SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT

THIS SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT (this “ Second Amendment ”) is made as of the 16 ^th day of October, 2008, by and between EMERITUS CORPORATION, a Washington corporation (“ Buyer ”), and HEALTH CARE REIT, INC., a Delaware corporation (“ HCN ”), together with the affiliates of HCN listed on the signature pages hereto (individually and collectively with HCN, “ Seller ”).

A.   Buyer and Seller entered into that certain agreement (as amended, the “ Agreement ”) captioned “ASSET PURCHASE AGREEMENT,” dated as of June 9, 2008, as amended by that certain First Amendment to Asset Purchase Agreement (the “ First Amendment ”) dated as of June 30, 2008.  Capitalized terms used and not defined in this Second Amendment shall have the meanings ascribed to them in the Agreement.

B.   The Closing on Tranche 1 occurred on June 30, 2008.

C.   Buyer exercised an initial option to extend the Tranche 2 Closing Deadline until December 1, 2008, by delivering notice thereof to Seller on September 29, 2008.

D.   Buyer would like to have the flexibility to close Tranche 2 in separate closings on separate days, as described herein.

E.   Buyer and Seller have agreed to amend the Agreement as described below.

NOW, THEREFORE, for and in consideration of the foregoing Recitals, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.   Section 1.4 of the Agreement is hereby amended to read in its entirety as follows:

1.4            Close in Tranches .  The sale of  the Assets shall be closed in two separate tranches (each a “ Tranche ”) with the Tranche 1 Facilities closed in “ Tranche 1 ” as designated on Schedule 2-A and with the Tranche 2 Facilities closed in “ Tranche 2 ” as designated on Schedule 2-B.  The Closing on Tranche 2 may be bifurcated, and the closings on the Tranche 2 Facilities to be purchased in part using a loan from Freddie Mac (“ Tranche 2 Freddie Mac Closing ”) and the Tranche 2 Facilities to be purchased in part using a loan from KeyBank (“ Tranche 2 KeyBank Closing ”), as each is designated on Schedule 2-B, may occur in separate closings on separate days with the Tranche 2 Freddie Mac Closing first, but both closings must occur no later than the Tranche 2 Closing Deadline.  (The closings may individually or collectively be referred to herein as a “ Closing ”).  Concurrently with each Closing, Buyer and Seller shall amend the Master Lease 1 and the Master Lease 2, as applicable, to delete the sold Facilities and adjust the Investment Amount (as defined therein) and corresponding provisions.

2.   Section 2.1 of the Agreement is hereby amended to read in its entirety as follows:

2.1            Purchase Price .  The “ Tranche 1 Purchase Price ” and the allocated purchase price for each Tranche 1 Facility is set forth on Schedule 2-A and the “ Tranche 2 Purchase Price ” and the allocated purchase price for each Tranche 2 Facility is set forth on Schedule 2-B, along with the portion of the Tranche 2 Purchase Price payable at the Tranche 2 Freddie Mac Closing (“ Tranche 2 Freddie Mac Purchase Price ”) and the portion payable at the Tranche 2 KeyBank Closing (“ Tranche 2 KeyBank Purchase Price ”).  The total of the Tranche 1 Purchase Price and the Tranche 2 Purchase Price is $299,819,368.00 (the “ Purchase Price ”).  All cash payments shall be payable in immediately available funds by wire transfer to an account designated by Seller.

3.   Section 2.4 of the Agreement is hereby amended to read in its entirety as follows:

2.4            Deposit at Closing; Failure to Close; Remedies .  [i] In the event that each Tranche shall close as provided herein, $299,804.91 of the Deposit shall be applied against the Tranche 2 Freddie Mac Purchase Price payable at the Tranche 2 Freddie Mac Closing and the balance of the Deposit shall be applied against the Tranche 2 KeyBank Purchase Price payable at the Tranche 2 KeyBank Closing; provided, however, that the foregoing shall apply only if the Tranche 2 Freddie Mac Closing occurs first, and if not, then the Deposit will be proportionately allocated to the Tranche 2 Freddie Mac Closing and the Tranche 2 KeyBank Closing based on the respective Tranche 2 Freddie Mac Purchase Price and the Tranche 2 KeyBank Purchase Price.  [ii] In the event that Buyer has not terminated this Agreement within the Due Diligence Period pursuant to Section 2.3, and either the Tranche 2 Freddie Mac Closing or the Tranche 2 KeyBank Closing shall fail to close as provided herein due to Buyer's default under this Agreement, then, as liquidated damages, any remaining Deposit not yet applied shall be retained by Seller and Buyer shall pay Seller the reasonable amount of out-of-pocket costs incurred by Seller in connection with the Acquisition.  The retention of the Deposit and receipt of such out-of-pocket costs as liquidated damages shall be Seller’s sole and exclusive remedy for such failure to close