ex107215.htm


    EX-10.72.15

      


       

      


       

      


       

      


       

      LOAN
AGREEMENT

       

      by and
among

       

      EMERITUS
CORPORATION, a Washington corporation,

       

      SUMMERVILLE
SENIOR LIVING, INC., a Delaware corporation,

       

      SW
ASSISTED LIVING, LLC, a Delaware limited liability company,

       

      SUMMERVILLE
AT HERITAGE PLACE, LLC, a Delaware limited liability company,

       

      SUMMERVILLE
AT BARRINGTON COURT LLC, a Delaware limited liability company,

       

      SUMMERVILLE
AT ROSEVILLE GARDENS LLC, a Delaware limited liability company,

       

      SUMMERVILLE
5 LLC, a Delaware limited liability company,

       

      SUMMERVILLE
14 LLC, a Delaware limited liability company,

       

      SUMMERVILLE
15 LLC, a Delaware limited liability company,

       

      SUMMERVILLE
16 LLC, a Delaware limited liability company, and

       

      SUMMERVILLE
17 LLC, a Delaware limited liability company,

       

      and

       

      VENTAS
REALTY, LIMITED PARTNERSHIP, a Delaware limited partnership

       

      


       

      Executed
as of December 19, 2008

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      TABLE OF
CONTENTS

      
 

      
        
          	
                  Section

                	 
      	 
      	
                  Page

                
	
                  1

                	
                  DEFINITIONS.

                	
                  3

                
	 
      	
                  1.1.

                	
                  Defined
      Terms

                	
                  3

                
	 
      	
                  1.2.

                	
                  Exhibits
      and Schedules Incorporated

                	
                  12

                
	
                  2

                	
                  LOAN.

                	 
      	
                  12

                
	 
      	
                  2.1.

                	
                  The
      Loan

                	
                  12

                
	 
      	
                  2.2.

                	
                  Intentionally
      Omitted.

                	
                  12

                
	 
      	
                  2.3.

                	
                  Loan
      Documents

                	
                  12

                
	 
      	
                  2.4.

                	
                  Agreement
      Date

                	
                  13

                
	 
      	
                  2.5.

                	
                  Maturity
      Date

                	
                  13

                
	 
      	
                  2.6.

                	
                  Note
      Rate.

                	
                  13

                
	 
      	
                  2.7.

                	
                  Prepayments;
      Amortization; Payments.

                	
                  14

                
	 
      	
                  2.8.

                	
                  Expenses

                	
                  15

                
	
                  3

                	
                  DISBURSEMENT.

                	
                  15

                
	 
      	
                  3.1.

                	
                  Loan
      Opening and Disbursements of Loan Proceeds

                	
                  15

                
	 
      	
                  3.2.

                	
                  Conditions
      Precedent to Opening Disbursement

                	
                  15

                
	 
      	
                  3.3.

                	
                  Disbursements
      Evidenced by the Note

                	
                  17

                
	
                  4

                	
                  INSURANCE.

                	
                  17

                
	 
      	
                  4.1.

                	
                  Types
      of Policies

                	
                  17

                
	 
      	
                  4.2.

                	
                  Policy
      Requirements

                	
                  18

                
	 
      	
                  4.3.

                	
                  Notice;
      Evidence of Renewal

                	
                  18

                
	 
      	
                  4.4.

                	
                  Separate
      Insurance

                	
                  19

                
	 
      	
                  4.5.

                	
                  Leasehold
      Properties

                	
                  19

                
	 
      	
                  4.6.

                	
                  Fee
      Properties

                	
                  19

                
	
                  5

                	
                  GENERAL
      REPRESENTATIONS AND WARRANTIES

                	
                  19

                
	 
      	
                  5.1.

                	
                  Authority

                	
                  19

                
	 
      	
                  5.2.

                	
                  Formation

                	
                  20

                
	 
      	
                  5.3.

                	
                  No
      Default

                	
                  20

                
	 
      	
                  5.4.

                	
                  No
      Litigation

                	
                  20

                
	 
      	
                  5.5.

                	
                  True
      and Complete Information

                	
                  20

                
	 
      	
                  5.6.

                	
                  Usury

                	
                  20

                
	 
      	
                  5.7.

                	
                  Non
      Foreign Status

                	
                  21

                
	 
      	
                  5.8.

                	
                  ERISA

                	
                  21

                
	 
      	
                  5.9.

                	
                  RICO

                	
                  21

                


        


        
          
             


          

          
             


            
              

            

          

          
             


          

        



        
          	 
      	
                  5.10.

                	
                  Financial
      Statements; No Material Adverse Change

                	
                  21

                
	 
      	
                  5.11.

                	
                  Property
      Specific

                	
                  21

                
	 
      	
                  5.12.

                	
                  Brokerage
      Commissions

                	
                  22

                
	 
      	
                  5.13.

                	
                  Loan
      Purposes

                	
                  22

                
	 
      	
                  5.14.

                	
                  Single
      Purpose Entity

                	
                  22

                
	 
      	
                  5.15.

                	
                  Master
      Lease

                	
                  23

                
	 
      	
                  5.16.

                	
                  Representations
      and Warranties Generally

                	
                  23

                
	 
      	
                  5.17.

                	
                  Benefits
      of the Loan; Additional Agreements of Emeritus

                	
                  23

                
	
                  6

                	
                  HAZARDOUS
      MATERIALS.

                	
                  25

                
	 
      	
                  6.1.

                	
                  Special
      Representations and Warranties

                	
                  25

                
	 
      	
                  6.2.

                	
                  Covenants

                	
                  26

                
	 
      	
                  6.3.

                	
                  Inspection
      By Lender

                	
                  27

                
	 
      	
                  6.4.

                	
                  Lender's
      Right to Rely

                	
                  27

                
	 
      	
                  6.5.

                	
                  Hazardous
      Materials Indemnity

                	
                  27

                
	 
      	
                  6.6.

                	
                  California
      Deed of Trust

                	
                  28

                
	
                  7

                	
                  GENERAL
      COVENANTS, CONDITIONS AND AGREEMENTS

                	
                  28

                
	 
      	
                  7.1.

                	
                  Compliance
      with Loan Documents

                	
                  28

                
	 
      	
                  7.2.

                	
                  Use
      of the Property

                	
                  28

                
	 
      	
                  7.3.

                	
                  Property
      Leases and Other Transfers

                	
                  28

                
	 
      	
                  7.4.

                	
                  Covenants,
      Conditions and Restrictions

                	
                  29

                
	 
      	
                  7.5.

                	
                  Other
      Agreements Affecting the Property

                	
                  29

                
	 
      	
                  7.6.

                	
                  Management
      Agreement

                	
                  29

                
	 
      	
                  7.7.

                	
                  Inspection
      of Books and Records

                	
                  29

                
	 
      	
                  7.8.

                	
                  Litigation

                	
                  30

                
	 
      	
                  7.9.

                	
                  No
      Lien Rights

                	
                  30

                
	 
      	
                  7.10.

                	
                  No
      Transfers or Other Financing

                	
                  30

                
	 
      	
                  7.11.

                	
                  No
      Related Party Payments

                	
                  30

                
	 
      	
                  7.12.

                	
                  Mechanics
      Liens

                	
                  30

                
	 
      	
                  7.13.

                	
                  Inspections

                	
                  31

                
	 
      	
                  7.14.

                	
                  Construction

                	
                  31

                
	 
      	
                  7.15.

                	
                  Massachusetts
      Mortgage

                	
                  31

                
	
                  8

                	
                  FINANCIAL
      STATEMENTS.

                	
                  31

                
	 
      	
                  8.1.

                	
                  Annual
      Reports

                	
                  31

                
	 
      	
                  8.2.

                	
                  Quarterly
      Reports

                	
                  32

                
	 
      	
                  8.3.

                	
                  Certifications
      of Compliance

                	
                  32

                
	 
      	
                  8.4.

                	
                  Annual
      Budgets

                	
                  32

                
	 
      	
                  8.5.

                	
                  Monthly
      Financial Information

                	
                  33

                
	 
      	
                  8.6.

                	
                  Authorizations

                	
                  33

                
	 
      	
                  8.7.

                	
                  Actuarial
      Reports

                	
                  33

                
	 
      	
                  8.8.

                	
                  Notices/Inspection
      Reports from Governmental Authorities

                	
                  33

                
	 
      	
                  8.9.

                	
                  Other
      Information

                	
                  34

                


        


        
          
             


          

          
             


            
              

            

          

          
             


          

        



      
        
          	
                  9

                	
                  BORROWER'S
      DEFAULT.

                	
                  34

                
	 
      	
                  9.1.

                	
                  Borrower's
      Defaults and Lender's Remedies.

                	
                  34

                
	 
      	
                  9.2.

                	
                  Protective
      Advances

                	
                  37

                
	 
      	
                  9.3.

                	
                  Other
      Remedies

                	
                  37

                
	 
      	
                  9.4.

                	
                  RICO
      Related Law Concerns

                	
                  37

                
	 
      	
                  9.5.

                	
                  No
      Lender Liability

                	
                  37

                
	 
      	
                  9.6.

                	
                  Lender's
      Fees and Expenses

                	
                  38

                
	
                  10

                	
                  MISCELLANEOUS.

                	
                  38

                
	 
      	
                  10.1.

                	
                  Indemnification

                	
                  38

                
	 
      	
                  10.2.

                	
                  Assignment
      and Participation.

                	
                  38

                
	 
      	
                  10.3.

                	
                  Prohibition
      on Assignment

                	
                  39

                
	 
      	
                  10.4.

                	
                  Time
      of the Essence

                	
                  39

                
	 
      	
                  10.5.

                	
                  No
      Waiver

                	
                  40

                
	 
      	
                  10.6.

                	
                  Severability

                	
                  40

                
	 
      	
                  10.7.

                	
                  Use
      of Proceeds

                	
                  40

                
	 
      	
                  10.8.

                	
                  Notices

                	
                  40

                
	 
      	
                  10.9.

                	
                  Successors
      and Assigns

                	
                  41

                
	 
      	
                  10.10.

                	
                  No
      Joint Venture

                	
                  42

                
	 
      	
                  10.11.

                	
                  Brokerage
      Commissions

                	
                  42

                
	 
      	
                  10.12.

                	
                  Publicity

                	
                  42

                
	 
      	
                  10.13.

                	
                  Documentation

                	
                  42

                
	 
      	
                  10.14.

                	
                  Additional
      Assurances

                	
                  42

                
	 
      	
                  10.15.

                	
                  Entire
      Agreement

                	
                  42

                
	 
      	
                  10.16.

                	
                  Choice
      of Law

                	
                  42

                
	 
      	
                  10.17.

                	
                  No
      Third Party Beneficiary

                	
                  43

                
	 
      	
                  10.18.

                	
                  Legal
      Tender of United States

                	
                  43

                
	 
      	
                  10.19.

                	
                  Definitions;
      Captions

                	
                  43

                
	 
      	
                  10.20.

                	
                  Interpretation

                	
                  43

                
	 
      	
                  10.21.

                	
                  WAIVER
      OF RIGHT TO JURY TRIAL

                	
                  44

                
	 
      	
                  10.22.

                	
                  Credit
      Reporting

                	
                  44

                
	 
      	
                  10.23.

                	
                  Duplication
      of Deliveries

                	
                  44

                
	 
      	
                  10.24.

                	
                  Conflicts
      with Master Lease

                	
                  44

                
	 
      	
                  10.25.

                	
                  Liability
      Limitation

                	
                  45

                


        


        
          
             


          

          
             


            
              

            

          

          
             


          

        



       

      


      Exhibits:

       

      EXHIBIT
A                                      LIST
OF FEE PROPERTIES/LEASEHOLD PROPERTIES A-1

      EXHIBITS
A
-1                                      BRIGHTON
LEGAL DESCRIPTION A-3

      EXHIBITS
A
-2                                      LAKE
MARY LEGAL DESCRIPTION A-4

      EXHIBITS
A
-3                                      GOLDEN
POND LEGAL DESCRIPTION A-5

      EXHIBITS
A
-4                                      MENTOR
LEGAL DESCRIPTION A-6

      EXHIBITS
A
-5                                      ATHERTON
LEGAL DESCRIPTION A-7

      EXHIBITS
A
-6                                      WINDSOR
LEGAL DESCRIPTION A-8

      EXHIBITS
A
-7                                      HERITAGE
LEGAL DESCRIPTION A-9

      EXHIBITS
A
-8                                      BARRINGTON
LEGAL DESCRIPTION A-10

      EXHIBITS
A
-9                                      SOMER
PARK LEGAL DESCRIPTION A-11

      EXHIBITS
A
-10                                      FARM
POND LEGAL DESCRIPTION A-12

      EXHIBITS
A
-11                                      BONITA
SPRINGS LEGAL DESCRIPTIONA-13

      EXHIBITS
A
-12                                      BOYNTON
BEACH LEGAL DESCRIPTIONA-14

      EXHIBITS
A
-13                                      DEER
CREEK LEGAL DESCRIPTION A-15

      EXHIBITS
A
-14                                      JENSEN
BEACH LEGAL DESCRIPTION A-16

      EXHIBITS
A
-15                                      JENSEN
BEACH (LAND) LEGAL DESCRIPTION A-17

      EXHIBIT
B                                      LOAN
DOCUMENTS B-1

      EXHIBIT
C                                      WIRE
INSTRUCTIONS C-1

      EXHIBIT
D                                      FORM
OF OFFICER’S CERTIFICATE D-1


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      LOAN
AGREEMENT

       

      


       

      THIS LOAN AGREEMENT (as amended,
supplemented, replaced and/or restated from time to time, this “Agreement”) is dated as of
December 19, 2008, and is made by and among EMERITUS CORPORATION, a Washington
corporation (“Emeritus”); SUMMERVILLE SENIOR
LIVING, INC., a Delaware corporation (“SSL”); SW ASSISTED LIVING,
LLC, a Delaware limited liability company (“Windsor Borrower”);
SUMMERVILLE AT HERITAGE PLACE, LLC, a Delaware limited liability company (“Heritage Borrower”);
SUMMERVILLE AT BARRINGTON COURT LLC, a Delaware limited liability company
(“Barrington Borrower”);
SUMMERVILLE AT ROSEVILLE GARDENS LLC, a Delaware limited liability company
(“Somer Park Borrower”);
SUMMERVILLE 5 LLC, a Delaware limited liability company (“Farm Pond Borrower”);
SUMMERVILLE 14 LLC, a Delaware limited liability company (“Bonita Borrower”); SUMMERVILLE
15 LLC, a Delaware limited liability company (“Boynton Borrower”);
SUMMERVILLE 16 LLC, a Delaware limited liability company (“Deer Creek Borrower”); and
SUMMERVILLE 17 LLC, a Delaware limited liability company (“Jensen Beach Borrower”, and
collectively with Emeritus, SSL, Windsor Borrower, Heritage Borrower, Barrington
Borrower, Somer Park Borrower, Farm Pond Borrower, Bonita Borrower, Boynton
Borrower and Deer Creek Borrower, on a joint and several basis, “Borrower” or individually each
a “Borrower” as the
context may require, as determined by Lender), and VENTAS REALTY, LIMITED
PARTNERSHIP, a Delaware limited partnership (“Lender”).

       

      RECITALS

       

      WHEREAS, EMERIVENT BRIGHTON LLC, a
Delaware limited liability company (“Brighton Owner”); EMERIVENT
LAKE MARY LLC, a Delaware limited liability company (“Lake Mary Owner”); EMERIVENT
BRADENTON LLC, a Delaware limited liability company (“Golden Pond Owner”); EMERIVENT
MENTOR LLC, a Delaware limited liability company (“Mentor Owner”); and EMERIVENT
ATHERTON COURT INC, a Delaware corporation (“Atherton Owner”, and together
with Brighton Owner, Lake Mary Owner, Golden Pond Owner and Mentor Owner,
individually, each an “Emeritus
Purchaser”, and collectively, the “Emeritus Purchasers”) hold fee
simple title to five (5) parcels of property, along with all improvements
thereon and easements and appurtenances thereto, which parcels are listed as
Facility Nos. 1 through 5 on Exhibit A attached hereto, and
legally described in Exhibits
A-1 through Exhibit
A-5 attached hereto (individually, each a “Sold Property”, and collectively,
the “Sold Properties”).

       

      WHEREAS, the Emeritus Purchasers have
acquired title to the respective Sold Properties pursuant to (i) that certain
Agreement for Sale of Real Estate dated as of July 25, 2008, by and between
Lender, as Seller, and Emeritus, as Purchaser, relating to the property commonly
known as Summerville at Brighton, (ii) that certain Agreement for Sale of Real
Estate dated as of July 25, 2008, by and between Lender, as Seller, and
Emeritus, as Purchaser, relating to the property commonly known as Summerville
at Lake Mary, (iii) that certain Agreement for Sale of Real Estate dated as of
July 25, 2008, by and between Lender, as Seller, and Emeritus, as Purchaser,
relating to the property commonly known as Golden Pond Assisted Living, (iv)
that certain

       


      
        
           


        

        
          1

          
            

          

        

        
           


        

      


      Agreement
for Sale of Real Estate dated as of July 25, 2008, by and between Lender, as
Seller, and Emeritus, as Purchaser, relating to the property commonly known as
Summerville at Mentor, and (v) that certain Agreement for Sale of Real Estate
dated as of July 25, 2008, by and between Lender, as Seller, and Emeritus, as
Purchaser, relating to the property commonly known as Atherton Court Alzheimer’s
Residence (as amended, supplemented, replaced and/or restated from time to time,
individually, each a “Purchase
Contract”, and collectively, the “Purchase
Contracts”).

       

      WHEREAS, Windsor Borrower, Heritage
Borrower, Barrington Borrower, Somer Park Borrower, Farm Pond Borrower, Bonita
Borrower, Boynton Borrower, Deer Creek Borrower and Jensen Beach Borrower
(individually, each a “Leasehold Borrower”, and collectively,
the “Leasehold Borrowers”) hold leasehold
interests in ten (10) parcels of property, along with all improvements thereon
and easements and appurtenances thereto, which parcels are listed as Facility
Nos. 6 through 15 on Exhibit
A attached hereto, and legally described in Exhibits A-6 through Exhibit A-15 attached
hereto (individually, each a
“Leasehold Property”, and collectively,
the “Leasehold Properties”) pursuant to that
certain Third Amended and Restated Master Lease Agreement dated as of July 25,
2008, by and among Lender and Ventas Framingham, LLC, a Delaware limited
liability company, as landlord (together, and collectively with any replacement
thereof under the Master Lease, the “Master Landlord”), and
Leasehold Borrowers and certain affiliates thereof, as tenants (as amended,
supplemented, replaced and/or restated from time to time, the “Master Lease”).

       

      WHEREAS,
certain Affiliates of Borrower have also entered into (i) that certain Master
Lease Agreement dated as of January 31, 2005, by and between Ventas Fairwood,
LLC, as landlord, and Summerville at Fairwood Manor, LLC, a Delaware limited
liability company, as tenant (as the same may be amended, supplemented, replaced
and/or restated from time to time, the “Fairwood Lease”) and (ii) that
certain Master Lease Agreement dated as of April 14, 2005, by and between Ventas
Whitehall Estates, LLC, a Delaware limited liability company, as landlord, and
Summerville 4 LLC, a Delaware limited liability company, as tenant (as the same
may be amended, supplemented, replaced and/or restated from time to time, the
“Whitehall
Lease”).

       

      WHEREAS,
SSL owns, directly or indirectly, one hundred percent (100%) of the membership
interests of each Fee Owner (as hereinafter defined) and each Leasehold
Borrower.

       

      WHEREAS,
Emeritus owns one hundred percent (100%) of the capital stock in
SSL.

       

      WHEREAS, as a condition of making the
Loan (as hereinafter defined) described in this Agreement, Lender requires that
Borrower execute and deliver this Agreement, the Collateral Documents (as
hereinafter defined), the other Loan Documents (as hereinafter defined) and the
Other Related Documents (as hereinafter defined), as applicable.

       

      THEREFORE, in consideration of the
mutual covenants, conditions and agreements herein contained, the parties hereto
hereby agree as follows:

       


      
        
           


        

        
          2

          
            

          

        

        
           


        

      


      AGREEMENT

       

      1. ­DEFINITIONS.

       

      1.1. ­Defined
Terms.  The following capitalized terms generally used in this
Agreement shall have the meanings defined or referenced
below.  Certain other capitalized terms used only in specific sections
of this Agreement are defined in such sections.

       

      “Actuarial Reports” shall mean
any and all written reports, studies, analyses or reviews prepared by or behalf
of any Borrower Party or their respective insurance providers or carriers,
whether quarterly or otherwise, concerning any Borrower Party’s malpractice or
professional liability insurance or any Borrower Party’s reserves for expenses
relating to malpractice or professional liability claims.

       

      “ADA” shall mean the Americans
with Disabilities Act, 42 U.S.C. §§ 12101, et. seq., as hereinafter amended or
modified.

       

      “Affiliate” or “Affiliates” shall mean an
entity’s partners, members or parent and subsidiary corporations, and any other
entity or person, directly or indirectly, controlling, controlled by or under
common control with said entity, and their respective affiliates, shareholders,
directors, officers, employees and agents.

       

      “Annual Budget” shall mean each
Borrower Party’s projection of such Borrower Party’s revenues and expenses for a
particular Fiscal Year in a format and containing such information as is
reasonably acceptable to Lender.

       

      “Assignee Lender” shall have
the meaning ascribed to such term in Section 10.2.

       

      “Assignment of Contracts, Permits and
Licenses” shall mean a collateral assignment duly executed by each
Leasehold Borrower and consented to by such Material Vendors as Lender may
request, as amended, supplemented, replaced and/or restated from time to time,
pursuant to which each Leasehold Borrower assigns to Lender, to the extent
assignable:  (i) all of Borrower’s right, title and interest in and to
all contracts relating to or entered into in connection with the Leasehold
Properties, including, without limitation, subcontracts, sub-subcontracts and
material purchase orders, and property management agreements, now or hereafter
entered into in connection with the management thereof, or any portion thereof,
relating to such Leasehold Properties; and (ii) all of Borrower’s right, title
and interest in and to all applicable plans and specifications, permits,
authorizations, approvals and licenses issued from time to time with respect to
the Leasehold Properties.

      


       “Authorizations” shall mean any
and all licenses, operating permits, Provider Agreements, certificates of
exemption, approvals, waivers, variances and other governmental or
“quasi-governmental” authorizations necessary or advisable for the use of any
Property for its primary intended use and receipt of reimbursement or other
payments under any Third Party Payor Programs.

       


      
        
           


        

        
          3

          
            

          

        

        
           


        

      


      “Bankruptcy Code” shall mean
the Bankruptcy Reform Act of 1978 (11 USC § 101-1330), as hereinafter amended or
recodified.

       

      “Borrower” shall have the
meaning ascribed to such term in the Preamble.

       

      “Borrower Annual Report” shall
have the meaning ascribed to such term in Section 8.1.

       

      “Borrower Party(ies)” shall
mean, collectively or individually as the context may require, as determined by
Lender, each Borrower and each Fee Owner; provided, however, that Borrower
Party(ies) shall not include any Fee Owner from and after the date such Fee
Owner is no longer controlled by Borrower or an Affiliate of Borrower due to a
default under the Loan and Lender’s pursuit of its remedies hereunder or under
any of the other Loan Documents.

       

      “Brighton” shall mean that
certain Fee Property commonly known as Summerville at Brighton and listed as
Facility No. 1 on Exhibit
A and legally described on Exhibit A-1.

       

      “Business Day” shall mean a day
of the week (but not a Saturday or Sunday or any holiday on which banks in
Chicago, Illinois are customarily required or authorized to close).

       

      “California Deed of Trust”
shall mean a Leasehold Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Fixture Filing, of even date herewith, covering each Leasehold
Property located in the State of California and executed by the respective
Leasehold Borrower(s) thereof in favor of Lender, as amended, supplemented,
replaced and/or restated from time to time.

       

      “Capital Stock” shall mean,
with respect to any Person, any capital stock (including preferred stock),
shares, interests and/or participation or other ownership interests (however
designated) of such Person and any rights, warrants or options to purchase any
thereof, but excluding the sale of all of the Capital Stock in a Venture Entity
(as defined below).

      


      “Capmark” shall mean Capmark
Bank, a Utah industrial bank, or any Affiliate thereof.

      


      “Capmark Loan” shall mean the
Fee Owners’ first mortgage financing from Capmark obtained in connection with
Fee Owners’ initial acquisition of the Fee Properties pursuant to the Purchase
Contracts.

      


       “Cash Collateral Agreement”
shall mean that certain Cash Collateral and Security Agreement
of even date herewith made by each Leasehold Borrower in favor of Lender
granting a first priority lien and security interest in, among other things, one
hundred percent (100%) of the Security Deposit, as amended, supplemented,
replaced and/or restated from time to time.

       

      “Collateral” shall mean all the
property (including all personal, real, tangible and intangible property) in
which the Collateral Documents grant (or purport to grant) Lender a security
interest or lien.

       

      


       


      
        
           


        

        
          4

          
            

          

        

        
           


        

      


      “Collateral Documents” shall
mean the Pledge Agreement, the Cash Collateral Agreement, the Mortgages, the
Assignment of Contracts, Permits and Licenses, and all UCC Financing Statements
relating to the foregoing.

       

      “Commitment Date” shall have
the meaning ascribed to such term in Section 5.10.

       

      “Common Materials” shall have
the meaning ascribed to such term in Section 6.2.1.

       

      “Connecticut Mortgage” shall
mean a Leasehold Mortgage, Assignment of Leases and Rents, Security Agreement
and Fixture Filing, of even date herewith, covering each Leasehold Property
located in the State of Connecticut and executed by the respective Leasehold
Borrower(s) thereof in favor of Lender, as amended, supplemented, replaced
and/or restated from time to time.

       

                 “Default Rate” shall mean the
rate of fourteen percent (14%) per annum, computed based on a 360-day year and
charged on the basis of actual days elapsed.

       

      “Emeritus” shall have the
meaning ascribed to such term in the Preamble.

       

      “Emeritus Entities” shall mean,
collectively, (i) each Borrower, (ii) each Emeritus Purchaser and (iii) any of
their respective Affiliates whose financial activities are, pursuant to GAAP,
included in Emeritus’s consolidated financial statements.

       

      “Emeritus Purchaser(s)” shall
have the meaning ascribed to such term in the Recitals.

       

                 “Equity Transaction” shall
mean, with respect to any Person, any issuance or sale of shares of Capital
Stock in such Person or any of its consolidated subsidiaries or other
Affiliates, other than an issuance (i) to such Person or any of its consolidated
subsidiaries or other Affiliates or (ii) of restricted stock to any present or
former employee, officer or director of such Person or any of its consolidated
subsidiaries or Affiliates, or in connection with the exercise by a present or
former employee, officer or director of such Person or any of its consolidated
subsidiaries or Affiliates under a stock incentive plan, stock option plan or
other equity-based compensation plan or arrangement.

       

      “Event of Default” shall have
the meaning ascribed to such term in Section 9.1.1.

       

      “Fairwood Lease” shall have the
meaning ascribed to such term in the Recitals.

       

      “Fairwood Guaranty” shall mean
that certain Guaranty of Lease dated as of July 25, 2008, by and between
Emeritus, as guarantor, and Ventas Fairwood, LLC, a Delaware limited liability
company, as landlord, as amended, supplemented, replaced and/or restated from
time to time.

       

      “Fee Owner(s)” shall mean the
Brighton Owner and the Golden Pond Owner.

       

      “Fee Property(ies)” shall mean
Brighton and Golden Pond.

       

      “FEMA” shall mean the Federal
Emergency Management Agency.

       

      


       


      
        
           


        

        
          5

          
            

          

        

        
           


        

      


      “Fiscal Year” shall mean the
twelve (12) month period from January 1 to December 31.

       

      “Florida Mortgage” shall mean a
Leasehold Mortgage, Assignment of Leases and Rents, Security Agreement and
Fixture Filing, of even date herewith, covering each Leasehold Property located
in the State of Florida and executed by the respective Leasehold Borrower(s)
thereof in favor of Lender, as amended, supplemented, replaced and/or restated
from time to time.

       

      “GAAP” shall mean generally
accepted accounting principles set forth in the opinions and pronouncements of
the Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and
authority within the accounting profession), or in such other statements by such
entity as may be in general use by significant segments of the U.S. accounting
profession.

       

      “Golden Pond” shall mean that
certain Fee Property commonly known as Golden Pond Assisted Living and listed as
Facility No. 3 on Exhibit
A and legally described on Exhibit A-3.

       

      “Governmental Authority” shall
mean any court, board, agency, licensing agency, commission, office or authority
or any governmental unit (federal, state, county, district, municipal, city or
otherwise) whether now or hereafter in existence, including, without limitation,
any state licensing agency and/or any state Medicaid agency and any
quasi-governmental authorities.

      


      “Hazardous Materials” shall
have the meaning ascribed to such term in Section 6.1.1.

       

      “Hazardous Materials Claims”
shall have the meaning ascribed to such term in Section 6.1.3.

       

      “Hazardous Materials Laws”
shall have the meaning ascribed to such term in Section 6.1.2.

       

      “Improvements” shall mean the
buildings and other structures now or hereafter located on any Property,
together with all necessary or required site improvements and all appurtenances
and fixtures and all tenant improvements.

       

      “Indemnified Matters” shall
have the meaning ascribed to such term in Section 6.5.

       

      “Intercreditor Agreement” shall
mean that certain Indemnity Agreement of even date herewith by and between
Lender and Capmark.

       

      “Leasehold Borrower(s)” shall have the
meaning ascribed to such term in the Recitals.

       

      “Leasehold Property(ies)” shall have the
meaning ascribed to such term in the Recitals.

       

      “Lender” shall have the meaning
ascribed to such term in the Preamble.

       

      “Loan” shall mean the loan
described in Section 2.1.

       

      


       


      
        
           


        

        
          6

          
            

          

        

        
           


        

      


      “Loan Amount” shall mean Ten
Million and No/100 Dollars ($10,000,000.00).

       

      “Loan Documents” shall mean
those documents, as hereafter amended, supplemented, replaced, modified and/or
restated from time to time, properly executed and in recordable form, if
necessary, listed as Loan Documents in Exhibit B, and shall also
include any other agreement executed by Borrower or any Affiliate of
Borrower in favor of or with Lender in connection with the transactions
contemplated by this Agreement (other than the Other Related
Documents).

       

      “Massachusetts Mortgage” shall
mean an Open-End Leasehold Mortgage Deed, Assignment of Leases and Rents,
Security Agreement and Fixture Filing, of even date herewith, covering each
Leasehold Property located in the State of Massachusetts and executed by the
respective Leasehold Borrower(s) thereof in favor of Lender, as amended,
supplemented, replaced and/or restated from time to time.

       

      “Master Landlord” shall have
the meaning ascribed to such term in the Recitals.

       

      “Master Lease” shall have the
meaning ascribed to such term in the Recitals.

       

       “Master Lease Guaranty” shall
mean, individually or collectively as the context may require (as determined by
Lender), (i) that certain Guaranty of Lease dated as of July 25, 2008, by and
between Emeritus, as guarantor, and Master Landlord, as landlord, as amended,
supplemented, replaced and/or restated from time to time, and (ii) that certain
Guaranty of Lease of even date herewith, by and between SSL, as guarantor, and
Master Landlord, as landlord, as amended, supplemented, replaced and/or restated
from time to time.

       

      “Material Indebtedness” shall
mean any borrowing, loan or indebtedness (other than the Loan) for which any
Borrower Party is liable (other than non-material vendor agreements, which, in
the case of any vendor agreement for which Emeritus is liable, shall mean and
refer to any vendor agreement for which the annual aggregate consideration is
less than $2,000,000.00, and other than loans for which Emeritus is liable, so
long as the principal amount of each such loan is less than $2,000,000.00 and
the aggregate principal amount of such loans is less than
$20,000,000.00).

       

      “Material Vendors” shall mean
those vendors providing services to any Property pursuant to a written contract
for which the annual payments to such vendors exceed $20,000.

       

      “Maturity Date” shall mean
December 18, 2011.

       

      “Mortgages” shall mean,
collectively, the California Deed of Trust, the Connecticut Mortgage, the
Florida Mortgage and the Massachusetts Mortgage. 

       

      “Municipality” shall mean, on a
collective and individual basis, each city or municipality in which any Property
is located.

       

      “Net Cash Proceeds” shall mean,
with respect to any Person, the aggregate gross cash proceeds received, directly
or indirectly, by such Person or any of its consolidated subsidiaries or
Affiliates (including, without limitation, as applicable, all cash proceeds
received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise, but only

       


      
        
           


        

        
          7

          
            

          

        

        
           


        

      


      as and
when received), minus the following, without any duplication: (i) reasonable and
customary brokerage commissions and other reasonable and customary fees and
expenses related to the transaction generating such cash proceeds (including
reasonable and customary fees and expenses of counsel and investment bankers
actually paid by the applicable Person or consolidated subsidiary or Affiliate),
and (ii) in each case, to the extent applicable and not already deducted from
the aforesaid aggregate gross cash proceeds, the amount of any payments made to
retire indebtedness secured by any land, buildings or other tangible assets
being sold or otherwise disposed of where payment of such indebtedness is
required in connection with such transaction generating such cash proceeds;
provided, however, that, if (a) the recipient of Net Cash Proceeds is an
Emeritus Entity that is not, directly or indirectly, 100% owned by Emeritus (a
“Venture Entity”), and
(b) such Venture Entity received such Net Cash Proceeds in return for Capital
Stock in such Venture Entity, then, in such event, the Net Cash Proceeds
received by such Venture Entity shall, for purposes hereof, be reduced by the
amount of the Net Cash Proceeds (x) received by such Venture Entity from an
Equity Transaction that, immediately upon receipt thereof, are paid to a Person
that is not a Emeritus Entity, or (y) that, pursuant to the terms of any
partnership or operating or shareholder agreement, or similar document, which
governs the use of such Net Cash Proceeds, may not be, and in fact are not,
distributed or otherwise paid to Emeritus or another entity that Emeritus wholly
owns.

       

      “Net Operating Income” shall
mean, for any period, the amount by which Operating Revenue for such period
exceeds Operating Expenses for such period.

       

      “Note” shall mean that certain
Secured Promissory Note of even date herewith duly executed by Borrower to the
order of Lender in the stated principal amount of the Loan Amount, as amended,
supplemented, replaced and/or restated from time to time.

       

      “Note Rate” shall mean, during
the following periods, the following interest rates per annum:

       

      
        	
                Period

              	
                Interest Rate

              
	
                December
      19, 2008 through December 18, 2009

              	
                8%

              
	
                December
      19, 2009 through December 18, 2010

              	
                8.25%

              
	
                December
      19, 2010 through December 18, 2011

              	
                8.5%

              


      

      


       

      “Officer’s Certificate” shall
mean a certificate of Borrower (or Borrower Parties, as applicable)
collectively, or each Borrower (or Borrower Party) individually, as applicable,
signed by the chairman of the board of directors, the president, the chief
operating officer, the chief financial officer, the general counsel or the
general partner or managing member, as applicable, of each Borrower (or Borrower
Party) in the case of a certificate of Borrower (or Borrower Party)
collectively, or of such particular Borrower (or Borrower Party), as applicable,
in the case of a certificate of an individual Borrower (or Borrower Party), as
applicable.

       


      
        
           


        

        
          8

          
            

          

        

        
           


        

      


      “Opening Disbursement” shall
have the meaning ascribed to such term in Section 3.1.

       

      “Operating Expenses” shall
mean, with respect to any or all of the Properties, and without duplication, all
costs and expenses incurred by the respective Borrower Party(ies), determined on
an accrual basis, relating to the operation, maintenance, repair, use and
management of such Property(ies), including, without limitation, utilities,
repairs and maintenance, insurance, taxes, assessments, levies, fees,
advertising expenses, payroll and related taxes, equipment lease payments and
actual management fees, but excluding (i) debt service, (ii) depreciation,
amortization and other non-cash expenses of the Property(ies); provided,
however, that such costs and expenses shall be subject to reasonable adjustment
by Lender to normalize such costs and expenses, and (iii) capital
expenditures.

       

      “Operating Revenue” shall mean
all revenue derived from the operation of any or all of the Properties or a
Property, as the case may be, and received by the respective Borrower Party(ies)
from whatever source, determined on an accrual basis, but excluding (i) sales,
use and occupancy or other taxes on receipts required to be accounted for by
such Borrower Party(ies) to any Governmental Authority, (ii) non-recurring
revenues as reasonably determined by Lender (e.g. proceeds from a sale of assets
or refinancing), (iii) casualty insurance proceeds and awards (other than
business interruption or other loss of income insurance related to business
interruption or loss of income for the Property(ies) in question), and (iv) any
proceeds from the permitted sale or refinancing of any Property or
recapitalization of the applicable Borrower Party(ies).  In addition,
if required by Lender, revenue accrued but not paid in cash during an accounting
period shall be adjusted for an allowance for doubtful accounts in a manner
consistent with historical net realizable value.

       

      “Organizational Documents”
shall mean, with respect to a (i) corporation, the articles or charter and
bylaws; (ii) with respect to a partnership, the partnership agreement and
certificate of limited partnership; (iii) with respect to a limited liability
company, the operating agreement and certification of formation; (iv) with
respect to a trust, the trust agreement; and (v) with respect to an
individual, none.

       

      “Other Related Documents” shall
mean those documents, as hereafter amended, supplemented, replaced, modified
and/or restated from time to time, properly executed and in recordable form, if
necessary, listed as Other Related Documents in Exhibit B.

       

      “Permitted Exceptions” shall
mean those title exceptions acceptable to Lender in its sole discretion, which
shall include any matter which would constitute a Permitted Encumbrance (as such
term is defined under the Master Lease) under the Master Lease.

       

      “Permitted Transfers” shall
mean (i) any Transfer related to a Leasehold Property, or involving a transfer
or issuance of stock in Emeritus, or any change in control of Emeritus or any
Person(s) controlling Emeritus, that, if made pursuant to the terms of the
Master Lease, would not be a prohibited Transfer thereunder (except that (a) in
the event any Successor Entity and/or Seniormost Parent Entity (as such terms
are defined in the Master Lease) is required pursuant to the terms of the Master
Lease to execute and deliver to the landlord under the Master Lease a new Lease
Guaranty in the form of the Emeritus Guaranty (as such terms are defined in the
Master Lease) in connection with such Transfer, then such Transfer shall not be
a Permitted

       


      
        
           


        

        
          9

          
            

          

        

        
           


        

      


      Transfer
hereunder unless such Successor Entity and/or Seniormost Parent Entity, as
applicable, assumes, joins in and agrees to perform any and all duties,
liabilities and other obligations of Emeritus under this Agreement, the other
Loan Documents and the Other Related Documents, on a joint and several basis
with each other (if both a Successor Entity and a Seniormost Parent Entity are
required to deliver a new Lease Guaranty relative to the Master Lease, as
described above) and with all other Borrowers (including, without limitation,
Emeritus, if Emeritus remains in existence), pursuant to documentation
reasonably satisfactory to Lender, and (b) if such Transfer results in any
mandatory prepayment obligation as provided in Section 2.7.2 hereof,
such mandatory prepayment is made to Lender), (ii) any sale or disposition of
any item of tangible personal property used in the operation of any of the
Properties, provided, however, that, unless such item is functionally obsolete,
Borrower shall be obligated to replace, or to cause the Fee Owners to replace,
such item with an item of similar quality, use and functionality, and (iii) the
mortgage lien granted to secure the Capmark Loan.

       

      “Person” shall mean any
individual, sole proprietorship, corporation, general partnership, limited
partnership, limited liability company, joint venture, association, joint stock
company, bank, trust, estate, unincorporated organization, Governmental
Authority, endowment fund or other form of entity.

       

      “Pledge Agreement” shall mean
that certain Membership Interest Pledge and Security Agreement of even date
herewith made by SSL in favor of Lender granting a first priority lien and
security interest in one hundred percent (100%) of the membership interests in
the Fee Owners, as amended, supplemented, replaced and/or restated from time to
time.

       

      “Project” shall mean all of the
Improvements located on any one or more of the Properties, as the context may
require as determined by Lender, together with any fixtures, fittings,
apparatus, machinery, equipment and other personal property, and any
replacements thereof or substitutes therefor, now or at any time hereafter owned
by the Borrower Parties and located on any such Property(ies) or not located on
such Property(ies) but used in any way in connection with such Property(ies) or
the Improvements located thereon (other than tangible personal property located
at Borrower’s main office).

       

      “Property Leases” shall mean all
commercial leases, licenses or other agreements providing for the use or
occupancy of any portion of the Properties, including all amendments,
extensions, renewals, supplements, modifications, sublets and assignments
thereof and all separate letters or separate agreements relating thereto,
provided, however, that Property Leases shall not include the Master Lease nor
any Residency Agreement.

       

      “Property(ies)” shall mean,
collectively or individually as the context may require, as determined by
Lender, each of the Fee Properties and each of the Leasehold
Properties.

       

      “Provider Agreements” shall
mean any agreements under which healthcare facilities are eligible to receive
payment under any Third Party Payor Program from Governmental Authorities or
non-public entities.

       

      “Purchase Contract(s)” shall
have the meaning ascribed to such term in the Recitals.

       

      


       


      
        
           


        

        
          10

          
            

          

        

        
           


        

      


      “REA” shall mean any reciprocal
easement agreement or like agreement (together with any amendments or
modifications thereto) concerning any of the Fee Properties executed by and
between the respective Fee Owner and owners of adjacent property.

       

      “Residency Agreement” shall
mean an agreement with a resident of a Property:  (i) that does not
provide for lifecare services; (ii) that does not contain any type of rate lock
provision or rate guaranty for more than one (1) calendar year; (iii) that does
not provide for any rent reduction or waiver other than for an introductory
period not to exceed six (6) months; (iv) under which Borrower Party at no time
collects rent for more than one (1) month in advance, other than an amount equal
to not more than two (2) months’ rent collected and held by Borrower Party as
security for the performance of the resident’s obligations to Borrower Party;
(v) that is accurately shown in the accounting records for such Property; and
(vi) that is otherwise on Borrower Party’s usual and customary form, without any
material amendments to such form.

       

      “RICO Related Law” shall mean
the Racketeer Influenced and Corrupt Organizations Act of 1970 or any other
federal, state or local law for which forfeiture of assets is a potential
penalty.

       

      “Security Deposit” shall mean
any security deposit, whether now or hereafter existing, and whether in the form
of cash or a letter of credit (or the proceeds thereof), deposited by Leasehold
Borrowers pursuant to the Master Lease and held by Master Landlord (and/or its
Affiliates) pursuant to the Master Lease or by Lender pursuant to the Cash
Collateral Agreement.

       

      “Sold Property(ies)” shall have the
meaning ascribed to such term in the Recitals.

       

      “SSL” shall have the meaning
ascribed to such term in the Preamble.

       

      “Subordination Agreement (Management
Agreement)” shall mean Lender’s standard form of Assignment and
Subordination of Management Agreement to be executed by the respective Borrower
Party and any property manager for the benefit of Lender.

       

      “Third Party Payor Programs”
shall mean any third party payor programs pursuant to which healthcare
facilities qualify for payment or reimbursement for medical or therapeutic cure
or other goods or services rendered, supplied or administered to any admittee,
occupant, resident or patient by or from any Governmental Authority, bureau,
corporation, agency, commercial insurer, non-public entity, “HMO,” “PPO” or
other comparable party.

       

      “Title Company” shall mean
First American Title Insurance Company.

       

      “Title Insurance Policies
(Leasehold)” shall mean an ALTA Lender’s (Leasehold) Policy or Policies
of Title Insurance as issued by the Title Company covering Lender’s security
interest and lien under the Mortgages and corresponding UCC Financing Statements
filed as fixture filings, with extended coverage and containing such
endorsements as Lender may reasonably require, to the extent available in the
State where a Leasehold Property is located, including, without limitation, a
creditor’s rights endorsement, a usury endorsement, a separate tax parcel
endorsement, a PUD endorsement, a variable rate endorsement, an access
endorsement relating to the public street, a survey endorsement, a comprehensive
endorsement no. 1, a 3.1

       


      
        
           


        

        
          11

          
            

          

        

        
           


        

      


      zoning
endorsement for any improved property, a first loss endorsement, a subdivision
endorsement (if applicable), a contiguity endorsement (if applicable), a waiver
of arbitration endorsement, a tie-in endorsement and a last dollar
endorsement.

       

      “Title Insurance Policies (Eagle
9)” shall mean (i) an Eagle 9 UCC Insurance Policy, or the equivalent
thereto, issued by the Title Company covering Lender’s security interest and
lien under the Pledge Agreement and corresponding UCC Financing Statements filed
as fixture filings, and containing such endorsements as Lender may require,
together with (ii) an ALTA Owner’s Policy of Title Insurance issued in favor of
the Fee Owners covering their fee title in the Fee Properties, containing such
endorsements as Lender may require, including, without limitation, a Mezzanine
Endorsement in favor of Lender.

       

      “Transfer” shall mean any
conveyance, transfer, sale, assignment, pledge, hypothecation, mortgage,
encumbrance or other disposition of all or any portion of the Properties or of
any interest in any Borrower Party, as applicable, or the entering into of any
agreement to do any of the foregoing, whether the same occurs directly,
indirectly, by operation of law or otherwise.

       

      “UCC” shall mean the Uniform
Commercial Code as enacted in the states where the Collateral is located or the
applicable party is organized.

       

      “Venture Entity” shall have
that meaning ascribed to it in the definition of “Net Cash
Proceeds”.

       

      “Whitehall Lease” shall have
the meaning ascribed to such term in the Recitals.

       

      “Whitehall Guaranty” shall mean
that certain Guaranty of Lease dated as of July 25, 2008, by and between
Emeritus, as guarantor, and Ventas Whitehall Estates, LLC, a Delaware limited
liability company, as landlord, as amended, supplemented, replaced and/or
restated from time to time.

       

      1.2. Exhibits
and Schedules Incorporated.  All exhibits and schedules
attached hereto or referenced herein are hereby incorporated into this
Agreement.

       

      2. LOAN.

       

      2.1. The
Loan.  Borrower desires to obtain from Lender a loan (the
“Loan”) in an amount
equal to the Loan Amount.  Borrower acknowledges and agrees that
Lender has not made any commitments, either express or implied, to extend the
term of the Loan past the Maturity Date, unless Borrower and Lender hereafter
specifically otherwise agree in writing.

       

      2.2. Intentionally
Omitted.

       

      2.3. Loan
Documents.  Borrower shall deliver to Lender con­currently
with this Agreement each of the Loan Documents and the Other Related Documents,
properly executed and in recordable form, as applicable.

       


      
        
           


        

        
          12

          
            

          

        

        
           


        

      


      2.4. Agreement
Date.  The Loan Documents and the Other Related Documents shall
become effective as of the date of this Agreement.

       

      2.5. Maturity
Date.  On the Maturity Date, all sums due and owing under this
Agreement and the other Loan Documents and the Other Related Documents shall be
repaid in full.  All payments due under this Agreement, whether at the
Maturity Date or otherwise, shall be paid in immediately available
funds.

       

      2.6. Note
Rate.

       

      2.6.1. Interest
Rate.  All disbursements of Loan proceeds shall bear interest
at the applicable Note Rate, subject to the default interest provisions
contained herein.

       

      2.6.2. Interest
Payments.  Subject to Section 2.6.3, interest accrued on
the outstanding amount of the Loan shall be payable by Borrower in arrears on
the first Business Day of the first calendar month following the date of this
Agreement, and the first Business Day of each succeeding calendar month
thereafter, and on the Maturity Date.  

       

      2.6.3. Default
Interest.

       

      2.6.3.1. If any
payment of interest required hereunder or under any other Loan Document or Other
Related Document is not received by Lender on or before the fifth (5th) day
following the date such payment becomes due, Borrower shall pay to Lender a late
charge equal to five percent (5%) of the amount of such unpaid payment to defray
part of the increased cost of collecting late payments and the opportunity costs
incurred by Lender because of the unavailability of the funds.  If
such interest payment is not received by Lender on or before the fifth (5th) day
following the date when it becomes due, Borrower shall pay interest on the
entire outstanding principal balance of the Note at the Default Rate from and
after the date when the payment was due.

       

      2.6.3.2. If any
payment of principal required hereunder or under any other Loan Document or
Other Related Document, other than the repayment of the Loan Amount due on the
Maturity Date, is not received by Lender on or before the date such payment
becomes due, Borrower shall pay to Lender a late charge equal to five percent
(5%) of the amount of such unpaid payment to defray part of the increased cost
of collecting late payments and the opportunity costs incurred by Lender because
of the unavailability of the funds.  In addition to the late charge,
Borrower shall pay interest on the entire outstanding principal balance of the
Note at the Default Rate from and after the date when the payment was
due.

       

      2.6.3.3. Effective
immediately upon the occurrence of any Event of Default other than default in
the payment of interest or principal as described in the preceding two
paragraphs, the balance of this Note then outstanding shall bear interest at the
Default Rate (based on a 360-day year and charged on the basis of actual days
elapsed).  In addition, all other amounts due Lender (whether directly
or for reimbursement) under the Note, the Loan Agreement or any of the other
Loan Documents or the Other Related Documents, if not paid when due or, in the
event no time period is expressed, if not paid within five (5) days
after

       


      
        
           


        

        
          13

          
            

          

        

        
           


        

      


      written
notice from Lender that the same has become due, shall also bear interest
thereafter at the Default Rate.

       

      2.6.4. Computation
of Interest.  Interest shall be computed on the basis of the
actual number of days elapsed in the period during which interest accrued and a
year of 360 days.  In computing interest, the date of funding, but not
the date of payment so long as received by 2:00 P.M. (Central Standard Time),
shall be included; provided, however, that if any funding is repaid on the same
day on which it is made, one day’s interest shall be paid
thereon.  Notwithstanding any of the terms and conditions contained in
this Section, interest in respect of any amount of the Loan shall not exceed the
maximum rate permitted by applicable law.

       

      2.7. Prepayments;
Amortization; Payments.

       

      2.7.1. Voluntary
Prepayments.  Borrower may prepay the Loan in whole or in part
at any time without penalty upon thirty (30) days prior written notice to
Lender.

       

      2.7.2. Mandatory
Prepayments.

       

      2.7.2.1. In the
event any of the Emeritus Entities engage, directly or indirectly, in an Equity
Transaction, Borrower shall pay, or cause to be paid, to Lender on account of
the Loan the lesser of either (i) the amount of the Net Cash Proceeds received
by any of the Emeritus Entities from such Equity Transaction or (ii) all amounts
owing with respect to the Loan.

       

      2.7.2.2. In the
event of any sale or refinancing, directly or indirectly, of any of the Sold
Properties (not including the Capmark Loan) and/or any interest of any Emeritus
Entity in the Sold Properties, Borrower shall pay, or cause to be paid, to
Lender on account of the Loan the lesser of either (i) the amount of the Net
Cash Proceeds from such sale or refinancing or (ii) all amounts owing with
respect to the Loan.

       

      2.7.3. Amortization.  In
addition to the interest payments provided in Section 2.6.2 above, on January 2,
2009, and on the first Business Day of each succeeding calendar month thereafter
that precedes the month which includes the Maturity Date, Borrower shall pay to
Lender, in partial repayment of the outstanding principal amount under the Loan
Documents and the Other Related Documents, the amount of Forty Thousand and
No/100 Dollars ($40,000.00).

       

      2.7.4. Manner
and Time of Payment.  All payments of principal, interest and
fees hereunder, or under the other Loan Documents or the Other Related
Documents,  payable to Lender shall be made, without condition or
reservation of right and free of set-off or counterclaim, in U.S. dollars and by
wire transfer (pursuant to Lender’s written wire transfer instructions from time
to time delivered pursuant to the notice provisions hereof (Lender’s current
wire transfer instructions are attached hereto as Exhibit C)) of immediately
available funds delivered to Lender not later than 2:00 P.M. (Central Standard
Time) on the date due.  Funds received by Lender after that time and
date shall be deemed to have been paid on the next succeeding Business
Day.

       


      
        
           


        

        
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      2.7.5. Payments
on Non-Business Days.  Whenever any payment to be made by
Borrower hereunder shall be stated to be due on a day which is not a Business
Day, payments shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder.

       

      2.8. Expenses.  Borrower
shall, immediately upon demand, pay or reimburse Lender for all attorneys’ fees
and expenses incurred by Lender in any proceedings involving the estate of a
decedent, an insolvent or a bankrupt, or in any action, proceeding or dispute of
any kind in which Lender, in its capacity as lender hereunder (and not as a
landlord under the Master Lease), is made a party, or appears as an intervenor
or party plaintiff or defendant, affecting or relating to this Agreement or any
of the other Loan Documents and the Other Related Documents, any Emeritus
Entity, or any of the Properties, including, without limitation, the foreclosure
of any of the Collateral Documents, any condemnation action involving any of the
Properties, or any action to protect Lender’s interest in any of the Properties,
and any such amounts paid by Lender and not paid or reimbursed by Borrower as
determined by Lender in its sole discretion, within ten (10) days after Lender’s
demand therefor shall be added to the indebtedness evidenced by the Note,
secured by the lien of the Collateral Documents, and shall be due and payable
upon demand.  Borrower shall pay promptly to or as directed by Lender,
after a request therefor by Lender, all out-of-pocket expenses, charges, costs
and fees relating to the cost of reviews and inspections of the Fee Properties
and reviews of environmental or title reports or materials related thereto, and
all out-of-pocket expenses, charges, costs and fees of or relating to the Loan,
including, without limitation, all escrow and recording fees and charges, title
insurance premiums, transfer, documentary stamp and/or other forms of mortgage
taxes, legal fees and expenses of outside counsel for Lender and any third-party
engaged by Lender’s outside counsel on behalf of Lender, and third-party
insurance consultant fees, and any such amounts paid by Lender and not paid or
reimbursed by Borrower within ten (10) days after Lender’s demand therefor shall
be added to the indebtedness evidenced by the Note, as determined by Lender in
its sole and absolute discretion, secured by the Collateral Documents, and shall
be due and payable upon demand.  The foregoing shall not require
Borrower to pay any charges or expenses which Master Landlord is otherwise
obligated to pay under the Master Lease or Lender is otherwise obligated to pay
under the Purchase Contracts.

       

      3. DISBURSEMENT.

       

      3.1. Loan
Opening and Disbursements of Loan Proceeds.  At such time as
all of the terms and conditions set forth in Section 3.2 have been satisfied by
Borrower and Borrower has executed and delivered or caused to be executed and
delivered to Lender each of the Loan Documents and the Other Related Documents
in form and substance satisfactory to Lender, in its sole and absolute
discretion, Lender shall disburse to Borrower an amount equal to the Loan Amount
(the “Opening
Disbursement”).  In the event Borrower fails to satisfy such
disbursement conditions, Borrower nevertheless shall pay all costs and expenses
incurred by Lender in connection with the transactions contemplated herein
promptly upon receipt of an invoice therefor from Lender (and, if appropriate,
any Affiliate of Lender).

       

      3.2. Conditions
Precedent to Opening Disbursement.  In addition to the Loan
Documents and the Other Related Documents, and in conjunction with and as
additional (but independent) supporting evidence for certain of the covenants,
representations and warranties

       


      
        
           


        

        
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      made by
Borrower herein, prior to and as a condition of the Opening Disbursement,
Borrower shall deliver or cause to be delivered to Lender each of the following,
each of which shall be in form and substance satisfactory to Lender, in its sole
and absolute discretion:

       

      3.2.1. Title
Insurance.

       

      3.2.1.1. Title
Insurance Policies (Leasehold).  Concurrently with the
recording of each of the Mortgages (other than the Florida Mortgage), the Title
Insurance Policies (Leasehold) issued by the Title Company with respect to each
of the Leasehold Properties (other than the Leasehold Properties located in
Florida), with a tie-in endorsement acceptable to Lender in its sole and
absolute discretion, insuring, in an amount equal to the Loan Amount, as of the
date of the Opening Disbursement, each such Mortgage to be a valid first and
prior lien on the leasehold interest of each Leasehold Borrower under the Master
Lease, subject only to the Permitted Exceptions, and, concurrently with the
recording of the Florida Mortgage, the Title Insurance Policies (Leasehold)
issued by the Title Company with respect to each of the Leasehold Properties
located in Florida, with a tie-in endorsement acceptable to Lender in its sole
and absolute discretion, insuring, in an amount equal to the Loan Amount, as of
the date of the Opening Disbursement, the Florida Mortgage to be a valid first
and prior lien on the leasehold interest of each Leasehold Borrower under the
Master Lease, subject only to the Permitted Exceptions.

      


      3.2.1.2. Title
Insurance Policies (Eagle 9).  Concurrently with the execution
and delivery of the Pledge Agreement, and the recording of the corresponding UCC
Financing Statements, the Title Insurance Policies (Eagle 9) issued by the Title
Company with respect to each Fee Owner (and Fee Property), insuring, in an
amount equal to the Loan Amount, as of the date of the Opening Disbursement, the
Pledge Agreement and corresponding UCC Financing Statements to be a valid first
and prior lien on the membership interests of each Fee Owner, subject only to
the Permitted Exceptions.

       

      3.2.2. Intentionally
Omitted.  

       

      3.2.3. Insurance.  Evidence
of the insurance described in Section 4.

       

      3.2.4. Searches.  Such
UCC searches on each Borrower Party, and any other owner of the Collateral
(including the Fee Owners directly) pertaining to the jurisdictions (i) in which
the owner of the Collateral is organized, and (ii) in which the Collateral is
located as determined pursuant to Article 9 of the UCC.

       

      3.2.5. Opinions.  An
opinion of counsel of Borrower reasonably satisfactory to Lender, dated on or
about the date of the Opening Disbursement and relating to such customary
matters with respect to the Loan Documents and the Other Related Documents, the
Loan, the Properties and otherwise with respect to the transaction contemplated
hereby as Lender may reasonably request.

       

      3.2.6. Organization,
Authorization
and Good Standing.  Such evidence of the due authorization,
good standing and qualification to do business, of the Borrower Parties
as

       


      
        
           


        

        
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      Lender
may reasonably request and certified copies of the Organizational Documents of
each Borrower Party.

       

      3.2.7. Master
Lease Guaranty from SSL.  An executed original of the Master
Lease Guaranty of even date herewith from SSL.

       

      3.2.8. Intentionally
Omitted.


       

      3.2.9. Lender
Consents.  Delivery of written consents from any mortgage
lender with a lien on Brighton and/or Golden Pond (including, without
limitation, Capmark), and from any other lenders having consent rights as to any
of the Collateral Documents, consenting to Lender’s security and collateral
interests and Lender’s other rights under the Collateral Documents, in form and
substance satisfactory to Lender, as determined in its reasonable
discretion.

       

      3.2.10. USA
Patriot Act. Such information on the principals of the Borrower Parties
as Lender reasonably believes is prudent to ensure compliance with the USA
Patriot Act (Title III of Pub. L. 107-56) (signed into law October 26,
2001).  Lender hereby notifies Borrower that, pursuant to the
requirements of the Act, it is required to obtain, verify and record the name
and address of Borrower and other information that will allow Lender to identify
Borrower in accordance with the Act.

       

      3.3. Disbursements
Evidenced by the Note.  All amounts disbursed by Lender
hereunder, together with interest thereon, shall be evidenced by the Note and
secured by the Collateral Documents.

       

      4. INSURANCE.

       

      4.1. Types of
Policies.  Subject to Section 4.6 below, Borrower,
at its sole cost and expense, shall insure or cause to be insured and keep
insured each Fee Property against such perils and hazards, and in such amounts
and with such limits, as Lender may from time to time deem (i) commercially
reasonable (in light of such factors, including, without limitation, the
availability and cost of particular types and amounts of coverages, as Lender,
in its sole discretion, deems appropriate) and/or (ii) consistent with the
insurance coverages that are maintained by owners of properties similar to the
Fee Properties, and, in any event, including, without limitation, the following
coverages with respect to each of the Fee Properties (where references are made
to “the Property” in this Section 4 they are intended to
refer to each and every Fee Property):

       

      4.1.1. All
Risk.  Insurance against loss to the Property which, during any
construction, shall be on an “All Risk” perils “Builders’ Risk,” monthly
reporting or non-reporting “Completed Value” form and, after completion of
construction, shall be on an “All Risk” policy form covering, in each case,
insurance risks of all physical loss “Causes of Loss - Special Form,” including
theft, terrorism, and insurance against such other risks as Lender may
reasonably require.  Such policies shall be in amounts equal to the
full replacement cost of the Property (including the related Improvements and,
specifically, Fee Owner’s interest in any leasehold improvements).

       


      
        
           


        

        
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      4.1.2. Flood.  If
any Property is now, or at any time while any obligation of Borrower hereunder
remains outstanding shall be, situated in any area which an appropriate
governmental authority designates as a Special Flood Hazard Area, insurance
against loss or damage by flood or mud slide in compliance with the Flood
Disaster Protection Act of 1973, as amended from time to time, in amounts
reasonably acceptable to Lender.

       

      4.1.3. Public
Liability.  Commercial general public liability insurance
against death, bodily injury and property damage arising in connection with the
Property with limits of not less than One Million and No/100 Dollars
($1,000,000.00) per occurrence with not less than a Three Million and No/100
Dollars ($3,000,000.00) general aggregate limit and with the applicable limits
applying on a “per
location” basis.  Such policy shall be written on a claims made
form and shall list the respective Borrower Parties as the named insured, shall
designate thereon the location of the Property and shall have such limits and
deductibles as Lender may reasonably require.

       

      4.1.4. Contractor’s
Insurance.  During the entire period of material renovation and
construction of any of the Improvements on the Property, Borrower shall cause to
be furnished to Lender certificates from the insurance carrier for the
respective Project contractor evidencing worker’s compensation, employers’
liability, commercial auto liability, excess umbrella liability coverage and
commercial general liability insurance (including contractual liability and
completed operations coverage) written on an occurrence form, with such general
liability insurance limits as Lender may reasonably require.

       

      4.2. Policy
Requirements.  All insurance shall be carried in companies
acceptable to Lender and all policies shall name Lender as an additional insured
on a primary and non-contributory basis, mortgagee and loss
payee.  Furthermore, all insurance shall be in form and content
reasonably acceptable to Lender, provide thirty (30) days’ advance written
notice to Lender before any cancellation, adverse material modification or
notice of non-payment and, to the extent limits are not otherwise specified
herein, contain deductibles which are in amounts acceptable to
Lender.  All physical damage policies and renewals shall contain a
standard mortgage clause naming Lender as mortgagee, which clause shall
expressly state that any breach of any condition or warranty by any applicable
Borrower shall not prejudice the rights of Lender under such insurance, as well
as a loss payable clause in favor of Lender for personal property, contents,
inventory and equipment.  Except for Master Landlord, no additional
parties shall appear in the mortgage or loss payable clause with respect to any
Property without Lender’s prior written consent.  All evidence of
insurance shall reference the specific projects being covered by name and
address and shall otherwise be in form and substance reasonably acceptable to
Lender.  All deductibles shall be in amounts reasonably acceptable to
Lender.

       

      4.3. Notice;
Evidence of Renewal.  Any notice pertaining to insurance and
required pursuant to this Section shall be given in the manner provided in Section 10.8 and at any additional
address of which Lender gives Borrower prior written notice.  Borrower
shall use commercially reasonable efforts to deliver to Lender evidence of
renewal satisfactory to Lender at least ten (10) days before the expiration date
of existing policies or any prior renewal thereof.  If Lender has not
received satisfactory evidence of such renewal or substitute insurance as of ten
(10) days before such expiration date, Lender shall have the right, but not the
obligation, to purchase such insurance upon three (3) days’ prior notice to
Borrower (if such notice is given by

       


      
        
           


        

        
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      Lender
more than five (5) days in advance of such expiration date), unless Borrower has
provided such satisfactory evidence to Lender prior to the expiration of such
three (3) day period, or with no notice to Borrower at any time three (3) days
or less prior to such expiration date, unless Borrower has provided such
satisfactory evidence to Lender prior to Lender’s aforesaid purchase of
insurance.  Any amounts so disbursed by Lender pursuant to this
Section shall be a part of the Loan and shall bear interest at the Default
Rate.  Nothing contained in this Section shall require Lender to
incur any expense or take any action hereunder, and inaction by Lender shall
never be considered a waiver of any right accruing to Lender on account of this
Section 4.

       

      4.4. Separate
Insurance.  Borrower shall not carry any separate insurance on
the Property concurrent in kind or form with any insurance required hereunder or
contributing in the event of loss without Lender’s prior written consent and, in
the event Lender grants its consent, any such policy shall nevertheless have
attached thereto a standard non-contributing mortgagee clause, with loss payable
to Lender, and shall otherwise meet all other requirements set forth in this
Section.

       

      4.5. Leasehold
Properties.  Notwithstanding anything contained herein which
may be construed to the contrary, the Leasehold Properties shall be insured
pursuant to the requirements set forth in the Master Lease so long as all or any
portion of the Loan remains outstanding, except that, in addition to complying
with such requirements, Borrower shall cause Lender, in its capacity as lender
under the Loan, to be named as an additional insured on a primary,
non-contributory basis on any commercial liability insurance that is required
under the Master Lease and shall cause Lender, in its capacity as lender under
the Loan, to be named as loss payee and mortgagee under a so-called New York
standard non-contributory mortgagee clause on any “all risk” or “special causes
of loss” or similar policy that is required under the Master Lease.

       

      


      4.6. Fee
Properties.  Notwithstanding anything contained herein which
may be construed to the contrary, in the event of any conflict between the
requirements of this Section
4 and the insurance requirements set forth in the Capmark Loan documents,
the Fee Properties shall be insured pursuant to the requirements set forth in
the Capmark Loan documents, so long as the Capmark Loan shall be outstanding,
except that, notwithstanding the foregoing, Borrower shall cause Lender, in its
capacity as lender under the Loan, to be named as an additional insured on a
primary, non-contributory basis on any commercial liability insurance that is
required under the Capmark Loan documents.

       

      5. GENERAL
REPRESENTATIONS AND WARRANTIES.  Borrower hereby
covenants, represents and warrants to Lender as follows:

       

      5.1. Authority.  Each
Borrower has full right, power and authority to execute, deliver and carry out
the terms and provisions of the Loan Documents and the Other Related Documents
to which it is a party and any other documents and instruments to be executed
and delivered by such Borrower pursuant to this Agreement.  The Loan
Documents and the Other Related Documents and any other documents and
instruments to be executed and delivered by the Borrower pursuant to this
Agreement, when executed and delivered pursuant hereto, will constitute the duly
authorized, valid and legally binding obligations of such parties and will
be

       


      
        
           


        

        
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      enforceable
strictly in accordance with their respective terms, subject to the effect of
bankruptcy and other laws affecting the rights of creditors
generally.

       

      5.2. Formation.  Each
Borrower that is not an individual or general partnership is a corporation,
limited liability company or limited partnership, is duly formed, validly
existing and in good standing under the laws of the state under the laws of
which it was formed.  Each Borrower that is an entity has qualified to
do business in every state where such qualification is required. Borrower has
furnished Lender with a certified true, complete and correct copy of the
Organizational Documents of each Borrower Party.  No Borrower shall
modify, amend, terminate or otherwise change any of the Organizational Documents
of any Borrower Party without Lender’s consent.

       

      5.3. No
Default.  None of the Borrower Parties is in default under any
contract, agreement or commitment to which it is a party, the effect of which
would adversely affect any Borrower’s performance of its respective obligations
pursuant to and as contemplated by the terms and provisions of this Agreement or
any of the other Loan Documents and the Other Related Documents.  The
execution and delivery of the Loan Documents and the Other Related Documents and
any other documents or instruments to be executed and delivered by Borrower
pursuant hereto, the consummation of the transactions herein or therein
contemplated, and compliance with the terms and provisions hereof or thereof,
will not (i) to the best of Borrower’s knowledge, violate any presently existing
provisions of law or any presently existing applicable regulation, order, writ,
injunction or decree of any court or governmental department, commission, board,
bureau, agency or instrumentality, or (ii) conflict or be inconsistent with, or
result in any breach of, any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in any acceleration of any
obligations under, any indenture, mortgage, deed of trust, instrument,
documents, agreement or contract of any kind to which any Borrower is a party or
by which any Collateral of any Borrower may be bound.

       

      5.4. No
Litigation.  There are no petitions, actions, suits or
proceedings pending or, to the best of Borrower’s knowledge, threatened in
writing against or affecting any Collateral before any court or governmental,
administrative, regulatory, adjudicatory or arbitrational body or agency of any
kind, which will materially adversely affect the performance by any Borrower of
its obligations pursuant to and as contemplated by the terms and conditions of
this Agreement or the other Loan Documents and the Other Related
Documents.

       

      5.5. True and
Complete Information.  To Borrower’s knowledge, neither this
Agreement, nor any other Loan Document or Other Related Document, nor any
document, financial statement, credit information, certificate or other
statement required herein furnished to Lender by any Borrower Party contains any
untrue statement of a material fact or omits to state a material fact relating
to the Collateral or any matter covered by this Agreement.

       

      5.6. Usury.  The
Loan constitutes a business loan within the meaning of 815 Illinois Compiled
Statutes, 205 Section 4(1)(c), and the amounts to be received by Lender as
interest under the Note are not usurious or illegal under Illinois
law.

       


      
        
           


        

        
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      5.7. Non
Foreign Status.  No Borrower Party is a nonresident alien for
purposes of U.S. income taxation or is not a foreign corporation, foreign
partnership, foreign trust or foreign estate (as said terms are defined in the
Internal Revenue Code and Income Tax Regulations).

       

      5.8. ERISA.  No
Borrower Party is and, for so long as any obligation of Borrower hereunder
remains outstanding, shall be an “employee benefit plan” within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended,
no Borrower Party’s assets constitute assets of any such plan.

       

      5.9. RICO.  There
are no suits, actions or proceedings pending or threatened against any Borrower
Party or Daniel R. Baty under a RICO Related Law.

       

      5.10. Financial
Statements; No Material Adverse Change.  Borrower has heretofore
furnished Lender a copy of each Borrower Party’s compiled financial statements
each dated as of September 30, 2008.  Such financial statements were
prepared on a GAAP basis in a manner consistent with the applicable Borrower
Party’s preparation method for the prior fiscal year and present fairly the
financial condition of such Borrower Party as of the date thereof and the
results of operations for the period then ended and otherwise comply with Section 8.1.  Since the
date of such financial statements, there has been no material adverse change in
such Borrower Party’s business or financial condition not disclosed in writing
to Lender.  Such Borrower Party has no contingent liabilities not
provided for or disclosed in said financial statements, except as disclosed in
writing to Lender.  Each Borrower Party has the financial capacity to
perform and discharge each and every one of its respective obligations and
liabilities under this Agreement and any of the other Loan Documents and the
Other Related Documents as it becomes due.  Since July 25, 2008 (the
“Commitment Date”), no
material adverse change has occurred in the financial condition of any Borrower
Party, and (ii) no Event of Default exists and is continuing under the Master
Lease, the Brighton Lease (as defined in the Master Lease), the Fairwood Lease,
the Whitehall Lease, or any guaranty relating to any of the foregoing, and no
event or condition has arisen that, with notice or passage of time or both,
could reasonably be expected to become an Event of Default under any one or more
of the foregoing.

       

      5.11. Property
Specific.  With respect to each Property (where references are
made to “the Property” in this Section 5.11 they are intended
to refer to each and every Property):  

       

      5.11.1. Compliance
With Laws.  To Borrower’s knowledge, the use of the Property
does not violate any presently existing applicable statute, law, regulation,
rule, ordinance or order of any kind whatsoever (including, without limitation,
any presently existing zoning or building laws or ordinances, any presently
existing environmental protection laws or regulations, or any presently existing
rules, regulations or orders of any governmental agency), or any building permit
issued with respect to the Property or any condition, easement, right-of-way,
covenant or restriction of record affecting the Property, which violation could,
in Lender’s reasonable opinion, impair any Borrower’s ability to keep or perform
any of its agreements, undertakings, obligations, covenants or conditions under
this Agreement.

       

      5.11.2. ADA
Compliance.  The Improvements on the Property are, to
Borrower’s knowledge, and shall be maintained, in strict accordance and full
compliance with all of the requirements of the ADA and any similar state or
local law, to the extent same are applicable

       


      
        
           


        

        
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      thereto.  Borrower
shall pay or cause to be paid all ADA related compliance costs relating to each
Property.

       

      5.11.3. Flood
Plain and Wetlands.  No portion of Improvements on any Property
is located (i) in an area designated by FEMA as a Special Flood Hazard Area,
(ii) in an area classified as “wetlands” or (iii) in an area
designated by any federal, state or local governmental or quasi-governmental
agency as a “floodway,”
special flood hazard area or flood plain.

       

      5.11.4. No
Defaults Under Agreements Affecting the Property.  There exist
no monetary defaults or other material defaults, of which the Borrower Parties
have given or received notice, beyond any applicable cure period under any (i)
agreement (written or oral) relating to the Property (including, without
limitation, any REA), or (ii) under any material Property Lease.

       

      5.11.5. Associations.  Each
Borrower will comply, in all material respects, with all obligations arising
from membership in any association imposed on the owner of its Property pursuant
to any recorded instrument to which title to the Property is subject, or
otherwise imposed on any Borrower under any such instrument.  Borrower
shall promptly deliver to Lender copies of any notice of default relating to any
payment or other obligation under any such instrument which any Borrower may
receive.  In the event Lender receives notice of any such payment
default from whatever source, Lender, upon prior notice to Borrower, may elect
(but shall have no obligation) to make such payment on behalf of any Borrower,
in which event the amount so paid, as determined by Lender in its sole
discretion, shall be deemed a disbursement of Loan proceeds and become
additional indebtedness under the Note.

       

      5.11.6. Agreements
Affecting the Properties.  No Borrower shall enter into any
contract or agreement relating to the management of the Properties without the
prior written consent of Lender (not to be unreasonably withheld or delayed)
and, if required by Lender, the applicable Borrower shall execute a collateral
assignment to Lender of such Borrower’s right, title and interest in and to any
such property management agreement.

       

      5.12. Brokerage
Commissions.  No brokerage fees or commissions are payable by
any Borrower in connection with the Loan.

       

      5.13. Loan
Purposes.  The Loan is not being made for the purpose of
purchasing or carrying margin stocks, and Borrower agrees to execute, or cause
to be executed, upon reasonable request from Lender, all instruments necessary
to comply with all of the requirements of Regulation U of the Federal Reserve
System.  The Loan is an exempt transaction under the Truth-in-Lending
Act.

       

      5.14. Single
Purpose Entity.  Each Leasehold Borrower and each Fee Owner is
and shall remain a single purpose entity which (i) was formed or organized
solely for the purpose of acquiring and directly holding an ownership or
leasehold interest in a Property and activities incidental thereto, (ii) does
not and will not engage in any business unrelated to such Property, (iii) does
not and will not have any assets other than those related to its interest in
such Property or any indebtedness other than as permitted by the Loan Documents
and the Other Related Documents, (iv) has its own separate books and records and
keeps its own accounts, in each case

       


      
        
           


        

        
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      which are
separate and apart from the books and records and accounts of any other entity,
(v) is subject to all of the limitations on powers set forth in its
organizational documentation, (vi) holds and will hold itself out as being an
entity separate and apart from any other entity, (vii) has not at any time
since its formation assumed or guaranteed and will not assume or guaranty the
liabilities of any other entity, (viii) has not at any time since its formation
acquired and will not acquire obligations or securities of any other entity,
(ix) has not at any time since its formation made and will not make loans to any
other entity, and (x) does not and will not have any subsidiaries.  No
Leasehold Borrower or Fee Owner shall allow, suffer or permit, at any time, any
security interest in personal or real property to exist with respect to any of
its property (including the Property), except for security interests in favor of
Lender (and other than the Capmark Loan).

       

      5.15. Master
Lease.  Each Leasehold Borrower shall at all times comply with
the requirements, obligations, terms and conditions set forth in the Master
Lease.

       

      5.16. Representations
and Warranties Generally.  The representations and warranties
set forth in this Agreement and/or in any other Loan Document or Other Related
Document will be true and correct on the date of this Agreement and at the dates
of all disbursements of the Loan.  All representations, warranties,
covenants and agreements made in this Agreement or in any certificate or other
document delivered to Lender by or on behalf of Borrower pursuant to or in
connection with this Agreement shall be deemed to have been relied upon by
Lender notwithstanding Lender’s review of any documents or materials delivered
by Borrower to Lender pursuant to the terms hereof and notwithstanding any
investigation heretofore or hereafter made by Lender or on its behalf (and
Borrower hereby acknowledges such reliance by Lender in making the Loan and all
disbursements thereunder).

       

      5.17. Benefits
of the Loan; Additional Agreements of Emeritus.  Each Borrower
acknowledges and agrees that:

       

      (i) the
consummation of the Purchase Contracts, and, among other results thereof, the
partial terminations of the Master Lease and termination of the Brighton Lease
that will result from such consummation, are beneficial to
Borrower;

       

      (ii) without
the Loan, Emeritus, as Purchaser under the Purchase Contracts, would not have
entered into the Purchase Contracts;

       

      (iii) pursuant
to Section 3.4.4 and the other provisions of the Master Lease, upon the
consummation of the Purchase Contracts, the Security Amount (as defined in the
Master Lease) will immediately be reduced by in excess of $4,000,000.00
(exclusive of the additional amount of the Security Deposit that is being
returned on account of the termination of the Master Lease as it relates to the
Sold Properties pursuant to the Purchase Contracts) and the manner in which such
Security Amount is calculated under the Master Lease in the future will be made
substantially more favorable to Borrower, both of which results are major
benefits to Borrower;

       

      (iv) the
Master Lease, as it was entered into as of July 25, 2008 and which combined,
amended and restated two previous master leases, included material,
bargained-for and advantageous provisions in favor of Leasehold Borrowers,
including, without limitation,

       


      
        
           


        

        
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      provisions
not included in the aforesaid previous master leases eliminating certain
individual Property financial tests, expanding Leasehold Borrowers’ rights
relative to assignments and changes in control, and extending certain rights of
first offer to additional Persons, that, in the business judgment of Leasehold
Borrowers, provided and provide fair consideration and value and business
justification for the agreements of Leasehold Borrowers in the Master Lease, and
in this Agreement, the other Loan Documents and the Other Related Documents,
relative to the Loan, including, without limitation, the agreements of Leasehold
Borrowers, at Section 17.11 of the
Master Lease (which Section
17.11 was not included in the aforesaid previous master leases), among
other things, (x) to be a borrower under the Loan, (y) that an Event of Default
under the Loan will constitute an event of default under the Master Lease and
(z) granting the right to apply the Security Deposit to amounts owing under the
Loan; and

       

      (v) for the
preceding reasons and many others, each Borrower has, after careful
consideration and with the advice of counsel, concluded that entry into this
Agreement and the other Loan Documents and the Other Related Documents is in the
best interest of each Borrower, and, without limitation of the foregoing, that
granting a lien and security interest in the Security Deposit to Lender to
secure the Loan, and agreeing that an Event of Default under the Loan will
constitute an Event of Default under the Master Lease, is in each Borrower's
best interest, notwithstanding that the proceeds of the Loan will initially be
wholly used by Emeritus to finance the consummation of the Purchase
Contracts.

       

      Moreover,
without limitation of the substantial and material benefits that each Leasehold
Borrower and SSL will realize from the Loan as referenced above, as an
additional material inducement to Leasehold Borrowers and SSL to enter into this
Agreement, the other Loan Documents and the Other Related Documents, Emeritus
agrees (1) with and in favor of Lender and each Leasehold Borrower and SSL,
that, in the event of any application of the Security Deposit to amounts due
under the Loan or other enforcement of Lender's rights with respect to the
Security Deposit, Emeritus shall immediately take all necessary actions (whether
by depositing additional Security Deposit funds or otherwise) to restore the
amount of the Security Deposit to the Secured Amount required under the Master
Lease, in order to avoid an Event of Default under the Master Lease, and (2) for
the benefit of each Leasehold Borrower and SSL and as between Emeritus, on the
one hand, and each other Borrower, on the other hand, to indemnify and hold
harmless each Leasehold Borrower and SSL from and against any loss, damage, cost
or expense actually incurred, including, without limitation, attorneys' fees and
expenses, that any Leasehold Borrower or SSL may suffer or incur as a result of
any application of the Security Deposit to amounts due under the Loan or other
enforcement of Lender's rights with respect to the Security Deposit or otherwise
as a result of collection by Lender of any amounts due under the Loan from any
Leasehold Borrower or SSL (which collection rights, and all other rights of
Lender under this Agreement, the other Loan Documents and the Other Related
Documents, are unaffected and unimpaired by this subsection (2)).

      



      
        
           


        

        
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      6. HAZARDOUS
MATERIALS.

       

      6.1. Special
Representations and Warranties.  Without in any way limiting
the other representations and warran­ties set forth in this Agreement, and
after reasonable investigation and inquiry, Borrower hereby specially represents
and warrants to the best of Borrower’s knowledge as of the date of this
Agreement as follows, with respect to each Property, except as otherwise
disclosed to Lender pursuant to the making of the Loan or in connection with the
Master Lease:

       

      6.1.1. Hazardous
Materials.  The Property is not and has not been a site for the
use, generation, manufacture, storage, treatment, release, threatened release,
discharge, disposal, transportation or presence of any oil, flammable
explosives, asbestos, urea formaldehyde insulation, polychlorinated biphenyls,
radioactive materials, hazardous wastes, toxic or contaminated substances or
similar materials, including, without limitation, any substances which are
“hazardous substances,” “hazardous wastes,” “hazardous materials” or “toxic
substances” under the Hazardous Materials Laws, as described below, and/or other
applicable environmental laws, ordinances or regulations (collectively, the
“Hazardous
Materials”).

       

      6.1.2. Hazardous
Materials Laws.  The Property is in compliance with all laws,
ordinances and regulations relating to Hazardous Materials and with any permit,
license or requirement pertaining to the protection, preservation, conservation
or regulation of the environment which relates to the Property (“Hazardous Materials Laws”),
including, without limitation:  the Clean Air Act, as amended, 42
U.S.C. Section 7401 et seq.; the Federal Water Pollution Control Act, as
amended, 33 U.S.C. Section 1251 et seq.; the Resource Conservation and Recovery
Act of 1976, as amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive
Environment Response, Compensation and Liability Act of 1980, as amended
(including the Superfund Amendments and Reauthorization Act of 1986), 42 U.S.C.
Section 9601 et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C.
Section 2601 et seq.; the Occupational Safety and Health Act, as amended, 29
U.S.C. Section 651, the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977,
as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, 42
U.S.C. Section 300f et seq.; and all comparable state and local laws, laws of
other jurisdictions or orders and regulations.

       

      6.1.3. Hazardous
Materials Claims.  There are no claims or actions (“Haz­ardous Materials
Claims”) pending or threatened in writing, nor have there been any such
claims or actions in the past, against Borrower, any Borrower Party or the
Property by any governmental entity or agency or by any other person or entity
relating to Hazardous Materials or pursuant to the Hazardous Materials
Laws.

       

      6.1.4. Storage
Tanks.  No storage tanks (including, without limitation,
petroleum or heating oil storage tanks), underground or above-ground, are
present on or under the Property.

       

      6.1.5. Waters of
the United States.  No part of the Fee Properties contains
“waters of the United States”, as defined in 33 CFR 328.  Borrower
shall not, and shall not cause

       


      
        
           


        

        
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      or permit
the Fee Owners to, discharge dredged or fill material into waters of the United
States as such activity is described and regulated by Section 404 of the Clean
Water Act, 33 U.S.C. 1344.

       

      6.2. Covenants.  Borrower
agrees as follows (where references are made to “the Property” in this Section 6.2 they are intended
to refer to each and every Property):

       

      6.2.1. No
Hazardous Activities.  Borrower shall not cause or permit the
Property or any Improvements to be used as a site for the use, generation,
manufacture, storage, treatment, release, discharge, disposal, transportation or
presence of any Hazardous Materials, other than products and materials of a type
commonly used or otherwise present in assisted living facilities, in quantities
and in a manner which complies with Hazardous Materials Laws (“Common
Materials”).

       

      6.2.2. Compliance.  Borrower
shall comply and cause the Fee Owners, the Property and the Improvements to
comply with all Hazardous Materials Laws.

       

      6.2.3. Notices.  Borrower
shall immediately notify Lender in writing of:  (i) the discovery of
any Hazardous Materials on, under or about the Property or Improvements, other
than Common Materials; (ii) any knowledge by any Borrower Party that the
Property or Improvements do not comply with any Hazardous Materials Laws; and
(iii) any Hazardous Materials Claims.  Borrower shall promptly cure
and have dismissed with prejudice, or caused to be promptly cured and dismissed
with prejudice, all Hazardous Materials Claims pursuant to applicable law, and
Borrower shall keep or cause to be kept the Property free of any encumbrance
arising from any judgment, liability or lien imposed pursuant to any Hazardous
Materials Claims.  Notwithstanding the foregoing sentence, Borrower
may, diligently, in good faith and by appropriate legal proceedings, contest, or
Borrower may permit another Borrower Party to contest, any such Hazardous
Materials Claims provided (i) Borrower first furnishes or causes to be furnished
to Lender such deposits or other collateral as Lender, in its sole discretion,
deems sufficient to fully protect Lender’s interests, (ii) such contest shall
have the effect of preventing any threatened or pending sale or forfeiture of
all or any portion of the Property or the loss or impairment of Lender’s lien
and security interests in and to the Property, and (iii) such contest will not
cause Lender to incur any liability, in Lender’s sole
judgment.  Borrower shall permit (or cause each Borrower Party to
permit) Lender, at Lender’s option (but with respect to the Fee Properties,
subject to any restrictions contained in the Capmark Loan documents of which
Borrower has provided Lender with written notice and evidence), to appear in and
to be represented in any such contest and shall pay or cause to be paid upon
demand all expenses incurred by Lender in so doing, including, without
limitation, attorneys’ fees and expenses.

       

      6.2.4. Remedial
Action.  In response to the presence of any Hazard­ous
Materials on, under or about the Property or Improvements (but with respect to
the Fee Properties, subject to any restrictions contained in the Capmark Loan
documents of which Borrower has provided Lender with written notice and
evidence), Borrower shall immediately take or cause to be taken, at Borrower’s
sole expense, all remedial action required by any Hazardous Mate­rials Laws
or any judgment, consent decree, settlement or compromise in respect to any
Hazardous Materials Claims.

       


      
        
           


        

        
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      6.2.5. Exceptions.  The
obligations of Borrower set forth in this Section 6.2 shall not be
applicable to any noncompliance with the terms and conditions hereof to the
extent relating to a particular Property and resulting directly from actions
taken by Lender, Lender’s nominee or a successful purchaser of Collateral after
the respective Borrower Party and its Affiliates have been dispossessed from
such Property.

       

      6.3. Inspection
By Lender.  Borrower shall provide such information and
certifications which Lender may reasonably request from time to time (whether
before or after the commencement of a nonjudicial or judicial foreclosure
proceeding) to monitor Borrower’s compliance with this Section for the sole
purpose of protecting Lender’s interest in the Properties and the Improvements
thereon.  To protect its interest in the Properties and Improvements
(but with respect to the Fee Properties, subject to any restrictions contained
in the Capmark Loan documents of which Borrower has provided Lender with written
notice and evidence), Lender shall have the right, but not the obligation, at
any time upon not less than five (5) days’ written notice to Borrower, except in
the case of emergency, in which event no notice shall be required  to
enter upon the Properties, if Lender has reason to believe that Hazardous
Materials exist on the Property in violation of Hazardous Materials Laws, take
reasonably necessary samples, review any Borrower Party’s books and records
related thereto, interview any Borrower Party’s employees and officers in
relation thereto, and conduct such other related activities as Lender, in its
reasonable discretion, deems appropriate.  Each Borrower Party shall
cooperate fully in the conduct of such an audit.  If Lender decides to
conduct such an audit because of (i) a Hazardous Material Claim, (ii) the
possibility that Lender may, directly or indirectly, take possession of or title
to the Properties (or any part thereof) after an Event of Default, (iii) a
material change in the use of the Properties which, in Lender’s sole and
absolute judgment, increases the risk to its interest in such Property and the
Improvements thereon, or (iv) the introduction of Hazardous Material to any
Property, then Borrower shall pay or cause to be paid upon demand all
out-of-pocket costs and expenses actually incurred by Lender and connected with
such audit, as determined by Lender, which, until paid, shall become additional
indebtedness under the Note secured by the Loan Documents and the Other Related
Documents.  Nothing in this Section shall give or be construed as
giving Lender the right to direct or control any Borrower Party’s actions in
complying with Hazardous Materials Laws.

       

      6.4. Lender’s
Right to Rely.  Lender is entitled to rely upon Borrower’s
representations, covenants, agreements and warranties contained in this Section
despite any independent investigations by Lender or its consultants or other
representatives.  Borrower shall take all necessary actions to
determine for itself, and to remain aware of, the environmental condition of the
Properties.  Borrower shall have no right to rely upon any independent
environmental investigations or findings made by Lender or its consultants or
other representatives unless otherwise stated in writing therein and agreed to
in writing by Lender.

       

      6.5. Hazardous
Materials Indemnity.  Subject to Section 10.24, Borrower hereby
agrees to defend, indemnify and hold harmless Lender, its directors, officers,
employees, agents, successors and assigns (including, without limitation, any
participants in the Loan) from and against any and all losses, damages,
liabilities, claims, actions, judgments, court costs and legal or other expenses
(including, without limitation, attorney’s fees and expenses) which Lender may
incur as a direct or indirect consequence of (a) any Hazardous Material Claim,
(b) any

       


      
        
           


        

        
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      misrepresentation,
inaccuracy or breach of any representation, warranty or covenant contained or
referred to in this Section
6, or (c) the use,
generation, manufacture, storage, disposal, threatened disposal, transportation
or presence of Hazardous Materials in, on, under or about the Properties or
Improvements (collectively, the “Indemnified
Matters”).  The Indemnified Matters shall include, without
limita­tion:  (i) the reasonable costs, whether foreseeable or
unforeseeable, of any repair, cleanup or detoxification of the Properties which
is required by any governmental entity or is otherwise necessary to render the
Properties in compliance with all laws and regulations pertaining to Hazardous
Ma­terials; (ii) all other direct or indirect consequen­tial damages
(including, without limita­tion, any third party tort claims or governmental
claims, fines or penalties against Lender, any corporation con­trolled by
Lender, or any of their re­spective directors, officers, employ­ees,
agents, successors or assigns); and (iii) all court costs and reasonable
attorneys’ fees and expenses paid or incurred by Lender, any entity
con­trolled by Lender, or any of their respec­tive directors, officers,
employ­ees, agents, successors or assigns relating to the subject matter
hereof.  Borrower shall immediately pay to Lender upon demand any
amounts owing under this indemnity, together with interest from the date the
indebtedness arises until paid at the rate of interest applicable to the
principal balance of the Note.  Borrower’s duty and obligations to
defend, indemnify and hold harmless Lender shall survive the cancellation of the
Note and the release, reconveyance or partial reconveyance of any of the
Mortgages or other Collateral.  Notwithstanding anything contained
herein to the contrary, the above indemnities shall not apply to the extent that
a matter relates to a particular Property and results solely and directly from
the actions of Lender and first arises after the date the respective Borrower
Party and its Affiliates are dispossessed from such Property, or with respect to
the Fee Properties, first arises after the date the applicable Fee Owner is no
longer controlled by Borrower or an Affiliate of Borrower due to a default under
the Loan and Lender’s pursuit of its remedies hereunder or under any of the
other Loan Documents.

       

      6.6. California
Deed of Trust.  Notwithstanding anything which might be
construed herein or in the California Deed of Trust or in any of the other Loan
Documents or the Other Related Documents to the contrary, in no event shall
Borrower’s obligations and liabilities under the foregoing Section 6 be secured by the
lien of the California Deed of Trust.

       

      7. GENERAL
COVENANTS, CONDITIONS AND AGREEMENTS.  Borrower hereby
further covenants and agrees with Lender as follows:

       

      7.1. Compliance
with Loan Documents.  Borrower shall, and shall cause the Fee
Owners to, comply with, observe and timely perform each and every one of the
covenants, agreements and obligations under each and every one of the Loan
Documents and the Other Related Documents.

       

      7.2. Use of
the Property.  Borrower shall, and shall cause the Fee Owners
to, not make, suffer or permit any use of the Property for any purpose other
than assisted
living facilities (along with ancillary independent living facilities) and/or
Alzheimer’s facilities and related or appurtenant uses.

       

      7.3. Property
Leases and Other Transfers.  Borrower shall not, and shall
cause the Fee Owners not to, without the prior written consent of Lender (to be
granted or withheld in Lender’s sole discretion), enter into any new Property
Lease, modify, surrender, terminate,

       


      
        
           


        

        
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      extend or
renew, either orally or in writing, any Property Lease now existing or hereafter
created upon the Property or any part thereof, or permit an assignment or
sublease thereof without the prior written consent of Lender (to be granted or
withheld in Lender’s sole discretion).  Borrower shall not, and shall
cause the Fee Owners not to, without the prior written consent of Lender, assign
or further encumber or convey or dispose (or permit or consent or agree to the
conveyance, encumbrance or disposal) of any interest in the Property (it being
understood that Lender has consented to the Capmark Loan), and any assignment or
encumbrance, or purported assignment or encumbrance, conveyance or disposal of
any of the foregoing shall be void and of no effect for any purpose
whatsoever.

       

      7.4. Covenants,
Conditions and Restrictions.  Borrower shall not record (or
cause or allow to be recorded) any covenants, conditions, restrictions or
declarations or any other agreement or instrument with respect to any portion of
the Property, without the prior written consent of Lender, which consent shall
not be unreasonably withheld.  Subject to the terms of the Capmark
Loan, Lender may, in the exercise of its discretion, require that Borrower
execute and deliver, or cause to be executed and delivered, to Lender a
collateral assignment of the declarant’s rights thereunder, to the extent
Borrower is the declarant, together with such other security agreements,
financing statements and instruments as Lender may require which have the effect
of creating a collateral assignment of any Borrower Party’s interest as
declarant, all in a form acceptable to Lender.

       

      7.5. Other
Agreements Affecting the Property.  Subject to the provisions
of the Capmark Loan, Borrower shall not, and shall not permit the Fee Owners to,
enter into any written agreement nor amend or modify, in any material respect,
any REA or any other easements, covenants or conditions affecting all or any
portion of the Property, without the prior written consent of Lender (to be
granted or withheld in Lender’s sole discretion).

       

      7.6. Management
Agreement. Borrower shall not, and
shall not permit the Fee Owners to,  enter into any contract or
agreement relating to the management of the Property (nor shall it permit any
Borrower Party to enter into any such agreement) unless such contract or
agreement (i) has been approved in writing by Lender, which approval shall not
be unreasonably withheld or delayed, (ii) can be terminated (for any reason) by
Borrower or its successors or assigns or any subsequent owner or operator of the
subject Property (at no cost or expense) upon thirty (30) days’ written notice,
and (iii) if required by Lender in its discretion, is the subject of a fully
executed and delivered Lender’s form of Assignment and Subordination of
Management Agreement.  Notwithstanding the foregoing, Lender agrees
that, for so long as a particular Fee Property is encumbered by the Capmark
Loan, such Fee Property may be managed by Emeritus or SSL pursuant to a
management agreement acceptable to Capmark and that complies with subsection
(ii) above.

       

      7.7. Inspection
of Books and Records.  Borrower shall keep and maintain, and
shall cause the Fee Owner’s to keep and maintain, at the Property or at
Borrower’s main office, proper and accurate books, records and accounts
reflecting all items of income and expense incurred by any Borrower Party in
connection with the operation of the Property or in connection with any
services, equipment or furnishings provided in the operation of the
Property.  Borrower shall allow, and shall cause the Fee Owners to
allow, Lender and any of Lender’s representatives, at any time during normal
business hours, access to the records and books of account,
including,

       


      
        
           


        

        
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      without
limitation, any supporting or related vouchers or papers kept at the Property or
at any Borrower Party’s main office, by or on behalf of any Borrower Party or
any of its representatives in connection with the Property, such access to
include the right to make abstracts or copies thereof.

       

      7.8. Litigation.  During
the term of the Loan, Borrower shall, upon receiving notice of same, promptly
furnish Lender a written notice of any material litigation in which any Borrower
Party is named as defendant or affecting or relating to the Property or any
portion thereof, other than personal injury or workers compensation claims which
are covered by insurance and minor construction contract disputes.

       

      7.9. ­No Lien
Rights.  If any Borrower or any person or entity controlled by
or affiliated with Borrower acts as a general contractor, architect, engineer,
subcontractor, property manager, supplier of materials, or otherwise performs
lienable work or services with respect to any part of the Property, Borrower
hereby irrevocably waives and relinquishes, or shall cause its Affiliate to
waive and relinquish, as appropriate, any and all lien rights it may obtain as a
result of such work or services.

       

      7.10. No
Transfers or Other Financing.  Other than with respect to a
Permitted Transfer, Borrower shall not permit a Transfer of all or any portion
of any direct or indirect ownership interest in any Borrower
Party.  In addition to the foregoing, other than with respect to a
Permitted Transfer, Borrower shall not permit a Transfer of the Property or any
other Collateral (or any portion thereof or any direct or indirect interest
therein), other than the encumbrance of such Property with the liens of the Loan
Documents and the Other Related Documents (and other than the liens granted
pursuant to the Capmark Loan).  Other than any assignments or
encumbrances evidenced by the Loan Documents and the Other Related Documents
(and other than the liens granted pursuant to the Capmark Loan), no Borrower
Party shall, without the prior written consent of Lender, assign or further
encumber or convey or dispose, or consent or agree, to the conveyance,
encumbrance or disposal (except for sales contracts entered into in compliance
with the provisions of this Agreement) of any other interest in the Property or
the Collateral, and any assignment or encumbrance, or purported assignment or
encumbrance, conveyance or disposal of any of the foregoing shall be void and of
no effect for any purpose whatsoever.  Furthermore, no Borrower Party
shall, without the prior written consent of Lender, enter into any financing
arrangement or loan transaction or consent to or agree to any such financing
arrangement or loan transaction (except with respect to a time when this Loan
has been repaid in full) other than the Loan, and any such financing arrangement
or loan transaction shall be void and of no effect for any purpose whatsoever
(and other than the liens granted pursuant to the Capmark Loan).

       

      7.11. No
Related Party Payments.  At any time after, and during the
continuance of, an Event of Default, no distributions or other payments shall be
made directly or indirectly by any Borrower Party or its partners, members or
managers to any person or entity or affiliate thereof owning a direct or
indirect interest in any Borrower Party or its partners, members or
managers.

       

      7.12. Mechanics
Liens.  If a claim of a mechanics or materialman’s lien is
recorded which affects any Property, Borrower shall, within twenty (20) days
after any Borrower Party

       


      
        
           


        

        
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      becomes
aware of such recording or service or within five (5) days of Lender’s demand,
which­ever occurs first: (i) pay and discharge the claim of lien; (ii)
effect the release thereof by recording or delivering to Lender a surety bond in
sufficient form and amount; (ii) cause the Title Company to insure over
such claim of lien by endorsement to the Title Insurance Policies; or (iv)
provide Lender with other assur­ance which Lender deems, in its sole
discretion, to be satisfactory for the payment of such claim of lien and for the
full and continuous protection of Lender from the effect of such
lien.

       

      7.13. Inspections.  Borrower
shall permit (and shall cause each Fee Owner to permit), and shall cooperate
(and shall cause each Fee Owner to cooperate) with Lender in arranging for,
inspections of the Property from time to time by any representatives of
Lender.  In the event that such representative furnishes Lender with
reports covering such inspections, Lender may, but is not under any obligation
whatsoever to, furnish Borrower with copies of any of said
reports.  Borrower acknowledges and agrees that (i) all of such
inspections and reports shall be made for the sole benefit of Lender and not for
the benefit of any Borrower Party or any third party, and none of Lender, nor
any of Lender’s representatives assume any responsibility or liability (except
to Lender) by reason of such inspections, reports or the furnishing of any of
such reports to Borrower, (ii) no Borrower Party shall rely upon any of such
inspections or reports for any purpose whatsoever, and (iii) such inspections
and the furnishing of any of such reports to Borrower shall not constitute a
waiver of any of the provisions of this Agreement or any of the obligations of
Borrower hereunder.

       

      7.14. Construction.  Borrower
shall not, and shall not permit the Fee Owners to (except as required pursuant
to the Capmark Loan), perform any construction or other improvement or repair to
any Property which is expected to cost in excess of $100,000, except with the
prior written consent of Lender, to be granted or withheld by Lender in its sole
discretion.

       

      7.15. Massachusetts
Mortgage.  As an accommodation, Lender has agreed that, if
necessary, Borrower may cause the Massachusetts Mortgage to be executed by Farm
Pond Borrower alone, as mortgagor, and recorded without a “Consent” attached
thereto evidencing the consent and agreement of each other
Borrower.  Notwithstanding anything which may be construed to the
contrary in the Massachusetts Mortgage, and whether or not the aforesaid
"Consent" is a part of the recorded Massachusetts Mortgage, each Borrower does
hereby consent and agree to the terms and conditions of the Massachusetts
Mortgage, and covenants and agrees to be bound by its terms and liable for the
payment and performance of all of the obligations of Farm Pond Borrower
thereunder.

       

      8. FINANCIAL
STATEMENTS.

       

      8.1. Annual
Reports.  As soon as available, and in any event within one
hundred eighty (180) days after the close of each Fiscal Year, Borrower shall
deliver to Lender, presented on a consolidated and consolidating, but not on a
Property-by-Property, basis, financial statements prepared for such Fiscal Year
with respect to the Borrower Parties (the “Borrower Annual Report”),
including a balance sheet and operating statement as of the end of such Fiscal
Year and further including related statements of income and members’, partners’
or owners’ capital for such Fiscal Year, audited by a “Big Four” accounting firm
or a nationally recognized,

       


      
        
           


        

        
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      independent
certified public accounting firm reasonably satisfactory to Lender, whose
opinion shall be to the effect that such financial statements have been prepared
in accordance with GAAP, applied on a consistent basis, and shall not be
qualified as to the scope of the audit or as to the status of any Borrower Party
as a going concern.  Together with each Borrower Party’s annual
financial statements, Borrower shall deliver to Lender:  (i) a
statement of cash flows for each Property; and (ii) such other information as
Lender shall reasonably request and that is prepared by any Borrower Party in
the ordinary course of its business.  Relative to the annual financial
statements described above, Lender agrees that, so long as Emeritus owns,
directly or indirectly, one hundred percent (100%) of the membership interests
in each of the Leasehold Borrowers and Fee Owners, in lieu of the above
referenced audited financial statements of the Borrower Parties, Borrower shall
deliver audited financial statements of Emeritus, rather than the Borrower
Parties, satisfying the above referenced requirements and unaudited financial
statements of each Borrower Party satisfying the above referenced
requirements.

       

      8.2. Quarterly
Reports.  As soon as available, and in any event within
forty-five (45) days after the end of each fiscal quarter, Borrower shall
deliver to Lender, presented on a consolidated and consolidating as well as a
Property-by-Property basis, quarterly and year-to-date unaudited financial
statements prepared for such fiscal quarter with respect to the Leasehold
Borrowers and the Fee Owners, including a balance sheet and operating statement
as of the end of such fiscal quarter and further including related statements of
income, members’, partners’ or owners’ capital and cash flows for such fiscal
quarter and for the portion of the Fiscal Year ending with such fiscal
quarter.  Each such quarterly statement shall show the separate
operations of each Property.  Each such quarterly report shall be
accompanied by the following:  (i) a statement in reasonable detail
showing the calculation of Net Operating Income for each Fee Property for the
trailing four fiscal quarters, in each case, ending at the end of the fiscal
quarter as to which such statement is being delivered; (ii) a then current
occupancy report for each Property; and (iii) such other information as Lender
shall reasonably request and that is prepared by any Borrower Party in the
ordinary course of its business.  In the event that Emeritus ceases to
be a public company that publishes its quarterly financial results, as soon as
available, and in any event within forty-five (45) days after the end of each
fiscal quarter, Borrower shall deliver to Lender, presented on a consolidated
and consolidating, but not on a Property-by-Property, basis, unaudited financial
statements prepared for such fiscal quarter with respect to the Borrower
Parties, including a balance sheet and operating statement as of the end of such
fiscal quarter and further including related statements of income and members’,
partners’ or owners’ capital for such fiscal quarter.

       

      8.3. Certifications
of Compliance.  Simultaneously with the delivery of the annual
and quarterly financial statements contemplated by Sections 8.1 and 8.2, Borrower shall deliver
to Lender an Officer’s Certificate in the form of Exhibit D attached hereto and
dated as of the date of such delivery.  

       

      8.4. Annual
Budgets.  Borrower has previously delivered to Lender the
Annual Budget for each Property for the Fiscal Year ending December 31,
2007.  Not more than thirty (30) days following the commencement of
each subsequent Fiscal Year for so long as all or any portion of the Loan
remains outstanding, Borrower shall deliver to Lender an Annual Budget for each
Property presented on a Property-by-Property basis for such Fiscal Year and,
promptly after

       


      
        
           


        

        
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      preparation
thereof, any subsequent revisions to such Annual Budget.  On or prior
to fifteen (15) days prior to the commencement of each such subsequent Fiscal
Year, Borrower shall deliver to Lender a preliminary draft of the aforesaid
Annual Budget for such Fiscal Year.

       

      8.5. Monthly
Financial Information.  As soon as available, and in any event
within thirty (30) days after the end of each calendar month, Borrower shall
deliver to Lender, presented on a consolidated and consolidating as well as a
Property-by-Property basis, monthly and year-to-date unaudited financial
statements prepared for the applicable month with respect to the Leasehold
Borrowers and the Fee Owners, including a balance sheet and operating statement
as of the end of such month and further including related statements of income,
members’, partners’ or owners’ capital and cash flows for such month and for the
portion of the Fiscal Year ending with such month, which statements shall be
accompanied by (i) an Officer’s Certificate certifying that the same are true
and correct and were prepared in accordance with GAAP, applied on a consistent
basis, subject to changes resulting from audit and normal year-end audit
adjustments, and (ii) an Officer’s Certificate certifying as to any material
variances from the approved Annual Budget on a line-item basis.  Each
monthly report shall show the separate operations of each Property, including,
without limitation, the monthly cash flow for such Property.  Each
such monthly report shall be accompanied by the following:  (a) a
statement setting forth in reasonable detail the calculation of Net Operating
Income for each Fee Property for the trailing twelve (12) months, in each case,
ending at the end of the calendar month as to which such statement is being
delivered; (b) a then current occupancy report for each Property; (c) a report
describing in reasonable detail the occurrence during such month of any event
that is reasonably likely to result in a material adverse effect on the ability
of the Borrower to perform any material provision of the Loan Documents or Other
Related Documents, or the value, use or enjoyment of any of the Properties or
the operation thereof; (d) a monthly summary of accounts receivable with respect
to each Property and all of the Properties in form acceptable to Lender; and (e)
such other information as Lender shall reasonably request and that is prepared
by any Borrower Party in the ordinary course of its business.

       

      8.6. Authorizations.  As
soon as available, and in any event within ninety (90) days after the end of
each calendar year, Borrower shall deliver to Lender as to each Property a
report describing in reasonable detail the status of such Property’s compliance
with all Authorizations for such Property.  In addition, not later
than thirty (30) days after the commencement of each Fiscal Year for so long as
all or any portion of the Loan remains outstanding, Borrower shall deliver to
Lender copies of any and all Authorizations (together with any renewals or
extensions thereof) certified by Borrower as accurate and complete in an
Officer’s Certificate.

       

      8.7. Actuarial
Reports.  Promptly (and in any event no later than ten (10)
days) after any Borrower Party’s receipt thereof, Borrower shall deliver to
Lender a complete copy of any Actuarial Report(s) received by the Borrower
Parties with respect to the Properties.

       

      8.8. Notices/Inspection
Reports from Governmental Authorities.  As soon as available,
and in any event within ten (10) days of any Borrower Party’s receipt, Borrower
shall deliver to Lender (i) any and all notices (regardless of form) from any
Governmental Authority that (a) any Authorization for any Property or the
certification of any Property for reimbursement under any applicable
governmental reimbursement program is the subject of any enforcement action,
revocation or suspension or is subject to assessment for civil monetary
penalties or is the

       


      
        
           


        

        
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      subject
of any overpayment claim or recoupment claim or (b) action is pending or being
considered to revoke or suspend any Authorization or to institute enforcement
actions of any kind, and (ii) any and all inspection reports (regardless of
form) from any Governmental Authority relating to any of the
Properties.

       

      8.9. Other
Information.  Borrower shall furnish, within ten (10) days
after written request from Lender, a written statement, duly acknowledged,
setting forth the unpaid principal of, and interest on, the indebtedness secured
by the Loan Documents and Other Related Documents and whether or not any offsets
or defenses exist against such principal and interest.  In addition,
Borrower shall deliver to Lender whatever additional information concerning any
Property, or any Borrower Party which Lender may reasonably request, provided
such information is consistent with the types of reports and information
generally utilized by institutions within the healthcare or financing
industry.

       

      9. BORROWER’S
DEFAULT.

       

      9.1. Borrower’s
Defaults and Lender’s Remedies.

       

      9.1.1. Events of
Default.  Each of the following shall constitute an “Event of Default” under this
Agreement:

       

      9.1.1.1. Borrower
fails to pay, when due, any principal of or installment of interest on the Note;
or

       

      9.1.1.2. Borrower
fails to pay, when due, any other amount payable under this Agreement (other
than principal or interest), and such failure continues for a period of five (5)
days after notice thereof from Lender to Borrower; or

       

      9.1.1.3. Borrower
fails to keep or perform any of its agreements, undertakings, obligations,
covenants or conditions under this Agreement not expressly referred to in
another clause of this Section and (i) such failure continues for a period of
thirty (30) days after notice thereof from Lender to Borrower, or (ii) if such
failure cannot, because of its nature, be cured within said thirty (30)-day
period, then, if Borrower commences curing such failure within said thirty
(30)-day period and diligently continues such cure, such failure continues for
an additional sixty (60)-day period after an additional notice; or

       

      9.1.1.4. Any
“Event of Default”
occurs, as defined under any of the other Loan Documents or the Other Related
Documents, including, without limitation, any Collateral Document;
or

       

      9.1.1.5. Any
Borrower fails to keep or perform any of its agreements, undertakings,
obligations, covenants or conditions under the other Loan Documents or the Other
Related Documents to which it (or its parent entity) is a party, and such
failure continues beyond any applicable cure period, or if no cure period is
specified, (i) such failure continues for a period of thirty (30) days after
notice thereof from Lender to Borrower, or (ii) if such failure cannot, because
of its nature, be cured within said thirty (30)-day period, then, if Borrower
commences

       


      
        
           


        

        
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      curing
such failure within said thirty (30)-day period and diligently continues such
cure, such failure continues for an additional sixty (60)-day period after an
additional notice; or

       

      9.1.1.6. Any
representation, warranty or certification made in this Agreement by Borrower or
otherwise made in writing in connection with or as contemplated by this
Agreement or any of the other Loan Documents or the Other Related Documents by
Borrower shall be or, to the extent intended to be continuing, become materially
incorrect or false, or any material representation to Lender by Borrower as to
the financial condition or credit standing of any Borrower Party is or proves to
be false or misleading; or

       

      9.1.1.7. Any
“Event of Default”, as
defined under any one or more of the Master Lease, the Master Lease Guaranty,
the Fairwood Lease, the Fairwood Guaranty, the Whitehall Lease and/or the
Whitehall Guaranty, occurs, or any default occurs under any Material
Indebtedness and the same is not cured within any applicable notice and cure
period; or

       

      9.1.1.8. Except in
connection with the Capmark Loan, the recording of any claim of lien against any
Fee Property or any Improvements thereon and the continuance of such claim of
lien for thirty (30) days without discharge, satisfac­tion or
pro­vi­­sion for payment being made by Borrower in a manner
satisfactory to Lender; or the sequestration or attach­ment of, or any levy
or execution upon any Fee Property or any Improvements, any other Collateral, or
any substantial por­tion of the other assets of any Bor­rower, which
sequestration, attachment, levy or execution is not released, ex­punged or
dis­missed prior to the earlier of thirty (30) days or the sale of the
assets affected thereby; or

       

      9.1.1.9. The
filing of a petition by any Borrower Party for relief under the Bankrupt­cy
Code, or under any other present or future state or federal law regarding
bankruptcy, reorganiza­tion or other debtor relief law; the filing of any
pleading or an answer by any Borrower Party in any involuntary proceeding under
the Bankrupt­cy Code or other debtor relief law which admits the
jurisdiction of the court or the petition’s mate­rial allega­tions
regarding any Borrower Party’s insolvency; a general assignment by any Borrower
Party for the benefit of creditors; or any Borrower Party applying for, or the
appointment of, a receiver, trustee, custodian or liquida­tor of any
Borrower Party or any of its property; or

       

      9.1.1.10. The
failure of any Borrower Party to effect a full dismis­sal of any involuntary
petition under the Bankruptcy Code or any other debtor relief law that is filed
against any Borrower Party or in any way restrains or limits any Borrower Party
or Lender regarding the Loan, the Property or any Improvements, prior to the
earlier of the entry of any court order grant­ing relief sought in such
involun­tary petition, or sixty (60) days after the date of filing of such
involuntary petition; or

       

      9.1.1.11. The
dissolution of any Borrower Party which Lender determines, in its sole and
absolute discretion, shall have a material adverse effect on the Loan, any
Property or any Improvements, or on the ability of any Borrower Party to perform
its respective obligations under the Loan Documents or the Other Related
Documents; or

       

      9.1.1.12. Any
Transfer occurs without the prior written consent of Lender, in its sole and
absolute discretion, other than a Permitted Transfer; or

       


      
        
           


        

        
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      9.1.1.13. Any
Borrower Party enters into any secondary or additional financing agreements or
arrangements of any kind whatsoever secured, in whole or in part, by all or any
part of or interest in any Collateral (other than Fee Owners’ first mortgage
financing from Capmark obtained in connection with Fee Owners’ initial
acquisition of the Fee Properties pursuant to the Purchase Contracts);
or

       

      9.1.1.14. Any order
or decree is entered by any court of competent jurisdiction directly or
indirectly enjoining or prohibiting any Borrower from performing any of their
material obligations under this Agreement or any of the Loan Documents or the
Other Related Documents, and such order or decree is not vacated, and the
proceedings out of which such order or decree arose are not dismissed, within
sixty (60) days after the granting of such decree or order; or

       

      9.1.1.15. The
filing of formal charges by any governmental or quasi-governmental entity,
including, without limitation, the issuance of an indictment, under a RICO
Related Law against any Borrower Party or any property manager, which are not
dismissed within thirty (30) days; or

       

      9.1.1.16. Any
Property is rezoned (except for such rezoning as does not affect the value, use
or operation of the Property), either voluntarily or involuntarily, or any
agreement for the foregoing is entered into, without the prior written consent
of Lender; or

       

      9.1.1.17. Any
Borrower Party fails to commence compliance with or to cause commencement of
compliance with (or to bond or indemnify Lender to its satisfaction with regard
to) any requirement (including, without limitation, compliance with all
applicable zoning, building, health, fire and environmental laws, rules,
regulations and ordinances) of any Governmental Authority having jurisdiction
within fifteen (15) days after such Borrower Party has written notice from such
Governmental Authority of such requirement or any Borrower Party fails to
thereafter diligently prosecute such compliance; or

       

      9.1.1.18. Any order
or decree is entered by any court of competent jurisdiction directly or
indirectly enjoining the operation of any Property or prohibiting any Borrower
from performing any of their material obligations under any of the Loan
Documents or the Other Related Documents and such order or decree is not
vacated, and the proceedings out of which such order or decree arose are not
dismissed, within thirty (30) days after the granting of such decree or
order.

       

      9.1.2. Lender’s
Remedies.  Upon the happening of any Event of Default, Lender
shall have the right, if such Event of Default shall then be continuing, in
addition to all the remedies conferred upon Lender by law or equity or the terms
of any Loan Document or Other Related Document, to do any or all of the
following, concurrently or successively, without notice to any Borrower
Party:

       

      9.1.2.1. Declare
the Note to be, and it shall thereupon become, immediately due and payable
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived, anything contained herein or in the Note to the
contrary notwithstanding; or

       


      
        
           


        

        
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      9.1.2.2. Terminate
Lender’s obligations under this Agreement to extend credit of any kind or to
make any disbursement, whereupon the commitment and obligation of Lender to
extend credit or to make disbursements hereunder shall terminate;
or

       

      9.1.2.3. Appropriate
and apply to any amounts due under the Loan Documents or the Other Related
Documents any and all balances, credits, deposits (general or special, time or
demand, provisional or final), accounts or monies of Borrower with Lender
including, without limitation, the Security Deposit (and in the event the
Security Deposit is in the form of a letter of credit, draw on the same and
apply the proceeds thereof to any such amounts due or hold the same in cash form
pursuant to the terms of the Cash Collateral Agreement); or

       

      9.1.2.4. Exercise
all of its rights and remedies at law, in equity and/or pursuant to any or all
Collateral Documents, including foreclosing on the Collateral.

       

      Borrower
shall pay to Lender, upon demand, all out-of-pocket expenses actually incurred
(including, without limitation, attorneys’ fees and expenses) of obtaining such
judgment or decree or of otherwise seeking to enforce its rights under this
Agreement or any of the other Loan Documents or the Other Related Documents; and
all such expenses, as determined by Lender in its sole and absolute discretion,
shall, until paid, be secured by the Loan Documents or the Other Related
Documents and shall bear interest at the Default Rate described in the
Note.

       

      9.2. Protective
Advances.  If an Event of Default occurs, Lender may (but shall
in no event be required to) cure any such Event of Default and any amounts
expended by Lender in so doing, as determined by Lender in its sole and absolute
discretion, shall (i) be deemed advanced by Lender under an obligation to do so
regardless of the identity of the person or persons to whom such funds are
furnished, (ii) constitute additional advances hereunder, the payment of which
is additional indebtedness evidenced by the Note, and (iii) become due and
owing, at Lender’s demand, with interest accruing from the date of disbursement
thereof until fully paid at the Default Rate.

       

      9.3. Other
Remedies.  If any Event of Default shall occur and be
continuing, Lender may, in addition to any other rights and remedies hereunder,
exercise any and all remedies provided in any of the other Loan Documents or the
Other Related Documents.

       

      9.4. RICO
Related Law Concerns.  Notwithstanding anything to the contrary
contained in this Agreement, if Lender has reasonable cause to believe that any
material portion of any Property or of any collateral securing the Loan or of
any other funds, property or other assets of any Borrower Party might be subject
to forfeiture under any RICO Related Law, Lender may, in its sole and absolute
discretion, refuse to make any further disbursements, hereunder or under any of
the other Loan Documents or the Other Related Documents, of any kind whatsoever
until Lender has no reasonable belief that any portion of any Property or any of
such assets are subject to forfeiture under any RICO Related Law.

       

      9.5. No Lender
Liability.  To the extent permitted by law, Lender shall have
no liability for any loss, damage, injury, cost or expense resulting from any
action or omission by it, or any of its representatives, which was taken,
omitted or made in good faith, except to the extent caused by Lender’s gross
negligence or willful misconduct.

       


      
        
           


        

        
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      9.6. Lender’s
Fees and Expenses.  In relation to any Event of Default
hereunder, Borrower shall pay Lender’s out-of-pocket fees and expenses actually
incurred, including, without limitation, attorneys’ fees and expenses, in
connection with the enforcement of this Agreement or any of the other Loan
Documents or the Other Related Documents.

       

      10. MISCELLANEOUS.

       

      10.1. Indemnification.  Borrower
shall indemnify, defend and hold Lender and its Affiliates harmless from and
against any and all actual (but not consequential) losses, liabilities,
obligations, penalties, claims, fines, demands, litigation, defenses, costs,
judgments, suits, proceedings, actual damages, disbursements or expenses of any
kind or nature whatsoever (including, without limitation, attorneys’ fees and
expenses) which may at any time be either directly or indirectly imposed upon,
incurred by or asserted or awarded against Lender or any of Lender’s Affiliates,
in their capacity as lender, in connection with, arising from or relating to
Lender’s entering into or carrying out the terms of this Agreement or being the
holder of the Note, or the use, operation or maintenance of any of the
Properties prior to Lender’s foreclosing upon or taking possession thereof,
including, without limitation, any injury or damage to person or property, or
both, occurring on or about any of the  Properties, other than any
loss, liability, damage, suit, claim, expense, fees or costs arising solely by
reason of Lender’s or any of Lender’s Affiliates’ willful misconduct or gross
negligence, or any liability of Lender to the extent that it arises due to its
being the landlord under the Master Lease.

       

      10.2. Assignment
and Participation.  

       

      10.2.1. Lender
may pledge or otherwise hypothecate all or any portion of this Agreement or
grant participations herein (provided Lender acts as agent for any participants,
except as provided below), or in any of its rights and security hereunder,
including, without limitation, the Note.  Lender may also assign all
or any part (provided Lender acts as agent in connection with any partial
assignment, except as provided below) of the Loan and the Lender’s obligations
in connection therewith to one or more commercial banks or other financial
institutions or investors (each an “Assignee
Lender”).  Upon delivery to Borrower of an executed copy of the
Assignee Lender’s assignment and acceptance (i) each such Assignee Lender shall
be deemed to be a party hereto and, to the extent that rights and obligations
hereunder have been assigned and delegated to such Assignee Lender, and assumed
in writing by such Assignee Lender, such Assignee Lender shall have the rights
and obligations of Lender hereunder and under the other Loan Documents or the
Other Related Documents, and (ii) Lender, to the extent that rights and
obligations hereunder have been assigned, assumed in writing, and delegated by
it, shall be released from its obligations hereunder and under the other Loan
Documents or the Other Related Documents (including, without limitation, the
obligation to fund the Assignee Lender’s share of the Loan).  Within
five (5) Business Days after receipt of a copy of the executed assignment and
acceptance document, along with a form new Note or Notes (in the same form as
the existing Note except for changes to specifically address the assignment of
all or a portion of the Note), at Lender’s request, Borrower shall execute and
deliver to Lender a new Note or Notes in the form provided by Lender, as
applicable (for delivery to the relevant Assignee Lender), evidencing such
Assignee Lender’s assigned portion of the Loan and a replacement Note or Notes,
as applicable, in the principal amount of the Loan retained by Lender (such
Note(s) to be in exchange for, but not in payment of, the Note then
held

       


      
        
           


        

        
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      by
Lender).  Such Note(s) shall be dated the date of the predecessor
Note.  Lender shall hold such new Note or Notes in escrow until Lender
has marked the predecessor Note(s) “exchanged” and delivered it to
Borrower.  Accrued interest on that part of the predecessor Note(s)
evidenced by the new Note(s), and accrued fees, shall be paid as provided in the
assignment agreement between Lender and to the Assignee Lender, provided that in
no event shall Borrower pay any duplicate interest or fees.  Accrued
interest on that part of the predecessor Note(s) evidenced by the replacement
Note(s) shall be paid to Lender, provided that in no event shall Borrower pay
any duplicate interest or fees.  Accrued interest and accrued fees
shall be so apportioned between the Note(s) and paid at the same time or times
provided in the predecessor Note(s) and in this Agreement, provided that in no
event shall Borrower pay any duplicate interest or fees.  Borrower
authorizes Lender to disclose to any prospective Assignee Lender any financial
or other information pertaining to Borrower, the Loan, the Properties or
Improvements, provided that such prospective Assignee Lender agrees to keep such
information confidential in accordance with customary lending
practice.  In addition, Borrower agrees that, in connection with any
complete assignment of the Loan, if so requested by Lender and at Lender’s
expense, Borrower will cause all insurance policies, binders and commitments
(including, without limitation, casualty insurance and title insurance) required
by the Loan Documents or the Other Related Documents to be delivered to Lender
to name the Assignee Lender as an additional insured or obligee, as Lender may
request.  In the event of a granting of a participation or an
assignment of less than all of its interest in the Loan, Ventas Realty, Limited
Partnership, a Delaware limited partnership, shall continue to act as agent for
Lender and any notice, report or other document delivered to agent shall be
deemed to have been delivered to any party then constituting
Lender.  Anything in this Agreement to the contrary notwithstanding,
and without the need to comply with any of the formal or procedural requirements
of this Agreement, including this Section 10.2, Lender may at any
time and from time to time pledge and assign all or any portion of its rights
under all or any of the Loan Documents or the Other Related Documents to a
Federal Reserve Bank; provided that no such pledge or assignment shall release
Lender from its obligations thereunder.

       

      10.2.2. In the
event that (i) an Assignee Lender (or, if such Assignee Lender is a disregarded
entity for United States federal income tax purposes, the entity or person
treated, for United States federal income tax purposes, as the owner of the
assets of such Assignee Lender) is not organized under the laws of the United
States or a state thereof and (ii) such Assignee Lender fails to establish to
the reasonable satisfaction of Borrower that payments under the Loan Documents
are exempt from United States withholding taxes, Borrower shall not be required
to “gross-up” payments made to such Assignee Lender for United States
withholding taxes required to be withheld by Borrower.  Any amounts
payable to an Assignee Lender that are subject to United States withholding
taxes shall be withheld by Borrower and remitted to the applicable taxing
authority and treated, for purposes of this Agreement and all other Loan
Documents, as if they were paid to such Assignee Lender.

       

      10.3. Prohibition
on Assignment.  Borrower shall not assign or attempt to assign
its rights under this Agreement, either voluntarily or by operation of
law.

       

      10.4. Time of
the Essence.  Time is of the essence of this
Agreement.

       


      
        
           


        

        
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      10.5. No
Waiver.  No waiver of any term, provision, condition, covenant
or agreement herein contained shall be effective unless set forth in a writing
signed by Lender, and any such waiver shall be effective only to the extent set
forth in such writing.  No failure to exercise or delay in exercising,
by Lender or any holder of the Note, of any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege preclude any other or further exercise thereof, or
the exercise of any other right or remedy provided by law.  The rights
and remedies provided in this Agreement are cumulative and not exclusive of any
right or remedy provided by law or equity.  No notice or demand on
Borrower in any case shall, in itself, entitle Borrower to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of Lender to any other or further action in any circumstances without
notice or demand.  No consent or waiver, expressed or implied, by
Lender to or of any breach or default by Borrower in the performance of its
obligations hereunder shall be deemed or construed to be a consent or waiver to
or of any other breach or default in the performance of the same or any other
obligations of Borrower hereunder.  Failure on the part of Lender to
complain of any acts or failure to act or to declare an Event of Default,
irrespective of how long such failure continues, shall not constitute a waiver
by Lender of its rights hereunder or impair any rights, powers or remedies on
account of any breach or default by Borrower.

       

      10.6. Severability.  Any
provision of this Agreement which is unenforceable or invalid or contrary to
law, or the inclusion of which would adversely affect the validity, legality or
enforcement of this Agreement, shall be of no effect and, in such case, all the
remaining terms and provisions of this Agreement shall subsist and be fully
effective according to the tenor of this Agreement the same as though any such
invalid portion had never been included herein.  Notwithstanding any
of the foregoing to the contrary, if any provisions of this Agreement or the
application thereof are held invalid or unenforceable only as to particular
persons or situations, the remainder of this Agreement, and the application of
such provision to persons or situations other than those to which it shall have
been held invalid or unenforceable, shall not be affected thereby, but shall
continue valid and enforceable to the fullest extent permitted by
law.

       

      10.7. Use of
Proceeds.  All agreements between Borrower and Lender
(including, without limitation, this Agreement and any other Loan Documents or
the Other Related Documents) are expressly limited so that in no event
whatsoever shall the amount paid or agreed to be paid to Lender exceed the
highest lawful rate of interest permissible under the laws of the State of
Illinois.  If, from any circumstances whatsoever, fulfillment of any
provision hereof or of any other Loan Documents or the Other Related Documents,
at the time performance of such provision shall be due, shall involve exceeding
the limit of validity prescribed by law which a court of competent jurisdiction
may deem applicable hereto, then ipso facto, the obligation to be fulfilled
shall be reduced to the highest lawful rate of interest permissible under the
laws of the State of Illinois, and if for any reason whatsoever, Lender shall
ever receive as interest an amount which would be deemed unlawful, such interest
shall be applied to the payment of the last maturing installment or installments
of the indebtedness secured by the Collateral (whether or not then due and
payable) and not to the payment of interest.

       

      10.8. Notices.  All
notices, demands, requests, consents, approvals and other communications
hereunder shall be in writing and delivered (i) by mail (registered or
certified

       


      
        
           


        

        
          40

          
            

          

        

        
           


        

      


      mail,
return receipt requested), in which case such notice shall be deemed received
three (3) Business Days after its deposit, (ii) by confirmed facsimile, in which
case such notice shall be deemed received on the date sent provided a copy is
sent pursuant to clause (iii) on the next Business Day, or (iii) by reputable
nationally recognized overnight courier service, in which case such notice shall
be deemed received the next Business Day, addressed to the respective parties,
as follows:

       

      if to
Borrower:                                           c/o
Emeritus Corporation

      3131
Elliott Avenue, #500

      Seattle,
Washington  98121

      Attention:  Eric
Mendelsohn

      Facsimile:  (206)
357-7388

       

      with a
copy
to:                                           Pircher,
Nichols & Meeks

      900 North
Michigan Avenue, Suite 1050

      Chicago,
Illinois  60611

      Attention:  Real
Estate Notices (JDL/MJK)

      Facsimile:  (312)
915-3348

      


      in the
case of Lender
to:                                                      c/o
Ventas, Inc.

      10350
Ormsby Park Place, Suite 300

      Louisville,
Kentucky  40223

      Attention:  General
Counsel

      Telephone:  (502)
357-9000

      Facsimile:  (502)
357-9001

      


      with a
copy
to:                                           c/o
Ventas, Inc.

      10350
Ormsby Park Place, Suite 300

      Louisville,
Kentucky  40223

      Attention:  Loan
Administration

      Telephone:  (502)
357-9000

      Facsimile:  (502)
357-9001

      


      with a
copy
to:                                           Barack
Ferrazzano Kirschbaum & Nagelberg LLP

      200 West
Madison Street, Suite 3900

      Chicago,
Illinois 60606

      Attention:  Douglas
W. Anderson, Esq.

      Facsimile:  (312)
984-3150

      


      or to
such other address or addresses as the party to be given notice may have
furnished in writing to the party seeking or desiring to give notice, as a place
for the giving of notice.

       

      10.9. Successors
and Assigns.  This Agreement shall inure to the benefit of the
parties and their respective heirs, legal representatives, successors and
assigns except that, unless Lender consents in writing, no assignment made by
Borrower in violation of this Agreement shall confer any rights on any assignee
of Borrower.

       


      
        
           


        

        
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      10.10. No Joint
Venture.  Nothing contained herein or in any document executed
pursuant hereto and no action or inaction whatsoever on the part of Lender,
shall be deemed to make Lender a partner or joint venturer with
Borrower.

       

      10.11. Brokerage
Commissions.  Borrower and Lender each represent that they have
not engaged any broker in connection with the transaction contemplated by this
Agreement.  Borrower and Lender shall each indemnify, defend and hold
the other party and their respective Affiliates harmless from and against any
and all losses, liabilities, obligations, penalties, claims, fines, lost
profits, demands, litigation, defenses, costs, judgments, suits, proceedings,
damages, disbursements or expenses of any kind or nature whatsoever (including,
without limitation, attorneys’ fees and expenses), consequential or otherwise,
which may at any time be either directly or indirectly imposed upon, incurred by
or asserted or awarded against such party or any of its Affiliates in connection
with, arising out of or relating to any claim of a broker’s or finder’s fee
against such party or any person or entity in connection with the Loan herein
contemplated arising out of or relating to Borrower’s or Lender’s action or
inaction.

       

      10.12. Publicity.  Borrower
shall not publicize this Loan without the prior written consent of Lender, which
shall not be unreasonably withheld, or as required by applicable securities
laws.

       

      10.13. Documentation.  Subject
to the express terms of this Agreement, all documents and other matters required
by any of the provisions of this Agreement to be submitted or furnished to
Lender shall be in form and substance reasonably satisfactory to
Lender.

       

      10.14. Additional
Assurances.  Borrower agrees that, at any time or from time to
time, upon the written request of Lender, it will execute all such further
documents and do all such other acts and things as Lender may reasonably request
to effectuate the transaction herein contemplated.

       

      10.15. Entire
Agreement.  This Agreement and the Exhibits hereto constitute
the entire agreement between the parties hereto with respect to the subject
matter hereof and may not be modified or amended in any manner other than by
supplemental written agreement executed by the parties hereto.

       

      10.16. Choice of
Law.  This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Illinois.  Nothing
herein shall be deemed to limit any rights, powers or privileges which Lender
may have pursuant to any law of the United States of America or any rule,
regulation or order of any department or agency thereof and nothing herein shall
be deemed to make unlawful any transaction or conduct by Lender which is lawful
pursuant to, or which is permitted by, any of the foregoing.  Borrower
acknowledges that Lender’s principal office is located in Chicago, Illinois and
that Lender may be irreparably harmed if required to institute or defend any
action in any jurisdiction other than the Northern District of Illinois or Cook
County, Illinois or, with respect to enforcement of the Mortgages, the States
where the respective Leasehold Properties are located.  Therefore,
Borrower irrevocably (i) agrees that any suit, action or other legal
proceeding relating to this Loan Agreement or any of the other Loan Documents or
the Other Related Documents may be brought, at Lender’s sole option, only in the
Circuit Court of Cook County or in the Northern District of Illinois or,
with

       


      
        
           


        

        
          42

          
            

          

        

        
           


        

      


      respect
to enforcement of the Mortgages, any state or Federal court sitting in the
counties where the respective Leasehold Properties are located,
(ii) consents to the jurisdiction of each such court in any such suit,
action or proceeding, (iii) waives any objection which Borrower may have to
the laying of venue in any such suit, action or proceeding in any such court,
and (iv) waives personal service of any and all process (in any court or
jurisdiction whatsoever) and consents that all such services of process may be
made by certified mail return receipt requested directed to Borrower at the
address indicated in Section
10.8 herein, and services
so made shall be complete five (5) days after the same has been deposited in the
U.S. Mail as aforesaid.

       

      10.17. No Third
Party Beneficiary.  This Agreement is made for the sole benefit
of Borrower and Lender, and no other person shall be deemed to have any privity
of contract hereunder nor any right to rely hereon to any extent or for any
purpose whatsoever, nor shall any other person have any right of action of any
kind hereon or be deemed to be a third party beneficiary hereunder.

       

      10.18. Legal
Tender of United States.  All payments hereunder shall be made
in coin or currency which at the time of payment is legal tender in the United
States of America for public and private debts.

       

      10.19. Definitions;
Captions.  With respect to any reference in this Agreement to
any defined term, (i) if such defined term refers to a person, or a trust,
corporation, partnership or other entity, then it shall also mean all heirs,
legal representatives, successors and assigns of such person or entity, and (ii)
if such defined term refers to a document, instrument or agreement, then it
shall also include any replacement, extension or other modification
thereof.  Captions contained in this Agreement in no way define, limit
or extend the scope or intent of their respective provisions.

       

      10.20. Interpretation.  All
references herein to a party’s best knowledge shall be deemed to mean the best
knowledge of such party based on commercially reasonable inquiry.  All
references herein to Borrower’s knowledge shall be deemed to refer to the actual
knowledge of each Borrower Party.  Unless specified to the contrary
herein, all references herein to an exercise of discretion or judgment by
Lender, to the making of a determination or designation by Lender, to the
application of Lender’s discretion or opinion, to the granting or withholding of
Lender’s consent or approval, to the consideration of whether a matter or thing
is satisfactory or acceptable to Lender, or otherwise involving the decision
making of Lender, shall be deemed to mean that Lender shall decide unilaterally
using its sole and absolute discretion or judgment.  The terms “herein,” “hereof,” “hereunder” and any other
similar terms used herein shall be deemed to refer to this Agreement in its
entirety.  Any reference contained herein, or in any of the other Loan
Documents or Other Related Documents, to attorneys’ fees and expenses shall be
deemed to be reasonable fees and expenses of Lender’s outside counsel and of any
other third-party experts or consultants engaged by Lender’s outside counsel on
Lender’s behalf and, in the case of attorneys’ fees and expenses, shall include,
without limitation, attorneys’ fees and expenses at trial, on appeal, in a
bankruptcy proceeding or otherwise.  All references to any Loan
Document or Other Related Document shall be deemed to be to such document as
amended, modified or restated from time to time.

       


      
        
           


        

        
          43

          
            

          

        

        
           


        

      


      10.21. WAIVER OF
RIGHT TO JURY TRIAL.  BORROWER AND LENDER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THAT THEY MAY HAVE TO A TRIAL BY
JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS AGREEMENT, THE
NOTE OR ANY OF THE OTHER LOAN DOCUMENTS OR OTHER RELATED DOCUMENTS, OR ANY OTHER
STATEMENTS OR ACTIONS OF BORROWER OR LENDER.  EACH OF BORROWER AND
LENDER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS
AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED
OF ITS OWN FREE WILL, AND THAT IT HAS DISCUSSED THIS WAIVER WITH SUCH LEGAL
COUNSEL. BORROWER FURTHER ACKNOWLEDGES THAT (I) IT HAS READ AND UNDERSTANDS THE
MEANING AND RAMIFICATIONS OF THIS WAIVER, (II) THIS WAIVER HAS BEEN REVIEWED BY
BORROWER AND BORROWER’S COUNSEL AND IS A MATERIAL INDUCEMENT FOR LENDER TO ENTER
INTO THE AGREEMENT AND THE OTHER LOAN DOCUMENTS AND OTHER RELATED DOCUMENTS, AND
(III) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF SUCH OTHER LOAN DOCUMENTS OR
OTHER RELATED DOCUMENTS AS IF FULLY INCORPORATED THEREIN.

       

      10.22. Credit
Reporting.  Borrower acknowledges that the following notice is
provided as required by the Fair Credit Reporting Act:  Lender may
report information about the Loan/Borrower’s account to credit bureaus and late
payments, missed payments or other defaults on such Loan/Borrower’s account may
be reflected in Borrower’s credit report.

       

      10.23. Duplication
of Deliveries.   To the extent that Borrower or any
Borrower Party is required to make a delivery to Lender of any notice, report,
agreement or other document hereunder that such Borrower, Borrower Party, or any
Affiliate thereof, is also required to deliver to the landlord under the Master
Lease, so long as Lender or its Affiliates, either directly or indirectly,
continues to be the landlord under the Master Lease, the delivery of such
notices, reports, agreements or other documents the Master Lease shall
constitute delivery by such Borrower, Borrower Party, or any Affiliate thereof,
to Lender hereunder, and neither Borrower, Borrower Party nor or any Affiliate
thereof shall be obligated to make a duplicate delivery hereunder.

       

      10.24.  
Conflicts
with Master Lease.  Notwithstanding anything which may be
construed to the contrary in this Agreement, and except as expressly set forth
herein, Borrower acknowledges and agrees that (i) except as provided in the Cash
Collateral Agreement and the Consent and Agreement of Master Landlord relating
to such agreement, (a) in no event will the terms, conditions, restrictions or
obligations of Lender under this Agreement or any of the other Loan Documents or
Other Related Documents impair or abrogate the rights or remedies of Master
Landlord under the Master Lease or any guaranty made in conjunction therewith,
and (b) nothing herein shall be construed so as to prevent Master Landlord from
exercising or enforcing any or all of its rights and remedies under the Master
Lease in accordance with the terms thereof, and (ii) in no event will the terms,
conditions, restrictions or obligations of Master Landlord under the Master
Lease impair or abrogate the rights or remedies of Lender under this Agreement
or any of the other Loan Documents or Other Related Documents, and nothing
herein shall be construed so as to prevent Lender from exercising or enforcing
any or all of its rights

       


      
        
           


        

        
          44

          
            

          

        

        
           


        

      


      and
remedies under this Agreement or any of the other Loan Documents or Other
Related Documents in accordance with the terms thereof.  Without
limitation of the Cash Collateral Agreement and the Consent and Agreement of
Master Landlord relating to such agreement, in the event of a clear and
unavoidable conflict between the terms of this Agreement or any of the other
Loan Documents or Other Related Documents and the terms of the Master Lease, for
so long as Ventas Realty, Limited Partnership and/or any of its affiliates are
both Lender under this Agreement and Master Landlord under the Master Lease,
such conflict shall be resolved by Ventas Realty, Limited Partnership, in its
sole and absolute discretion.

       

      10.25. Liability
Limitation.  This Agreement, the Notes and the other Loan
Documents and the Other Related Documents are being entered into between
Borrower and Lender to create a borrower/lender relationship with respect to the
Loan, and Borrower and Lender agree that, notwithstanding anything to the
contrary contained in this Agreement, the Notes and the other Loan Documents and
the Other Related Documents, (i) in the case of any indemnity of Lender by
Borrower that is contained in this Agreement, the Notes and the other Loan
Documents and/or the Other Related Documents, Borrower shall not be liable to
indemnify Lender with respect to any loss, damage, cost or expense, including,
without limitation, attorneys' fees, that is incurred by Lender if and to the
extent that the same arises as a result of Lender being the Master Landlord
under the Master Lease and (ii) in the case of any covenant or agreement by
Borrower that is contained in this Agreement, the Notes and the other Loan
Documents and/or the Other Related Documents and breached by Borrower, Borrower
shall not be liable for any damages suffered by Lender as a result of such
breach if and to the extent that such damages are suffered by Lender as a result
of Lender being the Master Landlord under the Master Lease.  For
example, if Borrower indemnifies Lender from certain environmental claims in a
Loan Document, Lender suffers a loss from a claim of the nature described in the
indemnity provision of such Loan Document and Lender suffers the loss, not
because it is the Lender (e.g. because it does not have or exercise under the
Loan Documents liability-creating dominion over the property in its capacity as
Lender) but instead as a result of the fact that, e.g., in its capacity as
Master Landlord it exercised rights of control or consent under the Master Lease
that resulted in the attachment of liability for the particular claim, then
subsection (i) above would exculpate Borrower from liability under the aforesaid
Loan Document indemnity provision.

       

      


      


      [THE
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

       


      
        
           


        

        
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      IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed by their duly authorized
representatives as of the date first above written.

       

      BORROWER:

       

      EMERITUS
CORPORATION,

      a
Washington corporation

      


      


      


      By:
/s/                      Eric
Mendelsohn

      Name:                      Eric
Mendelsohn

      Its:           Senior
Vice President Corporate

      Development

      


      


      


      SUMMERVILLE SENIOR LIVING,
INC.,

      a
Delaware corporation

      


      


      


      By: /s/ Eric
Mendelsohn

      Name:                      Eric
Mendelsohn

      Its:           Senior
Vice President Corporate

      Development

      


      


      


      SW ASSISTED LIVING, LLC

      SUMMERVILLE
AT BARRINGTON COURT LLC

      SUMMERVILLE AT ROSEVILLE GARDENS
LLC

      


      Each of which entities is a Delaware
limited liabilitycompany

      


      By:           Summerville
Senior Living, Inc., a Delaware

      corporation, its Sole
Member

      


      


      


      By: /s/ Eric
Mendelsohn                                                                           

      Name:                      Eric
Mendelsohn

      Its:           Senior
Vice President Corporate

      Development

      



      
        
           


        

        
          S
- 1

          
            

          

        

        
           


        

      


      SUMMERVILLE
5 LLC

      SUMMERVILLE
14 LLC

      SUMMERVILLE
15 LLC

      SUMMERVILLE
16 LLC

      SUMMERVILLE 17 LLC

      


      Each of which entities is a Delaware
limited liabilitycompany

      


      By:           Summerville
Investors, LLC, a Delaware limited

      liability company, each of their Sole
Member

      


      By:           Summerville
Senior Living, Inc.,

      a Delaware corporation,

      its Sole Member

      


      


      


      By:
/s/                      Eric
Mendelsohn

      Name:                      Eric
Mendelsohn

      Its:           Senior
Vice President Corporate

      Development

      


      


      


      SUMMERVILLE AT HERITAGE PLACE,
LLC,

      a
Delaware limited liability company

      


      By:           Summerville
at Cobbco, Inc.,

      a California corporation,

      its Sole Member

      


      


      


      By: /s/ Eric Mendelsohn
_____________________

      Name: Eric Mendelsohn

      
        	
                 
      

              	
                Title:

              	
                Senior
      Vice President Corporate
Development

              


      

      


      



      
        
           


        

        
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- 2

          
            

          

        

        
           


        

      


      LENDER:

       

      VENTAS REALTY, LIMITED
PARTNERSHIP,

      a
Delaware limited partnership

       

      
        	
                 
      

              	
                By:

              	
                Ventas,
      Inc., a Delaware corporation, its general
  partner

              


      

       

      


      


      By:           /s/ T. Richard
Riney                                                                           

      Name:                      T.
Richard Riney

      
        	
                 
      

              	
                Title:

              	
                Executive
      Vice President, Chief Administrative Officer, General Counsel and
      Secretary

              


      

       

      


       

      


       


      
        
           


        

        
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- 3

          
            

          

        

        
           


        

      


      LANDLORD
CONSENT

       

      The undersigned, being the landlord
under the Master Lease, hereby consent to the Leasehold Borrowers’ encumbering
of (i) their interest in the Leasehold Properties pursuant to the Mortgages,
(ii) the Security Deposit pursuant to the Cash Collateral Agreement, and (iii)
any Net Insurance Proceeds (as such term is defined in the Mortgages) pursuant
to Sections 1.9, 1.10, 1.11 and 1.12 of the Mortgages, and
otherwise consent to the terms of this Agreement, the other Loan Documents and
the Other Related Documents, and further acknowledge that the execution of this
Agreement, the other Loan Documents and the Other Related Documents, along with
any other documents executed by Leasehold Borrowers in connection therewith,
shall not be deemed a default under the Master Lease.   All
capitalized terms used in the foregoing paragraph shall have the meaning
ascribed to same in the Loan Agreement to which this consent is
attached.

       

      MASTER
LANDLORD:

      


      VENTAS REALTY, LIMITED
PARTNERSHIP,

      a
Delaware limited partnership

       

      
        	
                 
      

              	
                By:

              	
                Ventas,
      Inc., a Delaware corporation, its general
  partner

              


      

       

      


       

      By:           /s/ T. Richard
Riney

      Name:                      T.
Richard Riney

      
        	
                 
      

              	
                Title:

              	
                Executive
      Vice President, Chief Administrative

              	
                Officer,
      General Counsel

              


      

      and
Secretary

       

      


       

      VENTAS FRAMINGHAM,
LLC,

      a
Delaware limited liability company

       

      


       

      By: /s/ T. Richard
Riney                                                                           

      Name:                      T.
Richard Riney

      
        	
                 
      

              	
                Title:

              	
                Executive
      Vice President, General Counsel and Corporate
  Secretary

              


      


      
        
           


        

        
          S
- 4