SECOND
AMENDMENT TO MASTER LEASE AND SECURITY AGREEMENT




THIS
SECOND AMENDMENT TO MASTER LEASE AND SECURITY AGREEMENT (“Amendment”) is dated
as of the 14th day of November, 2008 (the “Effective Date”), and is among HCP
AUR1 CALIFORNIA A PACK, LLC, a Delaware limited liability company (“HCP
California A Pack”), HCP AUR1 CALIFORNIA B PACK, LLC, a Delaware limited
liability company (“HCP California B Pack”), HCP AUR1 CONNECTICUT, LLC, a
Delaware limited liability company (“HCP Connecticut”), HCP AUR1 MARYLAND, LLC,
a Delaware limited liability company (“HCP Maryland”), HCP AUR1 MASSACHUSETTS,
LLC, a Delaware limited liability company (“HCP Massachusetts”), HCP AUR1 NEW
JERSEY, LLC, a Delaware limited liability company (“HCP New Jersey”) and HCP
AUR1 VIRGINIA, LLC, a Delaware limited liability company (“HCP Virginia,” and
together with HCP California A Pack, HCP California B Pack, HCP Connecticut, HCP
Maryland, HCP Massachusetts and HCP New Jersey, as their interests may appear,
“Lessor”) and EMERITUS CORPORATION, a Washington corporation (“Emeritus” or
“Lessee”).




RECITALS





A.          Lessor
is the “Lessor” and Lessee is the “Lessee” pursuant to that certain Master Lease
and Security Agreement dated as of August 22, 2008 (the “Original Lease”), as
amended by that certain First Amendment to Master Lease and Security Agreement
dated as of October 20, 2008 (the “First Amendment,” and together with the
Original Lease, collectively, the “Lease”).  The Lease covers the
Leased Property of eleven (11) senior housing/care Facilities located in the
States of California, Connecticut, Maryland, Massachusetts, New Jersey and
Virginia, all as more particularly described therein.  All capitalized
terms used in this Amendment and not otherwise defined herein shall have the
meanings given to such terms in the Lease.





B.           Lessor
and Lessee desire to amend the Lease in accordance with the terms and conditions
set forth herein.





AMENDMENT





NOW
THEREFORE, in consideration of the mutual covenants contained in this Amendment
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Lessor and Lessee hereby agree as
follows:





1.           Lease Termination
Agreement.  The references to “November 14, 2008” contained in
Section 48.1.1(c) and Section 48.2.1(c) of the Original Lease, as amended by the
First Amendment, are hereby replaced with references to “November 25,
2008.”





2.           Board of Directors
Approval.  The reference to “November 21, 2008” contained in
Section 48.1.1(d) of the Original Lease, as amended by the First Amendment, is
hereby replaced with a reference to “November 25, 2008.”


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3.           Full Force and
Effect.  Except as specifically set forth herein, the Lease
shall remain in full force and effect as originally executed by Lessor and
Lessee.





4.           Entire
Agreement.  The Lease, as hereby amended, constitutes the
entire agreement of the parties with respect to the subject matter hereof, and
may not be changed or modified except by an agreement in writing signed by the
parties.





5.           Counterparts; Facsimile
Signatures.  This Amendment may be executed in counterparts,
each of which shall be deemed to be an original, but all of which taken together
shall constitute but one and the same instrument.  Telecopied
signatures may be used in place of original signatures on this Amendment, and
Lessor and Lessee both intend to be bound by the signatures of the telecopied
document.








[Signature pages
follow]










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IN
WITNESS WHEREOF, the parties have caused this Lease to be executed and attested
by their respective officers thereunto duly authorized.









LESSOR:
            HCP AUR1 CALIFORNIA A PACK,
      LLC,




a
      Delaware limited liability company









HCP AUR1 CALIFORNIA B PACK,
      LLC,




a
      Delaware limited liability company









HCP AUR1 CONNECTICUT,
      LLC,




a
      Delaware limited liability company









HCP AUR1 MARYLAND,
      LLC,




a
      Delaware limited liability company









HCP AUR1 MASSACHUSETTS,
      LLC,




a
      Delaware limited liability company









HCP AUR1 NEW JERSEY,
      LLC,




a
      Delaware limited liability company









HCP AUR1 VIRGINIA,
      LLC,




a
      Delaware limited liability company









By:
            HCP
      Partners, LP, a Delaware limited
partnership,




their
      member









By:
            HCP
      GP Corp., a Delaware corporation,




its
      general partner




By:           /s/
Thomas D.
Kirby




Name: Thomas D.
Kirby




Title:  SVP














[Signatures continue on the following
page]




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LESSEE:
            EMERITUS
      CORPORATION,




a
      Washington corporation









By:/s/ Eric
Mendelsohn




Name:
Eric
Mendelsohn




Title:
SVP Corporate
Development














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