**Exhibit
      10.67.10**




**PROMISSORY
      NOTE**







$26,200,000.00
            August
                15, 2007





FOR
      VALUE
      RECEIVED, the four (4) undersigned limited liability companies and limited
      partnerships, having an address at 3131 Elliott Avenue, Suite 500, Seattle,
      Washington 98121 (collectively, the **“Borrower”**), hereby jointly
      and severally promise to pay to the order of **CAPMARK BANK**, a
      Utah industrial bank, having an address at 116 Welsh Road, P. O. Box 809,
      Horsham, PA 19044, together with its successors and assigns or, if this Note
      has
      then been endorsed “to bearer,” to the bearer of this Note (collectively the
**“Lender”**), at Lender’s said address or at such other place or
      to such other person as may be designated in writing to Borrower by Lender,
      the
      principal sum of Twenty-Six Million Two Hundred Thousand and No/100 Dollars
      ($26,200,000.00) (the **“Loan”**), together with interest on the
      unpaid balance thereof at the rate hereinafter set forth. Capitalized terms
      used
      herein without definition shall have the meaning given to such terms in the
      Loan
      Agreement (defined herein).





ON
      THE
      TERMS AND SUBJECT TO THE CONDITIONS which are hereinafter set
      forth:





Section
      1. Interest
      Rate.





1.1           Initial
      Note Rate.  Interest shall accrue on the outstanding principal
      balance of the Loan from and after the date hereof (“**Closing
      Date**”) at the rate of 7.31% per annum (“**Initial Note
      Rate**”).  If the Loan is funded on a date other than the first
      (1st) day of a calendar month, Borrower shall pay to Lender at the time of
      funding of the Loan an interest payment calculated by multiplying (i) the number
      of days from and including the Closing Date to (and including) the last day
      of
      the current month or by (ii) the Initial Note Rate calculated based on a 360
      day
      year and paid for the actual number of days elapsed for any whole or partial
      month in which interest is being calculated.





1.2           Calculation
      Basis; Interest Accrual Period.  Interest on the outstanding
      principal balance of the Loan shall be calculated utilizing a 360 day year
      and
      paid for the actual number of days elapsed for any whole or partial month in
      which interest is being calculated.  The interest rate on the
      outstanding principal balance hereof from time to time shall be adjusted on
      the
      dates (each being a “**Rate Adjustment Date**”) described in this
      paragraph.  The first Rate Adjustment Date shall be September 1, 2007,
      and subsequent Rate Adjustment Dates shall fall on the first day of each
      subsequent one month anniversary thereafter.  The first payment
      adjustment date shall be October 1, 2007, and subsequent payment adjustment
      dates shall fall on the first day of each calendar month thereafter during
      the
      term of the Loan.  As used herein, “**Interest Accrual
      Period**” shall mean the period beginning on the 1st
      day of a month
      through the end of such month.


1


1.3           Default
      Interest Rate.  If Borrower fails to make any payment of
      principal, interest or fees on the date on which such payment becomes due and
      payable whether at maturity or by acceleration, or if an Event of Default (as
      defined below) exists, the Note Rate then payable on the Loan shall immediately
      increase to the Note Rate plus five hundred (500) basis points (the
“**Default Rate**”) and shall continue to accrue at the Default
      Rate until full payment of all amounts then due is received or such Event of
      Default is cured or waived in writing by Lender.  Interest at the
      Default Rate shall also accrue on any judgment obtained by Lender in connection
      with collection of the Loan or enforcement of any obligations due under the
      Loan
      Documents until such judgment is paid in full.





1.4           Note
      Rate and Note Rate Adjustment Dates.  The **“Note
      Rate”** shall mean an interest rate which is the average of London
      Interbank Offered Rates (**“LIBOR”**), in U.S. dollar deposits, for
      a term of one month determined solely by Lender on each Note Rate Adjustment
      Date (defined below) plus one hundred seventy (170) basis points
      (“**Margin**”), which combined figure shall be rounded upwards to
      the nearest one-eighth percent (.125%).  On each Note Rate Adjustment
      Date, Lender will obtain the close-of-business LIBOR from “Page 3750” on the
      Telerate Service (or such other page as may replace Page 3750 on that service)
      on the Note Rate Adjustment Date.  If Telerate Service ceases
      publication or ceases to publish LIBOR, Lender shall select a comparable
      publication to determine the LIBOR and provide notice thereof to
      Borrower.  LIBOR may or may not be the lowest rate based upon the
      market for U.S. dollar deposits in the London Interbank Eurodollar Market at
      which Lender prices loans on the date on which LIBOR is determined by Lender
      as
      set forth above.  Adjustments to the Note Rate in connection with
      changes in LIBOR shall be made two (2) Business Days prior to the beginning
      of
      any Interest Accrual Period (each “**Note Rate Adjustment Date**”)
      except than the Initial Note Rate shall be determined two (2) Business Days
      prior to the Closing Date.





1.5           Adjustments
      due to Calculation Errors.  This Note shall bear interest at the
      Initial Note Rate and Note Rate as determined in accordance with the provisions
      hereof; provided, however, that, if Lender at any time determines, in the sole
      but reasonable exercise of its discretion that it has miscalculated the amount
      of the monthly payment of principal and/or interest (whether because of a
      miscalculation of the Initial Note Rate, the Note Rate or otherwise), Lender
      shall give notice to Borrower of the corrected amount of such monthly payment
      (and the corrected amount of the Note Rate, if applicable) and (a) if the
      corrected amount of such monthly payment represents an increase thereof,
      Borrower shall, within ten (10) calendar days after the date of such notice,
      pay
      to Lender any sums that Borrower would have otherwise been obligated under
      this
      Note to pay to Lender had the amount of such monthly payment not been
      miscalculated or (b) if the corrected amount of such monthly payment represents
      a decrease thereof, and Borrower is not otherwise in breach or default under
      any
      of the terms and provisions of the Note, the Loan Agreement of even date
      herewith by and between Borrower and Lender (the “Loan Agreement”) or any of the
      other Loan Documents, Borrower shall, within ten (10) calendar days thereafter
      be paid the sums that Borrower would not have otherwise been obligated to pay
      to
      Lender had the amount of such monthly payment not been
      miscalculated.





1.6           LIBOR
      Unascertainable.  Lender’s obligation to maintain interest based
      on LIBOR shall be suspended and the Note Rate shall be based on the Interest
      Rate Index (plus Margin) upon Lender’s determination, in good faith, that
      adequate and reasonable means do not exist for ascertaining LIBOR or that a
      contingency has occurred which materially and adversely affects the London
      Interbank Eurodollar Market at which Lender prices loans (which determination
      by
      Lender shall be conclusive and binding on Borrower in the absence of manifest
      error).  Computation of the Note Rate based on the Interest Rate Index
      shall continue until Lender determines that the circumstances giving rise to
      Lender’s substitution of the Interest Rate Index for LIBOR no longer exists and
      Lender shall promptly notify Borrower of such determination.  For
      purposes hereof “**Interest Rate Index**” shall mean the weekly
      average yield on United States Treasury Securities adjusted to a constant
      maturity of one year, as made available by the Federal Reserve Board forty-five
      (45) days prior to each Note Rate Adjustment Date.


2


1.7           Adjustment
      for Impositions on Loan Payments.  All payments made by Borrowers
      under this Note and the other Loan Documents (described in Section 8.1.1 below)
      shall be made free and clear of, and without deduction or withholding for or
      on
      account of, any present or future income, stamp or other taxes, levies, imposts,
      duties, charges, fees, deductions or withholdings, and all liabilities with
      respect thereto, now or hereafter imposed, levied, collected, withheld or
      assessed by any governmental authority, excluding (i) income and franchise
      taxes
      of the United States of America or any political subdivision or taxing authority
      thereof or therein, (ii) taxes on the overall net income or overall gross
      receipts of Lender imposed as a result of a present or former connection between
      Lender and the jurisdiction of any Governmental Authority and (iii) any
      withholding taxes imposed by the United States of America, any state,
      commonwealth, protectorate territory or any political subdivision or taxing
      authority thereof or therein, in the event that Lender or any successor and/or
      assign of Lender, or the Person treated, for United States federal income tax
      purposes, as the owner of the assets of Lender or of any successor and/or assign
      of Lender if such Lender or such successor or assign of Lender is a disregarded
      entity for United States federal income tax purposes, is not organized under
      the
      laws of the United States of America or a state thereof and fails to establish
      an exemption from such withholding taxes (all such non-excluded taxes, levies,
      imposts, duties, charges, fees, deductions, withholdings and liabilities,
      collectively, "**Applicable Taxes**").  If Borrowers
      shall be required by law to deduct any Applicable Taxes from or in respect
      of
      any sum payable hereunder to Lender, the following shall apply: (i) Borrowers
      shall make all such required deductions and shall pay the full amount deducted
      to the relevant taxing authority or other authority in accordance with
      applicable law and (ii) the sum payable to Lender shall be increased in an
      amount determined by Lender in its sole discretion, as may be necessary so
      that
      after making all required deductions (including deductions applicable to
      additional sums payable under this Section 1.7), Lender receives an amount
      equal
      to the sum Lender would have received had no such deductions been
      made.  Payments made pursuant to this Section 1.7 shall be made within
      ten (10) Business Days after Lender makes written demand therefore.





1.8           Increased
      Costs of Maintaining Interest.  Borrower shall pay to Lender all
      Funding Losses incurred from time to time by Lender upon
      demand.  Lender shall deliver to Borrower a statement for any such
      sums to which Lender is entitled to receive pursuant to this Section 1.8, which
      statement shall be binding and conclusive absent manifest
      error.  Payment of Funding Losses hereunder shall be in addition to
      any obligation to pay any other fee in circumstances where such fee(s) would
      be
      due and owing under the Loan Documents.  For purposes hereof,
“**Funding Losses**” shall mean the reduction of any amounts
      received or receivable from Borrower, in either case, due to the introduction
      of, or any change in, law or applicable regulation or treaty (including the
      administration or interpretation thereof), whether or not having the force
      of
      law, or due to the compliance by Lender with any directive, whether or not
      having the force of law, or request from any central bank or domestic or foreign
      governmental authority.


3


1.9           Acceleration.  Notwithstanding
      anything to the contrary contained herein, if Borrower is prohibited by law
      from
      paying any amount due to Lender under Section 1.7 or Section 1.8 hereof, Lender
      may elect to declare the unpaid principal balance of the Loan, together with
      all
      unpaid interest accrued thereon and any other amounts due hereunder, due and
      payable within one hundred twenty (120) days of Lender’s written notice to
      Borrower and no exit or other prepayment fee shall be due in such
      event.  Lender’s delay or failure in accelerating the Loan upon the
      discovery or occurrence of an event under Section 1.7 or Section 1.8 shall
      not
      be deemed a waiver or estoppel against the exercise of such right.





Section
      2. Note Payments and
      Prepayment Rights.





2.1           Note
      Payments and Payment Dates.  Commencing on the 1st day
      of October,
      2007, and continuing on the first (1st) day of each successive month thereafter,
      provided that, if the first (1st) day of any month is not a Business Day, such
      payment shall be due and payable on the immediately preceding Business Day
      (each
      being a “**Payment Date**”), through and including the Payment Date
      immediately prior to the Maturity Date**,**Borrower shall make
      twenty-three (23) consecutive monthly payments of interest only at the Note
      Rate
      (determined as of the immediately preceding Note Rate Payment Adjustment Date)
      based upon the principal outstanding during the Interest Accrual Period in
      which
      the applicable Payment Date occurs, and any other amounts due under the Loan
      Documents.





2.2           Prepayments.  Borrower
      has the right to prepay all or any part of the Loan prior to the Maturity Date
      except as otherwise provided below.  Borrower may only prepay the Loan
      in whole or in part (provided each such partial prepayment is in an amount
      not
      less than the sum of $100,000.00, unless such prepayment is the final principal
      due under this Note or related to an “Allocated Loan Amount” (as such term is
      defined in the Loan Agreement) on any date after the Closing Date so long as
      each of the following conditions are satisfied:





(A)
            Borrower
                provides written notice to Lender of its intent to prepay not more
                than
                sixty (60) days and not less than thirty (30) days prior to the intended
                prepayment date.





(B)
            Borrower
                pays with such prepayment all accrued and unpaid interest and all
                other
                outstanding amounts then due and unpaid under the Loan Agreement
                and the
                other Loan Documents.





(C)
            Borrower
                pays with such prepayment all costs and expenses incurred by Lender
                in
                connection with such prepayment and any other costs and expenses
                due and
                payable by Borrower under the Loan
                Documents.


4


(D)
            No
                Event of Default exists as of the date Borrower delivers notice of
                intent
                to prepay and as of the date such prepayment is
                made.





2.3           Payment
      Debit Account.  During the term of the Loan, Borrower shall
      establish and maintain a deposit account (the “Payment Debit Account”) with a
      bank or financial institution acceptable to Lender and authorize such bank
      or
      financial institution to permit Lender to debit the Payment Debit Account from
      time to time without limitation and without further notice, consent or
      instructions from Borrower. In the absence of an Event of Default, Lender shall
      make transfers from the Payment Debit Account only for payment of principal,
      interest and deposits to reserves and escrows due from Borrower on a Payment
      Date under the Note, the Loan Agreement or any of the other Loan Documents.
      Borrower solely will be responsible for maintaining funds in the Payment Debit
      Account which are sufficient to pay the aggregate amounts due under the Loan
      Documents on each Payment Date. If sufficient funds are not available in the
      Payment Debit Account to make the full payment when due, Lender shall not be
      required to notify Borrower or demand that Borrower pay the deficiency prior
      to
      declaring an Event of Default. Debits made by Lender from the Payment Debit
      Account for less than the full monthly payment amount will not release Borrower
      from Borrower's obligations to pay the full amount due nor be deemed a waiver
      of
      Lender's right to collect the full payment amount or to declare an Event of
      Default.  Debits made by Lender from the Payment Debit Account
      following the occurrence of any Event of Default under the Loan Documents will
      not be deemed a waiver of that default by Lender or otherwise prejudice, in
      any
      manner, Lender's rights or remedies with respect thereto. Lender will have
      the
      right, upon reasonable prior notice to Borrower, to discontinue debiting
      payments from the Payment Debit Account for the purposes set forth herein and,
      if at any time such debiting has been discontinued, to reinstate the requirement
      that Borrower maintain a Payment Debit Account in accordance with the terms
      of
      this Note.  Borrower will not be permitted to close, or permit the
      Payment Debit Account to be closed, without Lender's prior written consent
      unless the Loan has been satisfied in full.  To the extent there are
      any inconsistencies between this Section 2.3 and any lockbox, deposit account
      or
      other cash management agreement executed by Borrower in connection with the
      Loan, the terms of such lockbox, deposit account or other cash management
      agreement, as applicable, shall govern and control.





Section
      3. Application of
      Payments.  Payments made by Borrower on account hereof shall be
      applied, first, toward any Late Fees (defined in Section 8.3 below) or other
      fees and charges due hereunder, second, toward payment of any interest due
      at
      the Default Rate, third, toward payment of any interest due at the then
      applicable Note Rate set forth in Section 1.4 above, and fourth, toward payment
      of principal.  Notwithstanding the foregoing, if any advances made by
      Lender under the terms of any instruments securing this Note have not been
      repaid, any payments made may, at the option of Lender, be applied, first,
      to
      repay such advances and interest thereon, with the balance, if any, applied
      as
      set forth in the preceding sentence.





Section
      4. Maturity
      Date.  Anything in this Note to the contrary notwithstanding
      (excluding Section 4.1 below), the entire unpaid balance of the principal amount
      hereof and all interest accrued thereon through the end of the current Interest
      Accrual Period and including interest accruing at the Default Rate, to and
      including the Maturity Date (as defined below) together with all fees, costs
      and
      amounts due and payable under the Loan Documents shall, unless sooner paid,
      and
      except to the extent that payment thereof is sooner accelerated, be and become
      due and payable on September 1, 2009 (the **“Maturity Date”**);
      provided that if the first (1st) day of that month is not a Business Day, such
      payment shall be due and payable on the immediately preceding Business
      Day.


5


4.1           Extension
      of Maturity Date.  Upon Borrower’s written request, the Maturity
      Date of this Note may be extended to September 1, 2010 (the “Extended Maturity
      Date”), upon satisfaction of the conditions set forth herein, and in such event,
      all references to the Maturity Date in this Note and the other Loan Documents
      shall be deemed to mean the Extended Maturity Date.  Lender shall
      grant the extension, provided that as of August 15, 2009 (a) no Default (as
      defined below) or Event of Default has occurred and is continuing, (b) the
      Management Agreement is in full force and effect, and (c) the Debt Service
      Coverage Ratio (as defined in the Loan Agreement) is at least 1.0 to
      1.0.  If the Debt Service Coverage Ratio is less than 1.0 to 1.0,
      Borrower, in order to extend the Maturity Date, shall be required to make a
      principal payment on this Note in an amount that would cause the Debt Service
      Coverage Ratio to be met.  For purposes of this Note, “Default” shall
      mean the occurrence or existence of any event which, but for the giving of
      notice or expiration of time or both, would constitute an Event of
      Default.  If the Maturity Date is extended as provided herein, the
      entire unpaid principal balance hereof and all interest accrued thereon
      (including interest accruing at the Default Rate), and all Late Fees shall,
      unless sooner paid, and except to the extent that payment thereof is sooner
      accelerated, be and become due and payable on the Extended Maturity
      Date.  If the Maturity Date is extended until the Extended Maturity
      Date, interest shall continue to be paid monthly at the Note Rate, commencing
      on
      the Maturity Date through August 1, 2010, and no payments of principal shall
      be
      due and payable until the Extended Maturity Date except to the extent payment
      thereof is sooner accelerated.





Section
      5. Intentionally
      Deleted.





Section
      6. Delivery of
      Payments.  All payments due to Lender under the Loan Documents are
      to be paid in lawful tender of the United States of America, in immediately
      available funds, directly to Lender at Lender’s office located at 116 Welsh
      Road, P.O. Box 809, Horsham, Pennsylvania 19044, Attn: Servicing - Accounting
      Manager, or at such other place as Lender may designate to Borrower in writing
      from time to time.  All amounts due under the Loan Documents shall be
      paid without setoff, counterclaim or any other deduction
      whatsoever.  No payment due under this Note or any of the other Loan
      Documents shall be deemed paid to Lender until received by Lender at its
      designated office on a Business Day prior to 2:00 p.m. Eastern Standard Time.
      Any payment received after the time established by the preceding sentence shall
      be deemed to have been paid on the immediately following Business
      Day.  Each payment that is paid to Lender within ten (10) days prior
      to the date on which such payment is due, and prior to its scheduled Payment
      Date, shall not be deemed a prepayment and shall be deemed to have been received
      on the Payment Date solely for the purpose of calculating interest
      due.  If any payment received by Lender is deemed by a court of
      competent jurisdiction to be a voidable preference or fraudulent conveyance
      under any bankruptcy, insolvency or other debtor relief law, and is required
      to
      be returned by Lender, then the obligation to make such payment shall be
      reinstated, notwithstanding that the Note may have been marked satisfied and
      returned to Borrower or otherwise canceled, and such payment shall be
      immediately due and payable upon demand.


6


Section
      7. Security.





The
      debt
      evidenced by this Note is to be secured by, among other things, (a) four
      (4) separate mortgages and deeds of trusts (collectively, the
**“Mortgage”**) by each Borrower, for the benefit of Lender, and
      (b) a Payment and Performance Guaranty Agreement****of
      even date herewith (the**“Guaranty Agreement”**), given by Emeritus
      Corporation (the **“Guarantor”**), for the benefit of
      Lender.





Section
      8. Default.





8.1           Events
      of Default.  Anything in this Note to the contrary
      notwithstanding, on the occurrence of any of the following events (each of
      which
      is referred to herein, together with each of the Events of Default defined
      and
      described in the Loan Agreement and the Mortgage as an **“Event of
      Default”**), Lender may, in the exercise of its sole and absolute
      discretion, accelerate the debt evidenced by this Note, in which event the
      entire outstanding principal balance and all interest and fees accrued thereon
      shall immediately be and become due and payable without further
      notice:





8.1.1 Failure
      to
      Pay or Perform.  If (a) any payment of principal and interest is
      not paid in full on or before the Payment Date on which such payment is due,
      (b)
      if unpaid principal, accrued but unpaid interest and all other amounts
      outstanding under the Loan Documents are not paid in full on or before the
      Maturity Date or (c) there exists an uncured default under any of the Loan
      Documents which has been executed by Borrower and/or Guarantor and/or Manager,
      and such default is not cured within the grace or cure period, if any, provided
      in any of such Loan Documents.





8.1.2 Bankruptcy.




(a)           If
      Borrower or Guarantor or Manager**** (i) applies for or
      consents to the appointment of a receiver, trustee or liquidator of Borrower
      or
      Guarantor or Manager, as the case may be, or of all or a substantial part of
      its
      assets, (ii) files a voluntary petition in bankruptcy, or admits in writing
      its
      inability to pay its debts as they come due, (iii) makes an assignment for
      the
      benefit of creditors, (iv) files a petition or an answer seeking a
      reorganization or an arrangement with creditors or seeking to take advantage
      of
      any insolvency law, (v) performs any other act of bankruptcy, or (vi) files
      an
      answer admitting the material allegations of a petition filed against Borrower
      or Guarantor****or Manager in any bankruptcy, reorganization
      or insolvency proceeding; or





(b)                 if
      (i) an order, judgment or decree is entered by any court of competent
      jurisdiction adjudicating Borrower or Guarantor or Manager a bankrupt or an
      insolvent, or approving a receiver, trustee or liquidator of Borrower or
      Guarantor or Manager or of all or a substantial part of its assets, or (ii)
      there otherwise commences with respect to Borrower or Guarantor or Manager
      or
      any of its assets any proceeding under any bankruptcy, reorganization,
      arrangement, insolvency, readjustment, receivership or like law or statute,
      and
      if such order, judgment, decree or proceeding continues unstayed for any period
      of sixty (60) consecutive days after the expiration of any stay
      thereof.


7


8.1.3                 Judgments.  If
      any judgment for the payment of money in excess of $250,000.00 hereafter awarded
      against Borrower or Guarantor or Manager by any court of competent jurisdiction
      remains unsatisfied or otherwise in force and effect for a period of thirty
      (30)
      days after the date of such award.





8.2           No
      Impairment of Rights.  Nothing in this Section shall be deemed in
      any way to alter or impair any right which Lender has under this Note or the
      Mortgage, or any other Loan Documents, or at law or in equity, to accelerate
      such debt on the occurrence of any other Event of Default provided herein or
      therein, whether or not relating to this Note.





8.3           Late
      Fees.  Without limiting the generality of the foregoing provisions
      of this Section, if any payment due on a Payment Date is not received in full
      on
      or before the Payment Date, other than the payment of the outstanding principal
      payment of the Loan due on the Maturity Date, Borrower shall pay to Lender,
      immediately and without demand, a late payment charge, for each month during
      which such payment delinquency exists, equal to five percent (5%) of such amount
      (**“Late Fees”**) to defray the expenses incurred by Lender in
      handling and processing such delinquent payment and to compensate Lender for
      the
      loss of use of such delinquent payment.





Section
      9. 
Costs of Enforcement.  Borrower shall
      pay to Lender on demand
      the amount of any and all expenses incurred by Lender (a) in enforcing its
      rights hereunder or under the Mortgage and/or the Loan Documents, (b) as the
      result of the occurrence of an Event of Default by Borrower in performing its
      obligations under this Note, including but not limited to the expense of
      collecting any amount owed hereunder, and of any and all attorneys’ fees
      incurred by Lender in connection with such default, whether suit be brought
      or
      not, and (c) in protecting the security for the Loan and Borrower’s obligations
      under the Loan Documents.  Such expenses shall be added to the
      principal amount hereof, shall be secured by the Mortgage and shall accrue
      interest at the Default Rate.





Section
      10. Borrower’s Waiver
      of Certain Rights.  Borrower and any endorser, guarantor or surety
      hereby waives the exercise of any and all exemption rights which it holds at
      law
      or in equity with respect to the debt evidenced by this Note, and of any and
      all
      rights which it holds at law or in equity to require any valuation, appraisal
      or
      marshalling, or to have or receive any presentment, protest, demand and notice
      of dishonor, protest, demand and nonpayment as a condition to Lender’s exercise
      of any of its rights under this Note or the Loan Documents.





Section
      11. Extensions.  The
      Maturity Date and/or any other date by which any payment is required to be
      made
      hereunder may be extended by Lender, in writing, from time to time in the
      exercise of its sole discretion, without in any way altering or impairing
      Borrower’s or Guarantor’s liability hereunder.


8


Section
      12. General.





12.1           Applicable
      Law.  This Note shall be given effect and construed by application
      of the laws of the State of Illinois (without regard to the principles thereof
      governing conflicts of laws), and any action or proceeding arising hereunder,
      and each of Lender and Borrower submits (and waives all rights to object) to
      non-exclusive personal jurisdiction in the State of Illinois, for the
      enforcement of any and all obligations under the Loan Documents except that
      if
      any such action or proceeding arises under the Constitution, laws or treaties
      of
      the United States of America, or if there is a diversity of citizenship between
      the parties thereto, so that it is to be brought in a United States District
      Court, it shall be brought in Cook County, Illinois, in the United States
      District Court for the Northern District of Illinois or any successor federal
      court having original jurisdiction.





12.2           Headings.  The
      headings of the Sections, subsections, paragraphs and subparagraphs hereof
      are
      provided herein for and only for convenience of reference, and shall not be
      considered in construing their contents.





12.3           Construction.  As
      used herein, (a) the term **“person”** means a natural person, a
      trustee, a corporation, a limited liability company, a partnership and any
      other
      form of legal entity, and (b) all references made (i) in the neuter, masculine
      or feminine gender shall be deemed to have been made in all such genders, (ii)
      in the singular or plural number shall be deemed to have been made,
      respectively, in the plural or singular number as well, and (iii) to any
      Section, subsection, paragraph or subparagraph shall, unless therein expressly
      indicated to the contrary, be deemed to have been made to such Section,
      subsection, paragraph or subparagraph of this Note.





12.4           Severability.  No
      determination by any court, governmental body or otherwise that any provision
      of
      this Note or any amendment hereof is invalid or unenforceable in any instance
      shall affect the validity or enforceability of (a) any other such provision
      or
      (b) such provision in any circumstance not controlled by such
      determination.  Each such provision shall be valid and enforceable to
      the fullest extent allowed by, and shall be construed wherever possible as
      being
      consistent with, applicable law.





12.5           No
      Waiver.  Lender shall not be deemed to have waived the exercise of
      any right which it holds hereunder unless such waiver is made expressly and
      in
      writing.  No delay or omission by Lender in exercising any such right
      (and no allowance by Lender to Borrower of an opportunity to cure a default
      in
      performing its obligations hereunder) shall be deemed a waiver of its future
      exercise.  No such waiver made as to any instance involving the
      exercise of any such right shall be deemed a waiver as to any other such
      instance, or any other such right.  Further, acceptance by Lender of
      all or any portion of any sum payable under, or partial performance of any
      covenant of, this Note, the Mortgage or any of the other Loan Documents, whether
      before, on, or after the due date of such payment or performance, shall not
      be a
      waiver of Lender’s right either to require prompt and full payment and
      performance when due of all other sums payable or obligations due thereunder
      or
      hereunder or to exercise any of Lender’s rights and remedies hereunder or
      thereunder.


9


12.6           Waiver
      of Jury Trial; Service of Process; Court Costs.  **BORROWER
      HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH BORROWER AND
      LENDER MAY BE PARTIES ARISING OUT OF, IN CONNECTION WITH, OR IN ANY WAY
      PERTAINING TO, THIS NOTE AND/OR ANY OF THE OTHER LOAN DOCUMENTS.  IT
      IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY
      JURY
      OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING
      CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS NOTE.  THIS WAIVER
      IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY BORROWER, UPON CONSULTATION
      WITH
      COUNSEL OF BORROWER’S CHOICE, AND BORROWER HEREBY REPRESENTS THAT NO
      REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE
      THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS
      EFFECT.  BORROWER FURTHER REPRESENTS AND WARRANTS THAT IT HAS BEEN
      REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS WAIVER BY
      INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY
      INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD
      THE
      OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.  BORROWER HEREBY
      IRREVOCABLY DESIGNATES ERIC MENDELSOHN, AND HIS/HER SUCCESSORS IN OFFICE, AS
      THE
      TRUE AND LAWFUL ATTORNEY OF BORROWER FOR THE PURPOSE OF RECEIVING SERVICE OF
      ALL
      LEGAL NOTICES AND PROCESS ISSUED BY ANY COURT IN THE STATE OF WASHINGTON AS
      WELL
      AS SERVICE OF ALL PLEADINGS AND OTHER DOCUMENTS RELATED TO ANY LEGAL PROCEEDING
      OR ACTION ARISING OUT OF THIS NOTE. BORROWER AGREES THAT SERVICE UPON SAID
      ERIC
      MENDELSOHN SHALL BE VALID REGARDLESS OF BORROWER’S WHEREABOUTS AT THE TIME OF
      SUCH SERVICE AND REGARDLESS OF WHETHER BORROWER RECEIVES A COPY OF SUCH SERVICE,
      PROVIDED THAT LENDER SHALL HAVE MAILED A COPY TO BORROWER IN ACCORDANCE WITH
      THE
      NOTICE PROVISIONS HEREIN.  BORROWER AGREES TO PAY ALL COURT COSTS AND
      REASONABLE ATTORNEY’S FEES INCURRED BY LENDER IN CONNECTION WITH ENFORCING ANY
      PROVISION OF THIS NOTE.  NOTWITHSTANDING THE FOREGOING, LENDER AGREES
      TO USE REASONABLE EFFORTS TO PROVIDE BORROWER WITH NOTICE OF THE FILING OF
      ANY
      LAWSUIT BY LENDER AGAINST BORROWER.**





12.7           Offset.  Upon
      the occurrence of an Event of Default, Lender may set-off against any principal
      and interest owing hereunder, any and all credits, money, stocks, bonds or
      other
      security or property of any nature whatsoever on deposit with, or held by,
      or in
      the possession of, Lender, to the credit of or for the account of Borrower,
      without notice to or consent of Borrower or Guarantor.





12.8           Non-Exclusivity
      of Rights and Remedies.  None of the rights and remedies herein
      conferred upon or reserved to Lender is intended to be exclusive of any other
      right or remedy contained herein or in any of the other Loan Documents and
      each
      and every such right and remedy shall be cumulative and concurrent, and may
      be
      enforced separately, successively or together, and may be exercised from time
      to
      time as often as may be deemed necessary or desirable by
      Lender.


10


12.9 
                 Incorporation
      by Reference.  All of the agreements, conditions, covenants and
      provisions contained in each of the Loan Documents are hereby made a part of
      this Note to the same extent and with the same force and effect as if they
      were
      fully set forth herein.  Borrower covenants and agrees to keep and
      perform, or cause to be kept and performed, all such agreements, conditions,
      covenants and provisions strictly in accordance with their terms.





12.10 Joint
      and
      Several Liability.  If Borrower consists of more than one person
      and/or entity, each such person and/or entity agrees that its liability
      hereunder is joint and several.





12.11 Business
      Purpose.  Borrower represents and warrants that the Loan evidenced
      by this Note is being obtained solely for the purpose of acquiring or carrying
      on a business, professional or commercial activity and is not for personal,
      agricultural, family or household purposes.





12.12 Interest
      Limitation.  Notwithstanding anything to the contrary contained
      herein or in the Mortgage or in any other of the Loan Documents, the effective
      rate of interest on the obligation evidenced by this Note shall not exceed
      the
      lawful maximum rate of interest permitted to be paid.  Without
      limiting the generality of the foregoing, in the event that the interest charged
      hereunder results in an effective rate of interest higher than that lawfully
      permitted to be paid, then such charges shall be reduced by the sum sufficient
      to result in an effective rate of interest permitted and any amount which would
      exceed the highest lawful rate already received and held by Lender shall be
      applied to a reduction of principal and not to the payment of
      interest.  Borrower agrees that for the purpose of determining highest
      rate permitted by law, any non-principal payment (including, without limitation,
      Late Fees and other fees) shall be deemed, to the extent permitted by law,
      to be
      an expense, fee or premium rather than interest.





12.13 Modification.  This
      Note may be modified, amended, discharged or waived only by an agreement in
      writing signed by the party against whom enforcement of such modification,
      amendment, discharge or waiver is sought.





12.14 Time
      of
      the Essence.  Time is strictly of the essence of this
      Note.





12.15 Negotiable
      Instrument.  Borrower agrees that this Note shall be deemed a
      negotiable instrument, even though this Note may not otherwise qualify, under
      applicable law, absent this paragraph, as a negotiable instrument.





12.16 Interest
      Rate after Judgment.  If judgment is entered against Borrower on
      this Note, the amount of the judgment entered (which may include principal,
      interest, fees, Late Fees and costs) shall bear interest at the Default Rate,
      to
      be determined on the date of the entry of the judgment.





12.17 Relationship.  Borrower
      and Lender intend that the relationship between them shall be solely that of
      creditor and debtor.  Nothing contained in this Note or in any of the
      other Loan Documents shall be deemed or construed to create a partnership,
      tenancy-in-common, joint tenancy, joint venture or co-ownership by or between
      Borrower and Lender.


11


12.18 **Waiver
      of
      Automatic Stay****.  BORROWER HEREBY AGREES THAT, IN
      CONSIDERATION OF LENDER’S AGREEMENT TO MAKE THE LOAN AND IN RECOGNITION THAT THE
      FOLLOWING COVENANT IS A MATERIAL INDUCEMENT FOR LENDER TO MAKE THE LOAN, IN
      THE
      EVENT THAT  BORROWER SHALL (A) FILE WITH ANY BANKRUPTCY COURT OF
      COMPETENT JURISDICTION OR BE THE SUBJECT OF ANY PETITION UNDER ANY SECTION
      OR
      CHAPTER OF TITLE 11 OF THE UNITED STATES CODE, AS AMENDED (THE
“****BANKRUPTCY CODE****”), OR SIMILAR LAW OR
      STATUTE; (B) BE THE SUBJECT OF ANY ORDER FOR RELIEF ISSUED UNDER THE BANKRUPTCY
      CODE OR SIMILAR LAW OR STATUTE; (C) FILE OR BE THE SUBJECT OF ANY PETITION
      SEEKING ANY REORGANIZATION, ARRANGEMENT, COMPOSITION, READJUSTMENT, LIQUIDATION,
      DISSOLUTION, OR SIMILAR RELIEF UNDER ANY PRESENT OR FUTURE FEDERAL OR STATE
      ACT
      OR LAW RELATING TO BANKRUPTCY, INSOLVENCY, OR OTHER RELIEF FOR DEBTORS; (D)
      HAVE
      SOUGHT OR CONSENTED TO OR ACQUIESCED IN THE APPOINTMENT OF ANY TRUSTEE,
      RECEIVER, CONSERVATOR, OR LIQUIDATOR; OR (E) BE THE SUBJECT OF AN ORDER,
      JUDGMENT OR DECREE ENTERED BY ANY COURT OF COMPETENT JURISDICTION APPROVING
      A
      PETITION FILED AGAINST ANY BORROWER FOR ANY REORGANIZATION, ARRANGEMENT,
      COMPOSITION, READJUSTMENT, LIQUIDATION, DISSOLUTION, OR SIMILAR RELIEF UNDER
      ANY
      PRESENT OR FUTURE FEDERAL OR STATE ACT OR LAW RELATING TO BANKRUPTCY, INSOLVENCY
      OR RELIEF FOR DEBTORS, THEN, TO THE EXTENT PERMITTED BY APPLICABLE LAW AND
      SUBJECT TO COURT APPROVAL, LENDER SHALL THEREUPON BE ENTITLED, AND BORROWER
      HEREBY IRREVOCABLY CONSENTS TO, AND WILL NOT CONTEST, AND AGREES TO STIPULATE
      TO, RELIEF FROM ANY AUTOMATIC STAY OR OTHER INJUNCTION IMPOSED BY SECTION 362
      OF
      THE BANKRUPTCY CODE OR SIMILAR LAW OR STATUTE (INCLUDING, WITHOUT LIMITATION,
      RELIEF FROM ANY EXCLUSIVE PERIOD SET FORTH IN SECTION 1121 OF THE BANKRUPTCY
      CODE) OR OTHERWISE, ON OR AGAINST THE EXERCISE OF THE RIGHTS AND REMEDIES
      OTHERWISE AVAILABLE TO LENDER AS PROVIDED IN THE LOAN DOCUMENTS, AND AS
      OTHERWISE PROVIDED BY LAW, AND BORROWER HEREBY IRREVOCABLY WAIVES ITS RIGHTS
      TO
      OBJECT TO SUCH RELIEF.**





12.19 “Business
      Day”.  Any reference to the term Business Day in this Note shall
      mean any day other than a Saturday, a Sunday, or days when Federal Banks located
      in the State of New York or Commonwealth of Pennsylvania are closed for a legal
      holiday or by government directive. When used with respect to the Note Rate
      Adjustment Date, “Business Day” shall mean a day upon which United States dollar
      deposits may be dealt in on the London and New York City interbank markets
      and
      commercial banks and foreign exchange markets are open in London and New York
      City.


12


12.20 Successors
      and Assigns Bound. The obligations set forth in this Note shall be binding
      upon each Borrower and its successors and assigns.





IN
      WITNESS WHEREOF, each Borrower has duly executed and delivered this Note, or
      caused it to be duly executed and delivered on its behalf by its duly authorized
      representatives, on the day and year first above written.








[REMAINDER
      OF THIS PAGE IS INTENTIONALLY LEFT BLANK]





(SIGNATURE
      PAGES ARE ATTACHED)


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In
      Witness Whereof, each Borrower has duly executed and delivered this note, or
      caused it to be duly executed and delivered on its behalf by its duly authorized
      representatives, on the day and year first above written.






**BORROWER:**EMERICHIP
                EVERETT LLC,a
                Delaware limited liability companyBy:
            EMERITUS
                CORPORATION,a
                Washington corporationits
                Sole MemberBy:
            /s/
                Eric MendelsohnEric
                Mendelsohn,Director
                of Real Estate and Legal
                Affairs


14




**BORROWER:**EMERICHIP
                PHOENIX LLC,a
                Delaware limited liability companyBy:
            EMERITUS
                CORPORATION,a
                Washington corporationits
                Sole MemberBy:
            /s/
                Eric MendelsohnEric
                Mendelsohn,Director
                of Real Estate and Legal
                Affairs


15




**BORROWER:**EMERICHIP
                SAN ANTONIO AO LPa
                Delaware limited partnershipBy:
            Emerichip
                Texas, LLC, a DelawareLimited
                liability companyIts
                General PartnerBy:
            ESC
                G.P. II, Inc.,a
                Washington corporationits
                Sole MemberBy:
            /s/
                Eric MendelsohnEric
                Mendelsohn,Authorized
                Signatory


16




**BORROWER:**EMERICHIP
                WALLA WALLA LLC,a
                Delaware limited liability companyBy:
            EMERITUS
                CORPORATION,a
                Washington corporationits
                Sole MemberBy:
            /s/
                Eric MendelsohnEric
                Mendelsohn,Director
                of Real Estate and Legal Affairs






17