ex10_6705.htm


    
      

    

    Exhibit
      10.67.05

     

    [Escondido,
      California]

    [Puyallup,
      Washington]

     

     

    
      

      

    

     

    PURCHASE
      AND SALE AGREEMENT

    AND

    JOINT
      ESCROW INSTRUCTIONS

    


    


    By
      and
      Between

    


    


    HEALTH
      CARE PROPERTY INVESTORS, INC.,

    a
      Maryland corporation

    


    as
      “Seller”

    


    


    and

    


    


    EMERITUS
      CORPORATION,

    a
      Washington corporation,

    


    as
      “Buyer”

     

     

    
      

      

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    TABLE
      OF CONTENTS

    


    
      	 	 	
              Page

            
	 	 	 
	
              1.

            	
              DEFINITIONS

            	
              1

            
	 	 	 
	
              2.

            	
              SALE
                OF THE PROPERTIES

            	
              4

            
	 	 	 
	
              3.

            	
              ESCROW

            	
              5

            
	 	 	 
	
              4.

            	
              PURCHASE
                PRICE; ALLOCATION OF PURCHASE PRICE

            	
              5

            
	 	 	 
	
              5.

            	
              CONDITIONS
                TO CLOSING; AS IS PURCHASE

            	
              5

            
	 	 	 
	
              6.

            	
              CLOSING
                OF ESCROW

            	
              8

            
	 	 	 
	
              7.

            	
              TERMINATION

            	
              13

            
	 	 	 
	
              8.

            	
              REPRESENTATIONS
                AND WARRANTIES

            	
              15

            
	 	 	 
	
              9.

            	
              CERTAIN
                EVENTS PRIOR TO CLOSING

            	
              17

            
	 	 	 
	
              10.

            	
              POST-CLOSING
                MATTERS

            	
              18

            
	 	 	 
	
              11.

            	
              BROKERS

            	
              18

            
	 	 	 
	
              12.

            	
              MISCELLANEOUS
                PROVISIONS

            	
              18

            


    

    


    


    
      	
              EXHIBITS

            	 
	 	 
	
              A

            	
              Description
                of Emeritus Master Lease

            
	 	 
	
              B

            	
              Escrow
                General Provisions

            
	 	 
	
              C

            	
              [RESERVED]

            
	 	 
	
              D

            	
              Form
                of Quitclaim Bill of Sale

            
	 	 
	
              E

            	
              [RESERVED]

            
	 	 
	
              F

            	
              [RESERVED]

            
	 	 
	
              G

            	
              List
                of Nominees, Properties/Facilities and Purchase Price
                Allocations

            
	 	 
	
              H

            	
              [Reserved]

            


    

    


    


    
      	
              SCHEDULE

            	 
	 	 
	
              1

            	
              Related
                Purchase Agreements

            


    

    


    
      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

    

    


    PURCHASE
      AND SALE AGREEMENT

    AND
      JOINT ESCROW INSTRUCTIONS

    


    THIS
      PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this “Agreement”) is
      made and entered into as of July 31, 2007 to be effective as of June 14, 2007
      (the “Effective Date”), by and among HEALTH CARE PROPERTY INVESTORS, INC., a
      Maryland corporation (“Seller”) and EMERITUS CORPORATION, a Washington
      corporation (“Buyer”), as follows:

    


    RECITALS

    


    A.              
      Seller is the owner of the Properties (as defined below).

    


    B.              
      The Properties are currently leased, together with certain other property,
      by
      Seller and/or certain Affiliates (as defined below) of Seller to Buyer and/or
      certain Affiliates of Buyer pursuant to the Emeritus Master Lease (as defined
      below).

    


    C.              
      Buyer desires to purchase the Properties from Seller and Seller desires to
      sell
      the Properties to Buyer on the terms and subject to the conditions set forth
      herein.

    


    AGREEMENT

    


       
      NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of which are hereby acknowledged, Buyer and Seller agree as
      follows:

    


    1.           
      DEFINITIONS

    


    For
      all
      purposes of this Agreement, except as otherwise expressly provided herein or
      unless the context otherwise requires, (i) the terms defined in this Article
      have the meanings assigned to them in this Article and include the plural as
      well as the singular; (ii) all references in this Agreement to designated
“Articles,” “Sections” and other subdivisions are to the designated Articles,
      Sections and other subdivisions of this Agreement; (iii) the word “including”
shall have the same meaning as the phrase “including, without limitation,” and
      other phrases of similar import; and (iv) the words “herein,” “hereof” and
“hereunder” and other words of similar import refer to this Agreement as a whole
      and not to any particular Article, Section or other subdivision.

    


    1.1             
      1031 Exchange:  As defined in
      Section 6.8.

    


    1.2             
      Additional Charges:  With
      respect to each applicable Property, “Additional Charges,” as defined in the
      Emeritus Master Lease and allocable to such Property.

    


    1.3             
      Additional Rent:  With
      respect to each applicable Property, “Additional Rent,” as defined in the
      Emeritus Master Lease (including “Percentage Rent” and “CPI Rent,” as each are
      defined in the Emeritus Master Lease) and allocable to such
      Property.

    


    1.4             
      Affiliate:  “Affiliate,” as
      defined in the Emeritus Master Lease.

    


    1.5             
      Allocated Purchase Price:  As
      defined in Section 4.1.

    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    1.6            
      Bill of Sale:  As defined in
      Section 6.2.2.

    


    1.7          
        Close of Escrow, Closing Date and/or
      Closing:  As defined in Section 6.1.

    


    1.8          
        Closing
      Funds:  As defined in Section
      4.4.

    


    1.9         
         Condemnation:  “Condemnation,”
as defined in the Emeritus Master
      Lease.

    


    1.10           Condemnor:  “Condemnor,”
      as defined in the Emeritus Master Lease.

    


    1.11           Deed:  As
      defined in Section 6.2.1.

    


    1.12           Earnest
      Money Deposit:  As defined in the Master
      Purchase Agreement.

    


    1.13           Effective
      Date:  As defined in the preface to this
      Agreement.

    


    1.14           Emeritus
      Master Lease:  That Amended and Restated
      Master Lease identified on Exhibit “A” attached hereto
      among Lessor and Lessee covering, among other properties, the Properties, as
      more particularly described therein, as the same may have been amended or
      modified from time to time in accordance with the terms thereof.

    


    1.15           Emeritus/Summerville
      Merger:  As defined in the Master
      Purchase Agreement.

    


    1.16           Escrow
      Holder:  As defined in Section
      3.1.

    


    1.17           Event
      of Default: “Event of Default,” as defined in the
      Emeritus Master Lease.

    


    1.18           Funds:  Immediately
      available funds in the form of cash, wire transfer of funds, or a certified
      or
      bank cashier’s check drawn on a reputable financial institution acceptable to
      Escrow Holder.

    


    1.19           Hazardous
      Substance:  With respect to each
      applicable Property, “Hazardous Substance,” as defined in the Emeritus Master
      Lease.

    


    1.20           HCP:  Health
      Care Property Investors, Inc., a Maryland corporation.

    


    1.21           Impositions:  With
      respect to each applicable Property, “Impositions,” as defined in the Emeritus
      Master Lease with respect to such Property.

    


    1.22           Laws:  All
      applicable governmental laws, codes, ordinances, regulations, judgments,
      permits, approvals or other requirements.

    


    1.23           Lessee:  “Lessee,”
      as defined in the Emeritus Master Lease.

    


    1.24           Lessor:  “Lessor,”
      as defined in the Emeritus Master Lease.

    


    1.25           Liabilities:
      Any claim, liability, loss, cost, action, damage, expense or fees, including
      but
      not limited to reasonable attorney’s and paralegals’ fees and costs of defense
      (each, a “Liability”).

    


    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    


    1.26           Master
      Purchase Agreement:  As defined in
Schedule 1 hereto.

    


    1.27           Minimum
      Rent:  With respect to each applicable
      Property, “Minimum Rent,” as defined in the Emeritus
      Master Lease with respect to such Property.

    


    1.28           Opening
      of Escrow:  As defined in Section
      3.3.

    


    1.29           Organizational
      Documents:  Collectively, as applicable,
      the articles or certificate of incorporation, certificate of limited partnership
      or certificate of limited liability company, bylaws, partnership agreement,
      operating company agreement, trust agreement, statements of partnership,
      fictitious business name filings and all other organizational documents relating
      to the creation, formation and/or existence of a business entity, together
      with
      resolutions of the board of directors, partner or member consents, trustee
      certificates, incumbency certificates and all other documents or instruments
      approving or authorizing the transactions contemplated by this
      Agreement.

    


    1.30           Outside
      Closing Date:  Subject to extension as
      provided Section 6.8 below, August 15, 2007.

    


    1.31           Permitted
      Exceptions:  With respect to each
      Property, as defined in Section 6.2.1.

    


    1.32           Person:  Any
      individual, corporation, partnership, joint venture, limited liability
      partnership, limited liability company, association, joint stock company, trust,
      unincorporated organization, whether or not a legal entity, or other business
      or
      governmental entity or authority (or any department, agency, or political
      subdivision thereof).

    


    1.33           Properties:  Collectively,
      the “Leased Property” (as defined in the Emeritus Master Lease) of the
“Facilities” (as defined in the Emeritus Master Lease) listed on
Exhibit G attached hereto, less any portion which has
      been taken by reason of any Condemnation or other exercise of the power of
      eminent domain.  The parties acknowledge that the Properties for
      purposes of this Agreement include only the “Leased Property” of the
“Facilities” listed on Exhibit G attached hereto, and
      that the balance of the “Leased Property” of each “Facility” covered by the
      Emeritus Master Lease, but not covered by this Agreement is being sold and
      conveyed to Buyer pursuant to the Master Purchase Agreement or another Related
      Purchase Agreement.  In other words, pursuant to this Agreement, the
      Master Purchase Agreement and the other Related Purchase Agreements Seller
      and/or its Affiliates are selling and Buyer is purchasing all of Seller’s and/or
      its Affiliates’ right, title and interest in and to the “Leased Property” of all
      of the “Facilities” covered by the Emeritus Master Lease upon the Closing
      hereunder and the Related Purchase Agreement Closing under each applicable
      Related Purchase Agreement, but this Agreement is intended to and only covers
      the “Leased Property” of the “Facilities” listed  on
Exhibit G attached hereto.

    


    1.34           Purchase
      Price:  As defined in Section
      4.1.

    


    1.35           Related
      Purchase Agreements:  The agreements identified on
Schedule 1 attached hereto between and/or among
      Seller
      or certain Affiliates of Seller, and Buyer, or certain Affiliates of Buyer,
      relating to certain purchase and sale transactions to be consummated
      concurrently with the Closing hereunder, if at all (each, a “Related Purchase
      Agreement”).

    


    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

    


    1.36           Related
      Purchase Agreement Closing.  The “Closing,” as defined in
      each Related Purchase Agreement.

    


    1.37           Related
      Purchase Agreement Buyer Default.  The occurrence of a
      default (i.e., after any applicable notice or cure period) by Buyer or any
      Affiliate of Buyer under any Related Purchase Agreement.

    


    1.38           Related
      Purchase Agreement Seller Default.  The
      occurrence of a default (i.e., after any applicable notice or cure period)
      by
      Seller or any Affiliate of Seller under any Related Purchase
      Agreement.

    


    1.39           Release
      of Claims:  As defined in the Master Purchase
      Agreement.

    


    1.40           Rent
      and Charges:  All accrued and unpaid
      Minimum Rent, Additional Rent, and any Additional Charges (whether or not
      billed) payable by the Lessee under the Emeritus Master Lease with respect
      to
      the applicable Properties, through and including the day prior to Closing Date
      (prorated to the extent applicable for the month during which the Closing
      occurs).

    


    1.41           Summerville:  Summerville
      Senior Living, Inc., a Delaware corporation.

    


    1.42           Summerville
      Master Lease:  As defined in the Master
      Purchase Agreement.

    


    1.43           Title
      Company:  Chicago Title Insurance
      Company, Attn: Angie Koetters, Escrow Officer, Fax
      No.:(312)223-5888.

    


    1.44           Title
      Policy:  As defined in Section
      6.4.

    


    1.45           Title
      Endorsements:  As defined in Section
      6.4.

    


    1.46           Transaction
      Documents:  Collectively, this
      Agreement, the Deeds, the Bills of Sale, each Related Purchase Agreement, and
      all other agreements, documents and/or instruments to be executed and/or
      delivered pursuant to and in connection with this Agreement, the Related
      Purchase Agreements and/or the Exhibits hereto or thereto.

    


    1.47           Transaction
      Taxes.  Any and all federal, state, municipal or other
      local Law documentary transfer, stamp, sales, use, excise, privilege or similar
      tax, fee or charge payable in connection with the delivery of any instrument
      or
      document provided in or contemplated by this Agreement, any Related Purchase
      Agreement or the Exhibits hereto and thereto together with interest and
      penalties, if any, thereon, including any sales or similar taxes payable in
      connection with the transfer of any personal property comprising a part of
      either Property.

    


    2.        
         SALE OF THE PROPERTIES

    


    Buyer
      agrees to purchase and accept from Seller, and Seller agrees to sell, convey
      and
      assign to Buyer, both of the Properties on the terms and subject to the
      conditions set forth herein.

    


    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

    


    3.        
         ESCROW

    


    3.1       
           General
      Instructions.  Title Company is also hereby designated as
      escrow holder (sometimes herein referred to as “Escrow
      Holder”).  Escrow Holder’s Escrow number, Escrow Officer for the
      transactions contemplated hereby and under the Related Purchase Agreements,
      address for notices and wiring information is set forth below Title Company’s
      acceptance of this Escrow.  Escrow Holder’s general conditions or
      provisions, which are attached hereto as Exhibit “B” are
      incorporated by reference herein; provided, however, that in the event of any
      inconsistency between Exhibit “B” and any of the
      provisions of this Agreement or any Related Purchase Agreement, the provisions
      of this Agreement or the Related Purchase Agreement, as applicable, shall
      control, respectively.  Buyer and Seller shall each execute, deliver
      and be bound by such further escrow instructions or other instruments as may
      be
      reasonably requested by the other party or by Escrow Holder from time to time,
      so long as the same are consistent with this Agreement.  Escrow Holder
      shall not comply with the unilateral instructions of only one party without
      the
      consent of the other party hereto unless otherwise expressly required to do
      so
      in this Agreement or any Related Purchase Agreement.

    


    3.2       
           Tax Reporting
      Person.  For purposes of complying with Internal Revenue
      Code § 6045(e), as amended effective January 1, 1991, Escrow Holder is
      hereby designated as the “person responsible for closing the transaction,” and
      also as the “reporting person” for purposes of filing any information returns
      with the Internal Revenue Service concerning this transaction, as required
      by
      law.

    


    3.3       
           Opening of
      Escrow.  Escrow shall be deemed open when not less than
      four (4) originals of this Agreement and each Related Agreement, fully signed
      by
      all parties hereto or thereto either together or in counterparts, are delivered
      to Escrow Holder (the “Opening of Escrow”), which shall occur within one (1)
      business day after execution of this Agreement by Buyer and Seller and each
      Related Purchase Agreement by the Parties thereto.  Escrow Holder
      shall immediately notify Buyer, Seller and their respective attorneys in writing
      of the official date of the Opening of Escrow.

    


    4.        
         PURCHASE PRICE; ALLOCATION OF PURCHASE
      PRICE

    


    4.1       
           Purchase
      Price.  The purchase price for the Properties shall be
      Thirty Million Four Hundred Three Thousand Five Hundred Thirty-Two Dollars
      and
      00/100ths ($30,403,532.00) (the “Purchase Price”).

    


    4.2       
           [Intentionally
      Deleted.]

    


    4.3       
           [Intentionally
      Deleted.]

    


    4.4       
           Closing
      Funds.  No later than 2:00 p.m., Pacific Standard Time,
      on the Closing Date, Escrow Holder shall calculate and Buyer shall wire Funds
      into Escrow (using wiring instructions reasonably satisfactory to Escrow Holder)
      in an amount which shall equal the Purchase Price plus any other sums payable
      by
      Buyer hereunder (the “Closing Funds”).

    


    5.      
           CONDITIONS TO CLOSING; AS IS
      PURCHASE

    


    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

     

    5.1          
        Buyer’s Conditions. Provided that Buyer is
      not in breach or default of any provisions of this Agreement, the obligation
      of
      Buyer to purchase the Properties shall be subject to satisfaction of each of
      the
      conditions set forth in this Section 5.1 on and as of the Closing
      Date.  Seller and Buyer expressly acknowledge and agree that each of
      the conditions set forth in this Section 5.1 is for the benefit of and may
      be
      waived only by Buyer as herein provided.

    


      
      5.1.1    Seller’s
      Representations and Warranties.  The representations and
      warranties of Seller set forth in Section 8 below shall be true and correct
      in
      all material respects on the Closing Date as if made again on the Closing
      Date.

    


      
      5.1.2    Seller’s
      Performance.  Seller shall have performed all of its
      obligations under this Agreement which by the terms of this Agreement are
      required to be performed by Seller as of or prior to the Closing
      Date.

    


      
      5.1.3    Purchase
      of All the Properties.  The Closing hereunder shall occur
      simultaneous with respect to all of the Properties.

    


      
      5.1.4    Occurrence
      of the Closing by the Outside Date.  The Closing
      hereunder shall occur on or before the Outside Closing Date.

    


      
      5.1.5    Related
      Purchase Agreements.  The Related Purchase Agreement
      Closing under each Related Purchase Agreement shall occur simultaneous with
      the
      Closing.  In addition, no Related Purchase Agreement Seller Default
      under any Related Purchase Agreement shall have occurred and be
      continuing.

    


    5.2       
           Buyer’s Approval, Disapproval or Waiver
      of Conditions.  Prior to Closing Buyer
      shall notify Seller and Escrow Holder in writing in the event that as of the
      date of Closing, any of the conditions set forth in Section 5.1 have not been
      satisfied or waived by Buyer; provided, however, that if any of the conditions
      set forth in Sections 5.1.3, 5.1.4  or 5.1.5 have not been satisfied
      as a result of any act or omission of Buyer or any Affiliate of Buyer, then
      Buyer shall not be entitled to disapprove such condition, but rather the same
      shall, following any applicable notice and cure period pursuant to Section
      7.2
      below, constitute a default by Buyer hereunder.  In the event that
      Buyer is not entitled to disapprove a condition or Buyer fails to approve,
      disapprove or waive such condition, if applicable, within the time and in the
      manner herein specified, then such condition shall be deemed conclusively
      satisfied or waived by Buyer and thereafter shall not be a condition precedent
      to the performance by Buyer of its respective obligations
      hereunder.

    


    5.3         
         “AS IS”
SALE.  IT IS EXPRESSLY UNDERSTOOD AND
      AGREED THAT BUYER
      IS ACQUIRING EACH OF THE PROPERTIES “AS IS,” IN ITS PRESENT STATE AND CONDITION,
      WITHOUT ANY REPRESENTATIONS OR WARRANTIES FROM SELLER OF ANY KIND WHATSOEVER,
      EITHER EXPRESS OR IMPLIED, EXCEPT AS EXPRESSLY SET FORTH IN SECTION 8
      BELOW.  IN PARTICULAR, EXCEPT AS EXPRESSLY SET FORTH IN SECTION 8
      BELOW, SELLER MAKES NO REPRESENTATION OR WARRANTY RESPECTING THE USE, CONDITION,
      TITLE, OPERATION OR MANAGEMENT OF EITHER OF THE PROPERTIES, OR COMPLIANCE WITH
      ANY APPLICABLE LAWS RELATING TO ZONING, SUBDIVISION, PLANNING, BUILDINGS, FIRE,
      SAFETY, EARTHQUAKE, HEALTH OR ENVIRONMENTAL MATTERS, THE PRESENCE OR ABSENCE
      OF
      HAZARDOUS SUBSTANCES, OR COMPLIANCE WITH ANY OTHER COVENANTS, CONDITIONS AND
      RESTRICTIONS (WHETHER OR NOT OF RECORD).  Buyer represents that it is
      knowledgeable in real estate matters and is relying upon Buyer’s own
      investigation and analysis in purchasing each of the Properties, as well as
      the
      fact that Buyer or its Affiliates originally sold to and/or developed on behalf
      of Seller each of the Properties and at all times thereafter have leased and
      exclusively controlled the same.  Buyer further represents that it has
      had ample opportunity to inspect and has, in fact, made all of the
      investigations Buyer deems necessary in purchasing each of the
      Properties.  As a result, Buyer hereby expressly waives any notice
      requirements which may be imposed upon Seller pursuant to § 25359.7 of the
      California Health & Safety Code or any other similar and applicable
      Laws.  If this Agreement is not terminated and Buyer acquires the
      Properties as provided herein, Buyer shall have thereby approved all aspects
      of
      each of the Properties and this transaction and thereby waives any claim or
      Liability against Seller.  In furtherance of the foregoing, at the
      Closing, Buyer shall and shall cause Lessee to execute and deliver to Seller
      the
      Release of Claims. The provisions of this Section 5.3 shall survive the
      Closing.

    


    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

    


    5.4        
          Seller’s
      Conditions.  Provided that Seller is not in breach or
      default of any provision of this Agreement, the obligation of Seller to sell
      the
      Properties (and each of them) shall be subject to satisfaction of each of the
      conditions set forth in this Section 5.4.  Seller and Buyer expressly
      acknowledge and agree that each of the conditions set forth in this Section
      5.4
      is for the benefit of and may be waived only by Seller in writing.

    


      
      5.4.1    No
      Default Under Emeritus Master Lease.  Prior to the
      Closing, (a) no Event of Default, or event which with notice and/or passage
      of time would constitute an Event of Default by Lessee under the Emeritus Master
      Lease shall have occurred and be continuing and (b) all Rent and Charges
      shall be paid as and when due under the Emeritus Master Lease, through but
      not
      including the Closing Date.

    


      
      5.4.2    Purchase
      of Both Properties.  The Closing hereunder shall occur
      simultaneously with respect to both of the Properties.

    


      
      5.4.3    Occurrence
      of Closing by the Outside Closing Date.  The Closing
      shall occur on or before the Outside Closing Date.

    


      
      5.4.4    Related
      Purchase Agreements.  The Related Purchase Agreement
      Closing under each Related Purchase Agreement shall occur simultaneous with
      the
      Closing.  In addition, no Related Purchase Agreement Buyer Default
      under any Related Purchase Agreement shall have occurred and be
      continuing.

    


      
      5.4.5    Buyer’s
      Representations and Warranties.  Buyer’s representations
      and warranties set forth in Section 8 below shall be true and correct in all
      material respects on the Closing Date as if made again on the Closing
      Date.

    


    
      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

    


      
      5.4.6    Buyer’s
      Performance.  Buyer shall have performed all of its
      obligations under this Agreement which by the terms of the Agreement are
      required to be performed by Buyer as of or prior to the Closing
      Date.

    


    5.5             Seller’s
      Approval, Disapproval or Waiver of Conditions.
      Prior to the Closing, Seller shall notify Buyer and Escrow Holder in writing
      in
      the event that as of the date of Closing, any of the conditions set forth in
      Section 5.4 have not been satisfied or waived by Seller; provided, however,
      that
      if any of the conditions set forth in Sections 5.4.2 , 5.4.3 or 5.4.4 have
      not
      been satisfied as a result of any act or omission of Seller or any Affiliate
      of
      Seller, then Seller shall not be entitled to disapprove such condition, but
      rather the same shall, following any applicable notice and cure period pursuant
      to Section 7.2 below, constitute a default by Seller hereunder.  In
      the event that Seller is not entitled to disapprove a condition or Seller fails
      to approve, disapprove or waive such condition, if applicable, prior to the
      Closing, then such condition shall be deemed conclusively satisfied or waived
      by
      Seller and thereafter shall not be a condition precedent to the performance
      by
      Seller of its obligations hereunder.

    


    6.        
         CLOSING OF ESCROW

    


    6.1         
         Closing Date.  Subject to
      extension in order to implement the provisions of Section 6.8, and unless this
      Agreement has been earlier terminated in accordance with the applicable
      provisions of Section 7 below, Escrow shall close on the Outside Closing Date;
      provided, however, that subject to satisfaction or waiver of each of the
      conditions set forth in Sections 5.1 and 5.4, Buyer shall be entitled to close
      Escrow prior to the Outside Closing Date upon not less than five (5) days’
notice to Seller and Escrow Holder; provided further, however, that in no event
      shall the closing occur prior to July 31, 2007.  The terms “Close of
      Escrow” and/or “Closing” are used in this Agreement to mean the time and date
      the transactions contemplated hereby are closed and the Deed or other applicable
      conveyance instrument has been delivered to Buyer through Escrow, regardless
      whether the applicable Deed or other conveyance instrument is actually recorded
      in the land records in which the applicable Property is situated.  The
      term “Closing Date” as used in this Agreement means the date that the Closing
      occurs.

    


    6.2             Deposits
      by Seller.  At or before 5:00 p.m., local time in Los
      Angeles, California, on that date which is not less than one (1) business day
      before the Close of Escrow, Seller shall deliver or cause to be delivered to
      Escrow Holder the following items for handling as described below; provided,
      however, that Escrow need not be concerned with the form or content but only
      with manual delivery of all of the following other than item 6.2.1:

    


      
      6.2.1    Deeds.  With
      respect to each Property, a duly executed and acknowledged grant deed, special
      warranty deed or equivalent thereof in the applicable State (a “Deed”) conveying
      the Property in such State to Buyer, in each case subject to (collectively
      the
“Permitted Exceptions”): (i) all Impositions, whether past due or delinquent,
      and (ii) all covenants, conditions, restrictions, rights of way, easements
      and
      other matters of record or which would be disclosed by an accurate survey or
      physical inspection of such Property;

    


      
      6.2.2    Bill
      of Sale.  A duly executed and acknowledged quit claim
      bill of sale conveying any right, title and interest of Seller in and to any
      tangible personal property located on or within each Property to Buyer, without
      warranty except as expressly set forth therein, in the form attached hereto
      as
Exhibit “D” or such other form as reasonably acceptable
      to Seller and Buyer.

    


    
      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

    

    


      
      6.2.3    [Intentionally
      Deleted];

    


      
      6.2.4    [Intentionally
      Deleted];

    


       6.2.5    Seller’s
      Certificate.  If any express
      representation or warranty of Seller set forth in Section 8 hereof needs to
      be
      modified due to changes since the Effective Date, a certificate of Seller,
      dated
      as of the Closing Date and executed on behalf of Seller by a duly authorized
      representative thereof, identifying any such representation or warranty which
      is
      not, or no longer is, true and correct and explaining the state of facts giving
      rise to the change.  In no event shall Seller have any Liability to
      Buyer for, or be deemed to be in default hereunder by reason of any breach
      of a
      representation or warranty set forth in Section 8 hereof which results from
      any
      change that (i) occurs between the Effective Date and the Closing Date, and
      (ii)
      is either expressly permitted under the terms of this Agreement or beyond the
      reasonable control of Seller to prevent.  The occurrence of a change
      in a representation or warranty which is permitted hereunder or is beyond the
      reasonable control of Seller to prevent shall, if materially adverse to Buyer,
      constitute the non-fulfillment of the conditions set forth in Section 5.1.1
      hereof.  If, despite changes or other matters described in such
      certificate, the Closing occurs, Seller’s representations and warranties set
      forth in this Agreement shall be deemed to have been modified by all statements
      made in any certificate of Seller delivered pursuant to this Section
      6.2.4;

    


      
      6.2.6    Evidence
      of Authority.  Such certificates or documents as may be
      reasonably required by Escrow Holder in order to cause any Title Policy
      requested by Buyer as provided in Section 6.4 below to be issued and the Close
      of Escrow to occur; provided, however, that in no event shall Seller be required
      to execute and deliver a so-called owner’s or ALTA affidavit or indemnity or a
      mechanics’ lien indemnity with respect to any Property, except in form and
      substance acceptable to Seller in its sole, but reasonable discretion, and
      in
      any event any such affidavit shall be limited to (a) the actual knowledge of
      Seller (without investigation or the duty to investigate) and (b) the direct
      actions of Seller;

    


      
      6.2.7    Closing
      Statement.  A duly executed and acknowledged counterpart
      of a joint buyer/seller estimated closing statement to be prepared by Escrow
      Holder and delivered to Seller and Buyer (the “Closing Statement”);
      and

    


      
      6.2.8    Additional
      Items.  Any additional funds and/or instruments, signed
      and properly acknowledged by Seller, if appropriate, as may be necessary to
      comply with Seller’s obligations under this Agreement.

     

    6.3
              
    Deposits by Buyer.  At
      or before 1:00 p.m., local time in Los Angeles, California, on the date of
      the
      Close of Escrow, Buyer shall deliver or cause to be delivered to Escrow
      Holder:

     

       
      6.3.1    
Funds.  Immediately
      available
      Closing Funds by wire transfer into Escrow Holder’s depository bank account in
      an amount which shall equal the Purchase Price plus all Closing costs, charges
      or prorations payable by Buyer hereunder, as the same shall be more particularly
      set forth on the Closing Statement;

    


    
      
        
          
          

        

        
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      6.3.2    [Intentionally
      Deleted];

    


      
      6.3.3    [Intentionally
      Deleted]; .

    


      
      6.3.4    [Intentionally
      Deleted];

    


      
      6.3.5    [Intentionally
      Deleted];

    


      
      6.3.6    Buyer’s
      Certificate.  If any representation or
      warranty of Buyer set forth in Section 8 hereof needs to be modified due to
      changes since the Effective Date, a certificate of Buyer addressed to Seller,
      dated as of the Closing Date and executed on behalf of Buyer by a duly
      authorized representative thereof, identifying any such representation or
      warranty which is not, or no longer is, true and correct and explaining the
      state of facts giving rise to the change.  In no event shall Buyer
      have any Liability to Seller for, or be deemed to be in default hereunder by
      reason of any breach of a representation or warranty set forth in Section 8
      hereof which results from any change that (i) occurs between the Effective
      Date
      and the Closing Date and (ii) is either expressly permitted under the terms
      of
      this Agreement or is beyond the reasonable control of Buyer to
      prevent.  The occurrence of a change in a representation or warranty
      which is permitted hereunder or is beyond the reasonable control of Buyer to
      prevent shall, if materially adverse to Seller, constitute the non-fulfillment
      of the conditions set forth in Section 5.4.5 hereof.  If, despite
      changes or other matters described in such certificate, the Closing occurs,
      Buyer’s representations and warranties set forth in this Agreement shall be
      deemed to have been modified by all statements made in such
      certificate;

    


      
      6.3.7    Evidence
      of Authority.  Such certificates or documents as may be
      reasonably required by Escrow Holder in order to cause each Title Policy to
      be
      issued and the Close of Escrow to occur;

    


      
      6.3.8    Closing
      Statement.  A duly executed and acknowledged counterpart
      of the Closing Statement; and

    


      
      6.3.9    Additional
      Items.  Any additional Funds and/or instruments, signed
      and properly acknowledged by Buyer, if appropriate, as may be necessary to
      comply with Buyer’s obligations under this Agreement.

    


    6.4     
              Title
      Policies.  At the Close of Escrow, but not as a condition
      thereto, Buyer shall be entitled to request and obtain from Title Company if
      so
      requested by Buyer, with a copy to be delivered to Seller, a policy of title
      insurance with respect to each Property, insuring good and indefeasible title
      to
      such Property vested in Buyer as of the Closing Date in the amount of the
      applicable Allocated Purchase Price, subject to such matters of record or
      apparent as Buyer and Title Company may agree (each, a “Title Policy”) and
      including such endorsements thereto as Buyer may request and Title Company
      agrees to issue (the “Title Endorsements”).  The cost of each Title
      Policy and all Title Endorsements thereto shall be borne by the parties as
      provided in Section 6.6 below.

    


    
      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

    

    


    6.5      
       
     Prorations.

    


      
      6.5.1    Impositions
      and Other Expenses.  Buyer and Seller acknowledge and
      agree that the Emeritus Master Lease is absolutely net to Lessor, and that
      Lessee is solely responsible for any and all Impositions, insurance premiums,
      utility charges and other expenses incurred in connection with the operation,
      maintenance and use of each Property.  Accordingly, Buyer and/or
      Lessee shall be solely responsible for all such amounts whether accruing prior
      to or after the Closing and there shall be no prorations on account thereof
      between Buyer and Seller hereunder.  Any adjustments or prorations of
      such amounts between Buyer and Lessee shall be solely between such parties
      and
      neither Seller nor Escrow Holder shall be concerned therewith.

    


    (a)           Rents.  Notwithstanding
      anything to the contrary herein, all Rents and Charges shall belong to and
      be
      paid over to Lessor by Lessee on the Closing Date. All Minimum Rent and
      Additional Rent payable by Lessee to Lessor shall be prorated pursuant to the
      terms of the Master Purchase Agreement, but such prorations shall nevertheless
      be reflected on the Closing Statement executed and delivered
      hereunder.

    


    6.6       
            Closing and Transaction
      Costs.

    


      
      6.6.1    Seller
      and Buyer shall execute such returns, questionnaires and other documents as
      shall be required with regard to all applicable Transaction Taxes imposed by
      applicable federal, state or local Law.

    


      
      6.6.2    Upon
      the Closing, Buyer shall be responsible for:

    


    (a)           any
      Transaction Taxes in excess of the portion thereof that is the responsibility
      of
      Seller as provided in Section 6.6.3 below;

    


    (b)           all
      expenses of or related to the issuance of any Title Policies (including the
      costs of any survey required by Buyer and/or the Title Company), any Title
      Endorsements and chain of title reports, and all fees and charges of Escrow
      Holder hereunder in excess of the applicable portion thereof that is the
      responsibility of Seller as provided in Section 6.6.3 below;

    


    (c)           the
      charges for or in connection with the recording and/or filing of any instrument
      or document provided herein or contemplated by this Agreement, the Related
      Purchase Agreements or any agreement or document described or referred to herein
      or therein;

    


    (d)           all
      reports or studies obtained by or at the direction of Buyer, including all
      appraisal, environmental, engineering or other third party reports and the
      fees
      or costs incurred in connection therewith;

    


    (e)           Buyer’s
      legal, accounting and other professional fees and expenses incurred in
      connection with the transactions contemplated hereby, the Related Purchase
      Agreements and the Exhibits hereto and thereto; and

    


    
      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

    

    


    (f)           all
      other costs and expenses incurred in connection with the transactions
      contemplated hereunder, under the Related Purchase Agreements and the Exhibits
      hereto and thereto that are not the responsibility of Seller as provided in
      Section 6.6.3 below.

    


      
      6.6.3    Upon
      the Closing, Seller shall be responsible for:

    


    (a)           Twenty-Seven
      Percent (27%) of the sum of (i) any Transaction Taxes, and (ii) the cost of
      the
      Title Policies and Title Endorsements, provided, however, that neither Seller
      nor its Affiliates shall be responsible for (i) any Transaction Taxes or (ii)
      the cost of any Title Policies and Title Endorsements, in either case, pursuant
      to this Agreement or the Related Purchase Agreements in excess of One Million
      Dollars and 00/100ths ($1,000,000.00), in the aggregate; and

    


    (b)           Seller’s
      legal, accounting and other professional fees and expenses incurred in
      connection with the transactions contemplated hereby and the Exhibits
      hereto.

    


      
      6.6.4    Any
      personal property conveyed to Buyer as part of either Property is included
      in
      this sale as part of the Allocated Purchase Price for such Property and without
      additional charge therefore.

    


      
      6.6.5    If
      the Closing does not occur for any reason other than Seller’s default hereunder,
      Buyer shall pay all title and Escrow cancellation charges and
      expenses.  If the Closing does not occur by reason of Seller’s default
      hereunder, then in such event Seller shall be responsible for any title and
      Escrow cancellation charges and expenses.  The provisions of this
      Section 6.6.5 shall survive any early termination of this Agreement prior to
      Closing.

    


    6.7      
             Completion and Distribution of
      Documents.  Escrow Holder shall also undertake the
      following at or promptly after the Close of Escrow:

    


      
      6.7.1    If
      necessary, Escrow Holder is authorized and instructed to insert the Closing
      Date
      as the date of any documents conveying or terminating interests herein or to
      become operative as of the Closing Date.

    


      
      6.7.2    Cause
      each Deed and any other recordable instrument which the parties so direct to
      be
      recorded in the appropriate land records office where the respective Property
      is
      located.  If permitted by applicable law, Escrow Holder is hereby
      instructed not to affix the amount of any Transaction Tax on the face of any
      Deed but to pay on the basis of a separate affidavit signed by either Seller
      or
      Buyer, as applicable, and not made a part of the public record; and

    


      
      6.7.3    Cause
      each non-recorded document to be delivered to the party acquiring rights
      thereunder, or for whose benefit such document was obtained.

    


    6.8       
            Seller’s Election of 1031
      Exchange.  Seller may elect to sell one or more of the
      Properties to Buyer in the form of a tax-deferred exchange pursuant to Section
      1031 of the Internal Revenue Code of 1986, as amended (“1031 Exchange”);
      provided, however, such 1031 Exchange shall not be a condition to Seller’s
      obligation to close the transactions contemplated by this Agreement; provided
      further, however, that Seller shall be entitled, in its sole discretion, to
      extend the Closing Date (including the Outside Closing Date) for up to ten
      (10)
      days by written notice delivered to Buyer and Escrow Holder no less than three (3) days prior to the
      scheduled Closing Date in order to accommodate such a 1031
      Exchange.  In the event that Seller shall so elect a 1031 Exchange,
      Seller shall give written notice to Buyer and Escrow Holder of such
      election.  Buyer shall fully cooperate with any such 1031 Exchange,
      including with respect to the following as may be requested or approved by
      Seller:

    


    
      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

    

     

      
      6.8.1    executing
      and delivering amendments to this Agreement and/or amendments and restatements
      of this Agreement so that the transactions contemplated hereby are incorporated
      into one or more cross-contingent agreements;

    


      
      6.8.2    executing
      and delivering one or more assignments of this Agreement or any of any of
      agreements described in Section 6.8.1 above from Buyer to an Affiliate of Buyer
      or by Seller to any Affiliate of Seller or to a qualified exchange accommodator
      of Seller or such Affiliate; and

    


      
      6.8.3    such
      other additional documents;

    


    provided,
      however, that Buyer shall not be required to incur any additional Liabilities
      or
      financial obligations as a consequence of any of the foregoing exchange
      transactions.  Seller hereby indemnifies and holds Buyer harmless from
      any Liabilities to which Buyer may be exposed due to any participation by Buyer
      in such a 1031 Exchange transaction.  The provisions of this Section
      6.8 shall survive the Closing.

    


    7.        
         TERMINATION

    


    7.1         
          Early Termination for Failure of
      Conditions.

    


      
      7.1.1    Termination
      by Buyer. If Buyer is entitled to and in fact disapproves any of
      the conditions set forth in Sections 5.1.1 through 5.1.5, inclusive, then Escrow
      and this Agreement shall automatically terminate upon receipt by Seller and
      Escrow Holder of Buyer’s written notice of disapproval of such condition within
      the time and in the manner provided in Section 5.2; provided, however, that
      if
      there is a failure of (a) any of the conditions set forth in Section 5.1.1
      or
      5.1.2 or (b) any of the conditions set forth in Section 5.1.3, 5.1.4 or 5.1.5
      that results from a breach or default by Seller or any Affiliate of Seller
      of
      their respective obligations under this Agreement or under any Related Purchase
      Agreement, then in any such event in lieu of terminating this Agreement and
      Escrow pursuant to this Section 7.1, Buyer shall be entitled to exercise its
      rights pursuant to Section 7.2 below.  In addition, without limiting
      the foregoing, the parties acknowledge and agree that the occurrence of any
      event of the type described in the second sentence of Section 5.1.5 above that
      results in the failure of the conditions set forth therein shall also constitute
      and be deemed a default by Seller under this Agreement entitling Buyer to
      exercise its remedies pursuant to Section 7.2 below.

    


      
      7.1.2    Termination
      by Seller.  If Seller disapproves any of the conditions
      set forth in Section 5.4 above, then Escrow and this Agreement shall
      automatically terminate upon receipt by Buyer and Escrow Holder of Seller’s
      written notice of disapproval thereof at any time prior to the Closing;
      provided, however, that if there is a failure of (a) any of the conditions
      set
      forth in Sections 5.4.5 or 5.4.6 or (b) any of the conditions set forth in
      Sections 5.4.2, 5.4.3, or 5.4.4 that results from a breach or a default by
      Buyer
      or any Affiliate of Buyer of its respective obligations under this Agreement
      or
      under any Related Purchase Agreement, then in any such event in lieu of
      terminating this Agreement and Escrow pursuant to this Section 7.1.2, Seller
      shall be entitled to exercise its remedies pursuant to Section 7.2
      below.  In addition, without limiting the foregoing, the parties
      acknowledge and agree that the occurrence of any event of the type described
      in
      Section 5.4.1(a) or in the second sentence of Section 5.4.4 above that results
      in the failure of the conditions set forth therein shall also constitute and
      be
      deemed a default by Buyer under this Agreement entitling Seller to exercise
      its
      remedies pursuant to Section 7.2 below.

    


    
      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

    

    


      
      7.1.3    Rights
      and Obligations Upon Termination for Failure of
      Conditions.  If Escrow and this Agreement are terminated
      in the manner and within the applicable time period(s) provided pursuant to
      either Section 7.1.1 or Section 7.1.2 above, (a) all instruments in Escrow
      shall
      be returned to the party depositing the same, (b) Buyer shall return all items
      previously delivered by Seller to Buyer, (c) the provisions of Section 6.6.5
      above shall apply and the Earnest Money Deposit shall be disbursed in accordance
      with the terms of the Master Purchase Agreement, and (d) neither party shall
      have any further rights, obligations or Liabilities whatsoever to the other
      party concerning the purchase and sale of the Property pursuant to this
      Agreement, except for those Liabilities which are expressly stated in this
      Agreement to survive termination.

    


    7.2     
              Termination by Reason of
      Default.  If the Closing fails to occur when and as
      provided in Section 6 above by reason of a breach or default (or deemed default
      as provided in the last sentence of either of Section 7.1.1 or Section 7.1.2
      above) of either party of any of its duties, obligations, representations or
      warranties under this Agreement, then the non-defaulting party may elect, by
      written notice to the defaulting party and to Escrow Holder, to terminate Escrow
      and this Agreement, and the Master Purchase Agreement shall govern the
      disbursement of the Earnest Money Deposit as provided therein.  Such
      termination shall be effective five (5) days after delivery of such notice
      (the
“Effective Termination Date”); provided, that (i) the non-defaulting
      party has performed or is in a position to perform all obligations on its part
      to be performed as of the Effective Termination Date other than those
      obligations which the non-defaulting party is prevented from having performed
      by
      reason of the defaulting party’s breach or default; and (ii) the defaulting
      party has not cured the default and the non-defaulting party has not waived
      such
      default by the Effective Termination Date.  Except as otherwise
      provided below in this Section 7.2 and Section 6.6.5 above and in the Master
      Purchase Agreement, Escrow Holder and the parties shall, upon such termination,
      return all of the other party’s funds and documents then held by them to the
      party depositing or delivering the same.  Thereafter, each of the
      parties shall be discharged and released from all obligations and Liabilities
      except as otherwise provided in this Section 7.2 and Section 6.6.5 above and
      in
      the Master Purchase Agreement and except for those obligations and Liabilities
      which are expressly intended to survive the termination of this Agreement,
      including those Liabilities set forth in Section 12.2 below.

    


      
      7.2.1    Seller’s
      Damages.  If the Closing fails to occur by reason of a
      breach or default of this Agreement by Buyer, then Seller may terminate this
      Agreement as of the Effective Termination Date as provided in Section 7.2 above,
      in which case Buyer shall be Liable for the cancellation and other charges
      and
      expenses as provided for in Section 6.6.5 and the Master Purchase Agreement
      shall govern the disbursement of the Earnest Money Deposit as provided
      therein.

    


    
      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

    

    


      
      7.2.2    Buyer’s
      Remedies. If the Closing fails to occur by reason
      of a breach or default of this Agreement by Seller, then Buyer may either (a)
      terminate this Agreement as of the Effective Termination Date as provided in
      Section 7.2 above, in which case the Master Purchase Agreement shall govern
      the
      disbursement of the Earnest Money Deposit as provided therein, and Seller shall
      be liable for the cancellation and other charges and expenses provided for
      in
      Section 6.6.5, or (b) enforce specific performance of the obligations of Seller
      here­under; provided, however, that any action by Buyer to seek such
      specific performance must be commenced within thirty (30) calendar days of
      the
      occurrence of the alleged default by Seller; provided further, however, that,
      except as provided in Section 6.6.5, in no event whatsoever shall Seller ever
      have any Liability (whether in law or equity) for damages as a result of a
      default by Seller under this Agreement.

    


    7.3        
           Relationship to Emeritus Master
      Lease.  Notwithstanding anything to the
      contrary in this Agreement, no termination of this Agreement and Escrow by
      Seller or Buyer regardless of the reason therefor shall affect the rights or
      obligations of Lessor or Lessee under the Emeritus Master Lease, which Emeritus
      Master Lease shall remain in full force and effect following any such
      termination of this Agreement prior to the Closing.

    


    8.       
          REPRESENTATIONS AND
      WARRANTIES

    


    8.1       
            In General.  In
      addition to any express agreements of either party contained herein, the
      following constitute representations and warranties by Seller to Buyer, and
      by
      Buyer to Seller, which shall be true and correct as of the date hereof, and
      the
      truth and accuracy of such representations and warranties as of the Close of
      Escrow by each party shall also constitute a condition to the Close of Escrow
      for the benefit of the party to whom such representations and warranties were
      made.

    


    8.2       
            By Each
      Party.  Seller represents and warrants to Buyer, and
      Buyer hereby represents and warrants to Seller, as follows:

    


      
      8.2.1    Authority.  Such
      party has full power and authority to enter into and comply with the terms
      of
      this Agreement, and the individuals executing this Agreement on behalf of such
      party have actual right and authority to bind that party to the terms of this
      Agreement.

    


      
      8.2.2    Binding
      Effect.  No action or consent which has not been obtained
      is necessary to make this Agreement, and this Agreement and all documents to
      be
      executed hereunder are or will be when executed the valid and legally binding
      obligations of such party, enforceable in accordance with their respective
      terms, except as such enforceability may be limited by creditors’ rights laws
      and general principles of equity.

    


    
      
        
          
          

        

        
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      8.2.3    No
      Conflict.  The execution and delivery of this Agreement
      and all other documents to be executed by such party hereunder, compliance
      with
      the provisions thereof and hereof and the consummation of the transactions
      contemplated hereunder and thereunder will not result in (a) a breach or
      violation of (i) any Laws applicable to such party now in effect, (ii) the
      Organizational Documents of such party, (iii) any judgment, order or decree
      of
      any governmental authority with jurisdiction binding on such party or (iv)
      subject to the Permitted Exceptions, any other material agreement or instrument
      to which such party is a party or by which it is bound.   Buyer
      shall be solely responsible for obtaining any consents, approvals or waivers
      required under any Permitted Exceptions with respect to any Property in
      connection with the transactions contemplated hereby or under the Related
      Purchase Agreements.  Seller hereby agrees to reasonably cooperate
      with Buyer, without any out-of-pocket cost or expense to Seller, in seeking
      any
      such required consents, approval or waivers.

    


      
      8.2.4    Patriot
      Act.  To the actual knowledge of such
      party, such party and its respective Affiliates are in
      compliance with the requirements of Executive Order No. 13224, 66 Fed. Reg.
      49079 (Sept. 25, 2001) (the “Order”) and other similar requirements contained in
      the rules and regulations of the Office of Foreign Assets Control, Department
      of
      Treasury (“OFAC”) and in any enabling legislation or other Executive Orders or
      regulations in respect thereof (the Order and such other rules, regulations,
      legislation or orders collecting called the “Orders”).  Neither such
      party nor any of their Affiliates (A) is listed on the Specially Designated
      Nationals and Blocked Person List maintained by OFAC pursuant to the Order
      and/or on any other list of terrorists or terrorist organizations maintained
      pursuant to any of the rules and regulations of OFAC or pursuant to any other
      applicable Orders (such lists are collectively referred to as the “Lists”), (B)
      is a Person (as defined in the Order) who has been determined by competent
      authority to be subject to the prohibitions contained in the Orders; or (C)
      to
      the actual knowledge of such party, is owned or controlled by (including without
      limitation by virtue of such person being a director or owning voting shares
      or
      interests), or acts for or on behalf of, any person on the Lists or any other
      person who has been determined by competent authority to be subject to the
      prohibitions contained in the Orders.  As used herein, the term
“actual knowledge” as it relates to Seller shall mean the actual knowledge
      (without investigation or the duty to conduct investigation) of Paul Gallagher
      and Brian J. Maas and as it relates to Buyer shall mean the actual knowledge
      (without investigation or the duty to conduct investigation) of Eric
      Mendelsohn.

    


    8.3     
              By Seller
      Only.  Seller represents and warrants to Buyer as
      follows:

    


      
       8.3.1    [Intentionally
      Deleted.]

    


      
      8.3.2    No
      Tax Withholding.  In accordance with Section 1445 of
      the Internal Revenue Code and the applicable provisions of the California
      Revenue and Taxation Code or other similar laws, (a) Seller is not now, and
      at
      Closing will not be, a “foreign person,” and (b) Buyer need not withhold tax at
      the Closing as a result of the transactions contemplated
      hereby.  Seller shall deliver a separate nonforeign/residency
      affidavit, executed by Seller, if reasonably required to do so by Escrow
      Holder.

    


      
      8.3.3    Litigation,
      Etc.  To the actual knowledge of Seller (without
      investigation and without the duty to conduct any investigation), there are
      no
      actions, proceedings or investigations pending or threatened against or
      affecting Seller seeking to enjoin, challenge or collect damages in connection
      with the transactions contemplated by this Agreement or which would reasonably
      be expected to materially and adversely affect the ability of Seller to carry
      out the transactions contemplated by this Agreement or which in any way
      challenge or affect Seller’s ownership of the Properties, or either of
      them.

    


    
      
        
          
          

        

        
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    8.4          
         By Buyer
      Only.  Buyer represents and warrants to
      Seller as follows:

    


      
      8.4.1    [Intentionally
      Deleted.]

    


      
      8.4.2    Litigation,
      Etc.  To the actual knowledge of Buyer (without
      investigation and without the duty to conduct any investigation), there are
      no
      actions, proceedings or investigations pending or to the knowledge of Buyer
      threatened against or affecting Buyer, Summerville or Lessee  seeking
      to enjoin, challenge or collect damages in connection with the transactions
      contemplated by this Agreement or which would reasonably be expected to
      materially and adversely affect the ability of Buyer, Summerville, or Lessee
      to
      carry out the transactions contemplated herein.

    


    9.          
       CERTAIN EVENTS PRIOR TO CLOSING

    


    9.1          
         Loss.  In the event of loss
      (including a loss due to a Condemnation) or damage to a Property or any portion
      thereof and which occurs prior to the Closing, this Agreement shall remain
      in
      full force and effect, Buyer shall nonetheless proceed to purchase the
      Properties and consummate this Agreement in accordance with the terms hereof
      and
      all insurance proceeds or Condemnation awards payable by reason thereof shall
      belong to Buyer.

    


    9.2           
        Prompt
      Notices.  Seller shall give prompt
      notice to Buyer, and Buyer shall give prompt notice to Seller, of (i) the
      occurrence, or failure to occur, of any event which occurrence or failure would
      be likely to cause (A) any representation or warranty of such party
      contained in this Agreement to be untrue or inaccurate in any material respect
      or (B) any covenant, condition or agreement of such party contained in this
      Agreement to be complied with or satisfied in all material respects and
      (ii) any failure of Seller or Buyer, as the case may be, to comply with or
      satisfy any covenant, condition or agreement to be complied with or satisfied
      under this Agreement.

    


    9.3         
          No Agreements; Release of
      Mortgages.  Except for this Agreement
      and matters expressly contemplated hereunder or under the Related Purchase
      Agreements, from and after the Effective Date, Seller shall not enter into
      any
      new contracts or other agreements, either written or oral, with respect to
      any
      of the Properties that shall survive the Closing, or become a Liability of
      Buyer.  Seller shall cause any mortgages, deeds of trust or other
      security interests of record, caused,  created or assumed in writing
      by Seller, to be satisfied in full on or before the Closing.

    


    9.4        
           Satisfaction of
      Conditions.  From and after the
      Effective Date, each party covenants and agrees with the other to use good
      faith, commercially reasonable efforts to satisfy or cause to be satisfied
      all
      conditions precedent to such party’s obligations hereunder which are in such
      party’s control or over which such party exercises control.

    


    
      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

    

    


    10.           POST-CLOSING
      MATTERS

    


    10.1         
        Confidentiality and Public
      Disclosure.  Each party shall hold in strict confidence
      all information received from the other party concerning this transaction and
      shall not release any such information to third parties (other than attorneys,
      accountants or other professional consultants, or lenders of the parties)
      without the prior written consent of the other party unless otherwise required
      by Law, which approval shall not be unreasonably withheld; provided that Buyer
      shall be entitled to disclose information concerning this transaction in
      connection with a secondary stock offering and as required by any applicable
      securities Law.  Except as provided above, any and all releases of
      information to the public relating to the sale of the Properties and the
      transactions contemplated hereby and under the Related Purchase Agreements
      by
      any party shall be subject to the review and approval by the other party, which
      approval shall not be unreasonably withheld.  Each party will
      undertake to consult with the other prior to responding to any inquiries made
      by
      any third party respecting the transactions contemplated by this
      Agreement.  The provisions of this Section 10.1 shall survive the
      execution and delivery of this Agreement and the occurrence of the
      Closing.

    


    10.2        
         Indemnification by
      Buyer.  In addition to the other indemnities of Buyer
      contained herein or in any of the other Transaction Documents, Buyer shall
      protect, indemnify, save harmless and defend Seller and each of its respective
      partners, predecessors, successors and assigns, and their respective past,
      present and future officers, directors, employees, agents, representatives,
      attorneys and all Persons acting by, through, under or in concert with any
      of
      the foregoing, from and against all Liabilities, based upon, relating or arising
      out of the Properties, or either of them, whether accruing before or after
      the
      Closing Date, including any Liabilities relating to the presence or existence
      of
      Hazardous Substances of any kind, on, under or about the Properties, or either
      of them, or on adjoining or neighboring property, or arising from any use of
      the
      Properties, or either of them; provided, however, the foregoing indemnity shall
      not extend to any Liabilities which are solely and proximately caused by the
      gross negligence or willful misconduct of Seller.  Payment shall not
      be a condition precedent to enforcement of the foregoing
      indemnification.  The provisions of this Section 10.2 shall
      specifically survive the execution and delivery of this Agreement and the
      occurrence of the Closing.

    


    11.           BROKERS

    


    Seller,
      on the one hand, and Buyer, on the other hand, agrees to indemnify, defend,
      protect and hold the other party(ies) and the Propertise harmless against any
      Liabilities for any broker’s commission or finder’s fee for which it is
      responsible or which is asserted as a result of its own act or omission in
      connection with this transaction.

    


    12.           MISCELLANEOUS
      PROVISIONS

    


    12.1       
          Assignment; Binding on
      Successors.  This Agreement shall be binding upon and
      shall inure to the benefit of Buyer and Seller and their respective
      representatives, successors and assigns; provided, however, that Buyer shall
      not
      have the right to assign this Agreement or any interest or right under this
      Agreement or under the Escrow or to appoint a nominee to act as Buyer under
      this
      Agreement without obtaining the prior written consent of Seller, which consent
      may be given or withheld in the sole and absolute discretion of Seller;
      provided, however, that without in any way relieving Buyer of any of its duties,
      covenants or obligations hereunder, upon written notice to Seller given not
      less
      than ten (10) business days prior to the scheduled Closing Date, Buyer may,
      without the consent of Seller, either (a) assign its rights and obligations
      hereunder with respect to either Property to one or more Affiliates of Buyer
      or
      Dan Baty, an individual, or (b) appoint one or more Affiliates of Buyer or
      Dan
      Baty as a nominee to take title to either Property or any portion thereof;
      provided, however, that any such (i) assignment shall be pursuant to a written
      assignment and assumption agreement reasonably satisfactory to Seller and (ii)
      any such Affiliate-assignee or nominee shall join in the execution and delivery
      of the Release of Claims at Closing with Buyer.  Any attempted
      assignment in violation of this provision shall be null and void.

    


    
      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

    

    


    By
      Buyer’s execution and delivery hereof, Buyer hereby appoints each of those
      Persons identified on Exhibit G attached hereto as its
      nominee to take title to the respective Property listed opposite the name of
      such nominee.

    


    12.2        
         Attorneys’ Fees.  In any
      dispute or action between the parties arising out of this Agreement or the
      Escrow, or in connection with the Properties, or either of them, the prevailing
      party shall be entitled to have and recover from the other party its costs
      and
      attorneys’ and paralegals’ fees related thereto, whether by final judgment or by
      out of court settlement.  The provisions of this Section 12.2 shall
      survive the Closing or any earlier termination of this Agreement.

    


    12.3       
          Notices. Any notice, consent,
      approval, demand or other communication required or permitted to be given
      hereunder (a “notice”) must be in writing and may be served personally or by
      U.S. Mail.  If served by U.S. Mail, it shall be addressed as
      follows:

    


    
      	
               If
                to Seller:

            	
              c/o
                Health Care Property Investors, Inc.

            
	 	
              3760
                Kilroy Airport Way, Suite 300

            
	 	
              Long
                Beach, California 90806

            
	 	
              Attn:Legal
                Department

            
	 	
              Fax:
                (562) 733-5200

            
	 	 
              
	
               with
                a copy to:

            	
              Latham
                & Watkins LLP

            
	 	
              650
                Town Center Drive, Suite 2000

            
	
               

            	
              Costa
                Mesa, California 92626-1925

            
	 	
              Attn:David
                C. Meckler, Esq.

            
	 	
              Fax:
                (714) 755-8290

            
	 	 
	
               If
                to Buyer:

            	
              Emeritus
                Corporation

            
	 	
              3131
                Elliott Avenue, Suite 500

            
	 	
              Seattle,
                Washington  98121

            
	 	
              Phone:
                (206) 301-4493

            
	 	
              Fax:
                (206) 301-4500

            
	 	
              Attn:
                Eric Mendelsohn

            
	 	 
	
               with
                a copy to:

            	
              Pircher,
                Nichols & Meeks

            
	 	
              900
                North Michigan Avenue, Suite 1050

            
	 	
              Chicago,
                Illinois 60611

            
	 	
              Attention:  Real
                Estate Notices (JDL/MJK)

            
	 	
              Phone:  (312)
                915-3112

            
	 	
              Fax:
                (312) 915-3348

            


    

    


    
      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

    

    


    Any
      notice which is personally served shall be effective upon the date of service;
      any notice given by U.S. Mail shall be deemed effectively given, if deposited
      in
      the United States Mail, registered or certified with return receipt requested,
      postage prepaid and addressed as provided above, on the date of receipt, refusal
      or non-delivery indicated on the return receipt.  In addition, either
      party may send notices by facsimile or by a nationally recognized overnight
      courier service which provides written proof of delivery (such as U.P.S. or
      Federal Express).  Any notice sent by facsimile shall be effective
      upon confirmation of receipt in legible form, and any notice sent by a
      nationally recognized overnight courier shall be effective on the date of
      delivery to the party at its address specified above as set forth in the
      courier's delivery receipt.  Any party may, by notice to the other
      from time to time in the manner herein provided, specify a different address
      for
      notice purposes.

    


    12.4           Governing
      Law; Jurisdiction.  THIS AGREEMENT WAS NEGOTIATED IN THE
      STATE OF CALIFORNIA, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL
      RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED
      HEREBY.  ACCORDINGLY, EXCEPT WHERE FEDERAL LAW IS APPLICABLE AND
      UNLESS OTHERWISE EXPRESSLY PROVIDED HEREIN OR REQUIRED BY ANY APPLICABLE LAW,
      THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
      LAWS
      OF THE STATE OF CALIFORNIA (WITHOUT REGARD OF PRINCIPLES OR CONFLICTS OF
      LAW).  EACH OF BUYER AND SELLER HEREBY IRREVOCABLY SUBMIT TO THE
      JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE STATE OF CALIFORNIA AND
      CONSENT TO SERVICE OF PROCESS IN ANY LEGAL PROCEEDING ARISING OUT OF, OR IN
      CONNECTION WITH, THIS AGREEMENT, BY ANY MEANS AUTHORIZED BY CALIFORNIA
      LAW.

    


    12.5           Interpretation.  All
      provisions herein shall be construed in all cases as a whole according to its
      fair meaning, neither strictly for nor against either Buyer or Seller and
      without regard for the identity of the party initially preparing this
      Agreement.  Titles and captions are inserted for convenience only and
      shall not define, limit or construe in any way the scope or intent of this
      Agreement.  References to Sections are to Sections as numbered in this
      Agreement unless expressly stated otherwise.

    


    12.6           Gender;
      Joint Obligations.  As used in this Agreement, the
      masculine, feminine or neuter gender and the singular or plural number shall
      each be deemed to include the others where and when the context so
      dictates.  If more than one party, trust or other entity is the Buyer
      hereunder, the obligations of all such parties shall be joint and
      several.

    


    12.7           No
      Waiver.  A waiver by any party of a breach of any of the
      covenants, conditions or agreements to be performed by the other parties shall
      be in writing to be effective and no such written waiver shall be construed
      as a
      waiver of any succeeding breach of the same or other covenants, conditions
      or
      Agreements.

    


    
      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

    

    


    12.8           Modifications.  Any
      alteration, change or modification of or to this Agreement, in order to become
      effective, must be made in writing and in each instance signed on behalf of
      each
      party to be charged.

    


    12.9           Severability.  If
      any term, provision, condition or covenant of this Agreement or its application
      to any party or circumstances shall be held, to any extent, invalid or
      unenforceable, the remainder of this Agreement, or the application of the term,
      provision, condition or covenant to persons or circumstances other than those
      as
      to whom or which it is held invalid or unenforceable, shall not be affected,
      and
      shall be valid and enforceable to the fullest extent permitted by
      law.

    


    12.10         Survival.  The
      conveyance of the Properties to Buyer shall constitute full performance and
      discharge of every representation, warranty and covenant and agreement of Seller
      to be performed hereunder by the Closing, notwithstanding anything herein to
      the
      contrary.  Thereupon, all representations or warranties, covenants or
      agreements by either Buyer or Seller contained in this Agreement will terminate
      and will not survive the Closing, except for the representations and agreements
      that contemplate performance after Closing such as the proration matters set
      forth in Section 6.2, the post-closing matters set forth in Section 10, payment
      of brokerage fees set forth in Section 11, all matters set forth in this Section
      12.10 and the Release of Claims to be executed and delivered by Buyer, Lessee,
      and any nominees of Buyer hereunder or under any Related Purchase Agreement
      in
      favor of Seller at the Closing, and any other matter or provision hereof that
      is
      expressly stated in this Agreement to survive the Closing.

    


    12.11         Merger
      of Prior Agreements.  This Agreement and the other
      Transaction Documents contain the entire understanding between the parties
      relating to the transactions contemplated by this Agreement and under the
      Related Purchase Agreements.  All prior or contemporaneous agreements,
      understandings, representations and statements, whether direct or indirect,
      oral
      or written, are merged into and superseded by this Agreement and the other
      Transaction Documents, and shall be of no further force or effect.

    


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

    


    12.13         Counterparts.  This
      Agreement may be signed in multiple counterparts which, when duly delivered
      and
      taken together, shall constitute a binding Agreement between all
      parties.

    


    12.14         Exhibits
      and Addendum.  All exhibits and the addendum attached to
      this Agreement are incorporated herein by reference.

    


    12.15         Cooperation
      of Parties.  Each party agrees to sign any other and
      further instruments and documents and take such other actions as may be
      reasonably necessary or proper in order to accomplish the intent of this
      Agreement.

    


    12.16         No
      Third Party Beneficiaries.  Except as otherwise expressly
      provided herein, the provisions of this Agreement are intended to be solely
      for
      the benefit of the parties hereto, and the execution and delivery of this
      Agreement shall not be deemed to confer any rights upon, nor obligate any of
      the
      parties hereunder, to any person or entity other than the parties to this
      Agreement.

    


    
      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

    

    


    12.17         Dates.  If,
      pursuant to this Agreement, any date indicated herein falls on an official
      United States holiday, or a Saturday or Sunday, the date so indicated shall
      mean
      the next business day following such date.

    


    12.18         Waiver
      of Trial by Jury. BUYER AND SELLER EACH
      ACKNOWLEDGE THAT IT HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT
      TO
      ITS RIGHTS TO TRIAL BY JURY UNDER THE CONSTITUTION OF THE UNITED STATES AND
      THE
      STATE OF CALIFORNIA AND THE STATE IN WHICH EITHER PROPERTY IS
      LOCATED.  BUYER AND SELLER EACH HEREBY EXPRESSLY WAIVES ANY RIGHT TO
      TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER
      THIS AGREEMENT (OR ANY AGREEMENT FORMED PURSUANT TO THE TERMS HEREOF) OR (ii)
      IN
      ANY MANNER CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF BUYER
      AND
      SELLER WITH RESPECT TO THIS AGREEMENT (OR ANY AGREEMENT FORMED PURSUANT TO
      THE
      TERMS HEREOF) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
      DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO,
      IN EACH CASE WHETHER NOW EXISTING OR HEREINAFTER ARISING, AND WHETHER SOUNDING
      IN CONTRACT OR TORT OR OTHERWISE; BUYER AND SELLER EACH HEREBY AGREES AND
      CONSENTS THAT, SUBJECT TO SECTION 12.19, ANY SUCH CLAIM, DEMAND, ACTION OR
      CAUSE
      OF ACTION SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY, AND THAT EITHER
      PARTY MAY FILE A COPY OF THIS SECTION WITH ANY COURT AS CONCLUSIVE EVIDENCE
      OF
      THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY
      JURY.

    


    BUYER’S
      INITIALS:    /s/ EM

    


    SELLER’S
      INITIALS:    /s/ BM

     

    
      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

    

     

    
      12.19         Arbitration
        of Disputes.

      


        
        (a)           EXCEPT AS
        PROVIDED IN SECTION 12.19(b) BELOW, ANY CONTROVERSY, DISPUTE OR CLAIM OF
        WHATSOEVER NATURE ARISING OUT OF, IN CONNECTION WITH, OR IN RELATION TO THE
        INTERPRETATION, PERFORMANCE OR BREACH OF THIS AGREEMENT, INCLUDING ANY CLAIM
        BASED ON CONTRACT, TORT OR STATUTE, SHALL BE DETERMINED BY FINAL AND BINDING,
        CONFIDENTIAL ARBITRATION ADMINISTERED BY THE AMERICAN ARBITRATION ASSOCIATION
        (“AAA”) IN ACCORDANCE WITH ITS THEN-EXISTING REAL ESTATE INDUSTRY ARBITRATION
        RULES, EXCEPT AS MODIFIED BY EXPRESS PROVISIONS HEREIN.  THE
        ARBITRATION SHALL BE CONDUCTED BY A SINGLE ARBITRATOR WHO SHALL BE A RETIRED
        JUDGE OF THE COURT SELECTED BY MUTUAL AGREEMENT OF THE PARTIES, AND IF THEY
        CANNOT SO AGREE WITHIN FIFTEEN (15) DAYS AFTER THE CLAIM DATE, THE ARBITRATOR
        SHALL BE A RETIRED JUDGE OF THE COURT SELECTED UNDER THE AAA RULES. ANY
        ARBITRATION HEREUNDER SHALL BE GOVERNED BY THE UNITED STATES ARBITRATION
        ACT, 9
        U.S.C. 1-16 (OR ANY SUCCESSOR LEGISLATION THERETO), AND JUDGMENT UPON THE
        AWARD
        RENDERED BY THE ARBITRATOR MAY BE ENTERED BY ANY STATE OR FEDERAL COURT HAVING
        JURISDICTION THEREOF.  NEITHER BUYER, SELLER NOR THE ARBITRATOR SHALL
        DISCLOSE THE EXISTENCE, CONTENT OR RESULTS OF ANY ARBITRATION HEREUNDER WITHOUT
        THE PRIOR WRITTEN CONSENT OF ALL PARTIES; PROVIDED, HOWEVER, THAT EITHER
        PARTY
        MAY DISCLOSE THE EXISTENCE, CONTENT OR RESULTS OF ANY SUCH ARBITRATION TO
        ITS
        PARTNERS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS AND ACCOUNTANTS
        AND
        TO ANY OTHER PERSON TO WHOM DISCLOSURE IS REQUIRED BY APPLICABLE GOVERNMENTAL
        REQUIREMENTS, INCLUDING PURSUANT TO AN ORDER OF A COURT OF COMPETENT
        JURISDICTION.  UNLESS OTHERWISE AGREED BY THE PARTIES, ANY ARBITRATION
        HEREUNDER SHALL BE HELD AT A NEUTRAL LOCATION SELECTED BY THE ARBITRATOR
        IN LOS
        ANGELES, CALIFORNIA.  THE COST OF THE ARBITRATOR AND THE EXPENSES
        RELATING TO THE ARBITRATION (EXCLUSIVE OF LEGAL FEES) SHALL BE BORNE EQUALLY
        BY
        BUYER AND SELLER UNLESS OTHERWISE SPECIFIED IN THE AWARD OF THE
        ARBITRATOR.  SUCH FEES AND COSTS PAID OR PAYABLE TO THE ARBITRATOR
        SHALL BE INCLUDED IN “COSTS AND ATTORNEYS’ AND PARALEGALS’ FEES” FOR PURPOSES OF
        SECTION 12.2 AND THE ARBITRATOR SHALL SPECIFICALLY HAVE THE POWER TO AWARD
        TO THE PREVAILING PARTY PURSUANT TO SUCH SECTION 12.2 SUCH PARTY’S COSTS
        AND EXPENSES INCURRED IN SUCH ARBITRATION, INCLUDING FEES AND COSTS PAID
        TO THE
        ARBITRATOR.  DISCOVERY SHALL BE LIMITED TO REQUESTS FOR PRODUCTION OR
        INSPECTION OF DOCUMENTS AND THINGS, REQUESTS FOR ADMISSIONS AND DEPOSITIONS,
        UNDER THE CALIFORNIA DISCOVERY ACT, AS INCORPORATED INTO THE CODE OF CIVIL
        PROCEDURE.  ALL SUCH DISCOVERY SHALL BE COMPLETED NO LATER THAN TEN
        (10) DAYS BEFORE THE FIRST HEARING DATE ESTABLISHED BY THE
        ARBITRATOR.  THE ARBITRATOR MAY EXTEND SUCH PERIOD IN THE EVENT OF A
        PARTY’S FAILURE OR REFUSAL TO PROVIDE IN COMPLIANCE WITH THE CODE OF CIVIL
        PROCEDURE EXCEPT FOR THE TIME PROVISIONS, REQUESTED DISCOVERY AUTHORIZED
        BY
        THESE ARBITRATION PROVISIONS FOR ANY REASON WHATSOEVER, INCLUDING, WITHOUT
        LIMITATION, OBJECTIONS RAISED TO SUCH DISCOVERY OR UNAVAILABILITY OF A WITNESS
        DUE TO ABSENCE OR ILLNESS.  NO PARTY SHALL BE ENTITLED TO “PRIORITY”
IN CONDUCTING DISCOVERY.  THE ARBITRATOR SHALL DETERMINE THE MANNER IN
        WHICH THE ARBITRATION HEARING IS CONDUCTED INCLUDING THE TIMING AND PRESENTATION
        OF EVIDENCE AND ARGUMENT, AND ALL OTHER QUESTIONS THAT MAY ARISE WITH RESPECT
        TO
        THE ARBITRATION PROCEEDINGS.  THE ARBITRATOR SHALL BE REQUIRED TO
        DETERMINE ALL ISSUES IN ACCORDANCE WITH EXISTING CASE AND STATUTORY LAWS
        OF
        CALIFORNIA.  THE RULES OF EVIDENCE APPLICABLE TO CIVIL TRIALS IN
        CALIFORNIA SHALL BE APPLICABLE TO THE ARBITRATION PROCEEDING.  THE
        ARBITRATOR SHALL BE EMPOWERED TO ENTER EQUITABLE AS WELL AS LEGAL RELIEF
        AS IS
        EXPRESSLY PROVIDED BY THIS AGREEMENT.  THE ARBITRATOR SHALL ISSUE AN
        AWARD AT THE CLOSE OF THE ARBITRATION PROCEEDING THAT SHALL DISPOSE OF ALL
        OF
        THE CONTROVERSIES, DISPUTES AND CLAIMS OF THE PARTIES THAT ARE THE SUBJECT
        OF
        THE ARBITRATION.

    

    


    
      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

    

    


      
      (b)           THE
      PROVISIONS OF THIS SECTION 12.19 SHALL NOT APPLY TO ANY REQUEST OR APPLICATION
      FOR AN ORDER OR DECREE GRANTING ANY PROVISIONAL OR ANCILLARY REMEDY (SUCH AS
      A
      TEMPORARY RESTRAINING ORDER OR INJUNCTION) WITH RESPECT TO ANY RIGHT OR
      OBLIGATION OF EITHER PARTY TO THIS AGREEMENT, AND ANY PRELIMINARY DETERMINATION
      OF THE UNDERLYING CONTROVERSY, DISPUTE, QUESTION OR ISSUE AS IS REQUIRED TO
      DETERMINE WHETHER OR NOT TO GRANT SUCH RELIEF.  A FINAL AND BINDING
      DETERMINATION OF SUCH UNDERLYING CONTROVERSY, DISPUTE, QUESTION OR ISSUE SHALL
      BE MADE BY AN ARBITRATION CONDUCTED PURSUANT TO THIS SECTION 12.19 AFTER AN
      APPROPRIATE TRANSFER OR REFERENCE TO THE ARBITRATOR SELECTED PURSUANT TO THIS
      SECTION 12.19 UPON MOTION OR APPLICATION OF EITHER PARTY HERETO.  ANY
      ANCILLARY OR PROVISIONAL RELIEF WHICH IS GRANTED PURSUANT TO THIS SECTION
      12.19(b) SHALL CONTINUE IN EFFECT PENDING AN ARBITRATION DETERMINATION AND
      ENTRY
      OF JUDGMENT THEREON PURSUANT TO THIS SECTION 12.19.

    


      
      NOTICE:  BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY
      DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE “ARBITRATION OF DISPUTES”
PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND
      YOU
      ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN
      A
      COURT OR JURY TRIAL.  BY INITIALING IN THE SPACE BELOW YOU ARE GIVING
      UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE
      SPECIFICALLY INCLUDED IN THE “ARBITRATION OF DISPUTES” PROVISION.  IF
      YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY
      BE
      COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL
      PROCEDURE.  YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS
      VOLUNTARY.

    


      
      WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING
      OUT OF THE MATTERS INCLUDED IN THE “ARBITRATION OF DISPUTES” PROVISION TO
      NEUTRAL ARBITRATION.

    


    BUYER’S
      INITIALS:    /s/ EM

    


    SELLER’S
      INITIALS:    /s/ BM

    


    12.20         [Intentionally
      Omitted].

    


    12.21         No
      Consent or Waiver Relating to Emeritus/Summerville Merger
      Transaction.  Nothing contained herein or in any of the
      other Transaction Documents (except as expressly provided therein) shall be
      deemed or construed to be the consent or approval by or waiver of any rights
      by
      HCP or any Affiliate of HCP to the proposed Emeritus/Summerville
      Merger.

    


    
      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

    

    


    12.22         Property
      Disclosures Generally.  Buyer hereby waives the right to
      receive and any obligation of Seller to deliver any disclosures applicable
      to
      either Property and required by Law; provided, however, if such waiver is not
      permitted by applicable Law, then Buyer shall promptly notify Seller in writing
      thereof and Seller shall provide, at Buyer’s expense, any such required
      disclosures as soon as practicable following Seller’s receipt of Buyer’s notice.
      The provisions of this Section 12.22 shall survive the Closing or any earlier
      termination of this Agreement.

    


    [Signature
      Page Follows]

    


    
      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

    

    


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

    


    
      	 	
              SELLER:

            	
              HEALTH
                CARE PROPERTY INVESTORS, INC.,

            
	 	 	
              a
                Maryland corporation

            
	 	 	 
	 	 	
              By:  /s/
                Brian J. Maas

            
	 	 	 
	 	 	
              Brian
                J. Maas

            
	 	 	
              Its:
                Senior Vice President

            


    

    


    


    


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              BUYER:

            	
              EMERITUS
                CORPORATION, 

            
	 	 	
              a
                Washington corporation 

            
	 	 	 	 
	 	 	
              By:

            	
              /s/
                Eric Mendelsohn

            
	 	 	 	
              Eric
                Mendelsohn

            
	 	 	 	
              Director
                of Real Estate and Legal Affairs

            


    

    


    
      
        
          
          

        

        
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    ACCEPTANCE
      BY TITLE COMPANY

    


    Title
      Company hereby agrees to establish an Escrow and act as the “Escrow Holder” in
      accordance with the provisions of the Agreement.  Title Company
      further agrees to deliver immediately to Buyer and Seller fully executed copies
      of the Agreement.  Title Company’s Escrow Number and Escrow Officer
      for the transaction contemplated hereby, address for notices for this Escrow,
      Escrow Account No. and wiring information is set forth below.

    


    CHICAGO
      TITLE INSURANCE COMPANY

    


    


    
      
        	By:
                	/s/
                Angie Koetters	 
	 	 	 
	Its:
                	Escrow
                Officer	 


      

    

     

    Date:  August
      ___, 2007

    


    
      	 	
              Escrow
                No.:

            	
              27061885

            	 
	 	 	 	 
	 	
              Escrow
                Officer:

            	
              Angie
                Koetters

            	 
	 	 	
              Telephone
                No.: 

            	(312)
              223-2718	 
	 	 	
              Fax
                No.:  

            	(312)
              223-5888	 
	 	 	 	 
	 	
              Address
                for Notices:

            	
              Chicago
                Title and Trust Company

            	 
	 	 	
              171
                North Clark

            	 
	 	 	
              Chicago,
                IL  60601

            	 
	 	 	 	 
	 	
              Wiring
                Information:

            	 	 
	 	 	 	 
	 	
              Bank:

            	
              LaSalle
                National Bank

            	 
	 	 	
              135
                S. LaSalle Street

            	 
	 	 	
              Chicago,
                IL  60603

            	 
	 	 	 	 
	 	
              ABA
                No.:

            	   	 
	 	 	 	 
	 	
              Credit
                to:

            	
              Chicago
                Title and Trust Company, Loop

            	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	
              Account
                No.:

            	   	 
	 	 	 	 
	 	
              Reference:

            	
              Escrow
                No. D1 027047813

            	 
	 	 	Escrow
              Officer:   	Angie
              Koetters	 
	 	 	 	Closing
              Division: D1	 
	 	 	
              Re:  HCP/Emeritus

            	 


    

     

     

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