| 1.   | Definitions.  Capitalized      terms used but not defined in this Agreement are defined in the Loan      Agreement. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------|

| 2.   | Release      of Meadowbrook Property. Notwithstanding the restrictions in the      Loan Agreement and the Meadowbrook Deed of Trust, Lender will cause the      Meadowbrook Deed of Trust to be released and reconveyed from the      Meadowbrook Property, provided that all the following conditions are      satisfied: |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.1   | Borrower      has provided evidence satisfactory to Lender that the Stonecreek Property      has been approved by Freddie Mac for permanent  financing. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 2.2   | Lender      has been paid the “Release      Price” for the Meadowbrook Property.  The Release Price      for the Meadowbrook Property is$2,595,000. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.3   | There      is then no Event of Default, nor any event or condition which would be an      Event of Default if not cured within the time  allowed. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.4   | Borrower      has provided to Lender, at Borrower’s expense, an endorsement to Lender’s      policy of title insurance for the Stonecreek Property, insuring the      continued priority of the lien of the Stonecreek Mortgage against the      Stonecreek Property.  There shall be no exceptions to title      other than those previously approved byLender. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.5   | Borrower      has paid all costs and expenses (including all attorney, trustee, title      and recording fees) incurred by Lender in connection with Borrower’s      request for a release of the Meadowbrook Property.  Borrower      covenants to pay all such costs and expenses even if the release is not      given because the conditions have not beenmet. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.6   | Emeritol      Stonecreek Lodge LLC has executed and delivered to Lender an Amended and      Restated Promissory Note in the form attached as Exhibit 1      hereto. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | Loan      Modifications.  The following modifications to the Loan      Documents shall become effective upon the date that the Meadowbrook Deed      of Trust has been released. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1   | Definitions.  The      definitions of the following terms in the Loan Documents are revised to      mean the following: |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------|

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| 3.2   | Compliance      Certificate. The form of Compliance Certificate attached as Exhibit B to      the Loan Agreement is hereby replaced with the Compliance Certificate      attached as Exhibit B      hereto: |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | Conditions.  This      Agreement shall be effective only upon satisfaction of the conditions set      forth below: |
|----------------|------------------------------------------------------------------------------------------------------------------------------|

| 4.1   | Borrower      has paid Lender all costs, fees and expenses relating to the execution and      performance of this Agreement, including all legal fees, title insurance      premiums, and other out-of-pocket expenses of  Lender. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.2   | Lender      has received certified copies of such duly adopted resolutions as Lender      may require, authorizing Borrower’s and Guarantor’s execution of this      Agreement and naming the persons authorized to execute this Agreement on      their behalf. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.   | Guaranty.  Guarantor      consents and agrees to this Agreement and ratifies and reaffirms the      obligations of such Guarantor under the respective Guaranty of the Loan as      modified by this Agreement. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.   | Representations.  Borrower      and Guarantor represent to Lender asfollows: |
|----------------|----------------------------------------------------------------------------------------|

| 6.1   | Neither      Borrower nor Guarantor has any claim, defense, counterclaims or right of      offset against Lender or its agents arising out of or in any way connected      with the Loan. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.2   | Borrower      and Guarantor have full right, power and authority to enter into this      Agreement and perform their obligations hereunder, and no information or      material submitted to Lender in connection with this Agreement contains      any material misstatement or misrepresentation nor omits to state any      material fact or circumstance. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.3   | There      is no Event of Default by Borrower under any of the Loan Documents, nor,      to Borrower’s knowledge, any event, circumstance or condition which with      notice or the passage of time or both would be an Event of      Default. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 6.4   | Except      as disclosed to Lender in writing, all representations made by Borrower      and Guarantor to Lender in the      Loan Documents are true andcorrect. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.   | Ratification.  Each and      every representation and warranty made by Borrower in the Loan Documents      and the Environmental Indemnities are hereby renewed and each and every      provision of the Loan Documents, as amended by this Agreement, is hereby      affirmed and ratified.  This Agreement is not intended and shall      not be construed to impair the validity, priority or enforceability of the      Mortgages or the other Loan Documents.  As further consideration      for Lender’s execution of this Agreement, Borrower and Guarantor hereby release and      discharge Lender from any and all claims, defenses, actions, counterclaims      or rights of offset in connection with the Loan and arising out of any act      or circumstance prior to the datehereof. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8.   | General. |
|----------------|----------|

| 8.1   | This      Agreement and the documents and instruments to be executed hereunder      constitute the entire agreement among the parties with respect to the      subject matter hereof and shall not be amended, modified or terminated      except by a writing signed by the party to be charged      therewith. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8.2   | Borrower      and Guarantor agree to execute      such other instruments and documents and provide Lender with such further      assurances as Lender may reasonably request to more fully carry out the      intent of this Agreement. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8.3   | This      Agreement may be executed in a number of identical      counterparts.  If so, each such counterpart shall collectively      constitute one agreement. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8.4   | No      provision of this Agreement is intended or shall be construed to be for      the benefit of any third party. |
|-----------------|----------------------------------------------------------------------------------------------------------------------|

| 8.5   | The      Loan Documents are hereby modified to include this Agreement within the      definition of the term “Loan      Documents” as used therein. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | By: | Summerville      Senior Living, Inc., a Delaware corporation, its Sole    Member |
|--------|-----|----------------------------------------------------------------------------------|

|   | By: | /s/      Eric Mendelsohn _ |
|--------|-----|----------------------------|

|   | Eric      Mendelsohn, Senior VP CorporateDevelopment |
|--------|------------------------------------------------------|

|   | By: | Summerville      Senior Living, Inc., a Delaware corporation, its Sole    Member |
|--------|-----|----------------------------------------------------------------------------------|

|   | By: | /s/      Eric Mendelsohn ___ |
|--------|-----|------------------------------|

|   | Eric      Mendelsohn, Senior VP CorporateDevelopment |
|--------|------------------------------------------------------|

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| Re: | Loan      Agreement dated as of October 17, 2008 (as amended, modified,      supplemented, restated, or renewed, from time to time, the “Agreement”),      between EMERITOL STONECREEK LODGE LLC, a Delaware limited liability      company, (“Borrower”),      and KEYBANK NATIONAL ASSOCIATION (“Lender”). |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | A. | Covenant:  Minimum      Facility Occupancy.  As of the end of each calendar      quarter commencing with the calendar quarter ending December 31, 2008, the      Occupancy of the Facility shall no time be less than 90% of the Occupancy      for the Facility as of September 30,2008. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Facility              | Occupancy      as of 9/30/08 | Occupancy      at end of reporting period | Compliance? |
|-----------------------|------------------------------|-------------------------------------------|-------------|
| Stonecreek      Lodge | _______%                     | ________%                                 | ________    |

|   | B. | Covenant: Minimum      Debt Service Coverage. For each calendar      quarter commencing with the calendar quarter ending December 31, 2008,      the |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Quarter End | Required Debt Service    Coverage |
|-------------|-----------------------------------|
| 12/31/2008  | 1.00                              |
| 3/31/2009   | 1.00                              |
| 6/30/2009   | 1.00                              |
| 9/30/2009   | 1.00                              |
| 12/31/2009  | 1.10                              |
| 3/31/2010   | 1.10                              |
| 6/30/2010   | 1.10                              |
| 9/30/2010   | 1.10                              |
| 12/31/2010  | 1.10                              |
| 3/31/2011   | 1.15                              |
| 6/30/2011   | 1.20                              |
| 9/30/2011   | 1.25                              |

|   | Quarter      Ending ________________, 20___ |
|--------|---------------------------------------------|

|   | Required      Debt ServiceCoverage:  1.___ |
|--------|------------------------------------------------------|

|   | Actual      Debt ServiceCoverage:  1.___ |
|--------|----------------------------------------------------|

|   | A. | Covenant: Minimum      Liquid Assets.  Emeritus      shall maintain minimum Liquid Assets of Twenty Million Dollars      ($20,000,000.00) |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | B. | Covenant: Minimum      Fixed Charge Coverage. Emeritus agrees to      maintain a minimum Fixed Charge Coverage Ratio of 1.10 to 1.00 (measured      at the end of each calendar quarter beginning with the calendar quarter      ending December 31, 2008, and building to the previous four calendar      quarters). |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Quarter      Ending ________________, 20___ |
|--------|---------------------------------------------|

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|   | C. | Covenant: Emeritus      agrees to permit no Change of Control without the prior written consent of      Lender. |
|--------|----|-----------------------------------------------------------------------------------------------------------------|

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