SECOND AMENDMENT TO LOAN AGREEMENT

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

R E C I T A L S:

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

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

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

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

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

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

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

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

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

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

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

                                Attention:  Mr. Eric Mendelsohn

               Facsimile:  (206) 357-7388

If to Lender:                                            Nationwide Health Properties, Inc.

610 Newport Center Drive, Suite 1150

Newport Beach, California  92660

         Attention:  President and CFO

         Facsimile:  (949) 759-6876

with a copy to:                                       Sherry Meyerhoff Hanson & Crance LLP

610 Newport Center Drive, Suite 1200

Newport Beach, California  9266

         Attention:  Kevin L. Sherry, Esq.

         Facsimile:  (949) 719-1212”

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

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

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