SECOND
AMENDMENT TO LOAN AGREEMENT








THIS SECOND AMENDMENT TO LOAN
AGREEMENT (this “Agreement”) is made as of
March 3, 2008 by and between EMERITUS CORPORATION, a
Washington corporation (“Borrower”), and NATIONWIDE HEALTH PROPERTIES,
INC., a Maryland corporation (“Lender”), with respect to the
following:





R E C I T A L S:





A.           Borrower
and Lender (as successor to Healthcare Realty Trust Incorporated, a Maryland
corporation (“HRT”)) are
parties to that certain Second Amended and Restated Loan Agreement dated as of
March 3, 2005, as amended by that certain Amendment to Loan Agreement dated as
of August 6, 2007 (as amended, the “Loan Agreement”), pursuant to
the terms and conditions of which a loan in the principal amount of Twenty-One
Million Four Hundred Twenty-Six Thousand Dollars ($21,426,000) is due from
Borrower to Lender (the “Loan”).  Unless
otherwise defined herein, all initially-capitalized terms herein shall have the
same meanings given to such terms in the Loan Agreement.





B.           The
Loan is evidenced by that certain Second Amended and Restated Note dated March
3, 2005, in the original principal amount of the Loan, executed by Borrower in
favor of HRT (the “Note”), which Note has been
assigned from HRT to Lender pursuant to that certain Allonge dated as of April
26, 2007.





C.           The
original Maturity Date of the Note is March 3, 2008.  Borrower has
requested that Lender extend the Maturity Date of the Note and otherwise modify
the repayment terms of the Loan.  Lender is willing to grant
Borrower’s request upon the terms and subject to the conditions set forth in
this Agreement.





NOW, THEREFORE, in
consideration of the foregoing Recitals, the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Lender and Borrower hereto agree
as follows:





1.           Amendments
to Note.  The following
amendments to the Note shall be effective as of March 3, 2008:





(a)           The
term “Maturity Date” as
defined in Section
1 of the Note shall mean March 3, 2009.





(b)           Section 2(a) of the
Note is hereby deleted in its entirety and the following substituted
therefor:





“From and
after March 4, 2008, Interest shall accrue on the principal amount outstanding
hereunder at the rate of eight and one-half percent (8.5%) per
annum.”


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(c)           The
first sentence of Section 4 of the Note
is hereby deleted in its entirety and the following substituted
therefor:





“Borrower
shall make all payments on this Note to Lender by wire transfer or ACH
(Automated Clearing House) or at such other place as the holder hereof may
designate in writing to Borrower in accordance with the provisions of Section
17.”





(d)           The
addresses for delivery of notices to Borrower and Lender set forth in Section 17 of the
Note are hereby deleted in their entirety and the following substituted
therefor:





“If
      to Borrower:
            Emeritus
      Corporation


3131
      Elliott Avenue, Suite 500


Seattle,
      Washington  98121


Attention:  Mr. Eric
Mendelsohn


Facsimile:  (206)
357-7388




If to
Lender:                                            Nationwide
Health Properties, Inc.


610 Newport Center Drive, Suite
1150


Newport Beach,
California  92660


Attention:  President
and CFO


Facsimile:  (949)
759-6876




with a
copy
to:                                       Sherry
Meyerhoff Hanson & Crance LLP


610 Newport Center Drive, Suite
1200


Newport Beach,
California  9266


Attention:  Kevin
L. Sherry, Esq.


Facsimile:  (949)
719-1212”





2.           Amendments
to Loan Agreement.  The following
amendments to the Loan Agreement shall be effective as of March 3,
2008:





(a)           The
term “Affiliate Obligation” as defined in Section 1.2 of the
Loan Agreement is hereby deleted in its entirety and the following substituted
therefor:





“Affiliate
Obligation” means all indebtedness and obligations of Borrower and any Affiliate
of Borrower to Lender or any Affiliate of Lender now existing or hereafter
arising, including, without limitation, obligations arising under the Lease
Documents and the Existing HRT Leases, indebtedness evidenced by promissory
notes, lease agreements, guaranties or otherwise and obligations under such
indebtedness documents and all other documents executed by Borrower or any
Affiliate of Borrower in connection therewith, and any extensions,
modifications, substitutions or renewals thereof.  Without limiting
the generality of the foregoing, as used herein the term “Affiliate Obligation”
shall be deemed and construed to include: (a) the obligations of the tenant
under that certain Master Lease dated as of October


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2, 2006
by and among Lender and its Affiliates, as landlord, and Summerville at Camelot
Place LLC, a Delaware limited liability company, Summerville at Hillen Vale LLC,
a Delaware limited liability company, Summerville at Lakeview LLC, a Delaware
limited liability company, Summerville at Ridgewood Gardens LLC, a Delaware
limited liability company, Summerville at North Hills LLC, a Delaware limited
liability company, and The Inn at Medina LLC, a Delaware limited liability
company, collectively, as tenant; as amended by (i) that certain First Amendment
to Master Lease dated as of December 1, 2006, (ii) that certain Second Amendment
to Master Lease dated as of January 2, 2007, and (iii) that certain Third
Amendment to Master Lease dated as of March 3, 2008 (as amended, the
“Summerville Master Lease”); (b) the obligations of Borrower and/or its
Affiliate(s) under the terms of that certain promissory note in the original
principal amount of Thirty Million Dollars ($30,000,000) to be executed and
delivered by Borrower and/or its Affiliate(s) in connection with that certain
Purchase and Sale Agreement dated as of February 6, 2008 by and between Lender,
as seller, and Borrower, as buyer.





(b)           Section 7.1.7 of the
Loan Agreement is hereby deleted in its entirety and the following substituted
therefor:





“7.1.7                      [i]
Borrower or any Affiliate defaults on any indebtedness, Existing HRT Lease,
Affiliate Obligation or other obligation to Lender or any Lender Affiliate; or
[ii] Borrower defaults on any Material Obligation, and any applicable grace or
cure period with respect to default under such indebtedness, obligation or
agreement described in clauses (i) and (ii) above expires without such default
having been cured.  This provision applies to all such indebtedness,
obligations and agreements as they may be amended, modified, extended or renewed
from time to time.”





3.           Release of
Mortgages.





The parties hereby acknowledge that,
except with respect to the Mortgages encumbering the facilities known as (a)
Anderson Place, in Anderson, South Carolina, and (b) Creston Village, in Paso
Robles, California, Lender hereby agrees to release, on or after June 15, 2008,
the lien of the Mortgages pledged as security for the Loan within ten (10) days
of Borrower’s written request therefor.





4.           Reaffirmation of
Obligations.





(a)           Borrower
hereby acknowledges and reaffirms its obligations under the Note and Loan
Agreement, as such documents have been amended by this Agreement, and agrees
that any reference made in any of the loan documents to such documents shall
mean as amended pursuant to this Agreement.





(b)           Borrower
hereby acknowledges and agrees that the execution and delivery of this Agreement
by Lender shall not be deemed or construed to constitute a waiver by
Lender


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of any
default existing under any of the loan documents or a commitment by Lender to
otherwise modify the loan documents.





5.           Representations and
Warranties.





As a
material inducement to Lender’s entry into this Agreement, Borrower represents
and warrants to Lender that:





(a)           To
the best of Borrower’s knowledge, as of the date hereof (and after giving effect
to all of the amendments reflected in this Agreement), no Event of Default by
Borrower exists under the Loan Agreement, the Note, or any of the other
documents evidencing and/or securing the Loan, and no event exists which, with
the giving of notice or the passage of time, or both, would give rise to an
Event of Default by Borrower hereunder or under any of the loan documents;
and





(b)           To
the best of Borrower’s knowledge, Lender is not in default and has performed all
of its obligations under the Loan Agreement and the other loan documents, and
Borrower does not have any claim against Lender or defense against the
enforcement of the Note, the Loan Agreement or any of the other documents
evidencing and/or securing the Loan.





6.           Effect of Loan
Documents.





Except as
specifically amended pursuant to the terms of this Agreement, the terms and
conditions of the Note and Loan Agreement shall remain unmodified and in full
force and effect.  In the event of any inconsistencies between the
terms of this Agreement and any terms of any of the loan documents, the terms of
this Agreement shall govern and prevail.





7.           Governing
Law.





This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of Ohio without giving effect to the conflicts-of-law
rules and principles of such state.





8.           Counterparts.





This
Agreement may be executed and acknowledged in any number of counterparts, all of
which executed and acknowledged counterparts shall together constitute a single
document.  Signature and acknowledgment pages may be detached from the
counterparts and attached to a single copy of this document to physically form
one document, which may be recorded.





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9.           Further
Assurances.





At any
time or from time to time upon the reasonable request of Lender, Borrower shall,
at its expense, promptly execute, acknowledge and deliver, or cause to be
executed, acknowledged, or delivered, such further instruments and documents and
perform such other acts as may be necessary or advisable, in the reasonable
discretion of Lender, for carrying out the intention or facilitating the
performance of the terms of this Agreement, or for assuring the validity of,
perfecting, or preserving the lien of any other loan documents, as modified by
this Agreement.





10.           Attorneys’
Fees.





In the
event of any dispute or litigation concerning the enforcement, validity or
interpretation of this Agreement, or any part thereof, the losing party shall
pay all costs, charges, fees and expenses (including reasonable attorneys’ fees)
paid or incurred by the prevailing party, regardless of whether any action or
proceeding is initiated relative to such dispute and regardless of whether any
such litigation is prosecuted to judgment.





11.           Entire
Agreement.





This
Agreement contains the entire agreement between the parties relating to the
subject matters contained herein.  Any oral representations or
statements concerning the subject matters herein shall be of no force or
effect.





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IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first above
written.





“BORROWER”





EMERITUS
CORPORATION,


a
Washington corporation




By:           /s/
Eric
Mendelsohn


Name:            Eric
Mendelsohn


Title:              SVP Corporate
Development











“LENDER”





NATIONWIDE
HEALTH PROPERTIES, INC.,


a
Maryland corporation




By:           /s/Brent P.
Chappell


Name:            Brent P.
Chappell


Title:              VP Portfolio
Management





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