Document:

ex10_6702.htm

    
      

    

    
      
        Exhibit
          10.67.02

         

        AMENDED
          AND RESTATED PURCHASE AND SALE AGREEMENT

      

      AND

      JOINT
        ESCROW INSTRUCTIONS

      

      

      By
        and
        Between

      

      HEALTH
        CARE PROPERTY INVESTORS, INC.,

      a
        Maryland corporation,

      

      HCPI
        TRUST,

      a
        Maryland real estate trust,

      

      EMERITUS
        REALTY V, LLC,

      a
        Delaware limited liability company,

      

      ESC-LA
        CASA GRANDE, LLC,

      a
        Delaware limited liability company,

      

      and

      

      TEXAS
        HCP
        HOLDING, L.P.,

      a
        Delaware limited partnership, and

      

      each
        a
“Seller,” and collectively, as “Sellers”

       

      and

      

      EMERITUS
        CORPORATION,

      a
        Washington corporation,

      

      as
        “Buyer”

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      TABLE
        OF CONTENTS

       

      
        Page

         

        
          	
                  1.

                	
                  DEFINITIONS

                	
                  2

                
	 	 	 
	
                  2.

                	
                  SALE
                    OF THE PROPERTIES

                	
                  9

                
	 	 	 
	
                  3.

                	
                  ESCROW

                	
                  9

                
	 	 	 
	
                  4.

                	
                  PURCHASE
                    PRICE; ALLOCATION OF PURCHASE PRICE

                	
                  9

                
	 	 	 
	
                  5.

                	
                  CONDITIONS
                    TO CLOSING; AS IS PURCHASE

                	
                  11

                
	 	 	 
	
                  6.

                	
                  CLOSING
                    OF ESCROW

                	
                  13

                
	 	 	 
	
                  7.

                	
                  TERMINATION

                	
                  20

                
	 	 	 
	
                  8.

                	
                  REPRESENTATIONS
                    AND WARRANTIES

                	
                  22

                
	 	 	 
	
                  9.

                	
                  CERTAIN
                    EVENTS PRIOR TO CLOSING

                	
                  25

                
	 	 	 
	
                  10.

                	
                  POST-CLOSING
                    MATTERS

                	
                  25

                
	 	 	 
	
                  11.

                	
                  BROKERS

                	
                  26

                
	 	 	 
	
                  12.

                	
                  MISCELLANEOUS
                    PROVISIONS

                	
                  26

                

        

        

        EXHIBITS

        
          	
                  A-1

                	
                  Description
                    of Emeritus Master Lease

                
	 	 
	
                  A-2

                	
                  Description
                    of Summerville Master Lease

                
	 	 
	
                  A-3

                	
                  Description
                    of Painted Post Lease

                
	 	 
	
                  B

                	
                  Escrow
                    General Provisions

                
	 	 
	
                  C

                	
                  [RESERVED]

                
	 	 
	
                  D

                	
                  Form
                    of Bill of Sale

                
	 	 
	
                  E

                	
                  Form
                    of Summerville Lease Amendment

                
	 	 
	
                  F

                	
                  Form
                    of Release of Claims

                
	 	 
	
                  G

                	
                  List
                    of Sellers, Nominees, Properties/Facilities and Purchase Price
                    Allocation

                
	 	 
	
                  H

                	
                  Form
                    of Emeritus Master Lease Termination

                
	 	 
	
                  I

                	
                  Form
                    of Painted Post Lease Termination

                
	 	 
	
                  J

                	
                  Form
                    of New Emeritus Guaranty of the Summerville Master
                    Lease

                
	 	 
	
                  K

                	
                  Form
                    of New Emeritus Guaranty of the Summerville
                    Loan

                

        

        

        SCHEDULE

        
          	
                  1

                	
                  Related
                    Purchase Agreements

                

        

         

        
          
            
            

          

          
            i

            
              

            

          

          
            
            

          

        

        AMENDED
          AND RESTATED PURCHASE AND SALE AGREEMENT

        AND
          JOINT ESCROW INSTRUCTIONS

         

        THIS
          AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
          (this “Agreement”) is made and entered into as of July 31, 2007, to be effective
          as of June 14, 2007 (the “Effective Date”), by and among HEALTH CARE PROPERTY
          INVESTORS, INC., a Maryland corporation (“HCP”), HCPI TRUST, a Maryland real
          estate trust (“HCP Trust”), EMERITUS REALTY V, LLC, a Delaware limited liability
          company (“ER-V”), ESC-LA CASA GRANDE, LLC, a Delaware limited liability company
          (“ESC-La Casa Grande”), and TEXAS HCP HOLDING, L.P., a Delaware limited
          partnership (“Texas HCP”) (each, a “Seller,” and collectively, “Sellers”) and
          EMERITUS CORPORATION, a Washington corporation (“Buyer”), as
          follows:

         

        RECITALS

         

        A.           Each
          Seller is the owner (fee or leasehold, as applicable) of one or more the
          Properties (as defined below) as indicated opposite the name of such Property
          on
Exhibit G attached hereto.

         

        B.           The
          Properties comprising the Emeritus Properties (as defined below) are currently
          leased by the applicable Seller or Sellers to Buyer and/or certain Affiliates
          (as defined below) of Buyer pursuant to the Emeritus Master Lease (as defined
          below).

         

        C.           The
          Property also described herein as the Painted Post Property (as defined
          below)
          is currently leased by the applicable Seller to an Affiliate of Buyer pursuant
          to the Painted Post Lease (as defined below).

         

        D.           The
          Properties comprising the Summerville Properties (as defined below) are
          currently leased, together with certain other property, by the applicable
          Seller
          or Sellers to Summerville Lessee (as defined below) pursuant to the Summerville
          Master Lease (as defined below).

         

        E.           Buyer
          desires to purchase the Properties from Sellers and Sellers desire to sell
          the
          Properties to Buyer on the terms and subject to the conditions set forth
          herein.

         

        F.           This
          Agreement, together with the Amended and Restated (Membership Purchase)
          Addendum
          to Purchase and Sale Agreement and Joint Escrow Instructions dated of even
          date
          herewith and attached hereto, amends and restates, in their entireties,
          that
          certain Purchase and Sale Agreement and Joint Escrow Instructions made
          and
          entered into as of June 14, 2007 (the “Original Agreement”), as supplemented by
          that certain (Membership Purchase) Addendum to Purchase and Sale and Joint
          Escrow Instructions dated June 14, 2007 attached thereto (the “Original
          Addendum,” and together the Original Agreement, collectively, the “Original
          Purchase Agreement”) for the sale by Sellers to Buyer of the
          Properties.  To the extent the Original Purchase Agreement covered
          properties in addition to the Properties described herein, this Agreement
          shall
          no longer cover such other properties.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        AGREEMENT

         

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

         

        
          	
                  1.

                	
                  DEFINITIONS

                

        

         

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

         

        1.1    1031
          Exchange:  As defined in Section
          6.8.

         

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

         

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

         

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

         

        1.5    Allocated
          Purchase Price: As defined in Section
          4.1

         

        1.6    Base
          Gross Revenues:  With respect to each
          applicable Emeritus Property and the Painted Post Property,  “Base
          Gross Revenues,” as defined in the Emeritus Master Lease or the Painted Post
          Lease, respectively, with respect to such Property.

         

        1.7    Bill
          of Sale:  As defined in Section
          6.2.2.

         

        1.8    Cash
          Security Deposit:  “Cash Security
          Deposit,” as defined in the Emeritus Master Lease and the Painted Post Master
          Lease.

         

        1.9    Cash
          Security Deposit Credit.  As defined in Section
          4.3.

         

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

         

        1.11   Closing
          Breakpoint:  As defined in Section 6.5.2
          below.

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

        1.12     Closing
          Funds:  As defined in Section
          4.4.

         

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

         

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

         

        1.15     Cost
          of Living Index:  With respect to each applicable
          Property, “Cost of Living Index,” as defined in the applicable Master
          Lease.

         

        1.16     Deed:  As
          defined in Section 6.2.1.

         

        1.17     Earnest
          Money Deposit:  As defined in Section
          4.2.

         

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

         

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

         

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

         

        1.21     Emeritus
          Master Lease:  That Amended and Restated
          Master Lease identified on Exhibit “A-1” attached hereto
          among the Emeritus Lessor and the Emeritus Lessee covering, among other
          properties, the Emeritus Properties, as more particularly described therein,
          as
          the same may have been amended or modified from time to time in accordance
          with
          the terms thereof.

         

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

         

        1.23     Emeritus/Summerville
          Merger:  The acquisition by Emeritus of all of the
          outstanding stock of Summerville pursuant to an Agreement and Plan of Merger
          between Emeritus and Summerville and pursuant to which SSL and each Summerville
          Lessee will become a direct or indirect wholly-owned subsidiary of
          Emeritus.

         

        1.24     Emeritus/Summerville
          Merger Closing: The closing of the Emeritus/Summerville
          Merger.

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

        1.25     ER-V:  As
          defined in the preface to this Agreement.  As of the Effective Date,
          ER-V is the owner of the Emeritus Properties located in Englewood, Florida
          and
          Altamonte Springs, Florida.  Prior to the Closing, HCP will convey to
          ER-V all of its right, title and interest in and to the Summerville Property
          located in (West) Ocala, Florida to ER-V so that as of the Closing, ER-V
          shall
          own the Emeritus Properties located in Englewood, Florida and Altamonte
          Springs,
          Florida and the Summerville Property located in (West Ocala,
          Florida).

         

        1.26     ESC-
          La Casa Grande:  As defined in the
          preface to this Agreement.  ESC-La Casa Grande is the owner of the
          Emeritus Property located in New Port Richey, Florida.

         

        1.27     Escrow
          Holder:  As defined in Section
          3.1.

         

        1.28     Event
          of Default: “Event of Default,” as defined in the
          applicable Master Lease with respect to such Property.

         

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

         

        1.30     Gross
          Revenues:  With respect to each
          applicable Property, “Gross Revenues,” as defined in the applicable Master Lease
          with respect to such Property.

         

        1.31     Hazardous
          Substance:  With respect to each
          applicable Property, “Hazardous Substance,” as defined in the applicable Master
          Lease with respect to such Property.

         

        1.32     HCP:  As
          defined in the preface to this Agreement.

         

        1.33     HCP
          AL:  HCP AL of Florida, LLC, a Delaware
          limited liability company. As of the Effective Date, HCP
          AL is the owner of certain properties located in (East) Ocala, Florida,
          New Port
          Richey, Florida, Lakeland, Florida and Venice, Florida that are leased
          pursuant
          to the Summerville Master Lease and that are also being sold to Buyer or
          its
          Affiliate pursuant to a Related Purchase Agreement as more particularly
          described therein.  Prior to the Closing and the applicable Related
          Purchase Agreement Closing, HCP AL will transfer and convey the real property
          (including improvements thereon and its interest in any personal property
          related thereto), of such properties to HCP AL Sub.

         

        1.34     HCP
          AL Sub:  AL of Florida Sub, LLC, a Delaware limited
          liability company, the sole member of which shall be HCP AL prior to the
          Closing.

         

        1.35     HCP
          Trust:  As defined in the preface to
          this Agreement.

         

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

         

        1.37     Land
          Lease Facilities: “Land Lease Facilities,” as
          defined in the Emeritus Lease (i.e., the Allentown, PN Facility and the
          Latrobe,
          PN Facility).

         

        1.38     Land
          Lease Rent:  “Land Lease Rent,” as
          defined in the Emeritus Master Lease.

         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

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

         

        1.40     Lease
          Year:  With respect to each applicable
          Property, “Lease Year,” as defined in the applicable Master Lease with respect
          to such Property.

         

        1.41     Lessee:  With
          respect to (i) the Emeritus Master Lease, the Emeritus Lessee, (ii) the
          Painted
          Post Lease, the Painted Post Lessee, and (iii) the Summerville Master Lease,
          the
          Summerville Lessee.

         

        1.42     Lessor:  With
          respect to (i) the Emeritus Master Lease, the Emeritus Lessor, (ii) the
          Painted
          Post Lease, the Painted Post Lessor, and (iii) the Summerville Master Lease,
          the
          Summerville Lessor.

         

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

         

        1.44     Master
          Lease Termination:  With respect
          to  (a) the Emeritus Master Lease, a Master Lease Termination
          Agreement among the applicable Lessor and Lessee, in the form attached
          hereto as
Exhibit “H”, to be executed and delivered by such Lessor
          and Lessee on the Closing Date, and (b) the Painted Post Lease, a Lease
          Termination Agreement between the applicable Lessor and Lessee, in the
          form
          attached hereto as Exhibit “I”, to be executed and
          delivered by such Lessor and Lessee on the Closing Date.

         

        1.45     Master
          Leases:  Collectively, the Emeritus
          Master Lease, the Summerville Master Lease and the Painted Post Lease (each,
          a
“Master Lease”).

         

        1.46     Memorandum
          of Termination:  With respect to each
          Master Lease and Property (or property covered by a Related Purchase Agreement)
          for which a written memorandum or other evidence of such Master Lease with
          respect to such Property (or property covered by a Related Purchase Agreement)
          has been recorded in the applicable land records office where such Property
          (or
          property covered by a Related Purchase Agreement) is located, a memorandum
          of
          termination of such Master Lease in form and substance reasonably satisfactory
          to Buyer and Sellers, to be executed, acknowledged and delivered by the
          applicable Lessor and Lessee.

         

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

         

        1.48     New
          Emeritus Guaranty.  With respect to any and all
          Summerville Obligations, a written guaranty in form and substance reasonably
          acceptable to Sellers to be executed and delivered by Emeritus upon the
          later to
          occur of (i) the Closing hereunder or (ii) the Emeritus/Summerville Merger
          Closing.  For purposes of the foregoing, with respect to (a) the
          Summerville Master Lease, the form of such New Emeritus Guaranty shall
          be in the
          form of Exhibit “J” attached hereto and (b) the
          Summerville Loan, the form of such New Emeritus Guaranty shall be in the
          form of
Exhibit “K” attached hereto.  Notwithstanding
          the foregoing, in the event that the Summerville Loan is paid off at or
          prior to
          the Emeritus/Summerville Merger Closing, then Emeritus shall not be required
          to
          deliver a New Emeritus Guaranty of the Summerville Loan.

         

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

        1.49     Opening
          of Escrow:  As defined in Section
          3.3.

         

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

         

        1.51     Original
          Purchase Agreement:  As defined in the
          Recitals hereto.

         

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

         

        1.53     Painted
          Post Lease:  That Lease identified on
Exhibit “A-3” attached hereto
          between the Painted Post
          Lessor and the Painted Post Lessee covering the Painted Post Property,
          as the
          same may have been amended or modified from time to time in accordance
          with the
          terms thereof.

         

        1.54     Painted
          Post Lessee:  “Lessee,” as defined in
          the Painted Post Lease.

         

        1.55     Painted
          Post Lessor:  “Lessor,” as defined in
          the Painted Post Lease.

         

        1.56     Painted
          Post Property:  The “Leased Property”
(as defined in the Painted Post Lease) of
          the “Facility” (as defined in the
          Painted Post Lease), less any portion of any which has been taken by reason
          of
          any Condemnation or other exercise of the power of eminent domain.

         

        1.57     Pennsylvania
          Land Leases:  “Pennsylvania Land
          Leases,” as defined in the Emeritus Master Lease.

         

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

         

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

         

        1.60     Properties:  Collectively,
          the Emeritus Properties, the Summerville Properties and the Painted Post
          Property (each, a “Property”).

         

        1.61     Purchase
          Price:  As defined in Section
          4.1.

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

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

         

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

         

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

         

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

         

        1.66     Release
          of Claims:  As defined in Section 6.3.2.

         

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

         

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

         

        1.69     Summerville
          at Cobbco:  Summerville at Cobbco, Inc.,
          a California corporation.

         

        1.70     Summerville
          Lessee:  “Lessee,” as defined in the
          Summerville Master Lease.

         

        1.71     Summerville
          Lessor:  “Lessor,” as defined in the
          Summerville Master Lease; provided, however, that (i) upon the transfer
          and
          conveyance by HCP to ER-V of all of HCP’s right, title and interest in and to
          the Summerville Property located in (West) Ocala, Florida, as provided
          in the
          definition of “ER-V” above,  ER-V shall be a “Lessor” (as its
          interests may appear) under the Summerville Master Lease for purposes of
          executing and delivering the Summerville Master Lease Amedment (and any
          other
          documents to be executed in connection therewith), and (ii)  upon the
          transfer and conveyance of the real and personal property of the properties
          to
          HCP AL Sub as provided in the definition of “HCP AL” above, HCP AL Sub shall be
          a “Lessor” (as its interests may appear) under the Summerville Master Lease for
          purposes of executing and delivering the Summerville Master Lease Amendment
          (and
          any other documents to be executed in connection therewith).

         

        1.72     Summerville
          Loan:  That loan by HCP to Summerville
          at Cobbco, in the original principal amount of Ten Million Dollars
          ($10,000,000.00), pursuant to that certain Loan Agreement dated as of
          May 11, 1999 between Summerville at Cobbco and HCP as amended by that
          certain First Amendment to Loan Agreement dated as of July 26, 1999, that
          certain Second Amendment to Loan Agreement dated as of July 25, 2003, that
          certain Third Amendment to Loan Agreement dated as of June 29, 2005, and
          that
          certain Fourth Amendment to Loan Agreement dated as of June 14, 2007, and
          evidenced by that certain Second Amended and Restated Secured Promissory
          Note
          dated June 14, 2007, executed by Summerville at Cobbco in favor of
          HCP.

         

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

        1.73     Summerville
          Master Lease:  That Amended and Restated
          Master Lease identified on Exhibit “A-2” attached hereto
          among the Summerville Lessor and the Summerville Lessee covering the Summerville
          Properties and certain other property as more particularly described therein,
          as
          the same may have been or may hereafter be further amended or modified
          from time
          to time in accordance with the terms thereof.

         

        1.74     Summerville
          Master Lease Amendment:  An amendment to
          the Summerville Master Lease to be executed and delivered at Closing among
          the
          Summerville Lessor and the Summerville Lessee, and consented to by Summerville,
          as the existing Guarantor, in the form attached hereto as Exhibit
          E and incorporated herein by this
          reference.

         

        1.75     Summerville
          Obligations:  Any and all obligations
          and other Liabilities of Summerville or any Affiliate of Summerville under
          any
          existing or hereinafter executed lease (including the Summerville Master
          Lease
          and the lease contemplated to be executed by HCP or an Affiliate of HCP
          with
          Summerville or an Affiliate of Summerville relating to a facility located
          in
          Orangevale, California), agreement, guaranty, mortgage, deed of trust or
          other
          instrument between or in favor of any Seller(s) or any Affiliate of Seller(s),
          on the one hand, and with or made by Summerville or an Affiliate of Summerville,
          on the other hand.

         

        1.76     Summerville
          Properties:  Collectively, the “Leased
          Property” (as defined in the Summerville Master Lease) of those “Facilities” (as
          defined in the Summerville Master Lease) listed on Exhibit
          G attached hereto as “Summerville Properties,” less any portion of
          any which has been taken by reason of any Condemnation or other exercise
          of the
          power of eminent domain (each, a “Summerville Property”).  The parties
          acknowledge and agree that the Summerville Properties for purposes of this
          Agreement do not include the “Leased Property” of all of the Facilities covered
          by the Summerville Master Lease and only includes those Facilities identified
          on
Exhibit G attached hereto as “Summerville Properties,”
and that the “Leased Property”  of certain other “Facilities” (but not
          all other “Facilities”) covered by the Summerville Master Lease are being sold
          and conveyed by Sellers and/or their Affiliates to Buyer pursuant to a
          Related
          Purchase Agreement as more particularly described therein.

         

        1.77     Texas
          HCP:  As defined in the preface to this
          Agreement.

         

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

         

        1.79     Title
          Policies:  As defined in Section
          6.4.

         

        1.80     Title
          Endorsements:  As defined in Section
          6.4.

         

        1.81     Transaction
          Documents:  Collectively, this
          Agreement, the Deeds, the Bills of Sale, the Summerville Master Lease Amendment,
          each Master Lease Termination, each Related Purchase Agreement, each New
          Emeritus Guaranty and all other agreements, documents and/or instruments
          to be
          executed and/or delivered pursuant to and in connection with this Agreement,
          the
          Related Purchase Agreements and/or the Exhibits hereto or thereto.

         

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

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

         

        
          	
                  2.

                	
                  SALE
                    OF THE PROPERTIES

                

        

         

        Subject
          to the terms of the Addendum attached hereto, Buyer agrees to purchase
          and
          accept from Sellers, and Sellers agree to sell, convey and assign to Buyer,
          all
          of the Properties on the terms and subject to the conditions set forth
          herein.

         

        
          	
                  3.

                	
                  ESCROW

                

        

         

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

         

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

         

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

         

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

        
          	
                  4.

                	
                  PURCHASE
                    PRICE; ALLOCATION OF PURCHASE
                    PRICE

                

        

         

        4.1     Purchase
          Price.  The purchase price for the Properties shall be
          Three Hundred Seventy-Seven Million Nine Hundred Seven Thousand Two Hundred
          Forty-Six Dollars and 00/100ths ($377,907,246.00) (the “Purchase
          Price”).  The Purchase Price shall be allocated among the Properties
          as set forth on Exhibit “G” attached hereto and
          incorporated herein by this reference (with respect each Property, the
          “Allocated Purchase Price”).

         

        4.2     Earnest
          Money Deposit.  Concurrently
          with the execution hereof by Buyer, Buyer shall deposit with the Escrow
          Holder
          the sum of Five Million Dollars and 00/100ths ($5,000,000.00) (the “Earnest
          Money Deposit”).  Escrow Holder shall hold the Earnest Money Deposit
          in United States Treasury obligations or treasury-backed repurchase agreements,
          or such other investment as may be selected by Buyer and reasonably approved
          by
          Sellers on a funds investment form provided by Escrow Holder.  All
          interest or other amounts earned upon the Earnest Money Deposit shall become
          part of the Earnest Money Deposit and shall be applied with the Earnest Money
          Deposit in accordance with the terms and provisions of this
          Agreement.  If the Closing occurs pursuant to the provisions of this
          Agreement and each Related Purchase Agreement Closing occurs under each
          Related
          Purchase Agreement, the Earnest Money Deposit, plus all accrued interest
          or
          other amounts earned thereon, shall be applied against the Purchase Price
          hereunder and/or against the purchase price payable under each Related
          Purchase
          Agreement, as directed by Buyer.  If the Closing fails to occur under
          the provisions of this Agreement or any Related Purchase Agreement Closing
          fails
          to occur under any Related Purchase Agreement, the Earnest Money Deposit,
          plus
          all accrued interest or other amounts earned thereon, shall be either delivered
          to Buyer, or delivered to Sellers as non-refundable liquidated damages
          (and not
          as a penalty), as determined by the provisions of Sections 7
          below.  In the event that Sellers are entitled to retain the Earnest
          Money Deposit plus accrued interest or other amounts earned thereon pursuant
          to
          Section 7.2.1 below, the allocation of Earnest Money Deposit plus accrued
          or
          other amounts earned interest thereon among each Seller, shall be as determined
          by Sellers, and neither Buyer nor Escrow Holder shall be concerned
          therewith.  Notwithstanding the foregoing or any other provision
          hereof to the contrary, the sum of One Hundred Dollars and 00/100ths ($100.00)
          out of the Earnest Money Deposit is independent of any other consideration
          provided hereunder, shall be fully earned by Sellers upon the Effective
          Date
          hereof, and is not refundable to Buyer under any
          circumstances.  Accordingly, if this Agreement is terminated for any
          reason by either party, such independent consideration shall be paid by
          Escrow
          Holder to Sellers.

         

        4.3     Cash
          Security Deposit Credit.  Buyer and Sellers acknowledge
          and agree that, as of the Effective Date, the Emeritus Lessee and the Painted
          Post Lessee have together deposited with the applicable Lessor pursuant
          to
          Article XXI of the Emeritus Master Lease and Article XXI of the Painted
          Post
          Lease, a Cash Security Deposit in the approximate aggregate amount of
          $3,055,328.66.  In addition, as of the Effective Date, accrued and
          unpaid interest on such aggregate Cash Security Deposit is approximately
          $34,466.80.  Pursuant to the each Master Lease Termination, the
          applicable Lessor thereunder has agreed that the applicable Lessee shall
          cause
          such Lessor to apply all of the sum of the following to the Purchase Price
          payable hereunder:  (i) the entire aggregate Cash Security Deposit,
          plus (ii) all accrued and unpaid interest on such Cash Security Deposit
          as of
          the Closing Date. The forgoing shall be referred to herein as the “Cash Security
          Deposit Credit.”

         

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

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

         

        
          	
                  5.

                	
                  CONDITIONS
                    TO CLOSING; AS IS
                    PURCHASE

                

        

         

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

         

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

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

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

         

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

         

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

         

        
          
            
            

          

          
            12

            
              

            

          

          
            
            

          

        

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

         

        5.4.2     Purchase
          of All Properties. The Closing hereunder
          shall occur simultaneously with respect to all of the Properties.

         

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

         

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

         

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

         

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

         

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

         

        
          	
                  6.

                	
                  CLOSING
                    OF ESCROW

                

        

         

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

         

        
          
            
            

          

          
            13

            
              

            

          

          
            
            

          

        

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

         

        6.2.1     Deeds.  With
          respect to each Property, a duly executed and acknowledged grant deed,
          special
          warranty deed or equivalent thereof in the applicable State (each a “Deed”)
          conveying the real property comprising such Property in such State to Buyer,
          in
          each case subject to (collectively the “Permitted Exceptions”): (i) all
          Impositions, whether past due or delinquent, and (ii) all covenants, conditions,
          restrictions, rights of way, easements and other matters of record or which
          would be disclosed by an accurate survey or physical inspection of such
          Property; provided, however, that with respect to each Land Lease Facility,
          the
          term “Deed” shall mean an assignment and assumption of the applicable
          Pennsylvania Land Lease in form and substance reasonably acceptable to
          the
          applicable Seller and Buyer, in each case subject to the Permitted
          Exceptions;

         

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

         

        6.2.3     Summerville
          Master Lease Amendment and Master Lease
          Terminations.  The Summerville Master Lease Amendment
          duly executed by the applicable Lessor thereunder and each Master Lease
          Termination duly executed by the applicable Lessor thereunder;

         

        6.2.4     Memorandum
          of Termination.  As required, each
          Memorandum of Termination duly executed and acknowledged by the applicable
          Lessor;

         

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

         

        
          
            
            

          

          
            14

            
              

            

          

          
            
            

          

        

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

         

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

         

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

         

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

         

        6.3.1     Funds.  Immediately
          available Closing Funds by wire transfer into Escrow Holder’s depository bank
          account in an amount which, when added to the Earnest Money Deposit, and
          all
          interest and other amounts earned thereon which Buyer instructs Escrow
          Holder to
          apply to the Purchase Price hereunder, and the Cash Security Deposit Credit
          shall equal the Purchase Price plus all Closing costs, charges or prorations
          payable by Buyer hereunder, as the same shall be more particularly set
          forth on
          the Closing Statement;

         

        6.3.2     Release
          of Claims:  A Release of Claims duly
          executed by Buyer, each Lessee and any nominees of Buyer hereunder or under
          any
          Related Purchase Agreement in the form attached hereto as Exhibit
“F” (the “Release of Claims”);

         

        6.3.3     Summerville
          Master Lease Amendment and Master Lease
          Terminations:  The Summerville Master
          Lease Amendment, duly executed by the applicable Lessee thereunder, and
          Summerville, as existing Guarantor, and each Master Lease Termination,
          duly
          executed by the applicable Lessee thereunder.

         

        
          
            
            

          

          
            15

            
              

            

          

          
            
            

          

        

        6.3.4     Memorandum
          of Termination.  As required, each
          Memorandum of Termination duly executed and acknowledged by the applicable
          Lessee;

         

        6.3.5     New
          Emeritus Guaranty(ies).  If the
          Emeritus/Summerville Merger Closing has occurred on or prior to the Closing
          Date, each New Emeritus Guaranty, duly executed by Emeritus; otherwise,
          the
          provisions of Section 10.3 shall apply.

         

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

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            16

            
              

            

          

          
            
            

          

        

        6.5     Prorations.

         

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

         

        6.5.2     Rents.  Notwithstanding
          anything to the contrary herein, all Rents and Charges shall belong to
          and be
          paid over to the applicable Lessor by the applicable Lessee on the Closing
          Date.
          Minimum Rent shall be prorated based upon the actual number of days in
          the month
          in which the Closing occurs.  For purposes of prorating any Additional
          Rent payable under any Master Lease with respect to any applicable Property,
          the
          following shall apply:

         

        (a)           To
          the extent Additional Rent payable for the then-current Lease Year for
          any
          Property is calculated and determined on the basis of a percentage of Gross
          Revenues in excess of the applicable Base Gross Revenues, such Additional
          Rent
          with respect to such Property shall be equal to the applicable percentage
          of
          Gross Revenues for such Property for such Lease Year in excess of the applicable
          Closing Breakpoint.  For purposes of the foregoing, the “Closing
          Breakpoint” shall mean the applicable Base Gross Revenues multiplied by a
          fraction the numerator of which is the number of days in the current Lease
          Year
          for such applicable Property through, but not including the Closing Date,
          and
          that the denominator of which is three hundred sixty-five (365).

         

        (b)           To
          the extent Additional Rent payable for the then-current Lease Year for
          any
          Property is calculated and determined on the basis of an increase in the
          Cost of
          Living Index, such Additional Rent shall be determined and paid in accordance
          with the applicable provisions of the applicable Master Lease for the number
          of
          days in such Lease Year through, but not including, the Closing
          Date.

         

        (c)           In
          the event that the amount of Additional Rent payable under such Lease Year
          is
          subject to either a floor or a ceiling, the amount of such floor or ceiling,
          as
          the case may be, shall also be prorated based upon a three hundred sixty-five
          (365) day year.

         

        (d)           Buyer
          and Sellers shall cooperate to estimate the proration amount for Additional
          Rent
          as of the Closing in good faith, and shall submit such amount to Escrow
          Holder
          at least one (1) business day prior to the Close of Escrow.  In
          determining such proration amount, Buyer shall be credited with any payments
          on
          account of Additional Rent previously paid to the applicable Lessor for
          the
          applicable current Lease Year.  Within thirty (30) days after the
          Closing Date, Buyer shall cause the applicable Lessee to make a final
          calculation of Additional Rent up to the Closing for each applicable Property,
          and deliver to Sellers an Officer’s Certificate (as defined in the applicable
          Master Lease) setting forth the calculation thereof.  Buyer shall
          promptly pay or cause the applicable Lessee to pay to Sellers, or if directed
          by
          Sellers, to the applicable Lessor, any deficiency in the payment of Additional
          Rent for each applicable Property, and Sellers shall promptly pay to Buyer
          or,
          if directed by Buyer, to the applicable Lessee, the amount of any overpayment
          of
          Additional Rent for any applicable Property.

         

        
          
            
            

          

          
            17

            
              

            

          

          
            
            

          

        

        (e)           The
          obligation to prorate and pay Additional Rent for each applicable Property
          shall
          survive the Closing.

         

        (f)           Notwithstanding
          anything to the contrary in this Agreement or any Related Property Purchase
          Agreement, to the extent the “Leased Property” (as defined in the applicable
          Master Lease) of any “Facility” (as defined in the applicable Master Lease) is
          being sold by an applicable Seller or its Affiliates pursuant to a Related
          Purchase Agreement, all Rent and Charges shall nevertheless be paid over
          to the
          applicable Lessor pursuant to this Agreement by the applicable Lessee on
          the
          Closing Date and all Minimum Rent and Additional Rent shall be prorated
          under
          this Agreement, as if such “Leased Property” of such Facility is being conveyed
          hereunder, as provided herein and not under any Related Purchase Agreement,
          but
          such proration shall nevertheless be reflected on the Closing Settlement
          Statements being executed and delivered in connection with each Related
          Purchase
          Agreement Closing.

         

        6.6     Closing
          and Transaction Costs.

         

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

         

        6.6.2     Upon
          the Closing, Buyer shall be responsible for:

         

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

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            18

            
              

            

          

          
            
            

          

        

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

         

        6.6.3     Upon
          the Closing, Sellers shall be responsible for:

         

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

         

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

         

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

         

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

         

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

         

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

         

        6.7.2     Cause
          each Deed, any Memorandum of Termination, and any other recordable instrument
          which the parties so direct to be recorded in the appropriate land records
          office where the respective Property is located, and if necessary, the
          parties
          will re-execute post-Closing any Memorandum of Termination to allow it
          to be
          recorded, such obligation to survive the Closing hereunder.  If
          permitted by applicable law, Escrow Holder is hereby instructed not to
          affix the
          amount of any Transaction Tax on the face of any Deed but to pay on the
          basis of
          a separate affidavit signed by either the applicable Seller or Buyer, as
          applicable, and not made a part of the public record; and

         

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

         

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

         

        
          
            
            

          

          
            19

            
              

            

          

          
            
            

          

        

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

         

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

         

        6.8.3     such
          other additional documents;

         

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

         

        
          	
                  7.

                	
                  TERMINATION

                

        

         

        7.1     Early
          Termination for Failure of
          Conditions.

         

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

         

        
          
            
            

          

          
            20

            
              

            

          

          
            
            

          

        

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

         

        7.1.3     Rights
          and Obligations Upon Termination for Failure of
          Conditions.  If Escrow and this Agreement are terminated
          in the manner and within the applicable time period(s) provided pursuant
          to
          either Section 7.1.1 or Section 7.1.2 above, (a) all instruments in Escrow
          shall
          be returned to the party depositing the same, (b) Buyer shall return all
          items
          previously delivered by Sellers to Buyer, (c) the provisions of Section
          6.6.5
          above shall apply, (d) subject to Section 7.2 below, the Earnest Money
          Deposit,
          and all interest and other amounts earned thereon, shall be promptly delivered
          to Buyer and (e) neither party shall have any further rights, obligations
          or
          Liabilities whatsoever to the other party concerning the purchase and sale
          of
          the Property pursuant to this Agreement, except for those Liabilities which
          are
          expressly stated in this Agreement to survive termination.

         

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

         

        
          
            
            

          

          
            21

            
              

            

          

          
            
            

          

        

        7.2.1     Seller’s
          Damages.  If the Closing fails to occur by reason of a
          breach or default of this Agreement by Buyer, then Sellers may terminate
          this
          Agreement as of the Effective Termination Date as provided in Section 7.2
          above,
          in which case Buyer shall be Liable for the cancellation and other charges
          and
          expenses as provided for in Section 6.6.5  and the Earnest Money
          Deposit (plus all accrued interest and any other amounts earned thereon)
          shall
          be delivered to Sellers as liquidated damages and not as a
          penalty.  BUYER RECOGNIZES THAT IF THE CLOSING FAILS TO OCCUR BY
          REASON OF A BREACH OR DEFAULT OF THIS AGREEMENT BY BUYER, SELLERS SHOULD
          BE
          ENTITLED TO COMPENSATION FOR THE DETRIMENT CAUSED THEREBY.  HOWEVER,
          BOTH PARTIES AGREE THAT IT IS EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN
          THE EXTENT OF THE DETRIMENT AND TO AVOID SUCH DIFFICULTIES, THE PARTIES
          AGREE
          THAT, IF BUYER FAILS TO PURCHASE THE PROPERTIES AND SUCH FAILURE CONSTITUTES
          A
          BREACH OF BUYER’S OBLIGATIONS HEREUNDER, SELLERS SHALL BE ENTITLED TO THE
          EARNEST MONEY DEPOSIT AND ANY ACCRUED INTEREST AND ANY OTHER AMOUNTS EARNED
          THEREON AS LIQUIDATED DAMAGES.  NOTWITHSTANDING ANYTHING HEREIN TO THE
          CONTRARY, AND EXCEPT AS PROVIDED IN SECTION 12.2 BELOW, THE PARTIES AGREE
          THAT
          SUCH AMOUNT STATED AS LIQUIDATED DAMAGES SHALL BE IN LIEU OF ANY OTHER
          RELIEF TO
          WHICH SELLERS MIGHT OTHERWISE BE ENTITLED BY VIRTUE OF BUYER’S FAILURE TO
          PURCHASE THE PROPERTIES IN THE EVENT SUCH FAILURE CONSTITUTES A BREACH
          OF
          BUYER’S OBLIGATIONS HEREUNDER.

         

        BUYER’S
          INITIALS:_/s/ EM__

         

        SELLERS
          INITIALS:_/s/
          BM__        __/s/BM___/s/BM

         

        _/s/
          BM__         __/s/ BM___/s/
          BM_

         

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

         

        7.3     Relationship
          to Master Leases.  Notwithstanding
          anything to the contrary in this Agreement, no termination of this Agreement
          and
          Escrow by Sellers or Buyer regardless of the reason therefor shall affect
          the
          rights or obligations of any applicable Lessor or Lessee under any applicable
          Master Lease, each which Master Lease shall remain in full force and effect
          (and
          unmodified by the applicable Summerville Master Lease Amendment or any
          Master
          Lease Termination, as applicable), following any such termination of this
          Agreement prior to the Closing.

         

        
          
            
            

          

          
            22

            
              

            

          

          
            
            

          

        

        
          	
                  8.

                	
                  REPRESENTATIONS
                    AND WARRANTIES

                

        

         

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

         

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

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            23

            
              

            

          

          
            
            

          

        

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

         

        8.3.1     Authority
          of each Lessor.  Each applicable Lessor has full power
          and authority to execute and deliver (a) the Summerville Master Lease Amendment
          pursuant to the terms of this Agreement and that when so executed and delivered,
          such Summerville Master Lease Amendment shall constitute the valid and
          binding
          obligations of such Lessor, enforceable against such Lessor in accordance
          with
          its respective terms, except as such enforceability may be limited by creditors’
rights laws and general principles of equity and (b) each Master Lease
          Termination pursuant to the terms of this Agreement and that when so executed
          and delivered, such Master Lease Termination shall constitute the valid
          and
          binding obligations of the such Lessor, enforceable against such Emeritus
          Lessor
          in accordance with its respective terms, except as such enforceability
          may be
          limited by creditors’ rights laws and general principles of equity.

         

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

         

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

         

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

         

        8.4.1     Authority
          of Lessees and Emeritus.  The (a) Summerville Lessee,
          Emeritus  and Summerville have full power and authority to execute and
          deliver the documents and instruments required to be delivered by them
          pursuant
          to the terms of this Agreement (including the Summerville Master Lease
          Amendment
          and each New Emeritus Guaranty (when executed and delivered by Emertius))
          and
          that when so executed and delivered, such instruments shall constitute
          the valid
          and binding obligations of the Summerville Lessee, Emeritus and Summerville,
          enforceable against them in accordance with their respective terms, except
          as
          such enforceability may be limited by creditors’ rights laws and general
          principles of equity and (b) Emeritus Lessee has full power and authority
          to
          execute and deliver the documents and instruments required to be delivered
          by
          them pursuant to the terms of this Agreement (including each Master Lease
          Termination) and that when so executed and delivered, such instruments
          shall
          constitute the valid and binding obligations of the Emeritus Lessee, enforceable
          against it in accordance with their respective terms, except as such
          enforceability may be limited by creditors’ rights laws and general principles
          of equity.

         

        
          
            
            

          

          
            24

            
              

            

          

          
            
            

          

        

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

         

        
          	
                  9.

                	
                  CERTAIN
                    EVENTS PRIOR TO
                    CLOSING

                

        

         

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

         

        9.2     Prompt
          Notices.  Sellers shall give prompt
          notice to Buyer, and Buyer shall give prompt notice to Sellers, of (i) the
          occurrence, or failure to occur, of any event which occurrence or failure
          would
          be likely to cause (A) any representation or warranty of such party
          contained in this Agreement or the Addendum hereto to be untrue or inaccurate
          in
          any material respect or (B) any covenant, condition or agreement of such
          party contained in this Agreement or the Addendum hereto not to be complied
          with
          or satisfied in all material respects and (ii) any failure of Sellers, or
          any of them, or Buyer, as the case may be, to comply with or satisfy any
          covenant, condition or agreement to be complied with or satisfied under
          this
          Agreement.

         

        9.3     No
          Agreements; Release of
          Mortgages.  Except for this Agreement
          and matters expressly contemplated hereunder or under the Related Agreements,
          from and after the Effective Date, no Seller shall enter into any new contracts
          or other agreements, either written or oral, with respect to any of the
          Properties that shall survive the Closing, or become a Liability of
          Buyer.  Sellers shall cause any mortgages, deeds of trust or other
          security interests of record, caused,  created or assumed in writing
          by Sellers, to be satisfied in full on or before the Closing.

         

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

         

        
          
            
            

          

          
            25

            
              

            

          

          
            
            

          

        

        
          	
                  10.

                	
                  POST-CLOSING
                    MATTERS

                

        

         

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

         

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

         

        10.3    New
          Emeritus Guaranty(ies).  In the event that the
          Emeritus/Summerville Merger Closing does not occur prior to the Closing,
          then
          promptly upon the Emeritus/Summerville Merger Closing Emeritus covenants
          and to
          execute and deliver promptly any New Emeritus Guaranty(ies) as required
          by HCP
          or any of its Affiliates with respect to any Summerville
          Obligations.  Without limiting the foregoing, to the extent the
          closing of any transactions that give rise to or otherwise create any new
          Summerville Obligations has not occurred as of the Closing hereunder, Emeritus
          hereby covenants and agrees to execute and deliver promptly any New Emeritus
          Guaranty(ies) as required by HCP or any of its Affiliates upon the later
          of (i)
          the closing of any such transactions and (ii) the Emeritus/Summerville
          Merger
          Closing.  The provisions of this Section 10.2 shall survive the
          execution and delivery of this Agreement and the occurrence of the Closing
          and
          shall be specifically enforceable by HCP and its Affiliates.

         

        
          
            
            

          

          
            26

            
              

            

          

          
            
            

          

        

        11.           BROKERS

         

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

         

        
          	
                  12.

                	
                  MISCELLANEOUS
                    PROVISIONS

                

        

         

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

         

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

         

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

         

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

         

        
          	
                   

                	
                  If
                    to Sellers:

                	
                  c/o
                    Health Care Property Investors,
                    Inc.

                

        

        
          	
                   

                	
                  3760
                    Kilroy Airport Way, Suite 300

                

        

        
          	
                   

                	
                  Long
                    Beach, California 90806

                

        

        
          	
                   

                	
                  Attn:

                	
                  Legal
                    Department

                

        

        
          	
                   

                	
                  Fax:

                	
                  (562)
                    733-5200

                

        

         

        
          
            
            

          

          
            27

            
              

            

          

          
            
            

          

        

        
          	
                   

                	
                  with
                    a copy to:

                	
                  Latham
                    & Watkins LLP

                

        

        
          	
                   

                	
                  650
                    Town Center Drive, Suite 2000

                

        

        
          	
                   

                	
                  Costa
                    Mesa, California 92626-1925

                

        

        
          	
                   

                	
                  Attn:

                	
                  David
                    C. Meckler, Esq.

                

        

        
          	
                   

                	
                  Fax:

                	
                  (714)
                    755-8290

                

        

         

        
          	
                   

                	
                  If
                    to Buyer:

                	
                  Emeritus
                    Corporation

                

        

        
          	
                   

                	
                  3131
                    Elliott Avenue, Suite 500

                

        

        
          	
                   

                	
                  Seattle,
                    Washington  98121

                

        

        
          	
                   

                	
                  Phone:

                	
                  (206)
                    301-4493

                

        

        
          	
                   

                	
                  Fax:

                	
                  (206)
                    301-4500

                

        

        
          	
                   

                	
                  Attn:

                	
                  Eric
                    Mendelsohn

                

        

         

        
          	
                   

                	
                  with
                    a copy to:

                	
                  Pircher,
                    Nichols & Meeks

                

        

        
          	
                   

                	
                  900
                    North Michigan Avenue, Suite 1050

                

        

        
          	
                   

                	
                  Chicago,
                    Illinois 60611

                

        

        
          	
                   

                	
                  Attention:  Real
                    Estate Notices (JDL/MJK)

                

        

        
          	
                   

                	
                  Phone:  (312)
                    915-3112

                

        

        
          	
                   

                	
                  Fax:
                    (312) 915-3348

                

        

         

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

         

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

         

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

         

        
          
            
            

          

          
            28

            
              

            

          

          
            
            

          

        

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

         

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

         

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

         

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

         

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

         

        12.11        
          Merger of Prior
          Agreements.  This Agreement and the other Transaction
          Documents contain the entire understanding between the parties relating
          to the
          transactions contemplated by this Agreement and under the Related Purchase
          Agreements.  All prior or contemporaneous agreements, understandings,
          representations and statements, whether direct or indirect, oral or written,
          are
          merged into and superseded by this Agreement and the other Transaction
          Documents, and shall be of no further force or effect.  Without
          limiting the generality of the foregoing, Sellers and Buyer hereby acknowledge
          and agree that the Original Agreement is merged into, superseded by and
          replaced
          in its entirety by this Agreement, the Addendum attached hereto and the
          Related
          Purchase Agreements.

         

        
          
            
            

          

          
            29

            
              

            

          

          
            
            

          

        

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

         

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

         

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

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            30

            
              

            

          

          
            
            

          

        

        BUYER’S
          INITIALS:     /s/ EM     

         

        SELLERS
          INITIALS:     /s/ BM  
            /s/
          BM             
/s/BM    

                                                 /s/
          BM              
/s/
          BM             
/s/BM    

         

        12.19        
          Arbitration of Disputes.

         

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

         

        
          
            
            

          

          
            31

            
              

            

          

          
            
            

          

        

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

         

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

         

        
          
            
            

          

          
            32

            
              

            

          

          
            
            

          

        

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

        
           

          BUYER’S
            INITIALS:     /s/ EM     

           

          SELLERS
            INITIALS:     /s/ BM  
            /s/
            BM             
/s/BM    

                                                   /s/
            BM              
/s/
            BM             
/s/BM    

        

         

        12.20        
          Seller’s Designated
          Agent.  Each Seller hereby appoints HCP
          to act as its designated agent and representative for all purposes of this
          Agreement.  Accordingly, all notices given to or by, and all actions
          taken by HCP, for itself or on behalf of any Seller hereunder, shall be
          binding
          upon each other Seller hereunder as if such Seller had individually given
          or
          received such notice or taken such action, and each Seller, by entering
          into
          this Agreement, authorizes HCP to receive or give such notices and take
          such
          actions on its behalf.

         

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

         

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

         

        12.23        
          Matters related to Certain Specific
          States.

         

        12.23.1     Florida.  Pursuant
          to Section 404.056, Florida Statues, Sellers hereby notify Buyer as
          follows:

         

        “RADON
          GAS: Radon is a naturally occurring radioactive gas that, when it has
          accumulated in a building in sufficient quantities, may present health
          risks to
          persons who are exposed to it over time.  Levels of radon that exceed
          federal and state guidelines have been found in buildings in Florida. 
Additional information regarding radon and radon testing may be obtained
          from
          your county health department.” 

         

        
          
            
            

          

          
            33

            
              

            

          

          
            
            

          

        

        12.23.2     Louisiana.

         

        (a)           Earnest
          Money Deposit.  Notwithstanding anything
          to the contrary in this Agreement, for purposes of Properties located in
          Louisiana (collectively, the “Louisiana Properties”), the Escrow Money Deposit
          is not “earnest money,” but is a “deposit” for purposes of La. Civ. Code art.
          2624.

         

        (b)           Louisiana
          Warranty Waivers. In accordance with Section 5.3
          above, Buyer will purchase the Louisiana Properties in their “as is” condition
“with all faults,” and specifically and expressly without any warranties,
          representations, or guaranties, either express or implied, of any kind,
          nature,
          or type whatsoever, from or on behalf of the Sellers or any of them, with
          the
          exception of the warranties set out in Section 8 of this Agreement and
          the
          warranty of title as to the Sellers’ own acts (excluding the title matters
          accepted by Buyer in this Agreement).  The Deed with respect to the
          Louisiana Properties will be an Act of Cash Sale in form customary for
          real
          property transfers in Louisiana and will contain the following waiver by
          Buyer
          of all warranties of condition and title and the Sellers’ warranty of title as
          to Sellers’ own acts:

         

        Buyer
          has
          inspected the title to and condition of the Property and is aware of and
          satisfied with its current title and condition.  This sale, transfer
          and conveyance is made “as is-where is,” without any warranty, guaranty, or
          representations by Seller as to the title to or condition of the Property
          and
          warranty of merchantability of title as to Seller’s own acts, excluding [the
          Permitted Exceptions].  Seller hereby expressly disclaims and Buyer
          hereby expressly waives any and all warranties whatsoever, either oral
          or
          written, expressed or implied, made by Seller or any other person or entity
          or
          implied by law with respect to the Property and the warranty of merchantability
          of title as to Seller’s own acts, excluding [the Permitted Exceptions], with the
          warranties waived herein including, without limitation, any and all warranties
          of title or peaceful possession (other than warranty of merchantability
          of title
          as to Seller’s own acts, , excluding [the Permitted Exceptions]) or use,
          condition, title, operation or management of the Property or compliance
          with any
          applicable governmental laws, codes, ordinances, regulations, judgments,
          permits, approvals or other requirements relating to zoning, subdivision,
          planning, buildings, fire, safety, earthquake, health or compliance with
          any
          other covenants, conditions, or restrictions (whether or not of record),
          any and
          all other warranties as to the condition of the Property or any of its
          components or parts or contents or any improvements, fixtures, or equipment
          forming a part thereof, any and all warranties with respect to the fitness
          or
          suitability of the Property for Buyer's business or any other particular
          or
          general use or purpose, any and all warranties with respect to the presence
          or
          suspected presence of any rodent or insect infestations, including subterranean
          or other termites or wood boring organisms, or the presence or suspected
          presence of mold, mildew, or fungal or other biological or microbial growths,
          and any and all warranties with respect to the condition of the Property
          under
          La. Civ. Code art. 2475, and any and all warranties whatsoever under La.
          Civ.
          Code arts. 2477 through 2548 or any other provision of law.  Buyer
          expressly acknowledges the foregoing and waives any and all right or cause
          of
          action that Buyer has or may have to rescind or resolve this transfer or
          to
          demand a reduction in purchase price based upon the existence of any redhibitory
          or other vices, defects, or other deficiencies in the Property or any
          improvements, fixtures, or equipment forming a part thereof, based upon
          the
          unsuitability of the Property or any of its components or parts for Buyer's
          intended use or any other use, based upon any eviction of Buyer, in whole
          or in
          part, or based upon any other claimed breach of warranty or other matter
          whatsoever, this transfer being otherwise entirely at Buyer's sole peril
          and
          risk, provided, however, that Seller will remain liable for its warranty
          of
          title as to Seller’s own acts (excluding [the Permitted
          Exceptions]).  Buyer acknowledges and agrees that the foregoing
          disclaimers and waiver of warranties have been fully explained to Buyer
          and that
          Buyer understands the same.  Buyer and Seller jointly acknowledge and
          agree that the foregoing waivers and disclaimers are of the essence of
          this
          transaction and the same would not otherwise have been entered into or
          consummated without them.

        
          
            
            

          

          
            34

            
              

            

          

          
            
            

          

        

        Without
          limiting the generality of the foregoing, Buyer hereby expressly waives,
          and
          releases Seller from, any claims, demands, causes or rights of action,
          in
          reimbursement, contribution or otherwise, that Buyer has or may have against
          Seller arising out of damages, losses or liabilities incurred by or imposed
          on
          Buyer or its successors or assigns based upon the existence of any asbestos
          and/or polychlorobiphenyl (PCB), and/or chlorinated solvents, and/or petroleum,
          including crude oil and any fraction thereof, and/or any other Hazardous
          Materials (as defined below) in, on or under the Property or the violation
          of
          any Environmental Law (as defined below) with respect to the
          Property.  “Hazardous Materials” means any substance or material, (i)
          the presence of which requires investigation, remediation and/or monitoring
          under any federal, state, or local statute, regulation, policy, law, or
          ordinance, including, without limitation, asbestos, asbestos-containing
          materials, petroleum and petroleum products, the group of organic compounds
          known as polychlorinated biphenyls, and any substances or materials that
          are
          regulated, controlled or prohibited under any Environmental Law; or
          (ii) which is or becomes defined as a “hazardous waste,” hazardous
          substance,” “solid waste,” pollutant or contaminant under any Environmental Law;
          or (iii) which is toxic, explosive, corrosive, flammable, infectious,
          radioactive, carcinogenic, mutagenic, or otherwise hazardous or is or becomes
          regulated by any governmental authority, agency, department, commission,
          board,
          agency or instrumentality of the United States, the State of Louisiana
          or any
          political subdivision thereof; or (iv) the presence of which on adjacent
          properties would constitute a trespass by the owner or operator of the
          Property.
“Environmental Law” means any one or more of the following: the Resource
          Conservation and Recovery Act of 1976 (Solid Waste Disposal Act) (“RCRA”), 42
          U.S.C. § 6901 et seq.; the Comprehensive Environmental Response, Compensation
          and Liability Act of 1980 (“CERCLA”), 42 U.S.C. Sections 9601 et seq., as
          amended by the Superfund Amendments and Reauthorization Act of 1986 (“SARA”);
          the Federal Water Pollution Control Act, 33 U.S.C. §1251 et seq.; the Clean Air
          Act, 42 U.S.C. § 7401 et seq.; the Toxic Substances Control Act (“TCSA”), 15
          U.S.C.§ 2601 et seq.; the Louisiana Environmental Quality Act, La. R.S. Section
          30:2001 et seq.; and any other federal or state law, statute, rule,
          order, or regulation, or local ordinance or other enactment, that is similar
          to
          the foregoing or that establishes environmental protection or regulatory
          requirements.

        
          
            
            

          

          
            35

            
              

            

          

          
            
            

          

        

        In
          addition, the Louisiana Properties will be transferred with no rights of
          substitution or subrogation as to prior owners of the Louisiana Properties
          that
          are affiliates of Sellers or any of them.

         

        12.23.3     Massachusetts.
          For purposes of Properties located in Massachusetts, “Hazardous Substances”
shall include any substance regulated or listed in Massachusetts General
          Law
          Chapters 21C, 21E and the implementing regulations thereof pursuant to
          310 CMR
          40.00.

         

        12.23.4     Montana.

         

        (a)           Radon
          Disclosure:  The following disclosure is given pursuant
          to the Montana Radon Control Act, MCA § 75-3-606.  RADON GAS: RADON IS
          A NATURALLY OCCURRING RADIOACTIVE GAS THAT, WHEN IT HAS ACCUMULATED IN
          A
          BUILDING IN SUFFICIENT QUANTITIES, MAY PRESENT HEALTH RISKS TO PERSONS
          WHO ARE
          EXPOSED TO IT OVER TIME. LEVELS OF RADON THAT EXCEED FEDERAL GUIDELINES
          HAVE
          BEEN FOUND IN BUILDINGS IN MONTANA.  ADDITIONAL INFORMATION REGARDING
          RADON AND RADON TESTING MAY BE OBTAINED FROM YOUR COUNTY OR STATE PUBLIC
          HEALTH
          UNIT.  SELLERS HAVE NO KNOWLEDGE OF ANY RADON TESTING PERFORMED ON THE
          PROPERTY.

         

        (b)           Noxious
          Weeds Disclosure:  The following disclosure is given
          pursuant to MCA § 7-22-2116(2).  Some properties in Montana contain
          noxious weeds and property owners are legally required to control and eradicate
          noxious weeds.  Information regarding a property owners’ obligations
          can be obtained from the local County extension agent or the Weed Control
          Board.

         

        (c)           Megan’s
          Law Disclosure:  Pursuant to the Montana Sexual and
          Violent Offender Registration Act, certain individuals are required to
          register
          their address with law enforcement agencies.  Law enforcement offices
          may make such information concerning registered offenders available to
          the
          public.  If you would like information regarding the registration of
          offenders, contact your local law enforcement agency, the Montana Department
          of
          Justice or a probation office in your community.

         

        12.23.5     New
          Jersey.

         

        (a)           Certificate
          of Occupancy.  If any governmental authority requires
          that a Certificate of Occupancy or Certificate of Continued Occupancy
          (collectively referred to as “CCO”) be obtained prior to the transfer of any
          Property located in New Jersey or any State or jurisdiction, Buyer agrees
          to
          obtain such CCO prior to Closing, at its sole cost and expense.

         

        
          
            
            

          

          
            36

            
              

            

          

          
            
            

          

        

        (b)           Environmental
          Matters.  Without limiting the representations and
          warranties of Buyer pursuant to Article 8 of this Agreement, Buyer further
          represents and warrants that no Property located in New Jersey constitutes
          an
“industrial establishment” or can be the subject of “negative declaration”
within the meaning of the Environmental Cleanup Responsibility Act and/or
          the
          Industrial Site Recovery Act, N.J.S.A. 13:1K-6
etseq..

         

        12.23.6     Pennsylvania.

         

        (a)           Zoning.  Without
          limiting the representations and warranties of Buyer pursuant to Article
          8 of
          this Agreement, Buyer hereby represents and warrants to Seller that Buyer
          as an
          Affiliate of Emeritus Lessee is fully aware of the zoning applicable to
          the
          Properties located in Allentown, PA and Latrobe, PA (the “Pennsylvania
          Properties”), and that the present use of such Properties by the applicable
          Emeritus Lessee thereof is in fully compliance with such
          zoning.  Seller hereby confirms to Buyer that Seller has not received
          notice of any uncorrected violations of housing, building, safety or fire
          ordinances.  Without in any way limiting the foregoing, Buyer hereby
          represents and warrants that (i) the current zoning classification of the
          Property located in Allentown, PA under the Zoning Code of Allentown is
“R-M”
Medium Density Residential District and (ii) the current zoning classification
          of the Property located in Latrobe, PA under the Zoning Code of Labrobe
          is “I”
Institutional Zone.

         

        (b)           Sewage
          Facility.  The Pennsylvania Sewage Facilities Act of
          January 24, 1966, No. 537 P.L. 1535, as amended, requires that there be
          a
          statement regarding the availability of a community sewage system.  In
          compliance therewith, and without limiting the representations and warranties
          of
          Buyer pursuant to Article 8 of this Agreement, Buyer hereby represents
          and
          warrants to Seller, and Seller hereby acknowledges, that the each of the
          Pennsylvania Properties are serviced by a community sewage system.

         

        (c)           Coal
          Notice.  NOTICE -- THIS AGREEMENT MAY NOT SELL, CONVEY,
          TRANSFER, INCLUDE OR INSURE THE TITLE TO THE COAL AND RIGHT OF SUPPORT
          UNDERNEATH THE SURFACE LAND DESCRIBED OR REFERRED TO HEREIN, AND THE OWNER
          OR
          OWNERS OF SUCH COAL MAY HAVE THE COMPLETE LEGAL RIGHT TO REMOVE ALL OF
          SUCH COAL
          AND, IN THAT CONNECTION, DAMAGE MAY RESULT TO THE SURFACE OF THE LAND AND
          ANY
          HOUSE, BUILDING OR OTHER STRUCTURE ON OR IN SUCH LAND.  THE INCLUSION
          OF THIS NOTICE DOES NOT ENLARGE, RESTRICT OR MODIFY ANY LEGAL RIGHTS OR
          ESTATES
          OTHERWISE CREATED, TRANSFERRED, EXCEPTED OR RESERVED BY THIS
          INSTRUMENT.  (This notice is set forth in the manner provided in
          Section 1 of the Act of July 17, 1957, P.L. 984, as amended, and is not
          intended as notice of unrecorded instruments, if any.)

         

        12.23.7     Texas.  The
          parties hereto waive any rights Uniform Vendor and Purchase Risk Act of
          the
          State of Texas.

         

        [Signature
          Page Follows]

        
          
            
            

          

          
            37

            
              

            

          

          
            
            

          

        

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

         

        
          	
                  SELLERS:

                	
                  HEALTH
                    CARE PROPERTY INVESTORS, INC.,

                
	 	
                  a
                    Maryland corporation

                
	 	 	 
	 	
                  By:    
                    /s/
                    Brian J. Maas

                
	 	 	
                  Brian
                    J. Maas

                
	 	
                  Its:
                    Senior Vice President

                
	 	 	 
	 	
                  HCPI
                    TRUST,

                
	 	
                  a
                    Maryland real estate trust

                
	 	 	 
	 	
                  By:

                	
                  /s/
                    Brian J. Maas

                
	 	
                  Brian
                    J. Maas

                
	 	
                  Its:

                	
                  Senior
                    Vice President

                
	 	 	 
	 	
                  TEXAS
                    HCP HOLDING, L.P.,

                
	 	
                  a
                    Delaware limited partnership

                
	 	 	 
	 	
                  By:

                	
                  Texas
                    HCP G.P., Inc.,

                
	 	 	
                  a
                    Delaware corporation,

                
	 	 	
                  its
                    general partner

                
	 	 	 
	 	
                  By:

                	
                  /s/
                    Brian J. Maas

                
	 	
                  Brian
                    J. Maas

                
	 	
                  Its:

                	
                  Senior
                    Vice President

                
	 	 	 
	 	
                  EMERITUS
                    REALTY V, LLC,

                
	 	
                  a
                    Delaware limited liability company

                
	 	 	 
	 	
                  By:

                	
                  Health
                    Care Property Investors, Inc.,

                  a
                    Maryland corporation,

                  its
                    sole member

                
	 	 	 
	 	 	 
	 	
                  By:
                    /s/ Brian J. Maas

                
	 	
                  Brian
                    J. Maas

                
	 	
                  Its:

                	
                  Senior
                    Vice President

                

        

         

        [Signature
          Page Continues on Following Page]

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	 	 	
                  ESC-LA
                    CASA GRANDE, LLC, a

                
	 	 	
                  a
                    Delaware limited liability company

                
	 	 	 	 
	 	 	
                  By:

                	
                  Health
                    Care Property Investors, Inc.,

                
	 	 	 	
                  a
                    Maryland corporation,

                
	 	 	 	
                  its
                    sole member

                
	 	 	 	 
	 	 	
                  By:

                	
                  /s/
                    Brian J. Maas

                
	 	 	
                  Brian
                    J. Maas

                
	 	 	
                  Its:

                	
                  Senior
                    Vice President

                

        

         

        [Signature
          Page Continues on Following Page]

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        
          	
                  BUYER:

                	
                  EMERITUS
                    CORPORATION,

                
	 	
                  a
                    Washington corporation

                
	 	 	 
	 	
                  By:

                	
                  /s/
                    Eric Mendelsohn

                
	 	 	
                  Eric
                    Mendelsohn

                
	 	 	
                  Director
                    of Real Estate and Legal Affairs

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        ACCEPTANCE
          BY TITLE COMPANY

         

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

         

        CHICAGO
          TITLE INSURANCE COMPANY

        

        

        
          	
                  By:

                	
                  /s/
                    Angie Koetters

                	 
	 	 	 
	
                  Its:

                	
                  Escrow
                    Officer

                	 

        

        

        Date:  June
          14, 2007

        

        
          	 	
                  Escrow
                    No.:

                	 	
                  D1
                    027047813

                	 
	 	 	 	 	 	 	 	 	 
	 	
                  Escrow
                    Officer:

                	 	
                  Angie
                    Koetters    

                	 
	 	 	 	
                  Telephone
                    No.:

                	 (312)
                  223-2718	 
	 	 	 	
                  Fax
                    No.:

                	(312)
                  223-5888	 
	 	 	 	 	 	 	 	 	 
	 	
                  Address
                    for Notices:

                	 	
                  Chicago
                    Title and Trust Company    

                	 
	 	 	 	
                  171
                    North Clark    

                	 
	 	 	 	
                  Chicago,
                    IL  60601    

                	 
	 	 	 	 	 	 	 	 	 
	 	
                  Wiring
                    Information:

                	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	
                  Bank:

                	 	
                  LaSalle
                    National Bank    

                	 
	 	 	 	
                  135
                    S. LaSalle Street    

                	 
	 	 	 	
                  Chicago,
                    IL  60603    

                	 
	 	 	 	 	 	 	 	 	 
	 	
                  ABA
                    No.:

                	 	     	 
	 	 	 	 	 	 	 	 	 
	 	
                  Credit
                    to:

                	 	
                  Chicago
                    Title and Trust Company, Loop    

                	 
	 	 	 	     	 
	 	 	 	     	 
	 	 	 	 	 	 	 	 	 
	 	
                  Account
                    No.:

                	 	    	 	 
	 	 	 	 	 	 	 	 	 
	 	
                  Reference:

                	 	
                  Escrow
                    No. D1 027047813    

                	 
	 	 	 	
                  Escrow
                    Officer:

                	Angie
                  Koetters	 
	 	 	 	 	Closing
                  Division: D1	 
	 	 	 	
                  Re:  HCP/Emeritusex10_6703.htm

    
      

    

    Exhibit
      10.67.03

    [Boise,
      Idaho]

     

    
      

      

    

     

    PURCHASE
      AND SALE AGREEMENT

    AND

    JOINT
      ESCROW INSTRUCTIONS

    

    

    By
      and
      Between

    

    

    HEALTH
      CARE PROPERTY INVESTORS, INC.,

    a
      Maryland corporation

    

    as
      “Seller”

    

    

    and

    

    

    EMERITUS
      CORPORATION,

    a
      Washington corporation,

    

    as
      “Buyer”

     

     

    
      

      

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    TABLE
      OF CONTENTS

    

    
      	 	 	
              Page

            
	 	 	 
	
              1.

            	
              DEFINITIONS

            	
              1

            
	 	 	 
	
              2.

            	
              SALE
                OF THE PROPERTY

            	
              4

            
	 	 	 
	
              3.

            	
              ESCROW

            	
              4

            
	 	 	 
	
              4.

            	
              PURCHASE
                PRICE; ALLOCATION OF PURCHASE PRICE

            	
              5

            
	 	 	 
	
              5.

            	
              CONDITIONS
                TO CLOSING; AS IS PURCHASE

            	
              5

            
	 	 	 
	
              6.

            	
              CLOSING
                OF ESCROW

            	
              8

            
	 	 	 
	
              7.

            	
              TERMINATION

            	
              13

            
	 	 	 
	
              8.

            	
              REPRESENTATIONS
                AND WARRANTIES

            	
              15

            
	 	 	 
	
              9.

            	
              CERTAIN
                EVENTS PRIOR TO CLOSING

            	
              17

            
	 	 	 
	
              10.

            	
              POST-CLOSING
                MATTERS

            	
              17

            
	 	 	 
	
              11.

            	
              BROKERS

            	
              18

            
	 	 	 
	
              12.

            	
              MISCELLANEOUS
                PROVISIONS

            	
              18

            

    

    

     

    
      	EXHIBITS 	 
	 	 
	
              A

            	
              Description
                of Emeritus Master Lease

            
	 	 
	
              B

            	
              Escrow
                General Provisions

            
	 	 
	
              C

            	
              [RESERVED]

            
	 	 
	
              D

            	
              Form
                of Quitclaim Bill of Sale

            
	 	 
	
              E

            	
              [RESERVED]

            
	 	 
	
              F

            	
              [RESERVED]

            
	 	 
	
              G

            	
              Nominee
                and Property/Facility

            
	 	 
	
              H

            	
              [Reserved]

            

    

    

     

    
      	SCHEDULE 	 
	
              1

            	
              Related
                Purchase Agreements

            

    

    

    
      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

    

    

    PURCHASE
      AND SALE AGREEMENT

    AND
      JOINT ESCROW INSTRUCTIONS

    

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

    

    RECITALS

    

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

    

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

    

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

    

    AGREEMENT

    

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

    

    1.            
      DEFINITIONS

    

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

    

    1.1             
      1031 Exchange:  As defined in
      Section 6.8.

    

    1.2             
      Additional
      Charges:  “Additional Charges,” as
      defined in the Emeritus Master Lease and allocable to the Property.

    

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

    

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

    

    1.5             
      Bill of Sale:  As defined in
      Section 6.2.2.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

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

    

    1.7             
      Closing Funds:  As defined in
      Section 4.4.

    

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

    

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

    

    1.10           
      Deed:  As defined in Section
      6.2.1.

    

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

    

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

    

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

    

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

    

    1.15           
      Escrow Holder:  As defined in
      Section 3.1.

    

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

    

    1.17           
      Funds:  Immediately available
      funds in the form of cash, wire transfer of funds, or a certified or bank
      cashier’s check drawn on a reputable financial institution acceptable to Escrow
      Holder.

    

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

    

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

    

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

    

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

    

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

    

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

    

    1.24           
      Liabilities: Any claim, liability,
      loss, cost, action, damage, expense or fees, including but not limited to
      reasonable attorney’s and paralegals’ fees and costs of defense (each, a
“Liability”).

    

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

    

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    

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

    

    1.27           Opening
      of Escrow:  As defined in Section
      3.3.

    

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

    

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

    

    1.30           Permitted
      Exceptions:  As defined in Section
      6.2.1.

    

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

    

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

    

    1.33           Purchase
      Price:  As defined in Section
      4.1.

    

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

    

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

    

    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

    1.43           Title
      Policy:  As defined in Section
      6.4.

    

    1.44           Title
      Endorsements:  As defined in Section
      6.4.

    

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

    

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

    

    2.            SALE
      OF THE PROPERTY

    

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

    

    3.           
      ESCROW

    

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

    

    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

    

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

    

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

    

    4.         
        PURCHASE PRICE; ALLOCATION OF PURCHASE
      PRICE

    

    4.1        
           Purchase
      Price.  The purchase price for the Property shall be Nine
      Million Three Hundred Seventy-One Thousand Five Hundred Ninety Dollars and
      00/100ths ($9,371,590.00) (the “Purchase Price”).

    

    4.2          
         [Intentionally Deleted.]

    

    4.3        
           [Intentionally
      Deleted.]

    

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

    

    5.         
        CONDITIONS TO CLOSING; AS IS PURCHASE

    

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

    

    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

    

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

    

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

    

    5.1.3    [Intentionally
      Omitted].

    

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

    

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

    

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

    

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

    

    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

    

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

    

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

    

       
      5.4.2    [Intentionally
      Omitted].

    

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

    

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

    

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

    

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

    

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

    

    
      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

    

    6.            CLOSING
      OF ESCROW

    

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

    

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

    

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

    

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

    

      
      6.2.3    [Intentionally
      Deleted];

    

      
      6.2.4    [Intentionally
      Deleted];

    

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

    

    
      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

    

    

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

    

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

     

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

    

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

    

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

    

       
      6.3.2    [Intentionally
      Deleted];

    

       
      6.3.3    [Intentionally
      Deleted]; .

    

       
      6.3.4    [Intentionally
      Deleted];

    

       
      6.3.5    [Intentionally
      Deleted];

    

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

     

    
      
        
          
          

        

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

     

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

     

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

    

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

    

    6.5        
           Prorations.

    

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

    

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

    

    
      
        
          
          

        

        
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    6.6         
          Closing and Transaction
      Costs.

    

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

    

      
      6.6.2    Upon
      the Closing, Buyer shall be responsible for:

    

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

    

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

    

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

    

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

    

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

    

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

    

      
      6.6.3    Upon
      the Closing, Seller shall be responsible for:

    

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

    

    
      
        
          
          

        

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

    
      
        
          
          

        

        
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      6.8.3    such
      other additional documents;

    

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

    

    7.      
           TERMINATION

    

    7.1           
        Early Termination for Failure of
      Conditions.

    

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

    

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

    

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

    

    
      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

    

    

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

    

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

    

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

    

    
      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

    

    

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

    

    8.          
       REPRESENTATIONS AND WARRANTIES

    

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

    

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

    

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

    

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

    

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

    

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

    

    
      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

    

    

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

    

      
      8.3.1    [Intentionally
      Deleted.]

    

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

    

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

    

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

    

      
      8.4.1    [Intentionally
      Deleted.]

    

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

    

    
      
        
          
          

        

        
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    9.        
         CERTAIN EVENTS PRIOR TO CLOSING

    

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

    

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

    

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

    

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

    

    10.          POST-CLOSING
      MATTERS

    

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

    

    
      
        
          
          

        

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

    

    11.           BROKERS

    

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

    

    12.           MISCELLANEOUS
      PROVISIONS

    

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

    

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

    

    
      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

    

    

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

    

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

    

    
      	
              If
                to Seller:

            	
              c/o
                Health Care Property Investors, Inc.

            
	 	
              3760
                Kilroy Airport Way, Suite 300

            
	 	
              Long
                Beach, California 90806

            
	 	
              Attn:       
                Legal Department

            
	 	
              Fax:         
                (562) 733-5200

            
	 	 
	
              with
                a copy to:

            	
              Latham
                & Watkins LLP

            
	 	
              650
                Town Center Drive, Suite 2000

            
	
               

            	
              Costa
                Mesa, California 92626-1925

            
	 	
              Attn:       
                David C. Meckler, Esq.

            
	
               

            	
              Fax:         
                (714) 755-8290

            
	 	 
	
              If
                to Buyer:

            	
              Emeritus
                Corporation

            
	 	
              3131
                Elliott Avenue, Suite 500

            
	 	
              Seattle,
                Washington  98121

            
	 	
              Phone:    
                (206) 301-4493

            
	 	
              Fax:         
                (206) 301-4500

            
	 	
              Attn:       
                Eric Mendelsohn

            
	 	 
	
              with
                a copy to:

            	
              Pircher,
                Nichols & Meeks

            
	 	
              900
                North Michigan Avenue, Suite 1050

            
	 	
              Chicago,
                Illinois 60611

            
	 	
              Attention:   Real
                Estate Notices (JDL/MJK)

            
	 	
              Phone:        
                (312) 915-3112

            
	 	
              Fax:             
                (312) 915-3348

            

    

    

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

    

    
      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

    

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

    
      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

    

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

    
      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

    

    

    BUYER’S
      INITIALS: /s/ EM

    

    SELLER’S
      INITIALS: /s/ BM

    

    12.19         Arbitration
      of Disputes.

    

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

    

    
      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

    

    

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

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    

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

    

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

    

    BUYER’S
      INITIALS: /s/ EM

    

    SELLER’S
      INITIALS: /s/ BM

    

    12.20         [Intentionally
      Omitted].

    

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

    

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

    

    [Signature
      Page Follows]

    

    
      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

    

    

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

    

    
      	
              SELLER:

            	HEALTH
              CARE PROPERTY INVESTORS, INC.,	 
	 	 	a
              Maryland corporation	 
	 	 	 	 	 
	 	 	By:	
              /s/
                Brian J. Maas

            	 
	 	 	 	 	 
	 	 	Brian
              J. Maas	 
	 	 	Its:	
              Senior
                Vice President

            	 

    

     

    

    [Signature
      Page Continues on Following Page]

    

    
      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

    

     

    
      	
              BUYER:

            	EMERITUS
              CORPORATION,	 
	 	 	a
              Washington corporation	 
	 	 	 	 	 
	 	 	By:	
              /s/
                Eric Mendelsohn

            	 
	 	 	 	
              Eric
                Mendelsohn

            	 
	 	 	 	
              Director
                of Real Estate and Legal Affairs

            	 

    

    

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    

    ACCEPTANCE
      BY TITLE COMPANY

    

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

    

    CHICAGO
      TITLE INSURANCE COMPANY

    

    

    
      	By:	/s/
              Angie
              Koetters                                                      	 
	 	 	 
	Its:
              	Escrow
              Officer	 

    

     

    Date:  August
      ___, 2007

     

    
      	 	
              Escrow
                No.:

            	
              27062176

            	 
	 	 	 	 
	 	
              Escrow
                Officer:

            	
              Angie
                Koetters

            	 
	 	 	
              Telephone
                No.:       

            	 (312)
              223-2718	 
	 	 	
              Fax
                No.:  

            	 (312)
              223-5888	 
	 	 	 	 
	 	
              Address
                for Notices:

            	
              Chicago
                Title and Trust Company

            	 
	 	 	
              171
                North Clark

            	 
	 	 	
              Chicago,
                IL  60601

            	 
	 	 	 	 
	 	
              Wiring
                Information:

            	 	 
	 	 	 	 
	 	
              Bank:

            	
              LaSalle
                National Bank

            	 
	 	 	
              135
                S. LaSalle Street

            	 
	 	 	
              Chicago,
                IL  60603

            	 
	 	 	 	 
	 	
              ABA
                No.:

            	   	 
	 	 	 	 
	 	
              Credit
                to:

            	
              Chicago
                Title and Trust Company, Loop

            	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	
              Account
                No.:

            	   	 
	 	 	 	 
	 	
              Reference:

            	
              Escrow
                No. D1 027047813

            	 
	 	 	Escrow
              Officer:      	
              Angie
                Koetters

            	 
	 	 	 	
              Closing
                Division: D1

            	 
	 	 	
              Re:  HCP/Emeritus

            	 

    

    

     

    3

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