SECOND
AMENDMENT TO CREDIT AGREEMENT





THIS AMENDMENT TO CREDIT AGREEMENT
(this "Amendment") is entered into as of March 4, 2009, by and between EMERITUS
CORPORATION, a Washington corporation ("Borrower"), and WELLS FARGO BANK,
NATIONAL ASSOCIATION ("Bank").





RECITALS





WHEREAS, Borrower is currently indebted
to Bank pursuant to the terms and conditions of that certain Credit Agreement
between Borrower and Bank dated as of January 17, 2008, as amended from time to
time ("Credit Agreement").





WHEREAS, Bank and Borrower have agreed
to certain changes in the terms and conditions set forth in the Credit Agreement
and have agreed to amend the Credit Agreement to reflect said
changes.





NOW, THEREFORE, for valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree that the Credit Agreement shall be amended as
follows:





1.           Section 5.2
is hereby deleted in its entirety, and the following substituted
therefor:





“SECTION 5.2.                                           OTHER
UNSECURED INDEBTEDNESS.  Create, incur, assume or permit to exist any
unsecured indebtedness or liabilities resulting from borrowings, loans or
advances, whether direct or indirect, matured or unmatured, liquidated or
unliquidated, joint or several, in an amount in excess of $1,000,000 in the
aggregate at any time, except the liabilities of Borrower to Bank.”





2.           Section 5.4
is hereby deleted in its entirety, and the following substituted
therefor:





“SECTION
5.4.                                           GUARANTIES/RECOURSE
INDEBTEDNESS/OTHER SECURED INDEBTEDNESS.  Except any of the following
in favor of Bank:





(A)           Guarantee
or become liable in any way as surety, endorser (other than as endorser of
negotiable instruments for deposit or collection in the ordinary course of
business), accommodation endorser or otherwise for any unsecured debts,
liabilities or obligations of any other person or entity, including without
limitation, any such unsecured debts, liabilities or obligations of any of
Borrower’s subsidiaries;





(B)           Create,
incur, assume or permit to exist any unsecured recourse indebtedness or
liabilities (as determined by Bank), arising out of and/or from any and all
actions or inactions of any person or entity, including without limitation, any
of Borrower’s subsidiaries, that may result in recourse against
Borrower;





(C)           Pledge
or hypothecate any assets of Borrower as security for any liabilities or
obligations of any other person or entity, including without limitation, any of
Borrower’s subsidiaries; or


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(D)             (i)
Guarantee or become liable in any way as surety, endorser (other than as
endorser of negotiable instruments for deposit or collection in the ordinary
course of business), accommodation endorser or otherwise for any secured debts,
liabilities or obligations of any other person or entity, including without
limitation, any such secured debts, liabilities or obligations of any of
Borrower’s subsidiaries; (ii) create, incur, assume or permit to exist any
secured recourse indebtedness or liabilities (as determined by Bank), arising
out of and/or from any and all secured indebtedness or obligations of any person
or entity, including without limitation, any of Borrower’s subsidiaries, that
may result in recourse against Borrower; or (iii) create, incur, assume or
permit to exist any secured indebtedness or liabilities resulting from
borrowings, loans or advances, by Borrower individually, or jointly with any of
Borrower’s subsidiaries or any other person or entity, whether matured or
unmatured, liquidated or unliquidated, joint or several, in an amount in excess
of $500,000,000 in the aggregate at any time, with respect to subparagraphs (i),
(ii) and (iii) above.”





3.  Except
as specifically provided herein, all terms and conditions of the Credit
Agreement remain in full force and effect, without waiver or
modification.  All terms defined in the Credit Agreement shall have
the same meaning when used in this Amendment.  This Amendment and the
Credit Agreement shall be read together, as one document.





4.  Borrower hereby remakes
all representations and warranties contained in the Credit Agreement and
reaffirms all covenants set forth therein.  Borrower further certifies
that as of the date of this Amendment there exists no Event of Default as
defined in the Credit Agreement, nor any condition, act or event which with the
giving of notice or the passage of time or both would constitute any such Event
of Default.





ORAL
AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR
ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.





IN WITNESS WHEREOF, the parties hereto
have caused this Amendment to be executed as of the day and year first written
above.





WELLS FARGO BANK,


EMERITUS
CORPORATION                                                                     NATIONAL
ASSOCIATION





By:  /s/
Jim L. Hanson
__________________                                                                         By:
/s/ Gloria Nemechek ___________


Jim
L. Hanson, Sr. Vice President
of                                                                                           Gloria
Nemechek, Vice President


Financial
Services, Controller





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