Document:

ex1070_01psanhpfeb08.htm

    EX
      10.70.01

    PURCHASE
      AND SALE AGREEMENT

    

    THIS
      PURCHASE AND SALE AGREEMENT
(this “Agreement”), dated as
      of
      February 6, 2008 (the “Effective Date”), is entered
      into by and among NATIONWIDE
      HEALTH PROPERTIES, INC., a Maryland corporation (“NHP”), and its
      Affiliated
      signatories hereto that are listed in Schedule 1, as
“Seller” (collectively,
“Seller”),
      and EMERITUS CORPORATION, a
      Washington corporation (“Buyer”), with respect to
      the
      following Recitals:

    

    R
      E C I T A L
      S:

    

    A.           
Seller
      is the
      owner of the assisted living and dementia care facilities identified on Schedule 2 attached
      hereto (the “Facilities”) and located on
      the parcels of real property described in Exhibit A attached
      hereto (collectively, the “Real
      Property”).

    

    B.           
Seller
      is
      interested in selling the Real Property together with Seller’s interest in the
      Personal Property defined below to Buyer and Buyer is interested in purchasing
      the same from Seller, all under the terms and conditions set forth in this
      Agreement.

    

    C.           
Buyer
      and the
      other entities identified on Schedule 3 attached
      hereto as “tenant” are the current tenants in possession of the Real Property
      (collectively, the “Tenant”).  As used
      herein, “Affiliate”
shall mean an entity
      owned or controlling, controlled by, or under common
      control with the first party.

    

    NOW,
      THEREFORE, in
      consideration of the foregoing Recitals and the mutual covenants of the parties
      set forth herein, IT IS HEREBY
      AGREED AS FOLLOWS:

    

    AGREEMENT

    

    1.           
Purchase
      and Sale.  On the terms
      and
      conditions set forth herein, Seller shall sell to Buyer and Buyer shall purchase
      from Seller the following:

    

    (a)           
      Real
      Property.  The Real Property, together with all tenements,
      hereditaments, rights, privileges, interests, easements and appurtenances now
      or
      hereafter belonging or in any way pertaining to the Real Property, which are
      herein incorporated in the definition of “Real Property”.

    

    (b)           
      Improvements.  The
      existing buildings, fixtures, structures and other improvements located upon
      the
      Real Property, together with, to the extent not owned by Tenant and not
      constituting Personal Property, apparatus, equipment and appliances incorporated
      therein and used in connection with the operation and occupancy thereof (the
      “Improvements”);
      and

    

    (c)           
      Personal
      Property.  All tangible and intangible personal property owned
      by Seller which is located on and used in connection with the Improvements
      or
      the Real Property, including, without limitation, all licenses, permits,
      warranties or contract rights and any other personal property relating thereto
      (the “Personal
      Property”).

    
      
         

      

      
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    Hereinafter
      the Real Property, Improvements and Personal Property shall sometimes be
      collectively referred to as “Seller’s Assets.”

    

    2.           
      Purchase Price and
      Earnest Money.

    

    (a)           
      The purchase price for Seller’s Assets (“Purchase Price”) shall be
      Three Hundred Five Million Dollars ($305,000,000).  Buyer and Seller
      acknowledge and agree that the portion of the Purchase Price allocable to the
      facility known as Autumn Ridge and located in Herculaneum, Missouri (the “Autumn Ridge Facility”) is
      Five Million Five Hundred Thousand Dollars ($5,500,000) (the “Autumn Ridge Purchase
      Price”).  The Purchase Price, subject to the prorations and
      adjustments set forth herein, shall be paid by Buyer to Seller in cash at
      Closing.  Buyer and Seller acknowledge that the purchase of Seller’s
      Assets is subject to the assumption by Buyer and/or payoff by Seller at Closing
      of the existing debt encumbering certain Facilities in the approximate amount
      of
      Fifty-Six Million Two Hundred Thousand Dollars ($56,200,000), which existing
      debt obligations are more particularly described on Schedule 4 attached
      hereto (collectively, the “Existing Debt”).  At
      Closing, Buyer shall receive a credit against the Purchase Price for the then
      outstanding principal balance of the Existing Debt assumed by Buyer.

    

    (b)           
      Within two (2) business days after the Effective Date, Buyer shall deliver
      to
      Escrow Agent (as hereinafter defined) an earnest money deposit in the amount
      of
      Three Million Fifty Thousand Dollars ($3,050,000), which sum, together with
      all
      interest accrued thereon, is sometimes hereinafter referred to as the “Deposit”.  Escrow
      Agent shall hold the Deposit pursuant to an escrow agreement reasonably
      acceptable to Buyer and Seller and shall invest the Deposit in one or more
      interest bearing accounts mutually acceptable to Seller and Buyer.  At
      Closing, the Deposit shall be disbursed by Escrow Agent to Seller and applied
      against the Purchase Price payable at Closing and Buyer shall receive a credit
      therefor.  In the event that this Agreement is terminated by either
      Buyer or Seller pursuant to an express right to terminate as herein provided,
      the Deposit shall be disbursed by Escrow Agent pursuant to the express terms
      hereof.

    

    (c)           
      At Buyer’s election, which shall be evidenced by Buyer’s delivery of written
      notice thereof to Seller not less than forty-five (45) days prior to Closing,
      Seller shall provide Buyer with a loan at Closing in the amount of Thirty
      Million Dollars ($30,000,000) (the “Seller Carry-back
      Loan”).  The Seller Carry-back Loan shall bear interest at an
      annual rate of Seven and one-quarter percent (7.25%) and be payable monthly
      on
      an interest only basis for a term of not more than four (4)
      years.  The Seller Carry-back Loan may be prepaid by Buyer at any time
      upon not less than one hundred eighty (180) days prior written notice to Seller.
      In the event Buyer exercises its rights under Section 13(d) to
      assign its rights hereunder to an Affiliate or Affiliates of Buyer at or prior
      to Closing, then the Seller Carry-back Loan shall be made to Buyer’s assignee(s)
      and the Seller Carry-back Loan shall be guaranteed by Buyer.  In
      addition, the Seller Carry-back Loan shall be cross-defaulted to the Summerville
      Master Lease (as hereinafter defined).  Such Seller Carry-back Loan
      shall be evidenced by a promissory note and guaranty in form and substance
      acceptable to the parties and a Third Amendment to the Summerville Master Lease
      (the “Seller Carry-back Loan
      Documents”). At Closing, Buyer shall receive a credit against the
      Purchase Price for the principal amount of the Seller Carry-back
      Loan.  As used herein, “Summerville Master Lease”
means that

    
      
         

      

      
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    certain
      Master Lease dated as of October 2, 2006 by and among Nationwide Health
      Properties, Inc. and NHP McClain, LLC, as landlord, and Summerville at Camelot
      Place LLC, Summerville at Hillen Vale LLC, Summerville at Lakeview LLC,
      Summerville at Ridgewood Gardens LLC, Summerville at North Hills LLC, and The
      Inn at Medina LLC, collectively as tenant, as amended by (i) that certain First
      Amendment to Master Lease dated as of December 1, 2006, and (ii) that certain
      Second Amendment to Master Lease dated as of January 2, 2007.

    

    3.           
      Closing.

    

    (a)           
      The Closing
      Date.  Provided the conditions to closing set forth in Section
      9 have been satisfied or waived, Buyer and Seller agree to use their good faith
      efforts to close the purchase and sale transaction contemplated under this
      Agreement (the “Closing”) as soon as
      practicable on or following April 1, 2008, provided, however,
      the date of
      such Closing shall occur on or before June 30, 2008 (the “Closing Date”).  The
      Closing will be a so-called “New York” style escrow closing with Chicago Title
      Insurance Company (the “Escrow
      Agent”), whereby Seller, Buyer and their attorneys need not be physically
      present at Closing and may deliver documents and proceeds to the Escrow Agent
      to
      be exchanged, disbursed and delivered pursuant to customary escrow
      arrangements.

    

    (b)           
      The Closing
      Process.  Closing shall occur through escrow and accordingly,
      at or prior to the Closing Date, Buyer and Seller shall deposit in escrow with
      Escrow Agent all documents and monies necessary to close this transaction as
      herein provided. Time is of the essence of this Agreement. Closing shall occur
      in accordance with the procedures and instructions given by Seller and Buyer
      to
      the Escrow Agent prior to Closing.

    

    (c)           
      Autumn Ridge
      Closing.  Provided that the Title Due Diligence Period (as
      hereinafter defined) has expired with respect to the Autumn Ridge Facility
      (as
      such period may be shortened with respect to the Autumn Ridge Facility by
      agreement of the parties), Buyer shall have the right to elect to close early
      on
      the acquisition of the Autumn Ridge Facility by delivering written notice of
      such election to Seller no less than fifteen (15) days prior to such closing
      date (unless another date is mutually agreed to by the parties).  If
      such election is made by Buyer, the Autumn Ridge Purchase Price, subject to
      the
      prorations and adjustments set forth herein, shall be paid by Buyer to Seller
      in
      cash at the closing of the purchase of the Autumn Ridge Facility (the “Autumn Ridge
      Closing”).  In no event shall any amount of the Deposit
      delivered to Escrow Agent be applied to the payment of the Autumn Ridge Purchase
      Price.

    

    4.           
Conveyances.

    

    At
      Closing, Seller shall (a) convey the Real Property to Buyer by limited or
      special warranty deed (the “Deeds”), generally in the
      form
      attached hereto as Exhibit B (or
      comparable state form), (b) execute and deliver Bills of Sale to Buyer in the
      form attached hereto as Exhibit C in order
      to
      convey the Personal Property to Buyer, and (c) execute and deliver such other
      conveyancing and closing documents as are reasonable and customary in the
      jurisdiction in which each parcel of Real Property is located.  In
      addition, at Closing each of the entities comprising Seller shall deliver (i)
      to

    
      
         

      

      
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    the
      Title
      Company (as hereinafter defined), such owner’s affidavits and indemnities,
      including, but not limited to gap indemnities where recording and funding cannot
      occur on the same date, as may reasonably be required to be executed by the
      seller of real estate in connection with the sales transaction contemplated
      under this Agreement; and (ii) to Buyer, an affidavit executed by such entity
      under penalty of perjury, stating such entity’s United States taxpayer
      identification number and that such entity is not a foreign person, in
      accordance with the Internal Revenue Code, Section 1445(b)(2), in the form
      attached hereto as Exhibit D.

    

    5.           
Closing
      Costs And Prorations.

    

    At
      or
      prior to Closing, as appropriate, Seller and Buyer shall be responsible for
      the
      following costs and expenses of, and prorations related to, the transaction,
      all
      of which, to the extent not paid prior to Closing, will be included on the
      closing statement to be executed and delivered by Buyer and Seller at
      Closing:

    

    (a)           
      Attorneys’
Fees.  Each party
      shall pay its own attorneys’ fees and costs
      incurred in connection with the transactions contemplated under this
      Agreement.

    

    (b)           
      Survey.  Buyer
      shall pay for all costs of any ALTA surveys required by Buyer.

    

    (c)           
      Due Diligence
      Expenses.  Buyer shall pay all of the costs incurred in
      conducting its Due Diligence Review (as defined below).

    

    (d)           
      Proration of Real
      and
      Personal Property Taxes. All real and personal property taxes shall not
      be prorated, it being understood and agreed that Buyer and the other entities
      comprising the Tenant shall be responsible for them for the periods both before
      and after the Closing Date.

    

    (e)           
      Escrow Fees and
      Charges.  Buyer and Seller shall each pay one-half (1/2) of all
      escrow fees and charges.

    

    (f)           
      Other Closing
      Costs.  At or prior to Closing, as appropriate, Seller and
      Buyer shall be responsible for the other costs and expenses of the transaction
      as set forth on Exhibit E.

    

    (g)           
      Amounts Under the
      Facility Leases.  Any rent payable under the leases between
      Seller and Tenant described on Schedule 3 hereto
      (the “Facility Leases”)
      shall be prorated and Buyer shall receive a credit for any prepaid rent for
      any
      period after the Closing Date.  In addition, Buyer shall either
      receive a credit at Closing for any security deposits (other than security
      deposits held in the form of Letters of Credit, which shall be returned to
      Tenant at Closing), escrows for property taxes, capital expenditures or other
      impounds held by Seller as of the Closing Date pursuant to the Facility Leases
      or, at Buyer’s option, Seller shall remit the same to Buyer or its designee at
      Closing.

    
      
         

      

      
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    (h)           
      Existing
      Debt.  Buyer shall be required to pay any loan costs, including
      without limitation, assumption fees or prepayment penalties/defeasance fees
      associated with the assumption or payoff/defeasance of the Existing Debt.

    

    6.           
      Title
      Insurance.

    

    (a)           
      The following provisions shall apply with respect to the delivery of the title
      commitments to Buyer with respect to each of the parcels of land comprising
      the
      Real Property and Buyer’s review thereof:

    

    (i)           
      Within fifteen (15) days after the Effective Date, Buyer shall cause Chicago
      Title Insurance Company (the “Title Company”) to issue title
      reports or commitments to Buyer (the “Title Commitments”), along
      with legible copies of all of the exception documents referenced therein.

    

    (ii)           
      Within twenty (20) days after the later to occur of (i) the Effective Date
      or
      (ii) Buyer’s receipt of the last of the Title Commitments, along with legible
      copies of all of the exception documents referenced therein, Buyer shall advise
      Seller by written notice of its objections, if any, to the matters reflected
      in
      the Title Commitments (the “Title Objection
      Letter”).

    

    (iii)           
      Within ten (10) days after Seller’s receipt of the Title Objection Letter,
      Seller shall specify by written notice delivered to Buyer (the “Seller Response Notice”) which
      of the title defects to which Buyer has objected it will correct at or prior
      to
      Closing and which of such defects it refuses to correct at or prior to
      Closing.  If Seller fails to deliver any such notice within such ten
      (10) day period, Seller shall be deemed to have refused to correct any of the
      defects to which Buyer has objected.  If Seller refuses or is deemed
      to have refused to correct some or all of the title defects objected to by
      Buyer, Buyer shall have five (5) business days after the delivery (or the
      deadline for the delivery) of the Seller Response Notice to advise Seller by
      written notice of its decision to close, notwithstanding the defects, or of
      its
      election to terminate this Agreement (“Buyer’s Acceptance
      Notice”).  Buyer’s failure to deliver the Buyer’s Acceptance
      Notice within such five (5) business day period shall be deemed to be Buyer’s
      election to terminate this Agreement.

    

    (iv)           
      In the event Buyer elects or is deemed to have elected to terminate this
      Agreement as a result of the existence of title defects which Seller refuses
      to
      correct by Closing, the Deposit shall be returned to Buyer and neither party
      shall have any further rights or obligations hereunder except for Seller’s
      rights to indemnification provided in Section 7(b)
      below.

    

    (v)           
      All matters reflected on the Title Commitments and not objected to or not deemed
      to be objected to by Buyer in accordance with the terms hereof, together with
      such other matters approved by Buyer pursuant to Buyer’s Acceptance Notice,
      shall be deemed accepted by Buyer and shall for purposes hereof be deemed to
      be
      the “Permitted

    
      
         

      

      
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    Exceptions”.  Prior
      to Closing, Buyer and Seller shall prepare the written list of the applicable
      Permitted Exceptions to be attached to each of the Deeds to be delivered at
      Closing.

    

    (vi)           
      Buyer and Seller hereby agree that, notwithstanding anything to the contrary
      set
      forth in this Section
      6(a) (but subject to the obligations of Buyer under Section 5(h) above),
      (I) Seller shall have no right to refuse to correct any objections related
      to
      (A) the Facility Leases unless Buyer elects to have them assigned to Buyer
      at
      Closing pursuant Section 9(a)(vii), or
      (B) any liens and security interests granted by Seller to secure debt
      obligations of Seller other than any of the Existing Debt which Buyer elects
      to
      assume at Closing and (II) the following shall be deemed to be accepted by
      Buyer
      as Permitted Exceptions:  (A) any non-delinquent real property taxes
      (whether general or special); (B) the standard printed exceptions set forth
      in
      the title reports or commitments, except for any that are removed by title
      endorsements, title affidavits and indemnities which Seller has agreed to
      provide under Section 4 hereof or which are or can be provided by Buyer or
      any
      of the other entities comprising Tenant in its capacity as the tenant of the
      Facilities or by extended coverage; (C) any matters affecting the condition
      of
      title created by or with the consent of Tenant; and (D) the liens and security
      instruments relating to the Existing Debt if and to the extent assumed by Buyer
      at Closing pursuant to the terms of this Agreement.

    

    (vii)           
      The overall title review period described in clauses (i) through (iii) of Section 6(a) of this
      Agreement is sometimes referred to herein as the “Title Due Diligence
      Period”.

    

    (b)           
      At Closing, Buyer shall cause the Title Company to issue extended coverage
      title
      insurance policies to Buyer in the full amount of the Purchase Price and in
      accordance with the Title Commitments, subject to no exceptions other than
      the
      Permitted Exceptions and the liens of any security instruments executed by
      Buyer
      at Closing (the “Title
      Policies”). The parties will agree on an allocation of the Purchase Price
      among the Facilities if necessary to facilitate the issuance of the Title
      Policies and the allocation of the Closing costs for which the parties are
      responsible under Section 5.

    

    (c)           
      Seller agrees to provide, or to cause its Affiliates to provide, all such
      resolutions, good standing certificates, affidavits and other documentation
      as
      the title company may reasonably request (and as sellers customarily provide
      in
      such applicable jurisdiction) in connection with the issuance of the Title
      Policies.

    

    7.           
      Due Diligence
      Review.

    

    (a)           
      Buyer acknowledges that it is familiar with the operations of the Real Property
      because Tenant is currently in possession of the Real Property and operating
      the
      Facilities. Nonetheless, in addition to the Title Due Diligence Period, Buyer
      shall have a period of thirty (30) days after the Effective Date (the “Due Diligence Review Period”)
      in which to satisfy itself as to any and all matters affecting the Real Property
      and Buyer’s proposed use thereof, including, but not limited to, zoning and
      county ordinances, soils reports, existing and necessary easements,

    
      
         

      

      
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    topography,
      the environmental condition of the Real Property and the structural condition
      of
      the improvements located thereon, but specifically excluding any matters related
      to the operations thereof (the “Due Diligence Review”).

    

    (b)           
      Buyer hereby agrees to indemnify, defend and hold harmless Seller, its
      directors, officers, members, partners and employees from and against any and
      all costs and expenses and any and all claims and liabilities asserted by third
      parties against Seller as a result of any entry onto the Real Property or
      investigation, study or test conducted by Buyer, its agents, invitees, employees
      or representatives in connection with the Due Diligence Review. If any such
      investigation, study or test disturbed the condition of the Real Property or
      the
      Personal Property and Buyer does not consummate the transaction provided for
      in
      this Agreement, then Buyer shall, to the extent feasible, replace or restore
      such property to the same or to substantially the same condition as existed
      prior to any such inspection, test or study.

    

    (c)           
      At or prior to the expiration of the Due Diligence Review Period, Buyer shall
      advise Seller in writing whether it is prepared to proceed with the transaction
      contemplated by this Agreement or whether it intends to terminate this Agreement
      (the “Due Diligence Notice”). Buyer’s failure to deliver the Due Diligence
      Notice shall be an election to proceed with the transaction contemplated by
      this
      Agreement.  In the event Buyer elects to terminate this Agreement then
      the Deposit shall be returned to Buyer and neither party shall have any further
      rights or obligations hereunder except for Seller’s rights to indemnification
      provided in Section
      7(b) above.

    

    8.           
Representations,
      Warranties and Covenants.  As is more particularly set forth in
Section 13(n)
      below, the sale of Seller’s Assets to Buyer is AS-IS, WHERE IS, without express
      or implied warranties of any nature including merchantability or fitness for
      any
      purpose, other than the express representations and warranties of Seller set
      forth herein and in the documents and instruments delivered by Seller at
      Closing.

    

    (a)           
      Seller does hereby represent and warrant to Buyer as follows:

    

    (i)           
      Status.  Nationwide
      Health Properties, Inc. is a corporation duly organized, validly existing and
      in
      good standing under the laws of the State of Maryland.  NH Texas
      Properties Limited Partnership is a limited partnership duly organized, validly
      existing and in good standing under the laws of the State of
      Texas.  MLD Delaware Trust is a business trust duly organized, validly
      existing and in good standing under the laws of the State of
      Delaware.  MLD Properties, LLC is a limited liability company duly
      organized, validly existing and in good standing under the laws of the State
      of
      Delaware.  NHP Senior Housing, Inc. is a corporation duly organized,
      validly existing and in good standing under the laws of the State of
      California.  NHP CM Investment, Inc. is a corporation duly organized,
      validly existing and in good standing under the laws of the State of
      Delaware.  NHP Joliet, Inc. is a corporation duly organized, validly
      existing and in good standing under the laws of the State of
      Illinois.  QR Lubbock Texas Properties, L.P. is a limited partnership
      duly organized, validly existing and in good standing under the laws of the
      State of Texas.  BIP Sub I, Inc. is a corporation duly organized,
      validly existing and in good standing under the laws of the

    
      
         

      

      
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    State
      of
      Delaware.  Each of the entities comprising Seller is duly authorized
      and qualified to do all things required of it under this Agreement.

    

    (ii)           
      Authority.  Each
      of the entities comprising Seller has full power and authority to enter into
      this Agreement and all documents and instruments to be delivered at or prior
      to
      Closing and to carry out the terms hereof and the consummation of the
      transactions provided for herein does not result in a breach of the terms and
      conditions of nor constitute a default under or violation of any of the Seller’s
      charter documents or any law, regulation, court order, agreement, license or
      other instrument or obligation to which any of such entities is a
      party.  This Agreement is valid, binding and enforceable as against
      each of the entities comprising Seller in accordance with its terms, except
      as
      such enforceability may be limited by applicable bankruptcy, creditor’s rights
      laws or principles of equity.

    

    (iii)           
      Litigation.   There
      is no litigation, investigation, or other proceeding pending or, to the
      knowledge of Seller, threatened against or relating to any of the entities
      comprising Seller which is material to Seller’s Assets or this Agreement or
      which would prevent Seller from performing its obligations hereunder.

    

    (b)           
      Buyer does hereby represent and warrant to Seller as follows:

    

    (i)           
      Status.  Emeritus
      Corporation is a corporation duly organized, validly existing and in good
      standing under the laws of the State of Washington.  ESC IV, LP is a
      limited partnership duly organized, validly existing and in good standing under
      the laws of the State of Washington.  ESC IV, LP is qualified to do
      business in the State of Texas as “Texas  – ESC IV,
      L.P.”  Each of the entities comprising Buyer is duly authorized and
      qualified to do all things required of it under this Agreement.

    

    (ii)           
      Authority.  Each
      of the entities comprising Buyer has full power and authority to execute and
      to
      deliver this Agreement and all documents and instruments to be delivered at
      or
      prior to Closing, and to carry out the transactions contemplated herein and
      the
      same do not result in a breach of the terms and conditions of nor constitute
      a
      default under or violation of any of the Buyer’s charter documents or law,
      regulation, court order, mortgage, note, bond, indenture, agreement, license
      or
      other instrument or obligation to which any of the entities comprising Buyer
      is
      a party or by which the entities comprising Buyer or any of their respective
      assets may be bound or affected.  This Agreement is valid, binding and
      enforceable as against each of the entities comprising Buyer in accordance
      with
      its terms, except as such enforceability may be limited by applicable
      bankruptcy, creditor’s rights laws, or principles of equity.

    

    (iii)           
      Litigation.
      There is no litigation, investigation or other proceeding pending or, to the
      knowledge of Buyer, threatened against or relating to any of the entities
      comprising Buyer or which is material to this Agreement, or which would prevent
      Buyer from performing its obligations hereunder.

    
      
         

      

      
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    9.           
Conditions.

    

    (a)           
      All obligations of Buyer under this Agreement are subject to the fulfillment
      of
      each of the following conditions, any one or more of which may be waived in
      writing by Buyer prior to the Closing:

    

    (i)           
      The representations and warranties of Seller contained in this Agreement shall
      be true and correct at and as of the Closing Date as though such representations
      and warranties were then again made and at Closing, Seller shall deliver a
      reaffirmation of all representations and warranties hereunder signed by Seller
      and certified as of the Closing Date.

    

    (ii)           
      Seller shall have performed all of its obligations under this Agreement that
      are
      to be performed by it prior to or as of the Closing Date.

    

    (iii)           
      Buyer and Seller shall have executed and delivered all documents to be executed
      and delivered at Closing pursuant to the terms hereof.

    

    (iv)           
      Buyer shall have received the Title Policies in accordance with the requirements
      of Section 6(b) or the written assurances of the Title Company that the Title
      Policies meeting the requirements of this Agreement will be issued within a
      reasonable period of time after Closing.

    

    (v)           
      To the extent required by applicable law, Buyer shall have received the
      regulatory approvals of any governmental authorities regulating the Facilities
      or the transaction which is the subject of this Agreement in order to enable
      Buyer to take title to Seller’s Assets or any portion thereof and any applicable
      waiting period under such laws shall have expired.

    

    (vi)           
      Either Buyer shall have received written consent from the applicable lenders
      with respect to Buyer’s assumption of the Existing Debt (the “Lenders’ Consent”) at Closing
      or Seller shall have provided any required notices for the prepayment or
      defeasance of the Existing Debt at Closing and any applicable
      prepayment/defeasance notice periods shall have
      expired.  Notwithstanding the foregoing, Buyer acknowledges that the
      receipt of the Lenders’ Consent is not a condition of Closing and, if such
      consent is not available within the timeline for Closing provided in this
      Agreement, Seller shall be entitled to payoff Existing Debt at Closing from
      the
      proceeds of the sale and/or cause Buyer to defease such debt (where prepayment
      is not permitted by the terms of the applicable loan documents), and Buyer
      shall
      be responsible for any and all prepayment fees and/or defeasance costs
      associated therewith as provided in Section 5(h)
      above.

    

    (vii)           
      Tenant and Seller shall have entered into lease termination agreements with
      respect to the Facility Leases (the “Lease Termination
      Agreements”), pursuant to which the Facility Leases shall be terminated
      effective as of Closing.  Notwithstanding the

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    foregoing,
      if reasonably requested by Buyer in connection with the assumption of the
      Existing Debt or in order to facilitate the continued licensing of any
      applicable Facility comprising a part of the Seller’s Assets, Seller shall
      execute and deliver an assignment of any of the Facility Leases (and related
      ancillary agreements) at Closing to Buyer or an Affiliate of Buyer designated
      by
      Buyer (the “Lease
      Assignments”).

    

    
      	
              (vi)

            	
              Prior
                to the expiration of the Due Diligence Review Period, Seller and
                Buyer
                shall have agreed upon the form of the Seller Carry-back Loan Documents,
                which Seller Carry-back Loan Documents shall be executed and delivered
                concurrently with the Closing. 

            

    

    

    (b)           
      All obligations of Seller under this Agreement are subject to the fulfillment,
      prior to or as of the Closing Date, of each of the following conditions, any
      one
      or more of which may be waived by Seller in writing:

    

    (i)           
      The representations and warranties of Buyer contained in this Agreement shall
      be
      true and correct at and as of the Closing Date as though such representations
      and warranties were then again made and at Closing, Buyer shall deliver a
      reaffirmation of all representations and warranties hereunder signed by Buyer
      and certified as of the Closing Date.

    

    (ii) Buyer
      shall have performed all of its obligations under this Agreement that are to
      be
      performed by it prior to or as of the Closing Date.

    

    (iii) Buyer
      and
      Seller shall have executed and delivered all documents to be executed and
      delivered at Closing pursuant to the terms hereof.

    

    (iv) Tenant
      and Seller shall have entered into the Lease Termination Agreements and/or
      Lease
      Assignments, as the case may be.

    

    (v)      Prior
      to
      the expiration of the Due Diligence Review Period, Seller and Buyer shall have
      agreed upon the form of the Seller Carry-back Loan Documents, which Seller
      Carry-back Loan Documents shall be executed and delivered concurrently with
      the
      Closing.

    

    10.           
Termination;
      Default and Remedies; No Cross Defaults.

    

    (a)           
      Termination.  This
      Agreement may be terminated upon written notice by Buyer or Seller upon the
      following conditions:

    

    (i)           
      By mutual written consent of the parties;

    

    (ii)           
      By Buyer if the conditions to Closing set forth in Section 9(a) have not been
      satisfied or waived by the Closing Date other than as a result of a breach
      or
      default by Buyer of its obligations hereunder.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    (iii)           
      By Seller if the conditions to Closing set forth in Section 9(b) have not been
      satisfied or waived by the Closing Date other than as a result of a breach
      or
      default by Seller of its obligations hereunder;

    

    (iv)           
      By Buyer in the event that prior to the Closing Date a material portion of
      the
      Real Property or the improvements thereon is damaged or destroyed or taken
      or
      condemned by any public or quasi-public authority under the power of eminent
      domain; provided, however, that in the event Buyer fails to exercise its
      termination rights hereunder, then it shall be conclusively deemed to have
      waived said right and Seller shall assign to Buyer all of its rights to any
      insurance proceeds and condemnation award and all claims in connection
      therewith.

    

    (v)           
      By Seller in the event the Closing does not occur on or prior to June 30, 2008
      other than as a result of either (A) a breach or default by Seller, beyond
      any
      applicable cure period provided for in this Section 10, of its
      obligations hereunder or (B) the existence of any other event or circumstance
      which prevents Seller from consummating the transaction provided for
      herein.

    

    (vi)           
      By Buyer in the event the Closing does not occur on or prior to June 30, 2008
      as
      a result of either (A) a breach or default by Seller, beyond any applicable
      cure
      period provided for in this Section 10, of its
      obligations hereunder or (B) the existence of any other event or circumstance
      which prevents Seller from consummating the transaction provided for
      herein.

    

    (vii)           
      By Buyer pursuant to Section 6(a)(iii).

    

    (viii) By
      Buyer pursuant to Section 7(c).

    

    (b)           
      Seller’s
      Breach.  In the event Buyer has the right to terminate this
      Agreement as a result of Seller being in material breach of any representation,
      warranty or covenant of Seller under this Agreement, Buyer shall first be
      required to give written notice of such breach to Seller, which notice shall
      set
      forth in reasonable detail the nature of Seller’s breach (“Buyer’s Notice”) and Seller
      will have a period (“Seller’s
      Cure Period”) expiring on the tenth (10th)
      day
      after the date Seller receives Buyer’s Notice, to correct or cure Seller’s
      breach and if such breach is cured, then Buyer may not exercise any such
      termination rights.

     

     (c)           
      Buyer’s
      Default.  In the event Seller has the right to terminate this
      Agreement as  a result of Buyer being in material breach of any
      representation, warranty or covenant of Buyer under this Agreement, Seller
      shall
      first be required to give written notice of such breach to Buyer, which notice
      shall set forth in reasonable detail the nature of Buyer’s breach (“Seller’s Notice”) and Buyer
      will have a period (“Buyer’s
      Cure Period”) expiring on the tenth (10th)
      day
      after the date Buyer receives Seller’s Notice to correct or cure Buyer’s breach
      and if such breach is cured, then Buyer may not exercise any such termination
      rights.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    (d)           
      Rights on
      Termination.

    

    (i)           
      Return of
      Deposit. Buyer shall be entitled to the return of the Deposit in the
      event this Agreement is terminated pursuant to any of the following provisions:
      (a) pursuant to Section 10(a)(i), (b) pursuant to Section 10(a)(ii) if the
      failure of the condition to Closing either (I) is the result of a material
      breach by Seller of its obligations under this Agreement, beyond any applicable
      cure period provided for in this Section 10, or (II)
      regardless of the fault of Seller, arises out of any event or circumstance
      that
      prevents Seller from consummating the transaction provided for herein, (c)
      pursuant to Section 10(a)(iv), (d) pursuant to Section 10(a)(vi),  (e)
      pursuant to Section 10(a)(vii) or (f) pursuant to Section 10(a)(viii). In
      addition, if such termination by Buyer is due to a material breach by Seller
      of
      its obligations under this Agreement, beyond any applicable cure period provided
      for in this Section
      10, then Seller shall also reimburse Buyer on demand for its actual out
      of pocket costs and expenses incurred to the date of termination, not to exceed
      Three Hundred Thousand and no/100 Dollars ($300,000) (the “Buyer’s Transaction
      Costs”).

    

    (ii)           
      Forfeiture of
      Deposit. Buyer shall not be entitled to the return of the Deposit but
      instead the Deposit shall be released by Escrow Agent to Seller as liquidated
      damages and not as a penalty in the event of the termination of this Agreement
      pursuant to any of the following provisions: (a) pursuant to Section 10(a)(ii)
      if such termination occurs after the expiration of the Title Due Diligence
      Period and the failure of the condition to Closing is not due to any of the
      events described in Section 10(d)(i)(b), (b) pursuant to Section 10(a)(iii)
      or
      (c) pursuant to Section 10(a)(v) and in such event Seller and Buyer further
      acknowledge and agree as follows:

    

    THE
      DEPOSIT SHALL BE RELEASED TO SELLER AS SELLER’S SOLE AND EXCLUSIVE LIQUIDATED
      DAMAGES, AND IN FULL AND COMPLETE SETTLEMENT AND LIQUIDATION OF ALL DAMAGES
      SUSTAINED BY SELLER, IT BEING ACKNOWLEDGED BY SELLER AND BUYER THAT THE AMOUNT
      OF DAMAGES INCURRED BY SELLER AS A RESULT OF A TERMINATION OF THIS AGREEMENT
      PURSUANT TO ANY OF THE PROVISIONS SET FORTH IN THIS SECTION 10(d)(ii) WOULD
      BE
      SUBSTANTIAL BUT DIFFICULT, IF NOT IMPOSSIBLE, TO ASCERTAIN AND THAT SUCH
      LIQUIDATED DAMAGES REPRESENT THE PARTIES’ BEST ESTIMATE OF THE DAMAGES SELLER
      WILL INCUR AS A RESULT OF SUCH TERMINATION.  SELLER SHALL NOT BE
      ENTITLED TO EXERCISE ANY OTHER RIGHTS, POWERS AND REMEDIES AT LAW OR IN EQUITY,
      OTHER THAN ITS RIGHT TO RECEIVE THE DEPOSIT PURSUANT HERETO, AND, SUBJECT TO
      SELLER’S RECEIPT OF THE DEPOSIT IN FULL AND COMPLETE SETTLEMENT AND LIQUIDATION
      OF ALL DAMAGES SUSTAINED BY SELLER, SELLER HEREBY EXPRESSLY AND IRREVOCABLY
      WAIVES ALL SUCH OTHER RIGHTS, POWERS OR REMEDIES AND HEREBY COVENANTS NOT TO
      SUE
      BUYER AS A RESULT OF THE TERMINATION OF THIS AGREEMENT.

    

    /s/
      EM                                
/s/
      AK

    Buyer’s
      Initials                                                                           
Seller’s Initials

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    (e)           
      No Cross
      Default.  Notwithstanding anything to the contrary herein, no
      default by Buyer or Seller under this Agreement shall be deemed to constitute
      a
      default or event of default under any other document or instrument now or
      hereafter in effect between Seller, Buyer, Tenant or any Affiliates of the
      foregoing, including without limitation any of the Facility Leases or any other
      leases or loans between Seller or its Affiliates, on the one hand, and Buyer
      or
      its Affiliates, on the other hand.  It is the intent of the parties
      that this Agreement and the parties’ rights, duties and obligations hereunder
      are intended to be separate and distinct from any other contract, lease, loan
      document or other contractual or other relationship and not subject to any
      so-called “cross default” provisions or other provisions and that any
      termination of this Agreement prior to Closing, pursuant to this Section 10,
      whether as a result of a default by either party or as otherwise permitted
      by
      the terms of this Section 10, shall not affect Tenant’s continued rights under
      the Facility Leases.

    

    (f)           
      Indemnity.  The
      termination of this Agreement, whether by Seller or Buyer, shall not serve
      to
      terminate Buyer’s indemnity obligations under Section 7(b), which obligations
      shall specifically survive the termination of this Agreement.

    

    (g)           
      Specific Performance
      in Lieu of Termination.  Notwithstanding anything to the
      contrary set forth in this Section 10, if Seller is in material breach of its
      obligations hereunder and, as a result, Buyer has the right under this Section
      10 to terminate this Agreement and to demand a return of the Deposit and the
      payment of the Buyer’s Transaction Costs, in lieu thereof, Buyer shall have the
      right to seek specific performance of the Seller’s obligations hereunder, provided that Buyer must commence
      any
      action for specific performance within sixty (60) days after the scheduled
      Closing Date.

    

    11.           
Broker.

    

    Each
      party represents and warrants to the other that it has not retained the services
      of any broker or finder in connection with the transaction contemplated by
      this
      Agreement and each agrees to pay any commission or finder’s fee which may be due
      on account of this Agreement to any other broker or finder allegedly employed
      by
      it and each party agrees to indemnify the other party against any claim for
      any
      commission made by any broker allegedly employed by it.

    

    12.           
Indemnity.

    

    (a)           
      Buyer shall indemnify and hold Seller harmless from and against:

    

    (i)           
       Any and all obligations relating to the ownership of the Real Property
      which relate to the period from and after the Closing Date;

    

    (ii)  
 Any
      and all
      actions, suits, proceedings, demands, assessments, judgments, reasonable costs
      and other reasonable expenses, including, but not limited to, reasonable
      attorneys’ fees, incident to any of the foregoing.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    (b)           
      Seller shall indemnify and hold Buyer harmless from and against:

    

    (i)           
      Any and all obligations relating to the ownership of the Real Property which
      relate to the period prior to the Closing Date, except to the extent the same
      are due to the acts or omissions of Tenant under the Facility Leases;

    

    
      	
               

            	
              (ii)Any
                and all actions, suits, proceedings, demands, assessments, judgments,
                reasonable costs and other reasonable expenses, including, but not
                limited
                to, reasonable attorneys’ fees, incident to any of the foregoing.
                

            

    

    

    13.           
Miscellaneous.

    

    (a)           
      Any notice, request or other communication to be given by any party hereunder
      shall be in writing and shall be sent by registered or certified mail, postage
      prepaid, by overnight courier guaranteeing overnight delivery or by facsimile
      transmission (if confirmed verbally or in writing by mail as aforesaid), to
      the
      following address:

    

    
      	
              Seller:

            	
              Nationwide
                Health Properties, Inc. 

            

    

    610
      Newport Center Drive, Suite 1150

    Newport
      Beach, California  92660

    Attention:  President
      and CFO

    Facsimile:                                
      (949) 759-6876

    

    
      	
              With
                a copy to:

            	
              Sherry
                Meyerhoff Hanson & Crance LLP 

            

    

    610
      Newport Center Drive, Suite 1200

    Newport
      Beach, California  92660

    Attention:  Kevin
      L. Sherry, Esq.

    Facsimile:                                
      (949) 719-1212

    

    
      	
              Buyer:

            	
              Emeritus
                Corporation 

            

    

    
      	
               

            	
              3131
                Elliott Avenue, Suite 500 

            

    

    
      	
               

            	
              Seattle,
                Washington 98121 

            

    

    Attention:  Mr.
      Eric Mendelsohn

    Facsimile:                                
      (206) 357-7388

    

    
      	
              With
                a copy to:

            	
              The
                Nathanson Group PLLC 

            

    

    
      	
               

            	
              One
                Union Square 

            

    

    
      	
               

            	
              600
                University Street, Suite 2000 

            

    

    
      	
               

            	
              Seattle,
                Washington 98101-1195 

            

    

    Attention:  Randi
      Nathanson, Esq.

    Facsimile:                                
      (206) 623-1738

    

    Notice
      shall be deemed given on actual receipt or refusal of receipt regardless of
      the
      method of delivery used.

    

    (b) This
      Agreement may not be amended or modified in any respect whatsoever except by
      instrument in writing signed by the parties hereto.  This Agreement
      and the other documents and instruments executed and delivered simultaneously
      herewith constitutes the entire agreement

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    between
      the parties hereto and supersedes all prior negotiations, discussions, writings
      and agreements between them including, but not limited to, that Letter of Intent
      dated December 18, 2007 and accepted by Buyer on December 28, 2007.

    

    (c) This
      Agreement shall be governed by and  construed and enforced in
      accordance with the internal laws of the State of California, without regard
      to
      the conflict of laws rules thereof.

    

    (d) This
      Agreement shall inure to the benefit of and be binding upon the parties hereto
      and their heirs, successors and permitted assigns. Buyer may assign its rights
      hereunder without the prior written consent of Seller, in whole or in part,
      including with respect to one or more Facility comprising part of the Seller’s
      Assets or any portion thereof, provided that any assignee is an Affiliate of
      Buyer and such assignment shall not be deemed or construed to release Buyer
      from
      its obligations hereunder.  Buyer shall also be entitled to designate
      an unaffiliated third party transferee to take title to the Autumn Ridge
      Facility at the Autumn Ridge Closing.  Otherwise, Buyer may not assign
      its rights or obligations hereunder without the prior written consent of Seller,
      which may be granted or withheld in Seller’s sole discretion.  Each of
      the entities comprising Seller or Buyer shall be jointly and severally liable
      with all other entities comprising Seller or Buyer, respectively.

    

    (e) The
      waiver by any party of any breach of any of the provisions of this Agreement
      shall not be effective unless in writing and signed by the party granting the
      waiver and shall not constitute a continuing waiver or a waiver of any
      subsequent breach of any provision of this Agreement.

    

    (f) Each
      recital set forth and exhibit referenced in this Agreement is incorporated
      and
      becomes an integral part of this Agreement.

    

    (g) The
      captions of this Agreement are for convenience of reference only and shall
      not
      define or limit any of the terms or provisions hereof.

    

    (h) Time
      is
      of the essence of this Agreement and of all of the terms and provisions of
      this
      Agreement.

    

    (i) In
      the
      event of litigation or other proceedings involving the parties to this Agreement
      to enforce any provision of this Agreement, to enforce any remedy available
      upon
      default under this Agreement, or seeking a declaration of the rights of either
      party under this Agreement, the prevailing party shall be entitled to recover
      from the other such reasonable attorneys’ fees and costs as may be actually
      incurred, including its costs and fees on appeal.

    

    (j) Should
      any one or more of the provisions of this Agreement be determined to be invalid,
      unlawful or unenforceable in any respect, the validity, legality and
      enforceability of the remaining provisions hereof shall not in any way be
      affected or impaired thereby.

    

    (k) This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      an original; but such counterparts shall together constitute but one and the
      same instrument.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

    (l) This
      Agreement and the other documents and instruments executed and delivered
      simultaneously herewith is the entire and final agreement of the parties hereto
      with respect to the subject matter hereof and supersedes all prior negotiations,
      discussions, writings or agreements.

    

    (m) Each
      of
      the parties acknowledges and agrees that it has participated in the drafting
      and
      negotiation of this Agreement.  Accordingly, in the event of a dispute
      between the parties hereto with respect to the interpretation or enforcement
      of
      the terms hereof, no provision shall be construed so as to favor or disfavor
      either party hereto.

    

    (n) BUYER
      ACKNOWLEDGES THAT SELLER’S ASSETS ARE BEING SOLD IN THEIR AS-IS WHERE IS WITH
      ALL FAULTS CONDITION AND THAT EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT
      OR
      IN THE DOCUMENTS AND INSTRUMENTS EXECUTED AND DELIVERED AT CLOSING BY SELLER,
      SELLER MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED
      WITH
      RESPECT TO (A) THE DESIGN, CONSTRUCTION, LOCATION, SIZE, CHARACTER, PHYSICAL
      CONDITION OR STATE OF REPAIR OF SELLER’S ASSETS OR ANY PORTION THEREOF; (B) THE
      TOPOGRAPHY, DRAINAGE OR CONDITION OF THE SURFACE AND SUBSURFACE SOILS OF OR
      ON
      THE REAL PROPERTY, (C) THE PRESENCE OR ABSENCE OF HAZARDOUS WASTE OR HAZARDOUS
      SUBSTANCES ON OR FROM THE REAL PROPERTY OR THE IMPROVEMENTS; (D) THE
      MERCHANTABILITY, HABITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF SELLER’S
      ASSETS, (E) THE PAST OR FUTURE TAXES OR ASSESSMENTS OF SELLER’S ASSETS, (F) THE
      COMPLIANCE OF SELLER’S ASSETS WITH ANY APPLICABLE GOVERNMENTAL REQUIREMENT, (G)
      THE FINANCIAL ASPECTS OF THE OPERATION OF THE REAL PROPERTY, OR (H) ANY OTHER
      REPRESENTATION OR WARRANTY NOT EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN
      THE
      DOCUMENTS AND INSTRUMENTS EXECUTED AND DELIVERED AT CLOSING BY
      SELLER.  BY EXECUTION OF THIS AGREEMENT, BUYER REPRESENTS AND WARRANTS
      TO SELLER THAT BUYER IS AN EXPERIENCED, SOPHISTICATED BUYER OF COMMERCIAL REAL
      ESTATE, WITH KNOWLEDGE AND EXPERIENCE SUFFICIENT TO ENABLE IT TO EVALUATE THE
      MERITS AND RISKS OF THE SALE, AND THAT IT IS REPRESENTED BY KNOWLEDGEABLE AND
      EXPERIENCED LEGAL COUNSEL OF ITS OWN CHOOSING AND AGREES, THAT NEITHER SELLER
      NOR ITS AGENTS OR REPRESENTATIVES HAS MADE AND THAT BUYER HAS NOT RELIED UPON
      ANY REPRESENTATION OR WARRANTY OF ANY KIND WHICH IS NOT EXPRESSLY SET FORTH
      IN
      THIS AGREEMENT OR IN THE DOCUMENTS AND INSTRUMENTS EXECUTED AND DELIVERED AT
      CLOSING BY SELLER IN CONNECTION WITH THE SALE OF SELLER’S ASSETS OR BUYER’S
      ACTUAL PURCHASE THEREOF PURSUANT TO THE TERMS OF THIS AGREEMENT, IT BEING
      UNDERSTOOD AND AGREED THAT ANY SUCH PURCHASE WILL BE OTHERWISE BASED ONLY UPON
      BUYER’S OWN DUE DILIGENCE REVIEW AND UPON THE KNOWLEDGE OF TENANT.

     

     __/s/
      EM____ [Buyer's Initials]

     

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    (o)           
      Seller or Buyer, or both of them, may close this transaction as part of a
      like-kind exchange of properties under Section 1031 of the Internal Revenue
      Code
      of 1986, as amended, and applicable rules and regulations. The exchanging party
      shall bear all costs of the exchange. The other party shall cooperate with
      the
      exchanging party and do all things reasonably required and requested by the
      exchanging party (provided that such actions do not increase the other party’s
      obligations or liabilities under this Agreement) to effect and facilitate such
      an exchange.  The exchanging party shall and does hereby indemnify,
      defend and hold the other party harmless for and from all liabilities arising
      as
      a result of the exchange that would not have arisen had the
      exchanging party not closed this transaction as part of a like-kind
      exchange.  Anything in this section to the contrary notwithstanding:
      (a) no party makes any representation or warranty to the other as to the
      effectiveness or tax impact of any proposed exchange; (b) in no event shall
      any party be required to take title to any exchange or replacement property;
      (c)
      in no event shall completion of any such exchange be a cause or excuse for
      any
      delay in the Closing; and (d) no party shall be required to incur any costs
      or
      expenses or incur any additional liabilities or obligations in order to
      accommodate any exchange requested by the other party or any exchange
      intermediary or facilitator.

     

    (p)           
      Public
      Announcements.  Except with respect to public filings required
      to be made by either party in accordance with applicable securities and health
      care laws and regulations, each of Seller and Buyer shall consult with the
      other
      regarding, and shall use reasonable best efforts to agree upon, the form and
      content of any press release with respect to this Agreement or the transactions
      contemplated herein.

     

    (q)           
      Survival. All
      of the representations and warranties of the parties set forth herein, other
      than the indemnities set forth in Section 12, shall terminate and be of no
      further force and effect as of the Closing or, as to the Autumn Ridge Facility,
      the Autumn Ridge Closing, if such closing precedes the Closing with respect
      to
      the remainder of the Facilities.

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    

      IN
        WITNESS WHEREOF, the parties hereby execute this Agreement as of the day
        and
        year first set forth above.

      

       

      
        	 	
                “SELLER”

                
                

              
	
                
                

                
                

                WITNESSES:

                
                

                /s/
                  Kevin Sherry

                Printed
                  name: Kevin
                  Sherry

                
                

                 /s/
                  Jan Eckhardt

                Printed
                  name: Jan
                  Eckhardt

                
                

              	
                NATIONWIDE
                  HEALTH PROPERTIES, INC.,

                a
                  Maryland corporation

                
                

                
                

                By:          
                  /s/ Abdo H. Khoury                                            
                  

                Name:                    
                  _ Abdo H. Khoury
                  _______________

                Title:             
                  Chief Financial & Portfolio
                  Officer,                         Senior
                  Vice President

                
                

              
	
                
                

                
                

                
                

                
                

                
                

                
                

                WITNESSES:

                
                

                /s/
                  Kevin Sherry                                                      
                  

                Printed
                  name: : Kevin
                  Sherry

                
                

                /s/
                  Jan Eckhardt                                                      
                  

                Printed
                  name: Jan
                  Eckhardt                                                      
                  

                
                

              	
                NH
                  TEXAS PROPERTIES LIMITED
                  PARTNERSHIP, a Texas limited partnership

                
                

                By:
                  MLD TEXAS CORPORATION,

                a
                  Texas corporation,

                its
                  General Partner

                
                

                
                

                By:          
                  /s/ Abdo H. Khoury                                             
                  

                Name:
Abdo
                  H. Khoury _______________

                Title:               
                  Chief Financial & Portfolio
                  Officer,                         Senior
                  Vice President

                
                

              
	
                
                

                
                

                WITNESSES:

                
                

                /s/
                  Kevin Sherry                                                      
                  

                Printed
                  name: Kevin
                  Sherry                                                      
                  

                
                

                /s/
                  Jan Eckhardt                                                      
                  

                Printed
                  name: Jan
                  Eckhardt

                
                

              	
                MLD
                  DELAWARE TRUST,

                a
                  Delaware business trust

                
                

                
                

                By:               
                  /s/ Abdo H. Khoury ________

                Name:                        
                  _ Abdo H. Khoury _________

                Title:               
                  Not in his individual capacity,
                  but

                solely
                  as Trustee

                
                

              

      

      
        
           

        

        
          S
            -
            1

          
            

          

        

        
           

        

      

      

      
        	
                
                

                
                

                WITNESSES:

                
                

                /s/
                  Kevin Sherry                                                      
                  

                Printed
                  name: Kevin
                  Sherry                                                      
                  

                
                

                /s/
                  Jan Eckhardt                                                      
                  

                Printed
                  name:Jan Eckhardt

              	
                MLD
                  PROPERTIES, LLC,

                a
                  Delaware limited liability company

                
                

                By:          
                  MLD PROPERTIES, INC.,

                a
                  Delaware corporation,

                its
                  Sole Member

                By:               
                  /s/ Abdo H. Khoury _______

                Name:                        
                  Abdo H. Khoury __________

                Title:               
                  Chief Financial & Portfolio
                  Officer,                         Senior
                  Vice President

                
                

              
	
                
                

                
                

                WITNESSES:

                
                

                /s/
                  Kevin Sherry                                                      
                  

                Printed
                  name: Kevin
                  Sherry

                
                

                /s/
                  Jan Eckhardt

                Printed
                  name: Jan
                  Eckhardt                                                      
                  

                
                

              	
                NHP
                  SENIOR HOUSING, INC.,

                a
                  California corporation

                
                

                
                

                By:               
                  /s/ Abdo H. Khoury ______

                Name:                        
                  Abdo H. Khoury ________

                Title:               
                  Chief Financial & Portfolio
                  Officer,                         Senior
                  Vice President _

                
                

              
	
                
                

                
                

                WITNESSES:

                
                

                /s/
                  Kevin Sherry                                                      
                  

                Printed
                  name: Kevin
                  Sherry                                                      
                  

                
                

                /s/
                  Jan Eckhardt                                                      
                  

                Printed
                  name: Jan
                  Eckhardt                                                      
                  

                
                

              	
                NHP
                  CM INVESTMENT, INC.,

                a
                  Delaware corporation

                
                

                
                

                By:               
                  /s/ Abdo H. Khoury __

                Name:                        
                  Abdo H. Khoury _________

                Title:               
                  _ Chief Financial & Portfolio
                  Officer,                         Senior
                  Vice President _

                
                

              
	
                
                

                
                

                WITNESSES:

                
                

                /s/
                  Kevin Sherry                                                      
                  

                Printed
                  name: Kevin
                  Sherry                                                      
                  

                
                

                /s/
                  Jan Eckhardt                                                      
                  

                Printed
                  name: Jan
                  Eckhardt                                                      
                  

                
                

              	
                NHP
                  JOLIET, INC.,

                an
                  Illinois corporation

                
                

                
                

                By:               
                  /s/ Abdo H. Khoury __

                Name:                        
                  Abdo H. Khoury _________

                Title:               
                  _ Chief Financial & Portfolio
                  Officer,                         Senior
                  Vice President _

                
                

              

      

      
        
           

        

        
          S
            -
            2

          
            

          

        

        
           

        

      

      

      
        	
                
                

                
                

                
                

                
                

                
                

                
                

                
                

                
                

                
                

                
                

                WITNESSES:

                
                

                /s/
                  Kevin Sherry                                                      
                  

                Printed
                  name: Kevin
                  Sherry                                                      
                  

                
                

                /s/
                  Jan Eckhardt                                                      
                  

                Printed
                  name: Jan
                  Eckhardt                                                      
                  

                
                

              	
                QR
                  LUBBOCK TEXAS PROPERTIES, L.P.,

                a
                  Texas limited partnership

                
                

                By:
                  QR LUBBOCK GP, LLC,

                a
                  Texas limited liability
                  company,

                its
                  General Partner

                
                

                By:
                  Nationwide Health Properties, Inc.,

                a
                  Maryland corporation,

                its
                  sole member

                
                

                
                

                By:               
                  /s/ Abdo H. Khoury __

                Name:                        
                  Abdo H. Khoury _________

                Title:               
                  _ Chief Financial & Portfolio
                  Officer,                         Senior
                  Vice President _

                
                

                
                

              
	
                
                

                
                

                WITNESSES:

                
                

                /s/
                  Kevin Sherry                                                      
                  

                Printed
                  name: Kevin
                  Sherry                                                      
                  

                
                

                /s/
                  Jan Eckhardt                                                      
                  

                Printed
                  name: Jan
                  Eckhardt                                                      
                  

                
                

                
                

              	
                BIP
                  SUB I, INC.,

                a
                  Delaware corporation

                
                

                
                

                By:               
                  /s/ Abdo H. Khoury __

                Name:                        
                  Abdo H. Khoury _________

                Title:               
                  _ Chief Financial & Portfolio
                  Officer,                         Senior
                  Vice President _

                
                

              

      

      
        
           

        

        
          S
            -
            3

          
            

          

        

        
           

        

      

      

      
        	 	
                “BUYER”

                
                

              
	
                
                

                
                

                WITNESSES:

                
                

                /s/
                  Marjji Padden

                Printed
                  name: Marjji
                  Padden

                
                

                /s/
                  Paige Bae                                                      
                  

                Printed
                  name: Paige
                  Bae                                                      
                  

                
                

                
                

              	
                EMERITUS
                  CORPORATION,

                a
                  Washington corporation

                
                

                
                

                By:               
                  /s/ Eric Mendelsohn___

                Name:                        
                  _ Eric Mendelsohn ________

                Title:               
                  _Sr VP Corporate Development___

                
                

              
	
                The
                  “Tenant” entities below hereby execute this Agreement for the purpose of
                  evidencing such Tenant’s agreement to enter into the Lease Termination
                  Agreements and/or Lease Assignments, as the case may be, at the
                  time of
                  Closing, and to otherwise comply with the obligations of such Tenant
                  set
                  forth herein.

                
                

              
	
                
                

                
                

                
                

                
                

                
                

                
                

                WITNESSES:

                
                

                /s/
                  Marjji Padden

                Printed
                  name: Marjji
                  Padden

                
                

                /s/
                  Paige Bae                                                      
                  

                Printed
                  name:Paige Bae                                                      
                  

              	
                ESC
                  IV, LP, a Washington
                  limited partnership

                
                

                By:
                  ESC G.P. II, INC.,

                a
                  Washington corporation,

                its
                  General Partner

                
                

                
                

                By:               
                  /s/ Eric Mendelsohn___

                Name:                        
                  _ Eric Mendelsohn ________

                Title:               
                  _Sr VP Corporate Development___

                
                

              

      

      
        
           

        

        
          S
            -
            4

          
            

          

        

        
           

        

      

      

      
        	
                
                

                
                

                
                

                
                

                
                

                
                

                WITNESSES:

                
                

                s/
                  Marjji Padden

                Printed
                  name: Marjji
                  Padden

                
                

                /s/
                  Paige Bae                                                      
                  

                Printed
                  name: Paige
                  Bae                                                      
                  

                
                

              	
                ESC
                  IV, LP, a Washington
                  limited partnership

                (doing
                  business in the State of Texas as “Texas  – ESC IV,
                  L.P.”)

                
                

                By:
                  ESC G.P. II, INC.,

                a
                  Washington corporation,

                its
                  General Partner

                
                

                
                

                By:               
                  /s/ Eric Mendelsohn___

                Name:                        
                  _ Eric Mendelsohn ________

                Title:                                
                  _Sr VP Corporate Development___

                
                

              

      

      
        
           

        

        
          S
            -
            5

          
            

          

        

        
           

        

      

    SCHEDULE
      1

     

    ENTITIES
      COMPRISING “SELLER”

     

    

     

    1.            
      Nationwide Health Properties,
      Inc., a Maryland corporation

     

    Fee
      owner of:

     

    Charleston
      Gardens - Charleston,
      WV;

    Silverleaf
      Manor - Meridian, MS;

    Loyalton
      of Rockford - Rockford,
      IL;

    Heritage
      Hills ALZ - Columbus,
      GA;

    Pine
      Meadow - Hattiesburg, MS;

    Austin
      Gardens ALZ - Lodi, CA;
      and

    Clare
      Bridge - Corona, CA.

    

    2.           
      NH Texas Properties Limited
      Partnership, a Texas limited partnership

    

    Fee
      owner of:

     

    Beckett
      Meadows - Austin, TX;

     

    Creekside
      ALZ - Plano, TX;

     

    Oak
      Hollow ALZ - Bedford, TX;

     

    Pinehurst
      ALZ - Tyler, TX;

     

    Stonebridge
      ALZ - Dallas, TX; and

     

    Desert
      Springs ALZ - El Paso, TX.

     

    

    3.           
      MLD Delaware Trust, a
      Delaware business trust

    

    Fee
      owner of:

     

    Autumn
      Ridge - Herculaneum, MO

    

    

    4.           
      MLD Properties, LLC, a
      Delaware limited liability company

    

    Fee
      owner of:

    

    Kingsley
      Place of Shreveport -
      Shreveport; LA; and

    Pines
      of Goldsboro - Goldsboro,
      NC.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5.           
      NHP Senior Housing,
      Inc., a California corporation

    

    Fee
      owner of:

    

    The
      Lakes - Fort Myers, FL;

    Loyalton
      of Folsom - Folsom, CA;
      and

    Canterbury
      Woods - Attleboro,
      MA.

    

    

    6.           
      NHP CM Investment, Inc.,
      a Delaware corporation

    

    Fee
      owner of:

    

    Loyalton
      of Cape May - Cape May,
      NJ

    

    

    7.           
      NHP Joliet, Inc., an
      Illinois corporation

    

    Fee
      owner of:

    

    Loyalton
      of Joliet - Joliet, IL;
      and

    Joliet
      ALZ Expansion - Joliet,
      IL.

    

    8.           
      QR Lubbock Texas Properties,
      L.P., a Texas limited partnership

    

    Fee
      owner of:

    

    Quail
      Ridge ALZ - Lubbock, Texas

    

    

    9.           
      BIP Sub I, Inc., a
      Delaware corporation

    

    Fee
      owner of:

    

    Richland
      Gardens - Richland, WA

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
      2

    

    SCHEDULE
      OF FACILITIES

    

    

    
      	
              
              

              Facility
                Name

            	
              
              

              Facility
                Address

            	
              
              

              Type
                of Facility

            	
              
              

              No.
                of Units

              
              

            
	
              
              

              Beckett
                Meadows

            	
              
              

              7709
                Beckett Road

              Austin,
                TX  78749

              
              

            	
              
              

              ALF

            	
              
              

              72

            
	
              
              

              Charleston
                Gardens

            	
              
              

              800
                Association Drive

              Charleston,
                WV  25311

              
              

            	
              
              

              ALF

            	
              
              

              96

              
              

            
	
              
              

              Kingsley
                Place at Shreveport

              
              

            	
              
              

              7110
                University Drive

              Shreveport,
                LA  71105

              
              

            	
              
              

              ALF

            	
              
              

              80

            
	
              
              

              Silverleaf
                Manor

            	
              
              

              4555
                35th
                Avenue

              Meridian,
                MS  39305

              
              

            	
              
              

              ALF

            	
              
              

              98

              
              

            
	
              
              

              Pines
                at Goldsboro

            	
              
              

              380
                Country Day Road

              Goldsboro,
                NC  27530

              
              

            	
              
              

              ALF

            	
              
              

              99

              
              

            
	
              
              

              Autumn
                Ridge

            	
              
              

              300
                Autumn Ridge Drive

              Herculaneum,
                MO  63048

              
              

            	
              
              

              ALF

            	
              
              

              94

              
              

            
	
              
              

              Loyalton
                of Rockford

            	
              
              

              1545
                Temple Lane

              Rockford,
                IL  61112

              
              

            	
              
              

              ALF

            	
              
              

              97

              
              

            
	
              
              

              Creekside

              
              

              
              

            	
              
              

              2000
                West Spring Creek

              Pkwy

              Plano,
                TX  75023

            	
              
              

              ALZ

            	
              
              

              30

            
	
              
              

              Heritage
                Hills

            	
              
              

              3607
                Weems Road

              Columbus,
                GA  31909

              
              

            	
              
              

              ALZ

            	
              
              

              30

              
              

            

    

    
      
         

      

      
        S-2-1

        
          

        

      

      
         

      

    

    

    
      	
              
              

              Facility
                Name

            	
              
              

              Facility
                Address

            	
              
              

              Type
                of Facility

            	
              
              

              No.
                of Units

              
              

            
	
              
              

              Oak
                Hollow

              
              

            	
              
              

              2016
                L Don Dodson Pkwy

              Bedford,
                TX  76095

              
              

            	
              
              

              ALZ

            	
              
              

              30

            
	
              
              

              Pine
                Meadows

              
              

            	
              
              

              107
                Fox Chase Drive

              Hattiesburg,
                MS  39402

              
              

            	
              
              

              ALZ

            	
              
              

              30

            
	
              
              

              Pinehurst

            	
              
              

              5403
                Plantation Drive

              Tyler,
                TX  75703

              
              

            	
              
              

              ALZ

            	
              
              

              30

            
	
              
              

              Stonebridge

            	
              
              

              9271
                White Rock Trail

              Dallas,
                TX  75238

              
              

            	
              
              

              ALZ

            	
              
              

              30

              
              

            
	
              
              

              Austin
                Gardens

            	
              
              

              2150
                West Kettleman Lane

              Lodi,
                CA  95242

              
              

            	
              
              

              ALZ

            	
              
              

              30

              
              

            
	
              
              

              Desert
                Springs

              
              

            	
              
              

              5901
                Bandolero Drive

              El
                Paso, TX  79912

              
              

            	
              
              

              ALZ

            	
              
              

              30

            
	
              
              

              Arbor
                Gardens at Corona

              
              

            	
              
              

              2005
                Kellogg

              Corona,
                CA  92879

              
              

            	
              
              

              ALZ

            	
              
              

              45

            
	
              
              

              Loyalton
                of Folsom

              
              

            	
              
              

              780
                Harrington Way

              Folsom,
                CA  95630

              
              

            	
              
              

              ALF

            	
              
              

              101

            
	
              
              

              The
                Lakes

            	
              
              

              7460
                Lake Breeze Drive

              Fort
                Myers, FL  33919

              
              

            	
              
              

              ALF

            	
              
              

              151

            

    

    
      
         

      

      
        S-2-2

        
          

        

      

      
         

      

    

    

    
      	
              
              

              Facility
                Name

            	
              
              

              Facility
                Address

            	
              
              

              Type
                of Facility

            	
              
              

              No.
                of Units

              
              

            
	
              
              

              Canterbury
                Woods

            	
              
              

              100
                Garfield Avenue

              Attleboro,
                MA  02703

              
              

            	
              
              

              ALF

            	
              
              

              130

            
	
              
              

              Loyalton
                of Cape May

              
              

            	
              
              

              601
                Rte 9 South

              Cape
                May, NJ  08210

              
              

            	
              
              

              ALF

            	
              
              

              100

            
	
              
              

              Quail
                Ridge

            	
              
              

              5204
                Elgin Avenue

              Lubbock,
                TX  79413

              
              

            	
              
              

              ALZ

            	
              
              

              30

            
	
              
              

              Richland
                Gardens

            	
              
              

              770
                Gage Boulevard

              Richland,
                WA  99352

              
              

            	
              
              

              ALF

            	
              
              

              100

              
              

            
	
              
              

              Loyalton
                of Joliet

              
              

            	
              
              

              3320
                Executive Drive

              Joliet,
                IL  60431

              
              

            	
              
              

              ALF

            	
              
              

              101

            
	 	 	 	 
	
              
              

              Loyalton
                of Joliet

              (ALZ
                Facility) TO BE CONSTRUCTED

            	
              
              

              Joliet,
                IL

              
              

            	
              
              

              ALZ

            	
              
              

              38

            

    

    
      
         

      

      
        S-2-3

        
          

        

      

      
         

      

    

     

     

    SCHEDULE
      3

    

    SCHEDULE
      OF EXISTING LEASES

    

    

    

    
      	
              1.

            	
              That
                certain Master Lease dated as of March 31, 2004 by and among Nationwide
                Health Properties, Inc., a Maryland corporation, NH Texas Properties
                Limited Partnership, a Texas limited partnership, MLD Delaware Trust,
                a
                Delaware business trust, and MLD Properties, LLC, a Delaware limited
                liability company, collectively as landlord, and Emeritus Corporation,
                a
                Washington corporation, and ESC IV, LP, a Washington limited partnership,
                collectively as tenant, as subsequently amended from time to time.
                

            

    

    

    
      	
              2.

            	
              That
                certain Master Lease dated as of March 31, 2004 by and between NHP
                Senior
                Housing, Inc., a California corporation, as landlord, and Emeritus
                Corporation, a Washington corporation, as tenant.
                

            

    

    

    
      	
              3.

            	
              That
                certain Lease dated as of March 1, 2005 by and between BIP Sub I,
                Inc., a
                Delaware corporation, as landlord, and Emeritus Corporation, a Washington
                corporation, as tenant. 

            

    

    

    
      	
              4.

            	
              That
                certain Lease dated as of March 1, 2005 by and between QR Lubbock
                Texas
                Properties, L.P., a Texas limited partnership, as landlord, and ESC
                IV,
                LP, a Washington limited partnership (doing business in the State
                of Texas
                as Texas – ESC IV, L.P.), as tenant.

            

    

    

    
      	
              5.

            	
              That
                certain Lease dated as of October 1, 2004 by and between NHP Joliet,
                Inc.,
                an Illinois corporation, as landlord, and Emeritus Corporation, a
                Washington corporation, as tenant. 

            

    

    

    
      	
              6.

            	
              That
                certain Lease dated as of October 22, 2004 by and between NHP CM
                Investment, Inc., a Delaware corporation, as landlord, and Emeritus
                Corporation, a Washington corporation, as tenant.
                

            

    

    
      
         

      

      
        S-3-1

        
          

        

      

      
         

      

    

    SCHEDULE
      4

    

    SCHEDULE
      OF EXISTING DEBT

    

    
      	
              Facility

            	
              Lender

            	
              Interest
                Rate

            	
              Debt
                Balance (12/20/07)

            	
              Maturity

            	
              Prepayment
                Option

            	
              Prepayment
                Penalty1

            
	
              Quail
                Ridge

            	
              Wachovia

            	
              8.55%

            	
              $3,841,188

            	
              2010

            	
              Defeasance

            	
              $469,759

            
	
              Cape
                May

            	
              Collateral
                Mortgage Capital

            	
              6.29%

            	
              $6,866,540

            	
              2013

            	
              Yes

            	
              $611,850

            
	
              The
                Lakes and Canterbury

              Woods

            	
              GEMSA
                (A)

              
              

              GEMSA
                (B)

            	
              5.73%

              
              

              8.33%

            	
              $15,592,249

              
              

              $10,858,012

            	
              2013

              
              

              2013

            	
              Yes

              
              

              Yes

            	
              
              

              $918,552

              
              

              
              

            
	
              Folsom

            	
              GEMSA
                (A)

              
              

              GEMSA
                (B)

            	
              5.08%

              
              

              7.46%

            	
              $3,639,441

              
              

              $3,510,103

            	
              2010

              
              

              2010

            	
              Yes

              
              

              Yes

            	
              
              

              $175,376

              
              

            
	
              Richland
                Gardens

            	
              Wachovia

            	
              8.65%

            	
              $6,196,144

            	
              2010

            	
              Defeasance

            	
              $738,465

            
	
              Joliet

            	
              NorthMarq

              Capital

            	
              7.24%

            	
              $5,698,665

            	
              2012

            	
              Yes

            	
              $593,322

            
	
              Total

            	 	 	
              $56,202,342

            	 	 	
              $3,507,324

            

    

    

    

      

    

     

      1           The
        amounts set forth herein as the anticipated prepayment penalties and/or
        defeasance costs are based on the estimates of Buyer and or its
        consultants.  Seller makes no representations or warranties as to the
        accuracy of such amounts.

    

    
      
         

      

      
        S-4-1

        
          

        

      

      
         

      

    

    EXHIBIT
      A

    

    LEGAL
      DESCRIPTION OF REAL PROPERTY

    

    

     

    includes
      all improvements thereon and all appurtenances thereto.

     

    

     

    

     

    [SEE
      ATTACHED]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      B

    

    FORM
      OF LIMITED/SPECIAL WARRANTY DEEDS

    

    

    Prepared
      by and when recorded, return to:

    

    

    The
      Nathanson Group PLLC

    One
      Union
      Square

    600
      University Street

    Suite
      2000

    Seattle,
      Washington  98101

    Attention:  Randi
      Nathanson, Esq.

    

    

    SPECIAL
      WARRANTY DEED

    

    THIS
      SPECIAL WARRANTY DEED is made as of this _____ day of ___________, 2008, by
      and
      between [INSERT APPLICABLE
      SELLING ENTITY] (“Grantor”) whose post office address is 610 Newport
      Center Drive, Suite 1150, Newport Beach, CA  92660-6429, and [INSERT APPLICABLE BUYER
      ENTITY] (“Grantee”), whose post office address is 3131 Elliott Avenue,
      Suite 500, Seattle, WA  98121.

    

    Whenever
      used herein the terms "Grantor" and "Grantee" include the parties to this
      Instrument and the heirs, legal representatives and assigns of individuals,
      and
      the successors and assigns of trustees, partnerships and corporations.)

    

    W
      I T N E
      S S E T H:

    

    That
      Grantor, for and in consideration
      of the sum of Ten Dollars ($10.00) and other good and valuable consideration,
      the receipt and sufficiency of which is hereby acknowledged, hereby grants,
      bargains, sells, aliens, remises, releases, conveys and confirms unto Grantee,
      all of Grantor’s right, title and interest in and to that certain real property
      situate, lying and being in ___________ County, ___________ (the "Property"),
      and being more particularly described in Exhibit
      “A”
      attached hereto and made a part hereof.

    

    TOGETHER
      with all of the tenements,
      hereditaments and appurtenances thereto belonging or in anywise
      appertaining.

    

    TO
      HAVE AND TO HOLD the same in fee
      simple forever.

    

    AND
      Grantor hereby covenants with
      Grantee that Grantor is lawfully seized of the Property in fee simple; that
      Grantor has good right and lawful authority to sell and convey the Property,
      and
      hereby warrants the title to the Property and will defend the same against
      the
      lawful claims of all persons claiming by, through or under Grantor, but against
      no others.  This

    
      
         

      

      
        B-1

        
          

        

      

      
         

      

    

    conveyance
      is subject to those matters set forth on Exhibit
      "B" attached hereto and made a part hereof.

    

    IN
      WITNESS WHEREOF, Grantor has caused
      this instrument to be executed in its name by its corporate officer thereunto
      duly authorized, has caused its corporate seal to be hereunto affixed and has
      intended this instrument to be and become effective as of the day and year
      first
      above written.

    

    

    Signed,
      sealed and
      delivered                                                                                     
[INSERT APPLICABLE SELLING
      ENTITY]

    in
      the
      presence
      of:                                                                           
a __________________________

    

    

    

    Print
      Name:                                                                

    

    

    

    Print
      Name:                                                                

    

    

    STATE
      OF CALIFORNIA                                                                           
)

    )
      ss.

    COUNTY
      OF ORANGE                                                                
)

    

    

    On
      ______________________, 2008, before me, _______________________________,  Notary
      Public, personally appeared

    ,

    Name
      of
      Signer(s)

    who
      proved to me on the basis of satisfactory evidence to be the person(s) whose
      name(s) is/are subscribed to the within instrument and acknowledged to me that
      he/she/they executed the same in his/her/their authorized capacity(ies), and
      that by his/her/their signature(s) on the instrument the person(s), or the
      entity upon behalf of which the person(s) acted, executed the instrument.

    

    I
      certify
      under PENALTY OF PERJURY under the laws of the State of California that the
      foregoing paragraph is true and correct.

    

    WITNESS
      my hand and official seal.

    

    

    

    Signature                                                                                     
      (Seal)

    
      
         

      

      
        B-2

        
          

        

      

      
         

      

    

    EXHIBIT
      C

    

    FORM
      OF BILL OF SALE AND ASSIGNMENT

    

    

    In
      consideration of Ten Dollars ($10.00) and other good and valuable consideration,
      the receipt and sufficiency of which are hereby acknowledged, [INSERT APPLICABLE SELLING
      ENTITY] (“Seller”) does hereby
      grant,
      bargain, sell, convey and transfer to [INSERT APPLICABLE BUYER
      ENTITY] (“Buyer”), all of its
      right,
      title and interest, in and to, all Personal Property (as such term is defined
      in
      that certain Purchase and Sale Agreement dated as of February __, 2008 between
      Seller and its Affiliates and Buyer and its Affiliates (the “Purchase Agreement”)), which
      is located on that certain real property described on Exhibit A attached
      hereto.

    

    TO
      HAVE
      AND TO HOLD, all and singular, the Personal Property hereby sold, assigned,
      transferred and conveyed to Buyer, its successors and assigns, to and for its
      own use and benefit free and clear of all liens, claims and encumbrances other
      than those, if any, set forth on Schedule 1 attached hereto.  BUYER
      HEREBY ACKNOWLEDGES AND AGREES THAT ANY AND ALL PERSONAL PROPERTY BEING
      TRANSFERRED HEREUNDER IS ON AN AS-IS, WHERE-IS BASIS WITH ALL FAULTS AND
      CONDITIONS.  EXCEPT AS SET FORTH IN SECTION 8(a) OF THE PURCHASE
      AGREEMENT, WHICH ARE INCORPORATED HEREIN BY REFERENCE, SELLER MAKES NO EXPRESS
      OR IMPLIED WARRANTIES OR REPRESENTATIONS OF ANY KIND OR NATURE WHATSOEVER,
      INCLUDING ANY REPRESENTATIONS OR WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
      ANY PURPOSE.

    

    

    Dated
      this ____ day of _________, 2008.

    

    

    

    [INSERT
      SIGNATURE BLOCK FOR APPLICABLE
      SELLER ENTITY]

    

    
      
         

      

      
        C-1

        
          

        

      

      
         

      

    

    Schedule
      1 to Bill of Sale

    Permitted
      Encumbrances

    

     

    

    
      
         

      

      
        C-2

        
          

        

      

      
         

      

    

    EXHIBIT
      D

    

    FORM
      OF NONFOREIGN CERTIFICATION

    

    Section
      1445 of the Internal Revenue Code provides that a transferee of a U.S. real
      property interest must withhold tax if the transferor is a foreign
      person.  To inform the transferee that withholding of tax is not
      required upon the disposition of certain premises located in ___________,
      __________, as more particularly described in Exhibit A
      attached hereto, the undersigned hereby certifies the following on behalf of
       (“Seller”):

    

    1.           
      Seller is not a foreign person, foreign corporation, foreign partnership,
      foreign trust, or foreign estate (as those terms are defined in the Internal
      Revenue Code and Income Tax Regulations);

    

    2.           
      Seller is not a “disregarded entity” as defined in §1445-2(b)(2)(iii);

    

    3.           
      Seller’s employer identification number is _______________;

    

    4.           
      Seller’s office address is 610 Newport Center Drive, Suite 1150, Newport Beach,
      California 92660;

    

    5.           
      Seller understands that this certification may be disclosed to the Internal
      Revenue Service by transferee and that any false statement contained herein
      could be punished by fine, imprisonment, or both.

    

    Under
      penalties of perjury, I declare that I have examined this certification and
      to
      the best of my knowledge and belief it is true, correct and complete, and I
      further declare that I have authority to sign this document on behalf of Seller
      this ____ day of ____________, 2008.

    

    

    

    [INSERT
      SIGNATURE BLOCK FOR APPLICABLE
      SELLER ENTITY]

    
      
         

      

      
        D-1

        
          

        

      

      
         

      

    

    EXHIBIT
      E

    

    ALLOCATION
      OF OTHER CLOSING COSTS

    

    

    Allocation
      of Closing Costs
      for Facilities located in California:

    

    
      	
               

            	
              Seller
                shall pay the cost of: (i) recording the Deeds; (ii) all state and
                county
                transfer taxes due and payable as a result of the sale of the Real
                Property; and (iii) the standard owners coverage title insurance
                policy to
                be obtained by Buyer at Closing. 

            

    

    

    
      	
               

            	
              Buyer
                shall pay for: (i) the cost of recording any documents other than
                the
                Deeds and other documents necessary to cure title; (ii) any applicable
                mortgage taxes; (iii) any loan policy and extended owners title insurance
                coverage, including any endorsements required by Buyer and Buyer’s lender
                (excluding any endorsements Seller may agree to obtain during the
                Title
                Due Diligence Review Period in response to title objections); and
                (iv) any
                sales tax due and payable as a result of the sale of the Personal
                Property. 

            

    

    

    Allocation
      of Closing Costs
      for Facilities located in Florida:

    

    
      	
               

            	
              Seller
                shall pay the cost of: (i) all state and county transfer taxes due
                and
                payable as a result of the sale of the Real Property; and (ii) the
                standard owners coverage title insurance policy to be obtained by
                Buyer at
                Closing. 

            

    

    

    
      	
               

            	
              Buyer
                shall pay for: (i) the cost of recording the Deeds, any mortgage
                and any
                other documents necessary to cure title; (ii) any applicable mortgage
                taxes; (iii) any title search fees, loan policy and extended owners
                title
                insurance coverage, including any endorsements required by Buyer
                and
                Buyer’s lender (excluding any endorsements Seller may agree to obtain
                during the Title Due Diligence Review Period in response to title
                objections); and (iv) any sales tax due and payable as a result of
                the
                sale of the Personal Property. 

            

    

    

    Allocation
      of Closing Costs
      for Facilities located in Georgia:

    

    
      	
               

            	
              Seller
                shall pay the cost of: (i) documentary stamp taxes; (ii) all state
                and
                county transfer taxes due and payable as a result of the sale of
                the Real
                Property; and (iii) the standard owners coverage title insurance
                policy to
                be obtained by Buyer at Closing. 

            

    

    

    
      	
               

            	
              Buyer
                shall pay for: (i) the cost of recording the Deeds, any mortgage
                and any
                other documents necessary to cure title; (ii) any applicable mortgage
                taxes; (iii) any extended owners title insurance coverage, including
                any
                endorsements required by Buyer and Buyer’s lender (excluding any
                endorsements Seller may agree to obtain during the Title Due Diligence
                Review Period in response to title objections); and (iv) any sales
                tax due
                and payable as a result of the sale of the Personal Property.
                

            

    

    
      
         

      

      
        E-1

        
          

        

      

      
         

      

    

    Allocation
      of Closing Costs
      for Facilities located in Illinois:

    

    
      	
               

            	
              Seller
                shall pay the cost of: (i) all state and county transfer taxes due
                and
                payable as a result of the sale of the Real Property; (ii) the cost
                of
                recording documents necessary to cure title; and (iii) the standard
                owners
                coverage title insurance policy to be obtained by Buyer at Closing.
                

            

    

    

    
      	
               

            	
              Buyer
                shall pay for: (i) the cost of recording the Deeds and any mortgage;
                (ii)
                any applicable mortgage taxes; (iii) any loan policy and extended
                owners
                title insurance coverage, including any endorsements required by
                Buyer and
                Buyer’s lender (excluding any endorsements Seller may agree to obtain
                during the Title Due Diligence Review Period in response to title
                objections); and (iv) any sales tax due and payable as a result of
                the
                sale of the Personal Property. 

            

    

    

    Allocation
      of Closing Costs
      for Facilities located in Louisiana:

    

    
      	
               

            	
              Seller
                shall pay the cost of recording documents necessary to cure title.
                

            

    

    

    
      	
               

            	
              Buyer
                shall pay for: (i) the cost of recording the Deeds and any mortgage;
                (ii)
                all state and county transfer taxes (if any) and any applicable mortgage
                taxes; (iii) any title search fees and the cost of the owners title
                policy, loan policy and any extended owners title insurance coverage,
                including any endorsements required by Buyer and Buyer’s lender (excluding
                any endorsements Seller may agree to obtain during the Title Due
                Diligence
                Review Period in response to title objections); and (iv) any sales
                tax due
                and payable as a result of the sale of the Personal Property.
                

            

    

    

    Allocation
      of Closing Costs
      for Facilities located in Massachusetts:

    

    
      	
               

            	
              Seller
                shall pay the cost of: (i) all state and county transfer taxes due
                and
                payable as a result of the sale of the Real Property; and (ii) the
                cost of
                recording documents necessary to cure title.

            

    

    

    
      	
               

            	
              Buyer
                shall pay for: (i) the cost of recording the Deeds and any mortgage;
                (ii)
                any applicable mortgage taxes; (iii) any title search fees and the
                cost of
                the owners title policy, loan policy and any extended owners title
                insurance coverage, including any endorsements required by Buyer
                and
                Buyer’s lender (excluding any endorsements Seller may agree to obtain
                during the Title Due Diligence Review Period in response to title
                objections); and (iv) any sales tax due and payable as a result of
                the
                sale of the Personal Property. 

            

    

    

    Allocation
      of Closing Costs
      for Facilities located in Mississippi:

    

    
      	
               

            	
              Seller
                shall pay the cost of the standard owners coverage title insurance
                policy
                to be obtained by Buyer at Closing.

            

    

    
      
         

      

      
        E-2

        
          

        

      

      
         

      

    

    
      	
               

            	
              Buyer
                shall pay for: (i) the cost of recording the Deeds, any mortgage
                and any
                other documents necessary to cure title; (ii) all state and county
                transfer taxes (if any) and any applicable mortgage taxes; (iii)
                any loan
                policy and extended owners title insurance coverage, including any
                endorsements required by Buyer and Buyer’s lender (excluding any
                endorsements Seller may agree to obtain during the Title Due Diligence
                Review Period in response to title objections); and (iv) any sales
                tax due
                and payable as a result of the sale of the Personal Property.
                

            

    

    

    Allocation
      of Closing Costs
      for Facilities located in Missouri:

    

    
      	
               

            	
              Seller
                shall pay the cost of (i) the cost of recording documents necessary
                to
                cure title; and (ii) the standard owners coverage title insurance
                policy
                to be obtained by Buyer or its assignee at the Autumn Ridge Closing.
                

            

    

    

    
      	
               

            	
              Buyer
                shall pay for: (i) the cost of recording the Deeds and any mortgage;
                (ii)
                all state and county transfer taxes (if any) and any applicable mortgage
                taxes; (iii) any title search fees and the cost of the loan policy
                and any
                extended owners title insurance coverage, including any endorsements
                required by Buyer and Buyer’s lender (excluding any endorsements Seller
                may agree to obtain during the Title Due Diligence Review Period
                in
                response to title objections); and (iv) any sales tax due and payable
                as a
                result of the sale of the Personal Property.

            

    

    

    Allocation
      of Closing Costs
      for Facilities located in New Jersey:

    

    
      	
               

            	
              Seller
                shall pay the cost of: (i) all state and county transfer taxes due
                and
                payable as a result of the sale of the Real Property; and (ii) the
                cost of
                recording documents necessary to cure title.

            

    

    

    
      	
               

            	
              Buyer
                shall pay for: (i) the cost of recording the Deeds and any mortgage;
                (ii)
                any applicable mortgage taxes; (iii) any title search fees and the
                cost of
                the owners title policy, loan policy and any extended owners title
                insurance coverage, including any endorsements required by Buyer
                and
                Buyer’s lender (excluding any endorsements Seller may agree to obtain
                during the Title Due Diligence Review Period in response to title
                objections); and (iv) any sales tax due and payable as a result of
                the
                sale of the Personal Property. 

            

    

    

    Allocation
      of Closing Costs
      for Facilities located in North Carolina:

    

    
      	
               

            	
              Seller
                shall pay the cost of: (i) all state and county transfer taxes due
                and
                payable as a result of the sale of the Real Property; and (ii) the
                cost of
                recording documents necessary to cure title.

            

    

    

    
      	
               

            	
              Buyer
                shall pay for: (i) the cost of recording the Deeds and any mortgage;
                (ii)
                any applicable mortgage taxes; (iii) any title search fees and the
                cost of
                the owners title policy, loan policy and any extended owners title
                insurance coverage, including any

            

    

    
      
         

      

      
        E-3

        
          

        

      

      
         

      

    

    
      	
               

            	
              endorsements
                required by Buyer and Buyer’s lender (excluding any endorsements Seller
                may agree to obtain during the Title Due Diligence Review Period
                in
                response to title objections); and (iv) any sales tax due and payable
                as a
                result of the sale of the Personal Property.

            

    

    

    Allocation
      of Closing Costs
      for Facilities located in Texas:

    

    
      	
               

            	
              Seller
                shall pay the cost of: (i) all state and county transfer taxes (if
                any)
                due and payable as a result of the sale of the Real Property; (ii)
                the
                cost of recording documents necessary to cure title; and (iii) the
                standard owners coverage title insurance policy to be obtained by
                Buyer at
                Closing. 

            

    

    

    
      	
               

            	
              Buyer
                shall pay for: (i) the cost of recording the Deeds and any mortgage;
                (ii)
                any applicable mortgage taxes; (iii) any loan policy and extended
                owners
                title insurance coverage, including any endorsements required by
                Buyer and
                Buyer’s lender (excluding any endorsements Seller may agree to obtain
                during the Title Due Diligence Review Period in response to title
                objections); and (iv) any sales tax due and payable as a result of
                the
                sale of the Personal Property. 

            

    

    

    Allocation
      of Closing Costs
      for Facilities located in Washington:

    

    
      	
               

            	
              Seller
                shall pay the cost of: (i) all state and county transfer taxes due
                and
                payable as a result of the sale of the Real Property; (ii) the cost
                of
                recording documents necessary to cure title; and (iii) the standard
                owners
                coverage title insurance policy to be obtained by Buyer at Closing.
                

            

    

    

    
      	
               

            	
              Buyer
                shall pay for: (i) the cost of recording the Deeds and any mortgage;
                (ii)
                any applicable mortgage taxes; (iii) any loan policy and extended
                owners
                title insurance coverage, including any endorsements required by
                Buyer and
                Buyer’s lender (excluding any endorsements Seller may agree to obtain
                during the Title Due Diligence Review Period in response to title
                objections); and (iv) any sales tax due and payable as a result of
                the
                sale of the Personal Property. 

            

    

    

    Allocation
      of Closing Costs
      for Facilities located in West Virginia:

    

    
      	
               

            	
              Seller
                shall pay the cost of: (i) all state and county transfer taxes due
                and
                payable as a result of the sale of the Real Property; and (ii) the
                cost of
                recording documents necessary to cure title.

            

    

    

    
      	
               

            	
              Buyer
                shall pay for: (i) the cost of recording the Deeds and any mortgage;
                (ii)
                any applicable mortgage taxes; (iii) any title search fees and the
                cost of
                the owners title policy, loan policy and any extended owners title
                insurance coverage, including any endorsements required by Buyer
                and
                Buyer’s lender (excluding any endorsements Seller may agree to obtain
                during the Title Due Diligence Review Period in response to title
                

            

    

    
      
         

      

      
        E-4

        
          

        

      

      
         

      

    

    
      	
               

            	
              objections);
                and (iv) any sales tax due and payable as a result of the sale of
                the
                Personal Property. 

            

    

    

    
      
         

      

      
        E-5<PAGE>

EXHIBIT 4.3

                          REGISTRATION RIGHTS AGREEMENT

         This Registration Rights Agreement is made and entered into effective
as of November 15, 2006. On the Closing Date, the Company will issue Units to
the Subscribers upon the terms set forth in the Subscription Agreement. As an
inducement to the Subscribers to enter into the Subscription Agreement, the
Company agrees with each Subscriber, and with D & D, Octagon, ECS, and the
holders of the Lender Warrants as follows:

         1. Definitions. As used in this Agreement (including the preamble
above), the following defined terms shall have the following meanings:

         "AFFILIATE" of any specified person means any other person, which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

         "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in Los Angeles,
California are authorized or obligated by law or executive order to close.

         "CLOSING" has the meaning set forth in the Subscription Agreement.

         "CLOSING DATE" has the meaning set forth in the Subscription Agreement.

         "COMMISSION" means the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Exchange
Act or the Securities Act, whichever is the relevant statute for the particular
purpose.

         "COMMON STOCK" means the Company's common stock, par value $0.0001 per
share; and (ii) any other securities into which or for which any of the
securities described in the preceding clause (i) may be converted or exchanged
pursuant to a plan of recapitalization, reorganization, merger, sale of assets
or otherwise.

         "COMPANY" means Pacific Energy Resources Ltd., a Delaware corporation.

         "D & D" means D & D Securities Company.

         "D & D WARRANT SHARES" means the shares of Common Stock issuable upon
exercise of the placement agent's warrant to be issued to D & D on the Closing
Date.

         "ECS" means Energy Capital Solutions, LLC.

                                       1

<page>

         "ECS WARRANT SHARES" means the shares of Common Stock issuable upon
exercise of the placement agent's warrant to be issued to ECS on the Closing
Date.
         "EFFECTIVENESS DEADLINE DATE" means the 180th trading day following the
Closing Date; provided, that, if the Commission reviews and has comments on the
filed Registration Statement that would require the filing of a pre-effective
amendment thereto with the Commission, then the Effectiveness Deadline Date
shall be the 210th trading day following the Closing Date.

         "EFFECTIVENESS PERIOD" has the meaning assigned thereto in SECTION
2(b).

         "EFFECTIVE TIME" means the date and time on which the Commission
declares the Registration Statement effective or on which the Registration
Statement otherwise becomes effective.

         "ELECTING HOLDER" has the meaning assigned thereto in SECTION 3(a).

         "ENDING DATE" has the meaning assigned thereto in SECTION 2(c).

         "EVENT" has the meaning assigned thereto in SECTION 2(c).

         "EVENT DATE" has the meaning assigned thereto in SECTION 2(c).

         "EXCHANGE ACT" means the United States Securities Exchange Act of 1934,
as amended.

         "FILING DEADLINE DATE" means the 120th trading day following the
Closing Date.

         "HOLDER" means, when used with respect to any Security, the record
holder of such Security.

         "LENDER WARRANT SHARES" means the shares of Common Stock issuable to
upon exercise of the lender warrants to be issued to various lenders or their
affiliates on the Closing Date ("LENDER WARRANTS") pursuant to the terms of the
Credit Agreement among J. Aron and Company, the Company and certain of its
subsidiaries.

         "OCTAGON" means Octagon Capital Corporation.

         "OCTAGON WARRANT SHARES" means the shares of Common Stock issuable upon
exercise of the placement agent's warrant to be issued to Octagon on the Closing
Date.

         "PERSON" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.

                                       2

<page>

         "PROSPECTUS" means the prospectus (including, without limitation, any
preliminary prospectus, any final prospectus and any prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A or Rule 430B under the
Securities Act) included in the Registration Statement, as amended or
supplemented by any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by the
Registration Statement and by all other amendments and supplements to such
prospectus, including all material incorporated by reference in such prospectus
and all documents filed after the date of such prospectus by the Company under
the Exchange Act and incorporated by reference therein.

         "QUESTIONNAIRE" means a Selling Security Holder Questionnaire,
substantially in the form of EXHIBIT A attached hereto, relating to the
Securities.

         "REGISTRABLE SECURITIES" means 110% of the shares of Common Stock
issued to Subscribers on the Closing Date, 110% of the Underlying Warrant
Shares, 100% of the D & D Warrant Shares, 100% of the Octagon Warrant Shares,
100% of the ECS Warrant Shares, 100% of the Lender Warrant Shares, and any
securities issued with respect to any of the foregoing as a stock dividend or in
connection with a stock split or recapitalization occurring prior to the filing
of the Registration Statement, or, if occurring following the filing of the
Registration Statement, as contemplated by Rule 416 of the Securities Act;
provided, however, that any such securities shall cease to be Registrable
Securities when they are no longer Restricted Securities.

         "REGISTRATION" means a registration effected pursuant to SECTION 2.

         "REGISTRATION STATEMENT" means a registration statement filed under the
Securities Act providing for the registration of, and the sale on a continuous
or delayed basis by the holders of, all of the Registrable Securities pursuant
to Rule 415 under the Securities Act and/or any similar rule that may be adopted
by the Commission, filed by the Company pursuant to the provisions of SECTION 2,
including the Prospectus contained therein, any amendments and supplements to
such registration statement, including post-effective amendments, and all
exhibits and all material incorporated by reference in such registration
statement.

         "RESTRICTED SECURITIES" means any Securities except any such Securities
that (i) have been registered pursuant to an effective registration statement
under the Securities Act and sold in a manner contemplated by the Registration
Statement, (ii) have been transferred in compliance with Rule 144 under the
Securities Act (or any successor provision thereto) or are transferable pursuant
to paragraph (k) of such Rule 144 (or any successor provision thereto), or (iii)
have otherwise been transferred and new Securities not subject to transfer
restrictions under the Securities Act have been delivered by or on behalf of the
Company.

                                       3

<page>

         "RULES AND REGULATIONS" means the published rules and regulations of
the Commission promulgated under the Securities Act or the Exchange Act, as in
effect at any relevant time.

         "SECURITIES" means the shares of Common Stock issued pursuant to the
Subscription Agreement and the shares of Common Stock issued or issuable upon
exercise of Warrants.

         "SECURITIES ACT" means the United States Securities Act of 1933, as
amended.

         "SUBSCRIBERS" means the Subscribers named on the signature pages of the
Subscription Agreement and this Agreement.

         "SUBSCRIPTION AGREEMENT" means the Pacific Energy Resources Ltd.
Subscription Agreement by and among the Company and the Subscribers.

         "TRADING DAY" means a day on which the Common Stock trades on the
Toronto Stock Exchange or, if the Common Stock does not so trade on the day in
question, then trading day shall mean Business Day.

         "UNDERLYING WARRANT SHARES" means shares of Common Stock issued or
issuable under Warrants issued by the Company to Subscribers on the Closing
Date.

         "UNITS" means one share of Common Stock and one-half of one Warrant.

         "WARRANTS" means Common Stock purchase warrants comprising part of the
Units issued pursuant to the Subscription Agreement, with each whole Warrant
being exercisable into one share of Common Stock.

         2. REGISTRATION.

         (a) The Company shall (i) file with the Commission on or prior to the
Filing Deadline Date a Registration Statement covering the offer and sale of the
Registrable Securities, and (ii) use its reasonable best efforts to cause such
Registration Statement to be declared effective under the Securities Act on or
prior to the Effectiveness Deadline Date. The Registration Statement shall be on
Form S-1 or Form SB-2 (except if the Company is not then eligible to register
for resale the Registrable Securities on Form S-1 or Form SB-2, in which case
such registration shall be on another appropriate form for such purpose) and
shall contain (except if otherwise requested or required pursuant to comments
received from the Commission or other governmental or regulatory authority upon
a review of such Registration Statement) a "Plan of Distribution" substantially
in the form attached hereto as ANNEX A.

         (b) The Company shall use its reasonable best efforts to prepare and
file with the Commission such amendments and supplements to the Registration
Statement and Prospectus used in connection therewith and take all such other
actions to keep the Registration Statement continuously effective in order to
permit the Prospectus to be usable by holders for resales of Registrable

                                       4

<page>

Securities from the Effective Time until the earliest to occur of (A) the date
which is 24 months after the Closing Date, (B) the date upon which all
Registrable Securities registered under the Registration Statement have been
sold thereunder, and (C) the date upon which all of the Securities cease to be
Restricted Securities (such period being referred to herein as the
"EFFECTIVENESS PERIOD").

         (c) If (i) such Registration Statement covering the Registrable
Securities is not filed with the Commission on or prior to the Filing Deadline
Date, (ii) such Registration Statement covering the Registrable Securities is
filed with but is not declared effective by the Commission on or prior to the
Effectiveness Deadline Date or (iii) after the Effective Time, such Registration
Statement ceases for any reason to be effective or any Prospectus thereunder
ceases to be usable with respect to any Registrable Securities it is required to
cover at any time prior to the expiration of the Effectiveness Period for more
than an aggregate of 45 trading days (which need not be consecutive), excluding
(x) grace periods of not more than 15 trading days each during which a
post-effective amendment is to be filed to include in the Registration Statement
material information previously not included in the Registration Statement, or
to correct a misstatement of a material fact set forth in the Registration
Statement, in each case due to facts or circumstances previously unknown to the
Company and arising subsequent to the effectiveness of the Registration
Statement or any post-effective amendment thereto, or to otherwise provide
information necessary to comply with Section 10(a)(3) of the Securities Act
regarding the age of financial statements included therein, provided that the
Company diligently works to have any such post-effective amendment prepared,
filed and declared effective by the Commission as soon as practicable and (y)
grace periods of not more than five trading days each for the preparation and
filing with the Commission of any prospectus supplement (any such failure or
breach described in clauses (i), (ii) or (iii) above being referred to as an
"EVENT," and for purposes of clauses (i) or (ii) the date on which such Event
occurs, or for purposes of clause (iii) the date which such 45 trading
day-period is exceeded, being referred to as "EVENT DATE"), then following each
such Event Date, the Company shall become obligated to pay to each Electing
Holder, as liquidated damages and not as a penalty, a number of shares of Common
Stock equal to 1.0% of the number of shares of Common Stock that were issued to
such Electing Holder on the Closing Date and are still owned by such Electing
Holder on an Ending Date, for each 30-day period (pro rated on a daily pro-rata
basis for periods shorter than 30 days) elapsed between the Event Date and the
earlier of: (A) the date that the applicable Event is cured and (B) the date
that the Effectiveness Period expires. No such payments shall be payable in
respect of any Underlying Warrant Shares or securities that are not Registrable
Securities. Liquidated damages payments payable by the Company under this
SECTION 2(c) shall be issued by the Company to each Electing Holder not later
than seven Business Days following the end of each 30-day period or portion
thereof prior to the cure of an Event (each such end date being an "ENDING
DATE"). Notwithstanding anything to the contrary contained herein or in the
Subscription Agreement or any related document or agreement, the aggregate
number of shares of Common Stock issued or issuable to any holder as liquidated
damages under this SECTION 2(c) shall not exceed 10% of the aggregate number of
shares of Common Stock issued to such holder on the Closing Date pursuant to the
Subscription Agreement.

                                       5

<page>

         3. REGISTRATION PROCEDURES. In connection with the Registration
Statement, the following provisions shall apply:

         (a) No holder shall be entitled to be named as a selling security
holder in the Registration Statement as of the Effective Time, and no holder
shall be entitled to use the Prospectus for resales of Registrable Securities at
any time, unless such holder has returned a completed and signed Questionnaire
to the Company by the deadline for response set forth therein; provided,
however, holders of Registrable Securities shall have at least ten calendar days
from the date on which the Questionnaire is first sent to such holders to return
a completed and signed Questionnaire to the Company. The term "ELECTING HOLDER"
means any holder of Registrable Securities that has returned a completed and
signed Questionnaire to the Company in accordance with this SECTION 3(a). The
information provided by each Electing Holder in the signed Questionnaire shall
be for use in the Registration Statement.

         (b) The Company shall furnish to each Electing Holder prior to the
initial filing of the Registration Statement, a draft of such Registration
Statement, and shall furnish to such holders prior to the filing of any
amendment or supplement to the Prospectus that contains material revisions to
the selling security holder information, a draft of such amendment or supplement
and shall reflect in each such document when so filed with the Commission such
comments as such holders reasonably may propose with regard to the selling
security holder information; provided, however, that the Company shall make the
final decision as to the form and content of each such document.

         (c) Each Electing Holder shall promptly advise the Company in writing
if changes in the Registration Statement or the Prospectus are required in order
that disclosures made in the Registration Statement and Prospectus based upon
information previously provided by the Electing Holder for use in the
Registration Statement and the Prospectus do not contain an untrue statement of
a material fact and do not omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they are made) not
misleading. The Company shall promptly advise each Electing Holder in writing
(which notice pursuant to clauses (iii) through (v) hereof shall be accompanied
by an instruction to suspend the use of the Prospectus until the requisite
changes have been made):

         (i) when the Registration Statement and any amendment thereto has been
filed with the Commission and when the Registration Statement or any
post-effective amendment thereto has become effective;

         (ii) when the Commission notifies the Company whether there will be a
"review" of the Registration Statement and whenever the Commission comments in
writing on the selling security holder information or Plan of Distribution in
the Registration Statement (the Company shall provide true and complete copies
thereof and all written responses thereto to each of the Electing Holders that
pertain to such holders as a selling security holder or to the Plan of
Distribution, but not information which the Company believes would constitute
material and non-public information);

                                       6

<page>

         (iii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for such purpose;

         (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the securities included in the
Registration Statement for sale in any jurisdiction or the initiation of any
proceeding for such purpose (including, but not limited to, an order issued by
any state securities commission or other regulatory authority suspending the
qualification, or exemption from qualification, of the sale of the Registrable
Securities under state securities laws); and

         (v) if changes in the Registration Statement or the Prospectus are
required in order that the Registration Statement and Prospectus do not contain
an untrue statement of a material fact and do not omit to state a material fact
required to be stated therein or necessary to make the statements therein (in
the case of the Prospectus, in light of the circumstances under which they were
made) not misleading.

         (d) The Company shall promptly furnish to each requesting Electing
Holder, without charge, at least one copy of the Registration Statement and all
post-effective amendments thereto, including financial statements and schedules,
and, if such holder so requests in writing, all reports, other documents and
exhibits that are filed with or incorporated by reference in the Registration
Statement.

         (e) The Company shall, during the Effectiveness Period, promptly
deliver to each Electing Holder, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) and any amendment or
supplement thereto as such Electing Holder may reasonably request; and the
Company consents (except during the continuance of any event described in
clauses (iii) through (v) of SECTION 3(c) or any pending corporate development
described in SECTION 3(h)) to the use of the Prospectus and any amendment or
supplement thereto by each of the Electing Holders in connection with the
offering and sale of the Registrable Securities covered by the Prospectus and
any amendment or supplement thereto during the Effectiveness Period.

         (f) Prior to any offering of Registrable Securities pursuant to the
Registration Statement, the Company shall, unless appropriate exemptions are
available, use its reasonable best efforts to (i) register or qualify the
registration or qualification of such Registrable Securities for offer and sale
under the securities or "blue sky" laws of such jurisdictions within the United
States as any Electing Holder may reasonably request, (ii) keep such
registrations or qualifications in effect and comply with such laws so as to
permit the continuance of offers and sales in such jurisdictions for so long
during the Effectiveness Period as may be necessary to enable any Electing
Holder to complete its distribution of Registrable Securities pursuant to the
Registration Statement, and (iii) take any and all other actions necessary or

                                       7

<page>

advisable to enable the disposition in such jurisdictions of such Registrable
Securities; provided, however, that in no event shall the Company be obligated
to (A) qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to so qualify but for this
SECTION 3(f), or (B) file any general consent to service of process in any
jurisdiction where it is not then so subject.

         (g) The Company shall cooperate with the Electing Holders to facilitate
the timely preparation and delivery of certificates representing Registrable
Securities to be sold pursuant to the Registration Statement, which certificates
shall meet the requirements of any securities exchange on which the Company's
Common Stock is then listed and which certificates shall be in such permitted
denominations as Electing Holders may request in connection with the sale of
Registrable Securities pursuant to the Registration Statement.

         (h) Upon the occurrence of any fact or event contemplated by clauses
(iii) through (v) of SECTION 3(c), the Company shall (subject to the next
sentence) promptly prepare a post-effective amendment or supplement to the
Registration Statement or the Prospectus, or any document incorporated therein
by reference, or file any other required document so that, as thereafter
delivered to purchasers of the Registrable Securities included therein, the
Registration Statement or Prospectus will not include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading and shall comply with the Securities Act, state securities
laws and any other applicable laws. If the Company notifies the Electing Holders
in accordance with clauses (iii) through (v) of SECTION 3(c) to suspend the use
of the Prospectus until the requisite changes to the Prospectus have been made,
then each Electing Holder shall suspend the use of the Prospectus until (i) such
Electing Holder has received copies of the supplemented or amended Prospectus
contemplated by the preceding sentence, or (ii) such Electing Holder is advised
in writing by the Company that the use of the Prospectus may be resumed and has
received copies of any additional or supplemental filings that are incorporated
by reference in the Prospectus. Notwithstanding the foregoing, the Company shall
not be required to amend or supplement the Registration Statement, any related
Prospectus or any document incorporated by reference therein for a period not to
exceed 30 consecutive days (or 60 days in the aggregate in any calendar year) if
there occurs or exists any pending corporate development the disclosure of which
would, in the good faith judgment of the Board of Directors of the Company, be
harmful to the business, operations, prospects, or condition (financial or
otherwise) of the Company and its subsidiaries, taken as a whole.

         (i) The Company shall cause all Registrable Securities registered
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed.

         (j) The Company shall provide transfer agent and registrar for all
Registrable Securities registered pursuant to the Registration Statement and a
CUSIP number for all such Registrable Securities, in each case not later than
the effective date of such registration.

                                       8

<page>

         (k) The Company shall use commercially reasonable efforts to comply
with all applicable rules and regulations of the Commission.

         (l) The Company shall use commercially reasonable efforts to enable the
holders of the Registrable Securities to sell the Registrable Securities under
Rule 144 of the Securities Act.

         (m) The Company shall advise each Electing Holder when such Electing
Holder provides information to the Company under this Section 3 that such
Electing Holder must provide the information in a written statement signed by or
on behalf of such Electing Holder that expressly states that such information is
for use in the subject Registration Statement, Prospectus or amendment or
supplement thereto. The Company reserves the right not to rely on information
provided by an Electing Holder if such information is not contained in a written
statement meeting the foregoing requirements.

         4. REGISTRATION EXPENSES. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by it whether or not any Registration Statement is filed or becomes effective
and whether or not any securities are issued or sold pursuant to any
Registration Statement. Notwithstanding the foregoing or anything in this
Agreement to the contrary, each holder of the Registrable Securities being
registered shall pay all commissions and underwriting discounts with respect to
any Registrable Securities sold by it and the fees and disbursements of any
counsel or other advisors or experts retained by such holders (severally or
jointly).

         5. Indemnification and Contribution.

         (a) INDEMNIFICATION BY THE COMPANY. Upon the registration of the
Registrable Securities pursuant to SECTION 2, the Company shall indemnify and
hold harmless each Electing Holder and its affiliates and each underwriter,
selling agent or other securities professional, if any, which facilitates the
disposition of Registrable Securities, and each of their respective officers and
directors and each person who controls such Electing Holder, underwriter,
selling agent or other securities professional within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act (each such person being
sometimes referred to as an "Indemnified Person") against any losses, claims,
damages, liabilities or expenses, joint or several, to which such Indemnified
Person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
arise out of or are based upon an untrue statement of a material fact contained
in any Registration Statement or any Prospectus contained therein or furnished
by the Company to any Indemnified Person, or any amendment or supplement
thereto, or arise out of or are based upon the omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading
or any violation by the Company of any rule or regulation promulgated under the
Securities Act, the Exchange Act or any state securities laws applicable to the

                                       9

<page>

Company in connection with the registration hereunder, and the Company hereby
agrees to reimburse such Indemnified Person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable to any such Indemnified Person in any such case to
the extent that any such loss, claim, damage, liability or expense arises out of
or is based upon an untrue statement or omission made in such Registration
Statement or Prospectus, or amendment or supplement thereto, in reliance upon
and in conformity with written information furnished to the Company by an
instrument duly executed by or on behalf of such Indemnified Person expressly
for use therein; provided, further, however, that the foregoing indemnity
agreement with respect to any Prospectus shall not inure to the benefit of any
Indemnified Person who failed to deliver a final Prospectus or an amendment or
supplement thereto (provided by the Company to the several Indemnified Persons
in the requisite quantity and on a timely basis to permit proper delivery on or
prior to the relevant transaction date) to the person asserting any losses,
claims, damages and liabilities and judgments caused by any untrue statement of
a material fact contained in any Prospectus, or caused by any omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, if such material misstatement or omission was cured in such
final Prospectus or amendment or supplement thereto. For the purposes of this
subsection (a), the Company may rely on written information furnished to the
Company by an Indemnified Person via electronic mail if such electronic mail is
followed within five (5) days thereof by a written instrument meeting the
requirements set forth in the foregoing sentence.

         (b) INDEMNIFICATION BY THE HOLDERS. Each Electing Holder agrees, as a
consequence of the inclusion of any of such holder's Registrable Securities in
any Registration Statement, severally and not jointly, to (i) indemnify and hold
harmless the Company, its directors, its officers who sign such Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any losses, claims, damages or liabilities to which the Company or such
other persons may become subject, under the Securities Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement of a material fact contained
in such Registration Statement or Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or omission was made in reliance upon and in conformity
with written information furnished to the Company by an instrument duly executed
by or on behalf of such holder and stated to be expressly for use therein and
(ii) reimburse the Company and its directors and its officers who sign such
Registration Statement for any legal or other

                                       10

<page>

expenses reasonably incurred by the Company and such directors and officers in
connection with investigating or defending any such action or claim as such
expenses are incurred. For the purposes of this subsection (b), the Company may
rely on written information furnished to the Company by an Indemnified Person
via electronic mail if such electronic mail is followed within five (5) days
thereof by a written instrument meeting the requirements set forth in the
foregoing sentence. The liability of each Electing Holder shall be in proportion
to and limited to the net amount received by such Electing Holder from the sale
of Registrable Securities pursuant to such Registration Statement.

         (c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified
party under this SECTION 5 of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this SECTION
5, deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in and to
assume the defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party shall have the right to retain its
own counsel, with the reasonably incurred fees and expenses of one such counsel
for all indemnified parties to be reimbursed by the indemnifying party if
representation of any such indemnified party by the counsel retained by the
indemnifying party would be inappropriate under applicable standards of
professional conduct due to actual or potential conflicting interests between
such indemnified party and any other party represented by such counsel in such
proceeding. Except as specified in the immediately preceding sentence, after
notice from an indemnifying party to an indemnified party of such indemnifying
party's election to assume the defense pursuant to the immediately preceding
sentence, such indemnifying party shall not be liable to the indemnified party
under this SECTION 5 for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of liability to the indemnified party under this
SECTION 5 with respect to such action, except to the extent the indemnifying
party is materially prejudiced as a result of not receiving such notice, and
shall not relieve it of any liability that it may have to any indemnified party
otherwise than under this SECTION 5 or with respect to any other action except
to the extent the indemnifying party is materially prejudiced as a result of not
receiving such notice. No indemnifying party shall, without the written consent
of the indemnified party, which consent will not be unreasonably withheld,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to, or an admission of, fault,
culpability or a failure to act, by or on behalf of any indemnified party.

                                       11

<page>

         (d) Contribution. If the indemnification provided for in this Section 5
is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) of this SECTION 5 in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue statement of a material fact or omission to state a material
fact relates to information about such indemnifying party or indemnified party
supplied by such indemnifying party or by such indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The parties hereto agree that it
would not be just and equitable if contribution pursuant to this SECTION 5(d)
were determined by PRO RATA allocation (even if the Electing Holders or any
underwriters, selling agents or other securities professionals or all of them
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this SECTION 5(d). In no event shall the liability of any Electing Holder
be greater in amount than the amount of net proceeds received by such Electing
Holder upon such sale or the amount for which such indemnifying party would have
been obligated to pay by way of indemnification if the indemnification provided
for under this SECTION 5 had been available under the circumstances. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above shall
be deemed to include any legal or other fees or expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Electing Holders and any underwriters,
selling agents or other securities professionals in this SECTION 5(d) to
contribute shall be several in proportion to the percentage of Registrable
Securities registered or underwritten, as the case may be, by them and not
joint.

         (e) The obligations of the Company under this SECTION 5 shall be in
addition to any liability that the Company may otherwise have to any Indemnified
Person and the obligations of any Indemnified Person under this SECTION 5 shall
be in addition to any liability that such Indemnified Person may otherwise have
to the Company. The remedies provided in this SECTION 5 are not exclusive and
shall not limit any rights or remedies that may otherwise be available to an
indemnified party at law or in equity.

         6. MISCELLANEOUS.

                                       12

<page>

         (a) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless the Company has obtained the
written consent of Electing Holders holding not less than 50.1% of the
Registrable Securities then held by the Electing Holders at such time. In
addition, no amendment to this Agreement that adversely discriminates against an
Electing Holder shall be effective as to such Electing Holder without such
Electing Holder's written consent.

         (b) NOTICES. All notices and other communications required or permitted
to be provided to a party hereunder shall be in writing and shall be deemed
given and effective on the earliest of (i) the date of transmission, if such
notice or communication is delivered via facsimile (provided the sender receives
a machine-generated confirmation of successful transmission) or e-mail prior to
5:00 p.m. (Los Angeles, California time) on a trading day, (ii) the next trading
day after the date of transmission, if such notice or communication is delivered
via facsimile or e-mail on a day that is not a trading day or later than 4:59
p.m. (Los Angeles, California time) on any trading day, (iii) the trading day
following the date of mailing, if sent overnight by an overnight courier service
nationally recognized in the United States, or (iv) upon actual receipt by the
party to whom such notice is required to be given. The address for such notices
and communications for a party shall be as set forth on the signature pages to
this Agreement or such other address as may be designated in writing hereafter,
in the same manner, by such party.

         (c) PARTIES IN INTEREST. The parties to this Agreement intend that all
holders of Registrable Securities shall be entitled to receive the benefits of
this Agreement and that any Electing Holder shall be bound by the terms and
provisions of this Agreement by reason of such election with respect to the
Registrable Securities that are included in a Registration Statement. All the
terms and provisions of this Agreement shall be binding upon, shall inure to the
benefit of and shall be enforceable by the respective successors and assigns of
the parties hereto and any holder from time to time of the Registrable
Securities to the aforesaid extent. If any transferee of any holder of
Registrable Securities shall acquire Registrable Securities, in any manner,
whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be entitled
to receive the benefits of and, if an Electing Holder, be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement to the aforesaid extent.

         (d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

         (e) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning, construction
or interpretation hereof.

                                       13

<page>

         (f) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without giving effect to
provisions relating to conflicts of law to the extent the application of the
laws of another jurisdiction would be required thereby.

         (g) SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired or affected thereby, it being
intended that all of the rights and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.

         (h) Survival. The respective indemnities, agreements, representations,
warranties and other provisions set forth in this Agreement or made pursuant
hereto shall remain in full force and effect, regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of any
Electing Holder, any director, officer or partner of such holder, any agent or
underwriter, any director, officer or partner of such agent or underwriter, or
any controlling person of any of the foregoing, and shall survive the transfer
and registration of the Registrable Securities of such holder.

         (i) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein, with respect to
the registration rights granted with respect to the Registrable Securities. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.

         (j) TERMINATION ON FAILURE TO TIMELY FULFILL ESCROW RELEASE CONDITION.
This Agreement shall terminate and be of no further force or effect if the
Closing has not occurred by the close of business on the Closing Date.

                  (Remainder of page intentionally left blank)

                                       14

<PAGE>

                  REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE

         IN WITNESS WHEREOF, the Company has caused this Registration Rights
Agreement to be duly executed by its authorized signatory as of the date first
indicated above.

                                           Very truly yours,

                                           PACIFIC ENERGY RESOURCES LTD.
                                           111 West Ocean Boulevard, Suite 1240
                                           Long Beach, CA 90802

                                           By:  ____________________________
Name: Darren Katic
Title: President
With a copy to:

Rutan & Tucker, LLP
611 Anton Blvd., 14th Floor
Costa Mesa, California  92626
Fax:  (714) 546-9035
Attn: Gregg Amber, Esq.

<PAGE>

                  REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE

Please confirm by signing in the space provided below that the foregoing
correctly sets forth the agreement between the Company and you.

Accepted and Agreed

_________________________________________________________________
Name (Print)

By:         _____________________________________________
Name:
Title:

Date:       _____________________________________________

Address:    _____________________________________________

            _____________________________________________

            _____________________________________________

Telephone:  _____________________________________________

Facsimile:  _____________________________________________

E-mail:    _____________________________________________

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