**Exhibit
      10.67.03**


[Boise,
      Idaho]









**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**





Page1.
            DEFINITIONS
            12.
            SALE
                OF THE PROPERTY
            43.
            ESCROW
            44.
            PURCHASE
                PRICE; ALLOCATION OF PURCHASE PRICE
            55.
            CONDITIONS
                TO CLOSING; AS IS PURCHASE
            56.
            CLOSING
                OF ESCROW
            87.
            TERMINATION
            138.
            REPRESENTATIONS
                AND WARRANTIES
            159.
            CERTAIN
                EVENTS PRIOR TO CLOSING
            1710.
            POST-CLOSING
                MATTERS
            1711.
            BROKERS
            1812.
            MISCELLANEOUS
                PROVISIONS
            18







EXHIBITSA
            Description
                of Emeritus Master LeaseB
            Escrow
                General ProvisionsC
            [RESERVED]D
            Form
                of Quitclaim Bill of SaleE
            [RESERVED]F
            [RESERVED]G
            Nominee
                and Property/FacilityH
            [Reserved]







SCHEDULE1
            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 Property (as defined below).





B.               The
      Property is 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 Property from Seller and Seller desires to sell
      the Property 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****:**“Additional Charges,” as
      defined in the Emeritus Master Lease and allocable to the Property.





**1.3**             
      **Additional Rent****:**  “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
      the Property.





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





**1.5**             
      **Bill of Sale****:**  As defined in
      Section 6.2.2.











**1.6**           
        **Close of Escrow, Closing Date and/or
      Closing**:  As defined in Section 6.1.





**1.7**             
      **Closing Funds****:**As defined in
      Section 4.4.





**1.8**            
       **Condemnation****:**  “Condemnation,”
as defined in the Emeritus Master
      Lease.





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





**1.10**           
      **Deed****:**  As defined in Section
      6.2.1.





**1.11**           
      **Earnest Money Deposit****:**  As
      defined in the Master Purchase Agreement.





**1.12**           
      **Effective Date****:**As defined
      in the preface to this Agreement.





**1.13**          
      **Emeritus Master Lease****:**  That
      Amended and Restated Master Lease identified on **Exhibit
“A”** attached hereto among Lessor and Lessee covering,
      among other
      properties, the Property, as more particularly described therein, as the same
      may have been amended or modified from time to time in accordance with the
      terms
      thereof.





**1.14**           
      **Emeritus/Summerville
      Merger****:**  As defined in the Master
      Purchase Agreement.





**1.15**           
      **Escrow Holder****:**  As defined in
      Section 3.1.





**1.16**           
      **Event of Default****:**“Event of Default,”
as defined in the Emeritus Master
      Lease.





**1.17**           
      **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.





**1.18**           
      **Hazardous
      Substance****:**  “Hazardous Substance,” as
      defined in the Emeritus Master Lease.





**1.19**           
      **HCP****:**Health Care Property
      Investors, Inc., a Maryland corporation.





**1.20**           
      **Impositions****:**  “Impositions,”
as defined in the Emeritus Master
      Lease with respect to the
      Property.





**1.21**           
      **Laws****:**  All applicable
      governmental laws, codes, ordinances, regulations, judgments, permits, approvals
      or other requirements.





**1.22**           
      **Lessee****:**  “Lessee,” as defined
      in the Emeritus Master Lease.





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





**1.24**           
      **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”).





**1.25**           
      **Master Purchase
      Agreement****:**  As defined in
**Schedule 1** hereto.





2





**1.26**           **Minimum
      Rent****:**“Minimum Rent,” as defined in the
      Emeritus Master Lease with respect to the Property.





**1.27**           **Opening
      of Escrow****:**  As defined in Section
      3.3.





**1.28**           **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.





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





**1.30**           **Permitted
      Exceptions****:**As defined in Section
      6.2.1.





**1.31**           **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).





**1.32**           **Property****:**  The
      “Leased Property” (as defined in the Emeritus Master Lease) of the “Facility”
(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 Property for purposes of
      this Agreement includes only the “Leased Property” of the “Facility”
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 “Facility” listed  on **Exhibit
      G** attached hereto.





**1.33**           **Purchase
      Price****:**  As defined in Section
      4.1.





**1.34**           **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”).





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





3





**1.36**           **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.





**1.37**           **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.





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





**1.39**           **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 Property, through and including the day prior to Closing Date (prorated
      to
      the extent applicable for the month during which the Closing
      occurs).





**1.40**           **Summerville****:**  Summerville
      Senior Living, Inc., a Delaware corporation.





**1.41**           **Summerville
      Master Lease****:**  As defined in the Master
      Purchase Agreement.





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





**1.43**           **Title
      Policy****:**As defined in Section
      6.4.





**1.44**           **Title
      Endorsements****:**As defined in Section
      6.4.





**1.45**           **Transaction
      Documents****:**  Collectively, this
      Agreement, the Deed, the Bill 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.





**1.46**           **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
      the
      Property.





**2.            SALE
      OF THE PROPERTY**





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





**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.





4





**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 Property shall be Nine
      Million Three Hundred Seventy-One Thousand Five Hundred Ninety Dollars and
      00/100ths ($9,371,590.00) (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**





**5.1**       
           **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 Property 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





**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****[Intentionally
      Omitted]**.





**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 THE PROPERTY “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 THE PROPERTY, 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 the Property, as well as the fact
      that
      Buyer or its Affiliates originally sold to and/or developed on behalf of Seller
      the Property 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 the Property.  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 Property as provided herein, Buyer shall have thereby
      approved all aspects of the Property 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
      Property 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****[Intentionally
      Omitted]**.





**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.





**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.





7





**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
      Deed or other conveyance instrument is actually recorded in the land records
      in
      which the 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****Deed**.  A
      duly executed and acknowledged grant deed, special warranty deed or equivalent
      thereof in the State (a “Deed”) conveying the Property to Buyer, 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 the 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 the 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.





**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;





8





**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 the 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;





**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;




9




**6.3.7****Evidence
      of Authority**.  Such certificates or documents as may be
      reasonably required by Escrow Holder in order to cause the 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 the Property, insuring
      good and indefeasible title to the Property vested in Buyer as of the Closing
      Date in the amount of the Purchase Price, subject to such matters of record
      or
      apparent as Buyer and Title Company may agree (a “Title Policy”) and including
      such endorsements thereto as Buyer may request and Title Company agrees to
      issue
      (the “Title Endorsements”).  The cost of any Title Policy and all
      Title Endorsements thereto shall be borne by the parties as provided in Section
      6.6 below.





**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 the 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.





10





**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 Policy (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





(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 Policy 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





11





(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 the Property is included in
      this
      sale as part of the Purchase Price for the 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
      the Deed and any other recordable instrument which the parties so direct to
      be
      recorded in the appropriate land records office where the 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 the
      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 the Property 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:





**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





12





**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 5.1.4 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 5.4.3, 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.





**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.





13





**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.





**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.





14





**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.





**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 the 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.





15





**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 Property.





**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.





16





**9.        
         CERTAIN EVENTS PRIOR TO CLOSING**





**9.1**           
        **Loss**.  In the event of loss
      (including a loss due to a Condemnation) or damage to the 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
      Property 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
      the
      Property 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.





**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 Property 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.





17





**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 Property, 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 Property or on adjoining or
      neighboring property, or arising from any use of the Property; 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 Property 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 the 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 the 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.





By
      Buyer’s execution and delivery hereof, Buyer hereby appoints the Person
      identified on **Exhibit G** attached hereto as its nominee
      to take title to the Property.





18





**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 Property,
      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 300Long
                Beach, California 90806Attn:       
                Legal DepartmentFax:         
                (562) 733-5200with
                a copy to:
            Latham
                & Watkins LLP650
                Town Center Drive, Suite 2000Costa
                Mesa, California 92626-1925Attn:       
                David C. Meckler, Esq.Fax:         
                (714) 755-8290If
                to Buyer:
            Emeritus
                Corporation3131
                Elliott Avenue, Suite 500Seattle,
                Washington  98121Phone:    
                (206) 301-4493Fax:         
                (206) 301-4500Attn:       
                Eric Mendelsohnwith
                a copy to:
            Pircher,
                Nichols & Meeks900
                North Michigan Avenue, Suite 1050Chicago,
                Illinois 60611Attention:   Real
                Estate Notices (JDL/MJK)Phone:        
                (312) 915-3112Fax:             
                (312) 915-3348





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.





19





**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.





**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 Property 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.





20





**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.





**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 THE 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.





21





BUYER’S
      INITIALS: /s/ EM





SELLER’S
      INITIALS: /s/ BM





**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.





22





(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.




23





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.





**12.22**         **Property
      Disclosures Generally**.  Buyer hereby waives the right to
      receive and any obligation of Seller to deliver any disclosures applicable
      to
      the 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]





24





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 corporationBy:
            /s/
                Brian J. MaasBrian
              J. MaasIts:
            Senior
                Vice President







[Signature
      Page Continues on Following Page]





1




BUYER:
            EMERITUS
              CORPORATION,a
              Washington corporationBy:
            /s/
                Eric MendelsohnEric
                MendelsohnDirector
                of Real Estate and Legal Affairs





2





**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
              KoettersIts:
            Escrow
              Officer




Date:  August
      ___, 2007




Escrow
                No.:
            27062176Escrow
                Officer:
            Angie
                KoettersTelephone
                No.:
            (312)
              223-2718Fax
                No.:
            (312)
              223-5888Address
                for Notices:
            Chicago
                Title and Trust Company171
                North ClarkChicago,
                IL  60601Wiring
                Information:Bank:
            LaSalle
                National Bank135
                S. LaSalle StreetChicago,
                IL  60603ABA
                No.:Credit
                to:
            Chicago
                Title and Trust Company, LoopAccount
                No.:Reference:
            Escrow
                No. D1 027047813Escrow
              Officer:
            Angie
                KoettersClosing
                Division: D1Re:  HCP/Emeritus







3