, all other
      notices, and all other demands.




21.  Savings
      Clause. The
      intention of Lender and Borrower is to comply with the laws of the State and
      the
      federal government concerning the rate of interest on this Note. Notwithstanding
      any other provision in this Note or in any other document given in connection
      with this Note, Borrower shall not be required to pay interest in excess of
      the
      maximum lawful rate under applicable law. If a court of competent jurisdiction
      should determine that applicable law concerning the maximum lawful rate of
      interest on this Note is not that of the State, it is the intention of the
      parties to comply with the law of the state whose law is, in fact, applicable
      concerning the maximum lawful rate of interest on this Note. To the extent
      the
      amount of interest provided in this Note ever exceeds the maximum lawful rate
      (the “Excess Interest”), [i] the provisions of this paragraph shall govern and
      control; [ii] Borrower shall not be obligated to pay any Excess Interest; [iii]
      any Excess Interest that Lender may have received shall be credited against
      the
      then outstanding balance due under this Note and, if the Excess Interest exceeds
      the outstanding balance, the excess amount shall be refunded to Borrower; [iv]
      the rate of interest under this Note or the Default Rate, as applicable, shall
      be automatically reduced to the maximum lawful rate and this Note and any other
      documents given in connection therewith shall be deemed reformed and modified
      to
      reflect such reduction; and [v] subject to the foregoing provisions of this
      paragraph, Borrower shall have no action or remedy against Lender for any
      damages whatsoever or any defense to enforcement of this Note or any other
      documents given in connection therewith arising out of the payment or collection
      of any Excess Interest. In determining whether interest paid or payable on
      this
      Note exceeds the maximum lawful rate, Borrower agrees to exclude voluntary
      prepayment fees from the calculation of interest and to spread the total amount
      of interest throughout the entire contemplated term of this Note.




22.  Attorney’s
      Fees and Expenses. Borrower
      shall pay to Lender all reasonable costs and expenses incurred by Lender in
      connection with the Loan and the security for the Loan, enforcing or preserving
      Lender’s rights under this Note, the Loan Agreement, the Mortgage, or any other
      Collateral Document, and in all matters of collection and administration,
      whether or not an Event of Default has actually occurred or has been declared
      and thereafter cured, including but not limited to, [i] attorneys’ and
      paralegals’ fees and disbursements; [ii] the fees and expenses of any
      litigation, alternative dispute resolution, administrative, bankruptcy,
      insolvency, receivership and any other similar proceeding; [iii] court costs;
      [iv] the expenses of Lender, its employees, agents, attorneys and witnesses
      in
      preparing for litigation, alternative dispute resolution, administrative,
      bankruptcy, insolvency and other proceedings and for lodging, travel, and
      attendance at meetings, hearings, depositions,


6




and
      trials; and [v] consulting and witness fees incurred by Lender in connection
      with any litigation or other proceeding.




23.  Severability. If any
      clause, provision, section or article of this Note is ruled invalid by any
      court
      of competent jurisdiction, the invalidity of such clause, provision, section,
      or
      article shall not affect any of the remaining provisions hereof.




24.  Assignment. Borrower
      shall not assign its rights nor delegate its obligations under this
      Note.




25.  Amendment. This
      Note may not be amended except in writing signed by Borrower and Lender. All
      references to this Note, whether in this Note or in any other document or
      instrument, shall be deemed to incorporate all amendments, modifications, and
      renewals of this Note and all substitutions made therefor after the date
      hereof.




26.  Intentionally
      omitted.




27.  CONSENT
      TO JURISDICTION. BORROWER
      HEREBY IRREVOCABLY SUBMITS AND CONSENTS TO THE NON-EXCLUSIVE JURISDICTION AND
      VENUE OF ANY STATE OR FEDERAL COURT HAVING JURISDICTION OVER DAVIDSON COUNTY,
      TENNESSEE FOR ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY MATTER ARISING
      FROM OR RELATED TO [I] THIS NOTE; OR [II] ANY LOAN DOCUMENT EXECUTED IN
      CONNECTION WITH THIS NOTE. BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
      EXTENT BORROWER MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM
      TO
      THE MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING. BORROWER AGREES THAT A FINAL
      JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
      ENFORCED IN ANY OTHER JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER
      MANNER PROVIDED BY LAW.




BORROWER
      AGREES NOT TO INSTITUTE ANY LEGAL ACTION OR PROCEEDING AGAINST LENDER OR ANY
      DIRECTOR, OFFICER, EMPLOYEE, AGENT OR PROPERTY OF LENDER, CONCERNING ANY MATTER
      ARISING OUT OF OR RELATING TO THE COMMITMENT OR ANY LOAN DOCUMENT IN ANY COURT
      OTHER THAN A STATE OR FEDERAL COURT HAVING JURISDICTION OVER DAVIDSON COUNTY,
      TENNESSEE UNLESS SUCH COURTS LACK SUBJECT MATTER OR IN PERSONAM JURISDICTION
      IN
      WHICH CASE SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN ANY COURT WHICH HAS
      SUCH
      JURISDICTION.




BORROWER
      HEREBY CONSENTS TO SERVICE OF PROCESS BY LENDER IN ANY MANNER AND IN ANY
      JURISDICTION PERMITTED BY LAW. NOTHING HEREIN SHALL AFFECT OR IMPAIR LENDER’S
      RIGHT TO SERVE LEGAL PROCESS IN ANY MANNER PERMITTED BY LAW, OR LENDER’S RIGHT


7




TO
      BRING
      ANY ACTION OR PROCEEDING AGAINST BORROWER OR THE PROPERTY OF BORROWER OR ANY
      GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION.




28.  WAIVER
      OF JURY TRIAL .
      TO THE
      FULLEST EXTENT PERMITTED BY LAW, LENDER, BY ITS ACCEPTANCE OF THIS NOTE, AND
      BORROWER HEREBY KNOWINGLY AND VOLUNTARILY WAIVES THE RIGHT TO A JURY TRIAL
      IN
      ANY ACTION, PROCEEDING OR COUNTERCLAIMS ARISING OUT OF OR RELATING TO THIS
      NOTE.




29.  ORAL
      AGREEMENTS .  ORAL
      AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FOREBEAR
      FROM
      ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER THE LAWS OF THE STATE
      OF
      WASHINGTON.




**[THE
      REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]**


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IN
      WITNESS WHEREOF, the undersigned has executed this Note effective as of the
      date
      first set forth above.








EMERITUS
      CORPORATION, a Washington corporation





By: /s/
      William M. Shorten


William
      M. Shorten


Director
      of Real Estate Finance


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