Document:

EX 10.53.23 1ST Amend to restated master lease jun 30 05

    FIRST
      AMENDMENT TO AMENDED AND RESTATED

    MASTER
      LEASE AGREEMENT

    

    

    THIS
      FIRST AMENDMENT TO AMENDED AND RESTATED MASTER LEASE AGREEMENT (“First
      Amendment”) is dated as of June ___, 2005 (the “First Amendment Effective
      Date”) by and among HEALTH
      CARE REIT, INC.,
      a
      corporation organized under the laws of the State of Delaware (“HCRI” and a
“Landlord”), HCRI MISSISSIPPI
      PROPERTIES, INC,
      a
      corporation organized under the laws of the State of Mississippi (“HCRI-MS” and
      a “Landlord”), HCRI MASSACHUSETTS
      PROPERTIES TRUST II,
      a
      business trust organized under the laws of the Commonwealth of Massachusetts
      (“HCRI-MA” and a “Landlord”), and HCRI TEXAS
      PROPERTIES, LTD.,
      a
      limited partnership organized under the laws of the State of Texas (“HCRI-TX”
      and a “Landlord”), each Landlord having its principal office located at One
      SeaGate, Suite 1500, P.O. Box 1475, Toledo, Ohio 43603-1475,
      and
EMERITUS
      CORPORATION,
      a
      corporation organized under the laws of the State of Washington (“Tenant”),
      having its chief executive office located at 3131 Elliott Avenue,
      Suite 500, Seattle, Washington 98121.

     

    R
      E C I T A L S

     

    A.  HCRI,
      HCRI-MS, HCRI-MA and HCRI-TX, as Landlord, and Tenant entered into an Amended
      and Restated Master Lease Agreement dated effective as of September 30,
      2003 (“Master Lease” and together with this First Amendment, collectively, the
“Lease”).

     

    B.  Tenant
      desires to construct a 17 unit addition (“Addition”) at the Elmbrook
      Estates facility located in Lubbock, Texas. Landlord has agreed to make an
      Investment Advance in the amount of $1,660,000 to fund the construction of
      the
      Addition.

     

    C.  Landlord
      and Tenant desire to further amend the Lease to provide for the construction
      of
      the Addition, to increase the Investment Amount and as otherwise set forth
      herein.

     

    NOW,
      THEREFORE, in consideration of the foregoing recitals and for other good and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties hereto agree as follows.

     

    1.  Capitalized
      Terms.
      Any
      capitalized terms not defined in this First Amendment shall have the meaning
      set
      forth in the Lease.

     

    2.  Affiliate.
      The
      definition of “Affiliate” in §1.4 of the Lease is hereby amended to read in its
      entirety as follows:

     

    “Affiliate”
      means any person, corporation, partnership, limited liability company, trust,
      or
      other legal entity that, directly or indirectly, controls, or is controlled
      by,
      or is under common control with Tenant or Guarantor. “Control” (and the
      correlative meanings of the terms “controlled by” and “under common control
      with”) means the possession, directly or indirectly, of the power to direct or
      cause the direction of the management and policies of such entity. “Affiliate”
      includes, 

     

    
      
        
        

      

      
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    without
      limitation, Guarantor. An Affiliate of Tenant and Guarantor shall specifically
      exclude [i] Saratoga
      Partners IV, L.P. (“Saratoga”); [ii] Senior Healthcare Partners, LLC;
      [iii] Columbia
      Pacific Management, Inc.; [iv] Holiday
      Retirement Corporation; and [v] Alterra
      Healthcare Corporation, but only prior to the date of Tenant’s acquisition
      thereof; and
      [iv] any Affiliate of any of the entities listed in clauses [i]
      through [v].

     

    3.  Lubbock
      Addition Contingent Payment.
      The
      definition of “Lubbock Addition Contingent Payment” is hereby added to §1.4 of
      the Lease:

     

    “Lubbock
      Addition Contingent Payment” means $1,660,000.00. At such time as the Lubbock
      Addition Contingent Payment is fully disbursed, the Lubbock Addition Contingent
      Payment shall be deemed to be an Investment Advance and the Base Rent shall
      be
      adjusted according to the Rent Schedule attached hereto as
      Schedule 1.

     

    4.  Commitment.
      The
      definition of “Commitment” in §1.4 of the Lease is hereby amended to read in its
      entirety as follows:

     

    “Commitment”
      means the Commitment Letter for the Lease dated August 15, 2003 as modified
      by the Amended and Restated Project Approval Letter dated April 27,
      2005.

     

    5.  Disbursing
      Agreement.
      The
      definition of “Disbursing Agreement is hereby added to §1.4 of the
      Lease:

     

    “Disbursing
      Agreement” means any Construction Disbursing Agreement between Landlord and
      Tenant setting forth the terms and conditions pursuant to which Landlord shall
      make Contingent Payments to or for the benefit of Tenant for certain Project
      Improvements and any amendments thereto or substitutions and replacements
      therefore, including, but not limited to, the Construction Disbursing Agreement
      of even date in connection with the Lubbock Addition.

     

    6.  Late
      Payment Charge. §8.5
      “Late Payment Charge” of the Lease is hereby amended in its entirety as
      follows:

     

    8.5 Late
      Payment Charge.

     

    (a) Rent.
      Tenant
      acknowledges that any default in the payment of any installment of Rent payable
      hereunder will result in loss and additional expense to Landlord in servicing
      any indebtedness of Landlord secured by the Leased Property, handling such
      delinquent payments, and meeting its other financial obligations, and because
      such loss and additional expense is extremely difficult and impractical to
      ascertain, Tenant agrees that in the event any Rent payable to Landlord
      hereunder is not paid within 10 days after the due date, Tenant shall
      pay a
      late charge of 5% of the amount of the overdue payment as a reasonable estimate
      of such loss and expenses, unless applicable law requires a lesser charge,
      in
      which event the maximum rate permitted by such law may be charged by

     

    
      
        
        

      

      
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    Landlord.
      The 10-day period set forth in this section shall run concurrently with the
      10-day period contemplated under §8.1(a) and shall not otherwise extend the time
      for payment of Rent or the period for curing any default or constitute a waiver
      of such default.

     

    (b) Non-Rent
      Obligations.
      With
      respect to Non-Rent obligations, Tenant acknowledges that any default in the
      payment of any amount payable by Tenant to Landlord under this Lease will result
      in loss and additional expense to Landlord in servicing any indebtedness of
      Landlord secured by the Leased Property, handling such delinquent payments,
      and
      meeting its other financial obligations, and because such loss and additional
      expense is extremely difficult and impractical to ascertain, Tenant agrees
      that
      in the event such amount is not paid within 10 days after the due date
      or
      within 10 days after receipt of any invoice from Landlord (if Landlord
      is
      obligated under the terms of the Lease to provide an invoice), Tenant shall
      pay
      a late charge of 5% of the amount of the overdue payment as a reasonable
      estimate of such loss and expenses, unless applicable law requires a lesser
      charge, in which event the maximum rate permitted by such law may be charged
      by
      Landlord. The 10-day period set forth in this section shall run concurrently
      with the 10-day period contemplated under §8.1(a) and shall not otherwise extend
      the time for payment of the invoice or the period for curing any default or
      constitute a waiver of such default.

     

    7.  Subordination
      of Payments to Affiliates.
§14.6
      “Subordination of Payments to Affiliates” of the Lease is hereby amended in its
      entirety as follows:

     

    14.6 Subordination
      of Payments to Affiliates.

     

    (a) Except
      as
      otherwise provided in §14.6(b) below, after the occurrence of an Event of
      Default and until such Event of Default is cured or waived in writing, Tenant
      and Guarantor shall not make any payments or distributions (including, without
      limitation, salary, bonuses, fees, principal, interest, dividends, liquidating
      distributions, management fees, cash flow distributions or lease payments)
      to
      Guarantor, any Affiliate, or any shareholder, member or partner of Tenant,
      Subtenant or any Affiliate.

     

    (b) Notwithstanding
      the provisions of §14.6(a) or any other provision to the contrary contained in
      this Lease, [1] whether or not there is outstanding an Event of Default,
      the following shall be expressly permitted: [A] salaries paid to employees
      of the Facilities or employees of Tenant and Subtenant in the ordinary course
      of
      business; [B] equity contributions and inter-company loans from Tenant
      to
      its direct and indirect subsidiaries made in the ordinary course of business;
      [C] with respect to Subtenant, (i) distributions, dividends and
      repayments of inter-company loans to Tenant made in the ordinary course of
      business and (ii) payment to Tenant under the Sublease covering the
      Texas
      Facilities and provided that any such payment will be held in trust by Tenant
      for the sole purpose of paying Rent to Landlord; and [D] with respect
      to
      the preferred stock of Tenant issued to Saratoga, PIK dividends; and [2] so
      long as there is no Event of 

     

    
      
        
        

      

      
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    Default
      under §8.1(a) of this Lease or under the Working Capital Loan, Tenant may pay
      cash dividends to Saratoga or to any other preferred shareholder of Tenant
      who
      is not an Affiliate of Tenant.

     

    8.  Facility
      Licensure and Certification.
§15.8
      Facility Licensure and Certification is hereby amended in its entirety as
      follows:

     

    15.8 Facility
      Licensure and Certification.

     

    15.8.1 Notice
      of Inspection.
      Tenant
      and Subtenant, as applicable, shall [i] give written notice to Landlord
      within five days after an inspection of the Facility with respect to health
      care
      licensure or certification has occurred; and [ii] deliver to Landlord
      copies of each of the reports, notices, correspondence and all other items
      and
      documents listed under item no. 18 of Exhibit E within five days
      after
      receipt thereof. Tenant and Subtenant acknowledge that each has reviewed
      Exhibit E and agrees to the foregoing obligation.

     

    15.8.2 Material
      Deficiencies.
      If
      Tenant or Subtenant receives a Facility survey or inspection report with
      material deficiencies that threatens a loss of licensure or, if applicable,
      certification of the Facility or the imposition of a ban on admissions to the
      Facility (the “Material Deficiencies”) or notice of failure to comply with a
      previously submitted plan of correction or an HIPDB adverse action report
      related to any Material Deficiencies, Tenant and Subtenant shall cure all of
      the
      Material Deficiencies and implement all corrective actions with respect thereto
      by the date required by the regulatory authority and shall deliver evidence
      of
      same to Landlord.

     

    9.  Lubbock
      Addition Contingent Payment.
      The
      following §17.4 is hereby added to the Lease:

     

    17.4 Lubbock
      Addition Contingent Payment.
      Tenant
      shall cause each Lubbock Addition Contingent Payment to be requested by
      submitting a Disbursement Voucher pursuant to the Disbursing Agreement. Landlord
      shall make Contingent Payments, but never in excess of the Lubbock Addition
      Contingent Payment, provided that [i] no Event of Default has occurred
      and
      is continuing, and [ii] Landlord has determined in its reasonable
      discretion that all other requirements for the Lubbock Addition Contingent
      Payment have been satisfied or waived. Unless otherwise requested by or on
      behalf of Tenant and agreed to by Landlord, Contingent Payments will be made
      not
      less than eight Business Days and not more than twelve Business Days following
      Tenant’s delivery of the Disbursement Voucher by or on behalf of
      Tenant.

     

    17.4.1 Conditions.
      In
      addition to any other requirements set forth in this section, Landlord’s
      obligation to make Lubbock Addition Contingent Payments is subject to the
      conditions set forth in the Disbursing Agreement related to the Lubbock Addition
      Project Improvements. Landlord’s commitment to make Contingent Payments under
      this section shall expire on September 1, 2005.

     

    10.  Permitted
      Exceptions.
      Exhibit B of the Lease is hereby amended to read in its entirety as
      set
      forth on Exhibit B attached hereto.

     

    11.  Facility
      Information.
      Exhibit C of the Lease is hereby amended to read in its entirety as
      set
      forth on Exhibit C attached hereto.

     

    12.  Affirmation.
      Except
      as specifically modified by this First Amendment, the terms and provisions
      of
      the Lease are hereby affirmed and shall remain in full force and
      effect.

     

    13.  Binding
      Effect.
      This
      First Amendment will be binding upon and inure to the benefit of the successors
      and permitted assigns of Landlord and Tenant.

     

    14.  Further
      Modification.
      The
      Lease may be further modified only by writing signed by Landlord and
      Tenant.

     

    15.  Counterparts.
      This
      First Amendment may be executed in multiple counterparts, each of which shall
      be
      deemed an original hereof, but all of which will constitute one and the same
      document.

     

    16.  Subtenant
      and Consent of Guarantor.
      Texas-ESC Lubbock, L.P., as Subtenant and Guarantor, is signing this First
      Amendment for the purpose of consenting to the terms and conditions set forth
      herein. This First Amendment shall have no force or effect unless and until
      the
      Guarantor has executed the Consent of Guarantor set forth below.

     

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    IN
      WITNESS WHEREOF, Landlord and Tenant have executed this First Amendment as
      of
      the date first set forth above.

     

    
      	
              Signed
                and acknowledged in the presence of:

               

               

              Signature
                /s/ Rita J Rogge

               

              Print
                Name  Rita J. Rogge

               

               

               

              Signature 
                /s/ Kathleen A. Sullivan

               

              Print
                Name  Kathleen A. Sullivan 

               

            	
              HEALTH
                CARE REIT, INC.

               

              By: 
                /s/ Erin C. Ibele

                  
                 Erin
                C. Iblele

                    
                Title:  Vice President - Administration and Corporate
                Secretary

            
	 	 
	
               

               

               

              Signature 
                /s/ Rita J Rogge

               

              Print
                Name  Rita J. Rogge

               

               

               

              Signature 
                /s/ Kathleen A. Sullivan

               

              Print
                Name  Kathleen A. Sullivan 

               

            	
              HCRI MISSISSIPPI
                PROPERTIES, INC.

               

              
                By: 
                  /s/ Erin C. Ibele

                    
                   Erin
                  C. Iblele

                      
                  Title:  Vice President - Administration and Corporate
                  Secretary

              

            
	 	 
	
               

               

               

               

               

               

               

               

               

               

               

               

              Signature 
                /s/ Rita J Rogge

               

              Print
                Name  Rita J. Rogge

               

               

               

              Signature 
                /s/ Kathleen A. Sullivan

               

              Print
                Name  Kathleen A. Sullivan 

               

            	
              HCRI MASSACHUSETTS
                PROPERTIES TRUST II

               

              By: HCRI Massachusetts
                Properties, Inc., as Trustee, and not individually, and subject to
                the
                provisions of the Declaration of HCRI Massachusetts Properties
                Trust II filed with the Secretary of the Commonwealth of
                Massachusetts and the City Clerk of Boston

               

              
                By: 
                  /s/ Erin C. Ibele

                    
                   Erin
                  C. Iblele

                      
                  Title:  Vice President - Administration and Corporate
                  Secretary

              

            
	 	 
	
               

               

               

               

               

              Signature 
                /s/ Rita J Rogge

               

              Print
                Name  Rita J. Rogge

               

               

               

              Signature 
                /s/ Kathleen A. Sullivan

               

              Print
                Name  Kathleen A. Sullivan 

               

            	
              HCRI TEXAS
                PROPERTIES, LTD.

               

              By: Health
                Care REIT, Inc., General Partner

               

              
                
                  By: 
                    /s/ Erin C. Ibele

                      
                     Erin
                    C. Iblele

                        
                    Title:  Vice President - Administration and Corporate
                    Secretary

                

              

               

              
                 

              

            
	 	 
	
               

               

               

              Signature 
                /s/ Tara Anderson

                            

              Print
                Name  Tara Anderson 

               

               

               

              Signature 
                /s/ Alyce Conti

               

              Print
                Name  Alyce Conti

               

            	
              EMERITUS
                CORPORATION

               

              By:
                /s/  William M. Shorten 

                    
                William M.
                Shoten

                    
Title: 
                Director of Real Estate Finance

               

              Tax
                I.D. No.:  91-1605464

            
	 	 
	
               

               

               

               

               

              Signature 
                /s/ Tara Anderson

               

              Print
                Name  Tara Anderson 

               

               

               

              Signature 
                /s/ Alyce Conti

               

              Print
                Name   Alyce Conti

               

            	
              TEXAS-ESC-LUBBOCK,
                L.P.

               

              By: ESC
                G.P. II, Inc., its General Partner

              
                By:
                  /s/  William M. Shorten 

                      
                  William M.
                  Shoten

                      
Title: 
                  Director of Real Estate Finance

                 

              

              Tax
                I.D. No.:  91-1741861

            

    

    

     

    
      
        
        

      

      
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              STATE
                OF OHIO )

              )
                SS:

              COUNTY
                OF LUCAS )

               

              The
                foregoing instrument was acknowledged before me this ___ day
                of June,
                2005
                by
                _________________________, the _________________________ of Health
                Care
                REIT, Inc., a Delaware corporation, on behalf of the
                corporation.

               

              Notary
                Public

               

              My
                Commission Expires: [SEAL]

            
	 
	
              STATE
                OF OHIO )

              )
                SS:

              COUNTY
                OF LUCAS )

               

              The
                foregoing instrument was acknowledged before me this ___ day
                of June,
                2005
                by
                _________________________, the _________________________ of
                HCRI Mississippi Properties, Inc., a Mississippi corporation,
                on
                behalf of the corporation.

               

              Notary
                Public

               

              My
                Commission Expires: [SEAL]

            
	 
	
              STATE
                OF OHIO )

              )
                SS:

              COUNTY
                OF LUCAS )

               

              The
                foregoing instrument was acknowledged before me this ___ day
                of June,
                2005 by _________________________, the _________________________
                of
                HCRI Massachusetts Properties, Inc., a Delaware corporation,
                as
                Trustee, on behalf of and as the free act and deed of
                HCRI Massachusetts Properties Trust II, a Massachusetts
                business
                trust.

               

              Notary
                Public

               

              My
                commission expires: [SEAL]

            
	 

    

    
      
        
        

      

      
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              STATE
                OF OHIO )

              )
                SS:

              COUNTY
                OF LUCAS )

               

              The
                foregoing instrument was acknowledged before me this ___ day
                of June,
                2005
                by
                _________________________, the _________________________ of Health
                Care
                REIT, Inc., a Delaware corporation and the general partner of
                HCRI Texas Properties, Ltd., a limited partnership organized
                under
                the laws of the State of Texas on behalf of the limited
                partnership.

               

              Notary
                Public

               

              My
                Commission Expires: [SEAL]

            
	 
	
              STATE
                OF WASHINGTON )

              )
                SS:

              COUNTY
                OF KING )

               

              The
                foregoing instrument was acknowledged before me this
                _22nd__ day of June, 2005
                by
                _William M. Shorten________________________, the _Director of
                Real Estate Finance________________________ of Emeritus Corporation, a
                Washington
                corporation, on behalf of the corporation.

               

              Notary
                Public /s/ Ellie J. Keen

               

              My
                Commission Expires: [SEAL]
                2/28/09

            
	 

    

    
      
        
        

      

      
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              STATE
                OF WASHINGTON )

              )
                SS:

              COUNTY
                OF KING )

               

              The
                foregoing instrument was acknowledged before me this
                _22nd__ day of June, 2005
                by
                __William M. Shorten___________, the __Director of Real Estate
                Finance_ of ESC G.P. II, Inc., the general partner of
                Texas-ESC-Lubbock, L.P., a Washington limited partnership, on behalf
                of
                the limited partnership.

               

              Notary
                Public  /s/ Ellie J. Keen

               

              My
                Commission Expires: [SEAL] 
                2/28/09

            

    

    

    

    THIS
      INSTRUMENT PREPARED BY:

    

    Oksana M.
      Ludd, Esq.

    Shumaker,
      Loop & Kendrick, LLP

    1000 Jackson

    Toledo,
      Ohio 43624

    

    
      
        
        

      

      
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    CONSENT
      OF GUARANTOR

    

    

    The
      undersigned Guarantor hereby [i] consents to the foregoing First Amendment,
      [ii] agrees to be bound by the terms and provisions of the First Amendment
      to the extent applicable to the undersigned pursuant to the Guaranty or the
      Lease, [iii] affirms the Guaranty which shall remain in full force and
      effect, and [iii] waives any suretyship defenses arising in connection
      with
      the First Amendment. All capitalized terms not defined herein shall have the
      meaning set forth in the foregoing First Amendment.

     

    
      	 	
              TEXAS-ESC-LUBBOCK,
                L.P.

               

              By: ESC
                G.P. II, Inc., its General Partner

              By: 
                /s/  William M. Shorten

                         
                Title: 
                Director of Real Estate
                Finance

            

    

    

    

    
      
        
        

      

      
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    EXHIBIT B-1:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Loyalton at Rancho Solano

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              A
                Rancho Solano Development Agreement executed by The City of Fairfield
                and
                William L. Smith and Sally L. Smith, recorded June 12,
                1985
                as Instrument No. 25637 in Book 1985, page 50327
                of the
                Official Records; First Amendment to Rancho Solano Development Agreement,
                recorded November 12, 1985 in Book 1985, page 107968
                of the
                Official Records as Instrument No. 53392; and Second Amendment
                to
                Rancho Solano Development Agreement, recorded December 8,
                1986 in
                Book 1986, page 147516 of the Official Records as Instrument
                No. 71771.

            

    

     

    
      	3.  	
              A
                public service easement in favor of City of Fairfield, recorded
                May 1, 1991 as Instrument
                No. 910028835.

            

    

     

    
      	4.  	
              Covenants,
                conditions and restrictions as set forth in the document recorded
                August 24, 1994 as Instrument
                No. 1994-00077900.

            

    

     

    
      	5.  	
              An
                Agreement Affecting Real Property Wastewater Service Agreement executed
                by
                Smith Ranch Company and The Fairfield-Suisun Sewer District recorded
                March 27, 1996 as Instrument
                No. 1996-00019849.

            

    

     

    
      	6.  	
              Easements
                as shown on the Parcel Map, recorded at Book 40, page 10,
                as
                follows:

            

    

     

    
      	(a)  	
              Public
                service easement affecting the Easterly portions of
                Parcel 1;

            

    

    
      	(b)  	
              Private
                utility easement affecting a 15-foot strip of land within the
                Southwesterly portion of
                Parcel 1;

            

    

    
      	(c)  	
              Public
                service easement, private access easement and private utility easement
                affecting a portion of the Westerly and Southwesterly 40 feet
                of
                Parcel 1;

            

    

    
      	(d)  	
              Public
                service easement affecting a meandering 40-foot strip of land within
                the
                Westerly portion of Parcel 1;
                and

            

    

    
      	(e)  	
              Planting
                easement affecting the Easterly and Southerly 10 feet of
                Parcel 1.

            

    

     

    
      	7.  	
              A
                private access easement and private utility easement in favor of
                Smith
                Ranch Company, recorded August 1, 1996 as Instrument
                No. 1996-00051992.

            

    

     

    
      	8.  	
              A
                Maintenance Agreement executed by Smith Ranch Company and Fairfield
                Retirement Center, LLC, recorded August 1, 1996 as Instrument
                No. 1996-00051993.

            

    

     

    
      	9.  	
              Underground
                utilities easement in favor of Pacific Gas and Electric Company,
                recorded
                April 8, 1997 as Instrument
                No. 1997-00020927.

            

    

     

    
      	10.  	
              A
                Property Maintenance Agreement executed by Fairfield Retirement Center,
                LLC and the City of Fairfield, recorded September 3, 1997
                as
                Instrument No. 1997-00057266.

            

    

     

    
      	11.  	
              A
                cable television and communication facilities easement in favor of
                Century
                Communications, recorded May 18, 1998 as Instrument
                No. 1998-00037024.

            

    

     

    
      	12.  	
              Any
                facts, rights, interests or claims which may exist or arise by reason
                of
                the following matters shown on ALTA Survey entitled “ALTA SURVEY for
                Northbay at Rancho Solano (Loyalton of Rancho Solano)” prepared by
                Carlile-Macy, dated March 27, 2002 as
                follows:

            

    

     

    
      	(a)  	
              Temporary
                construction trailer, temporary overhead power poles and power lines,
                all
                being in the southwesterly portion of the
                property.

            

    

     

    

     

    

     

    
      
        
        

      

      
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    EXHIBIT B-2:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Creston Village

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              A
                private easement of ingress and egress in favor of the public and
                all
                owners of property contiguous thereto, recorded August 29,
                1968 in
                Book 1486, page 510 of the Official
                Records.

            

    

     

    
      	3.  	
              A
                road easement as shown on Parcel Map PR 79-119, recorded
                November 13, 1979 in Book 28, page 79 of Parcel
                Maps.

            

    

     

    
      	4.  	
              Covenants,
                conditions and restrictions as set forth in the document recorded
                November 16, 1979 in Book 2203, page 54 of the
                Official
                Records.

            

    

     

    
      	5.  	
              An
                irrevocable offer to dedicate real property to public use for roads,
                recorded April 22, 1997 as Instrument No. 1997-019987
                of the
                Official Records.

            

    

     

    
      	6.  	
              Easements
                granted to the City of El Paso De Robles recorded April 22,
                1997 as Instrument No. 1997-019987 of the Official Records,
                as
                follows:

            

    

     

    
      	(a)  	
              For
                transmit shelter affecting the Easterly portion of
                Parcel 1;

            

    

    
      	(b)  	
              For
                non-access affecting the Westerly portion of
                Parcel 1;

            

    

    
      	(c)  	
              For
                sidewalks affecting the Easterly portion of Parcels 1 and
                2;

            

    

    
      	(d)  	
              For
                open space affecting the Northerly portion of
                Parcel 1;

            

    

    
      	(e)  	
              For
                water pipelines, appurtenances, ingress, egress, maintenance and
                repair
                easement affecting the Southwesterly portion of
                Parcel 1;

            

    

    
      	(f)  	
              For
                sewer pipelines, appurtenances, ingress, egress, maintenance and
                repair
                easement affecting the Southwesterly portion of Parcel 1;
                and

            

    

    
      	(g)  	
              For
                access affecting a portion of
                Parcel 1.

            

    

     

    
      	7.  	
              Resolution
                by and between TDC/Emeritus Corporation Paso Robles Associates and
                the
                City of El Paso De Robles, recorded May 1, 1998
                as
                Instrument No. 1998-025643 of the Official
                Records.

            

    

     

    
      	8.  	
              Any
                rights, interest or claims which may exist or arise by reason of
                the
                following facts shown on a survey plat entitled ALTA/ACSM Land Title
                Survey, dated March 26, 2002, prepared by North Coast Engineering,
                Inc.:

            

    

     

    
      	(a)  	
              Area
                subject to inundation during 100-year storm affecting Northwesterly
                portion of Parcel 1;

            

    

    
      	(b)  	
              The
                fact that block wall is located between .88’ and 1.04’ Southerly of a
                portion of the Northerly boundary of Parcel 1;
                and

            

    

    
      	(c)  	
              The
                fact that block wall along the Westerly boundary is located on property
                to
                the West of Parcel 2 and portion of
                Parcel 1.

            

    

     

    

     

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-3:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Canterbury Ridge

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              Easement
                in favor of the Urbana & Champaign Sanitary District, recorded
                June 10, 1966 in Book 824, page 580 as Document
                No. 747985.

            

    

     

    
      	3.  	
              Covenants
                and restrictions provisions relating to the Eastgate Detention Basin
                Association and Assessments, Architectural Committee and to building
                setback lines, all as contained in the Subdivision No. 1 recorded
                June 26, 1996 in Book ”CC” at page 181 as Document
                No. 96R15730 and as amended in Document No. 96R30131
                recorded
                December 6, 1996.

            

    

     

    
      	4.  	
              An
                easement for sidewalk and utilities over the west 10 feet,
                for
                sidewalk over the westerly part of the north 15 feet, and
                for
                utilities over the North 15 feet, and the East and South
                10 feet.

            

    

     

    
      	5.  	
              Ordinance
                No. 9495-65 approving an Annexation Agreement for
                Meijer-Douglas-Atkins, recorded July 13, 1995 in Book 2311
                at
                page 606 as Document
                No. 95R13702.

            

    

     

    
      	6.  	
              Covenants,
                conditions and restrictions contained in the Reciprocal Construction,
                Operation and Easement Agreement, recorded April 4, 1995 in
                Book 2184 at page 660 as Document No. 95R05944
                made by and
                between Meijer Realty Company and Clinton C. Atkins, and a
                Covenant
                and Agreement dated December 10, 1996 and recorded January 2,
                1997 in Book 2480 at page 311 as Document
                No. 97R00173.

            

    

     

    
      	7.  	
              A
                Partial Vacation of Plat for Eastgate Subdivision No. 1, recorded
                July 14, 1997 as Document
                No. 97R16112.

            

    

     

    
      	8.  	
              Zoning
                Decision Sheet recorded July 23, 1997 as Document
                No. 97R16998.

            

    

     

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-4:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Loyalton of Hattiesburg

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              Title
                to all minerals within and underlying the premises, together with
                all
                mining rights and other rights, privileges and immunities relating
                thereto.

            

    

     

    [Remaining
      Permitted Exceptions to be provided post-closing]

     

    

     

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-5:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Loyalton of Flagstaff

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              Any
                charge upon said land by reason of its inclusion in Woodlands Village
                Association. (All assessments which are due and payable have been
                paid.)

            

    

     

    
      	3.  	
              Reservations
                contained in the Patent from the United States of America, as recorded
                June 17, 1949 in Book 11 of Official Records, page 147,
                reading as follows:

            

    

     

    Subject
      to any vested and accrued water rights for mining, agricultural manufacturing,
      or other purposes, and rights to ditches and reservoirs used in connection
      with
      such water rights as may be recognized and acknowledged by the local customs,
      laws, and decisions of courts; and there is reserved from the lands hereby
      granted, a right of way thereon for ditches or canals constructed by the
      authority of the United States of America. Excepting and Reserving, also to
      the
      United States, pursuant to the provisions of the Act of August 1, 1946,
      (60 Stat. 755), all uranium, thorium, or any other material which
      is
      or may be determined to be peculiarly essential to the production of fissionable
      materials, whether or not of commercial value, together with the right of the
      United States through its authorized agents or representatives at any time
      to
      enter upon the land and prospect for, mine and remove the same.

     

    
      	4.  	
              Water
                rights, claims or title to water, whether or not the matters excepted
                are
                shown by the public records.

            

    

     

    
      	5.  	
              Easements
                as set forth on the plat recorded in Case 4, Maps 131-131B,
                as
                located and shown on ALTA/ACSM Land Title Survey performed by
                Kenneth A. Krenke RPLS NO. 14671 of Northland Exploration
                Surveys, Inc., dated April 29, 1999, Job
                No. 98-016.

            

    

     

    
      	6.  	
              All
                matters as set forth in the Covenants, Conditions, and Restrictions
                in
                instrument recorded August 1, 1984 in Docket 989, page 455,
                re-recorded August 1, 1985 in Docket 1043, page 182,
                recorded June 2, 1995 in Docket 1774, page 813,
                and as
                amended by Amendment dated May 30, 1996 and recorded June 3,
                1996 in Docket 1881, page 360, but deleting any covenant,
                condition or restriction indicating a preference, limitation or
                discrimination based on race, color, religion, sex, handicap, familiar
                status or national origin to the extent such covenants, conditions
                or
                restrictions violate
                42 USC 3604(c).

            

    

     

    
      	7.  	
              Subdivider
                Agreement between the City of Flagstaff and Woodlands Village, Subdivider,
                recorded October 5, 1987 in Docket 1182,
                page 954.

            

    

     

    
      	8.  	
              All
                matters set forth in Development Agreement between City of Flagstaff
                and
                VVC, Inc., am Arizona Corporation, recorded June 9, 1995,
                in
                Docket 1776, page 263.

            

    

     

    
      	9.  	
              All
                matters set forth in Conditional Use Permit recorded November 24,
                1997 in Docket 2044,
                page 346.

            

    

     

    
      	10.  	
              An
                easement for public utility and rights incident thereto as granted
                in
                instrument recorded March 10, 1999 in Docket 2214,
                page 580, as located and shown an ALTA/ACSM Land Title Survey
                performed by Kenneth A. Krenke, RPLS NO. 14671 of Northland
                Exploration Surveys, Inc., dated April 29, 1999, Job
                No. 98-016.

            

    

     

    
      	11.  	
              Rights
                of parties in possession, as tenants
                only.

            

    

     

    
      	12.  	
              Easement
                and rights incident thereto, as set forth in instrument recorded
                in
                Docket 203, page 25, for telephone and telegraph
                lines.

            

    

     

    
      	13.  	
              Any
                rights, interest or claims which may exist or arise by reason of
                the
                following facts shown on a survey plat entitled ALTA/ACSM Land Title
                Survey of Lot 50, Woodlands Village Unit Three, Case 4,
                Maps 131-131B, Job No. 98-016, dated April 29,
                1999,
                prepared by Kenneth A. Krenke, Northland Exploration Surveys,
                Inc.

            

    

     

    Encroachments
      into setbacks:

     

    Deck
      and
      stairs

    Parking
      site located an the West side of the property

    Asphalt
      roadways

    Vertical
      curb and gutters

    CMU
      retaining walls for detention areas

     

    
      	14.  	
              EASEMENT
                and rights incident thereto, as set forth in
                instrument:

            

    

     

    
      	
              Recorded
                in Docket:

            	
              2214

            
	
              Page:

            	
              580

            
	
              Purpose:

            	
              Utilities

            

    

    

    

     

    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-6:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Loyalton of Phoenix

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              Reservations
                contained in the Patent from the United States of America, reading
                as
                follows:

            

    

     

    Subject
      to any vested and accrued water rights for mining, agricultural, manufacturing,
      or other purposes, and rights to ditches and reservoirs used in connection
      with
      such water rights as may be recognized and acknowledged by the local customs,
      laws and decisions of courts; and there is reserved from the lands hereby
      granted, a right of way thereon for ditches or canals constructed by the
      authority of the United States of America.

     

    
      	3.  	
              Water
                rights, claims or title to water, whether or not the matters excepted
                are
                shown by the public records.

            

    

     

    
      	4.  	
              An
                easement for roadway and rights incident thereto as set forth in
                insolent
                recorded Docket 3555,
                page 286.

            

    

     

    
      	5.  	
              A
                plat recorded in Book 13, page 70, of Road Maps, purporting
                to
                show a county roadway and thereafter a partial abandonment recorded
                in
                84-039960, of Official Records.

            

    

     

    
      	6.  	
              An
                easement for highway purposes and rights incident thereto as set
                forth in
                instrument recorded in 87-395490 of Official
                Records.

            

    

     

    
      	7.  	
              An
                easement for highway purposes and rights incident thereto as set
                forth in
                instrument recorded in 87-585651 of Official
                Records.

            

    

     

    
      	8.  	
              All
                matters as set forth in Revocation of Paradise Festival Declaration
                and
                Establishment of Protective Covenants, Conditions and Restrictions
                and
                Grant of Easements, dated January 22, 1997, recorded January 23,
                1997 in 97-0044914, of Official
                Records.

            

    

     

    
      	9.  	
              All
                matters set forth in Map of Dedication recorded in Book 457
                of Maps,
                page 30.

            

    

     

    
      	10.  	
              An
                easement for electric line and rights incident thereto as granted
                in
                instrument recorded September 29, 1998 in 98-864657 of Official
                Records.

            

    

     

    
      	11.  	
              The
                rights of parties in possession by reason of any unrecorded lease
                or
                leases or month to month tenancies affecting any portion of the within
                described property.

            

    

     

    

     

    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-7:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Park Club of Brandon

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              Terms,
                conditions, declarations, uses, options, leases, agreements, easements,
                covenants, restrictions, and assessments, as shown in Declaration
                of
                Condominium for Brandon Village dated June 30, 1995 and recorded
                July 3, 1995 in Official Records Book 7808, page 1746,
                Public Records of Hillsborough County,
                Florida.

            

    

     

    
      	3.  	
              Easement
                granted to Tampa Electric Company by Central Park Lodges, Inc., recorded
                October 18, 1990, in Official Records Book 6109, page 141,
                Public Records of Hillsborough County,
                Florida.

            

    

     

    
      	4.  	
              Rights,
                duties, obligations, covenants, conditions, terms and other matters
                as set
                out in Agreement dated April 11, 1990, between Paragon Communications
                d/b/a Paragon Cable and Central Park Lodges, Inc., as referenced
                in
                Memorandum of Agreement between same parties recorded in Official
                Records
                Book 6051, page 496, Public Records of Hillsborough
                County,
                Florida.

            

    

     

    
      	5.  	
              Perpetual
                Utility Easement granted to Hillsborough County, a Political Subdivision
                of the State of Florida, by Central Park Lodges, Inc., recorded
                March 26, 1991, in Official Records Book 6225, page 1557,
                Public Records of Hillsborough County,
                Florida.

            

    

     

    
      	6.  	
              Any
                claim by the Condominium Association for assessments, resulting from
                the
                effect of Florida Statutes 718.116(5)(a) and the provisions
                of
                Chapter 718 of the Florida Statutes as
                amended.

            

    

     

    
      	7.  	
              Rights
                of parties in possession, as tenants only, under unrecorded occupancy
                agreements.

            

    

     

    

     

    

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-8:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Park Club of Fort Myers

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              Rights
                of Robert Cody Brown, Trustee, his successors, legal representatives
                and assigns, forever, and all persons claiming by, through or under
                the
                same, by virtue of that certain reservation (grant or lease, etc.)
                of the
                oil, gas and/or minerals lying within the lands as described in that
                certain Deed, recorded March 22, 1949, in Deed Book 193,
                page 377, Public Records of Lee County,
                Florida.

            

    

     

    
      	3.  	
              Easement
                for roadway and public utility purposes disclosed in Warranty Deed
                from
                McIntyre, Inc., a Florida corporation, to Tindale, Inc., a Florida
                corporation, dated December 29, 1978, recorded in Official
                Records
                Book 1338, page 442, Public Records of Lee County,
                Florida.

            

    

     

    
      	4.  	
              Terms,
                covenants, conditions, right, duties and obligations contained in
                Road
                Maintenance Agreement between Arbor Living Centers of Florida, Inc.,
                McIntyre, Inc., and Flamborough Group, Inc., dated July 7,
                1987,
                recorded July 7, 1987, in Official Records Book 1927,
                page 4693, Public Records of Lee County,
                Florida.

            

    

     

    
      	5.  	
              Easement
                granted to United Telephone Company of Florida, from Leslie T.
                Ahrenholz, dated November 16, 1987, recorded November 25,
                1987,
                in Official Records Book 1955, page 1572, Public Records
                of Lee
                County, Florida.

            

    

     

    
      	6.  	
              Rights
                of parties in possession, as tenants only, under unrecorded occupancy
                agreements.

            

    

     

    

     

    

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-9:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Park Club of Oakbridge

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              Terms,
                conditions, declarations, uses, options, leases, agreements, easements,
                covenants, restrictions, and assessments, as shown in Declaration
                of
                Covenants, Conditions and Restrictions (Oakbridge Owners’ Association No.
                One, Inc.), recorded July 2, 1986, in Official Records
                Book 2435, page 960; together with Amendments recorded
                January 28, 1987, in Official Records Book 2495, page 1256,
                recorded October 26, 1989, in Official Records Book 2791,
                page 992, Book 3670 page 1026, Book 4532
                page 1964, and Book 4703 page 287, all in the
                Public
                Records of Polk County, Florida.

            

    

     

    
      	3.  	
              Terms,
                conditions, declarations, uses, options, leases, agreements, easements,
                covenants, restrictions, and assessments, as shown in Declaration
                of
                Condominium of Oakbridge at Lakeland, a condominium, recorded in
                Official
                Records Book 3549, page 835, Public Records of Polk
                County,
                Florida.

            

    

     

    
      	4.  	
              Any
                claim by the Condominium Association for Assessments recorded after
                date
                of the deed to which this exhibit is attached, resulting from the
                effect
                of Florida
                Statute 718.116(5)(a).

            

    

     

    
      	5.  	
              Drainage
                Easement (Parcel Five), as disclosed in the Deed from Drummond Company,
                Inc., an Alabama Corporation, to Polk County, a Florida Political
                Subdivision, dated March 23, 1987, Recorded May 8,
                1987, in
                Official Records Book 2526, page 1074, Public Records
                of Polk
                County, Florida.

            

    

     

    
      	6.  	
              Recreation,
                Landscape and Utility Easement Grant granted to Oakbridge Owners’
                Association No. One, Inc., a Florida not-for-profit corporation,
                from
                Drummond Company, Inc., an Alabama corporation, dated October 23,
                1989, recorded October 26, 1989, in Official Records Book 2791,
                page 997, Public Records of Polk County,
                Florida.

            

    

     

    
      	7.  	
              Public
                Utility Easement granted to City of Lakeland, Florida, from Central
                Park
                Lodge, Inc., a Delaware corporation, dated July 1, 1991, recorded
                July 30, 1991, in Official Records Book 2997, page 1870,
                Public Records of Polk County,
                Florida.

            

    

     

    
      	8.  	
              Public
                Utility Easement granted to City of Lakeland, Florida, from Central
                Park
                Lodge, Inc., a Delaware corporation, dated July 1, 1991, recorded
                July 30, 1991, in Official Records Book 2997, page 1872,
                Public Records of Polk County,
                Florida.

            

    

     

    
      	9.  	
              Public
                Utility Easement granted to City of Lakeland, Florida, from Central
                Park
                Lodge, Inc., a Delaware corporation, dated July 1, 1991, recorded
                July 30, 1991, in Official Records Book 2997, page 1874,
                Public Records of Polk County,
                Florida.

            

    

     

    
      	10.  	
              Public
                Utility Easement granted to City of Lakeland, Florida, from Central
                Park
                Lodge, Inc., a Delaware corporation, dated July 1, 1991, recorded
                July 30, 1991, in Official Records Book 2997, page 1876,
                Public Records of Polk County,
                Florida.

            

    

     

    
      	11.  	
              Terms
                and provisions contained in the Indemnification Agreement, dated
                November 11, 1991, between Central Park Lodge, Inc., and the
                City of
                Lakeland, Florida, recorded November 26, 1991, in Official
                Records
                Book 3038, page 391; and re-recorded December 18,
                1991, in
                Official Records Book 3045, page 2190, Public Records
                of Polk
                County, Florida.

            

    

     

    
      	12.  	
              Public
                Utility Easement granted to City of Lakeland, Florida, from Central
                Park
                Lodge, Inc., a Delaware corporation, dated January 29, 1992,
                recorded
                March 11, 1992, in Official Records Book 3075, page 196,
                Public Records of Polk County,
                Florida.

            

    

     

    
      	13.  	
              Rights
                of parties in possession, as tenants only, pursuant to unrecorded
                occupancy agreements.

            

    

     

    
      	14.  	
              Terms
                and conditions of the Easement/Maintenance/Quitclaim Agreement between
                Drummond Company, Inc., an Alabama corporation, Oakbridge Owners’
                Association No. One, Inc., a Florida not-for-profit corporation and
                The
                Falls at Oakbridge Office Condominium Association, Inc., a Florida
                not-for-profit corporation, dated as of March 4, 1998, recorded
                March 31, 1998 in O.R. Book 4000, page 707,
                Polk County
                Records.

            

    

     

    
      	15.  	
              Terms
                and conditions of that certain Easement and Maintenance Agreement
                recorded
                in Official Records Book 4409,
                page 908.

            

    

     

    

     

    

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-10:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Colonial Park Club

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              Water
                and Sewer Extension Agreement recorded in Official Records Book 1953,
                page 1204.

            

    

     

    
      	3.  	
              Permanent
                Easement in favor of Sarasota County recorded in Official Records
                Book 1992, page 1931.

            

    

     

    
      	4.  	
              Easement
                in favor of Florida Power & Light Company recorded in Official Records
                Book 2082, page 2807.

            

    

     

    
      	5.  	
              Easement
                in favor of Atlantic Utilities of Sarasota, Inc. recorded in Official
                Records Book 2482,
                page 936.

            

    

     

    
      	6.  	
              Permanent
                Easement (Lift Station) in favor of Atlantic Utilities of Sarasota,
                Inc.
                recorded in Official Records Book 2482,
                page 945.

            

    

     

    
      	7.  	
              Grant
                of Easement in favor of Storer Cable Communications of West Florida,
                Inc.
                recorded in Official Records Book 2770,
                page 766.

            

    

     

    
      	8.  	
              Terms
                and Conditions of Lease as shown in Memorandum of Lease by and between
                Health Care REIT, Inc. (Lessor) and Emeritus Corporation (Lessee),
                dated
                September 30, 2003 and recorded in
                Instrument #20032049975.

            

    

     

    

     

    

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-11:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Ridgewind

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              Levies
                and assessments under the Fort Hall Irrigation Project for the year
                2003
                and subsequent years.

            

    

     

    
      	3.  	
              10 foot
                wide Utility Easement affecting the West side of subject property
                as
                disclosed by the recorded plat of Ridgewind Subdivision, Instrument
                No. 96012449.

            

    

     

    
      	4.  	
              An
                easement for the purposes shown below and right incidental thereto
                as set
                forth in document:

            

    

     

    
      	
              Granted
                to:

            	
              Idaho
                Power Company

            
	
              Purpose:

            	
              Public
                Utilities

            
	
              Recorded:

            	
              November 3,
                1995

            
	
              Instrument
                No.:

            	
              95016515
                of Official Records

            

    

    

    
      	5.  	
              Rights
                of parties in possession, as tenants only, under unrecorded occupancy
                agreements.

            

    

     

    

     

    

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-12:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Loyalton of Coeur D’Alene

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              Rights
                of parties in possession, as tenants only, under unrecorded occupancy
                agreements.

            

    

     

    
      	3.  	
              An
                easement for the purpose shown below and rights incidental thereto
                as set
                forth in a document:

            

    

     

    
      	
              Granted
                to:

            	
              Washington
                Water Power Company

            
	
              Purpose:

            	
              Public
                Utilities

            
	
              Recorded:

            	
              February 23,
                1977

            
	
              Recording
                No.:

            	
              Book 281
                of Deeds, page 373, Records of Kootenai County,
                Idaho

            

    

    

    
      	4.  	
              An
                easement for the purpose shown below and rights incidental thereto
                as set
                forth in a document:

            

    

     

    
      	
              Granted
                to:

            	
              City
                of Coeur D’Alene

            
	
              Purpose:

            	
              Public
                Roadway

            
	
              Recorded:

            	
              March 16,
                1982

            
	
              Recording
                No.:

            	
              Book 317
                of Deeds, page 68, Records of Kootenai County,
                Idaho

            

    

    

    The
      land
      described in said easement is wholly located within the limits of 2nd Street.

     

    
      	5.  	
              An
                easement for the purpose shown below and rights incidental thereto
                as set
                forth in a document:

            

    

     

    
      	
              Granted
                to:

            	
              City
                of Coeur D’Alene

            
	
              Purpose:

            	
              Public
                Roadway

            
	
              Recorded:

            	
              March 16,
                1982

            
	
              Recording
                No.:

            	
              Book 317
                of Deeds, page 68, Records of Kootenai County,
                Idaho

            

    

    

    The
      land
      described in said easement is wholly located within the limits of Anton
      Avenue.

     

    

     

    

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-13:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Highland Hills

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              Easements
                shown on Plat of East Village 2nd
                Addition, Instrument
                No. 91000937:

            

    

     

    
      	(a)  	
              55-foot
                wide drainage easement affecting the Northern portion of subject
                property

            

    

    
      	(b)  	
              15-foot
                wide utility easement affecting the Northeast portion of subject
                property.

            

    

     

    
      	3.  	
              Easement
                for roadway granted to Lutheran Church, Missouri Synod recorded as
                Instrument No. 646828.

            

    

     

    
      	4.  	
              An
                easement for the purpose shown below and rights incidental thereto
                as set
                forth in document:

            

    

     

    
      	
              Granted
                to:

            	
              Intermountain
                Gas Company

            
	
              Purpose:

            	
              Public
                Utilities

            
	
              Recorded:

            	
              December 23,
                1986

            
	
              Instrument
                No.:

            	
              786788
                of Official Records

            

    

    

    
      	5.  	
              An
                easement for the purpose shown below and rights incidental thereto
                as set
                forth in document:

            

    

     

    
      	
              Granted
                to:

            	
              Idaho
                Power Company

            
	
              Purpose:

            	
              Public
                Utilities

            
	
              Recorded:

            	
              November 14,
                1991

            
	
              Recording
                No.:

            	
              90014597
                of Official Records

            

    

    

    
      	6.  	
              Provisions
                in Deed recorded October 1, 1996 as Instrument No. 96016751
                retaining as easement for Public Utilities and Ingress and Egress
                said
                easement being the same as disclosed on Record of Survey recorded
                September 30, 1994, as Instrument
                No. 94017802.

            

    

     

    
      	7.  	
              Rights
                of parties in possession, as tenants only, under unrecorded occupancy
                agreements.

            

    

     

    

     

    

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-14:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Loyalton of Hagerstown

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              Special
                Assessments.

            

    

     

    
      	3.  	
              Water
                rent and sewer service charges.

            

    

     

    
      	4.  	
              Unrecorded
                leases and tenants in possession.

            

    

     

    
      	5.  	
              Right
                of Way from Lewis M Miller and Grace E. Miller, his
                wife, to
                Columbia Gas of Maryland, Inc. recorded Liber 884 at folio 514.
                This right of way is also labeled and shown on plat recorded on
                August 10, 1994 as Plat Number 4408 and the line of
                that
                easement is shown, but not labeled on plat recorded on March 3,
                1998
                as Plat Number 5577.

            

    

     

    
      	6.  	
              Plat
                entitled Final Plat of Subdivision Lot 1 Emeritus Assisted
                Living
                Facility recorded in the Land Records of Washington County, Maryland
                on
                March 3, 1998 as Plat No. 5577 shows or discloses the
                following:

            

    

     

    
      	(a)  	
              Minimum
                building restriction lines established and
                shown.

            

    

    
      	(b)  	
              Stormwater
                management easement established and
                shown.

            

    

    
      	(c)  	
              Twenty
                foot (20”) sanitary easement established and
                shown.

            

    

    
      	(d)  	
              Eight
                foot (8”) (along side or rear lines) and ten foot (10”) (along front line)
                drainage and utility easements established, but not
                shown.

            

    

    
      	(e)  	
              References
                to proposed use as an assisted living facility, the zoning ordinance,
                Board of Zoning Appeals case (Docket No. AP97-049) set forth
                in
                Notes.

            

    

    
      	(f)  	
              Possible
                watershed effect set forth in
                Notes.

            

    

    
      	(g)  	
              Matters
                relating to address assignments, accessories and forest conservation
                ordinance set forth in Notes.

            

    

     

    Note
      indicates that the subdivision plat recorded at Plat No. 5577 and the
      approved site plan address the requirements recorded at Plat
      No. 4408:

     

    Note 6:
      60 feet from the center of Robinwood Drive is dedicated for future road
      widening.

     

    
      	7.  	
              Terms
                and conditions affecting appurtenant easements established in Roadway
                and
                Access Easement Agreement by and between Triad Properties, a Maryland
                General Partnership, and Meditrust Company LLC, a Delaware limited
                liability company, dated April 27, 1998 and recorded April 30,
                1998 in Liber 1406 at folio 600 among the Land Records
                of
                Washington County, Maryland. NOTE: There are indemnification provisions
                in
                paragraphs 4 and 5, which will survive the public dedication
                of Rose
                Bank Way.

            

    

     

    
      	8.  	
              Easements
                burdening Parcel 1 and terms and conditions affecting appurtenant
                easements established in Reciprocal Sewer Easement Agreement by and
                between Triad Properties, a Maryland General Partnership, and Meditrust
                Company LLC, a Delaware limited liability company, dated April 27,
                1998 and recorded April 30, 1998 in Liber 1406 at folio 608
                

            

    

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    among
      the
      Land Records of Washington County, Maryland. NOTE: There are indemnification
      provisions in paragraphs 4 an 5 which will survive the public dedication
      of
      Rose Bank Way and establishment of easement over the same.

     

    
      	9.  	
              Terms
                and conditions affecting appurtenant easements established in Water
                Easement Agreement by and between Triad Properties, a Maryland General
                Partnership, and Meditrust Company LLC, a Delaware limited liability
                company, dated April 27, 1998 and recorded April 30,
                1998 in
                Liber 1406 at folio 617 among the Land Records of Washington
                County, Maryland.

            

    

     

    
      	10.  	
              Easements
                established in Stormwater Easement Agreement by and between Triad
                Properties, a Maryland General Partnership, and Meditrust Company
                LLC, a
                Delaware limited liability company, dated April 27, 1998 and
                recorded
                April 30, 1998 in Liber 1406 at folio 625 among
                the Land
                Records of Washington County,
                Maryland.

            

    

     

    
      	11.  	
              Inspection
                and Maintenance Agreement of Private Stormwater Management Facilities
                by
                and between Meditrust Company LLC, a Delaware limited liability company,
                and Washington, County, Maryland dated June 16, 1998 and recorded
                July 14, 1998 in Liber 1425 at folio 414 among
                the Land
                Records of Washington County,
                Maryland.

            

    

     

    
      	12.  	
              Terms
                and conditions concerning the development and construction of a
                100 unit assisted living facility situate on the insured property
                disclosed in Collateral Assignment of Developer Agreement by and
                between
                Emeritus Properties I, Inc. and Meditrust Acquisition
                Corporation I recorded October 6, 1998 in Liber 1444
                at
                folio 262 and Assignment and Assumption of Developer Agreement
                by and
                between Emeritus Properties I, Inc. and Emeritus Corporation
                recorded
                October 6, 1998 in Liber 1444 at
                folio 291.

            

    

     

    
      	13.  	
              Right
                of Way Agreement by and between Meditrust Company LLC, a Delaware
                limited
                liability company, and The Potomac Edison Company dated February 10,
                1999 and recorded March 8, 1999 in Liber 1479 at folio 548
                among the Land Records of Washington County,
                Maryland.

            

    

     

    
      	14.  	
              Plat
                of subdivision recorded as Plat No. 4408 discloses the
                following:

            

    

     

    
      	(a)  	
              Owners
                statement as set forth thereon;

            

    

    
      	(b)  	
              Note
                as set forth thereon;

            

    

    
      	(c)  	
              Gas
                markers.

            

    

     

    
      	15.  	
              Conditions
                accompanying the subordination of the lien secured by the Indemnity
                Deed
                of Trust recorded in Liber 1209 at folio 134 to the
                benefit of
                the easements established in agreements recorded in Liber 1406
                at
                folios 600, 608 and 617 set forth in Subordination, Non-Disturbance
                and Recognition by and between Citizens National Bank of Southern
                Pa. and
                Meditrust Company LLC, a Delaware limited liability company, dated
                April 28, 1998 and recorded April 30, 1998 in Liber 1406
                at
                folio 633 among the Land Records of Washington County,
                Maryland.

            

    

     

    

     

    

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-15:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Pines of Tewksbury

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              Rights
                of parties in possession, as tenants only, under unrecorded occupancy
                agreements.

            

    

     

    
      	3.  	
              Utility
                Easement from Silver Lake Evangelical Camp Meeting Association to
                Lowell
                Electric Light Corp., dated July 9, 1926 and recorded with
                Middlesex
                North District Registry of Deeds in Book 739, page 150
                and
                delineated in Plan Book 49,
                page 14B.

            

    

     

    
      	4.  	
              Drainage
                Easement to the Commonwealth of Massachusetts, dated August 5,
                1936
                and recorded with Middlesex North District Registry of Deeds in
                Book 885, page 294.

            

    

     

    
      	5.  	
              Rights
                and Easement granted by Marvin Blank, Managing Partner of
                the High
                Point General Partnership/TMA to New England Telephone and Telegraph
                Company dated November 2, 1989 and recorded with the Middlesex
                North
                District Registry of Deeds in Book 5061,
                Page 26.

            

    

     

    
      	6.  	
              Survey
                plan entitled “ALTA/ASCM Title Survey (Class A) 2580 Main
                Street”, Tewksbury, MA., owned by: Emeritus Corporation, dated
                February 29, 1996, scale 1” = 40’, prepared by Cuoco &
                Cormier Engineering Associates, Inc. Civil Engineers - Land Surveyors,
                disclosed the following matters:

            

    

     

    
      	(a)  	
              Parking
                spaces and various improvements located within the 50 foot
                minimum
                setback line along Main Street;

            

    

    
      	(b)  	
              Parking
                spaces and various improvements located within the 30 foot
                sideyard
                setback line along Westerly boundary
                line;

            

    

    
      	(c)  	
              Driveway,
                pavement and stockage fence located within the 15 foot sideyard
                setback line along the Easterly boundary line;
                and

            

    

    
      	(d)  	
              Curbing
                and sign located within Main
                Street.

            

    

     

    
      	7.  	
              Terms
                and provisions of Order of Conditions from Tewksbury Conservation
                Commission to Paul E. Allen and Doris M. Allen dated
                September 19, 1988 and recorded with said Deeds in Book 4673,
                page 319, as amended by an Order of the Tewksbury Conservation
                Commission dated November 23, 1988 and recorded with said
                Deeds on
                December 22, 1988 in Book 4758, page 125, as
                affected by
                Certificate of Compliance recorded in Book 5283,
                page 319.

            

    

     

    
      	8.  	
              Terms
                and provisions of a Special Permit granted by the Tewksbury Board
                of
                Appeals to High Point Partnership recorded with said Deeds in
                Book 4401, page 244, as extended by grant of said Board
                of
                Appeals dated October 24, 1988 and recorded with said Deeds
                in
                Book 4758, page 124.

            

    

     

    
      	9.  	
              Terms
                and Provisions of Special Permit granted by the Town of Tewksbury
                Planning
                Board to High Point General Partnership/TMA, recorded with said Deeds
                in
                Book 4758, page 158.

            

    

     

    
      	10.  	
              Terms
                and provisions of a Special Permit from the Town of Tewksbury Board
                of
                Selectmen to High Point General Partnership recorded with said Deeds
                in
                Book 4758, page 163.

            

    

     

    
      	11.  	
              Terms
                and provisions of a Special Permit granted by the Town of Tewksbury
                Board
                of Appeals dated August 11, 1994, recorded with said Deeds
                in
                Book 7349, page 215.

            

    

     

    
      	12.  	
              Matters
                shown on Preliminary ALTA/ACSM Survey prepared by Cuoco &
                Cormier, dated February 25, 1999, Job #99-02-23:008,
                of
                2580 Main Street, Tewksbury,
                MA:

            

    

     

    
      	(a)  	
              Wetlands
                Area visible on premises.

            

    

     

    

     

    

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-16:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Loyalton of Lakewood

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              Rights
                of the public in and to that portion of premises lying in the bed
                of
                Southwestern Drive.

            

    

     

    
      	3.  	
              Terms,
                covenants, conditions and restrictions contained in an instrument
                recorded
                in Liber 2379 of Deeds at page 154 on December 31,
                1997.

            

    

     

    
      	4.  	
              Easement
                Agreement between June Holmes Fagerstrom and Village of Lakewood
                for
                Water Main replacement dated December 31, 1997 and recorded
                December 31, 1997 in Liber 2379 of Deeds,
                page 159.

            

    

     

    
      	5.  	
              Memorandum
                of Lease made by Meditrust Company LLC to Painted Post Properties,
                Inc.,
                dated September 15, 1998 and recorded September 23,
                1998 in
                Liber 2397 of Deeds at
                page 62.

            

    

     

    
      	6.  	
              Exceptions
                as disclosed by Survey made by Michael J. Rodgers,
                R.P.L.S. 49232 of Michael J. Rodgers Land Surveyor,
                PC, dated
                July 27, 1999, last revised September 7, 1999, as
                follows:

            

    

     

    
      	(a)  	
              Water
                line, utility pole, electric and telephone lines, storm sewer and
                sanitary
                sewer along easterly line within bed of
                roadway.

            

    

     

    

     

    

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-17:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Meadowbrook

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              Rights
                of parties in possession, as tenants only, under unrecorded occupancy
                agreements.

            

    

     

    
      	3.  	
              Regulations,
                including levies, assessments, water and irrigation rights and easement
                for ditches and canals of the Owyhee Irrigation
                District.

            

    

     

    
      	4.  	
              An
                easement, including the terms and provisions
                thereof:

            

    

     

    
      	
              In
                favor of:

            	
              City
                of Ontario, a municipal corporation

            
	
              Purpose:

            	
              Perpetual
                Utility Easement

            
	
              Affects:

            	
              The
                west 30 feet of Parcel 1

            
	
              Dated:

            	
              February 2,
                1976

            
	
              Recorded:

            	
              February 10,
                1977

            
	
              Recording
                No.:

            	
              26086
                of Deed Records

            

    

    

    
      	5.  	
              An
                easement, including the terms and provisions
                thereof:

            

    

     

    
      	
              In
                favor of:

            	
              The
                City of Ontario, a municipal corporation

            
	
              Purpose:

            	
              Utility
                easement for water and sewer lines across the west 30 feet
                of
                Parcel 2

            
	
              Dated:

            	
              January 16,
                1976

            
	
              Recorded:

            	
              February 10,
                1977

            
	
              Recording
                No.:

            	
              26084
                of Deed Records

            

    

    

    
      	6.  	
              An
                easement, including the terms and provisions
                thereof:

            

    

     

    
      	
              In
                favor of:

            	
              Kevin T.
                Hill and Kathie A. Hill, husband and wife

            
	
              Purpose:

            	
              Building
                setback to comply with the City of Ontario zoning ordinances, 16 feet
                wide and 101.33 feet long, adjoining said property along the
                south
                line of Parcel No. 1

            
	
              Dated:

            	
              November 7,
                1995

            
	
              Recorded:

            	
              January 9,
                1996

            
	
              Recording
                No.:

            	
              96-204
                of Deed Records

            

    

    

    
      	7.  	
              The
                following matters shown on the survey prepared by Gaschler & Cummings,
                Civil Engineering and Land Surveying, dated May 5, 1997, designated
                as Job No. SO-3297, Drawing
                No. S03297-C681:

            

    

     

    
      	(a)  	
              Fence
                encroaching onto Parcel 1 by 1.0
                feet

            

    

    
      	(b)  	
              Fence
                encroaching onto Parcel 1 by
                0.5 feet

            

    

    
      	(c)  	
              Building
                encroaching into 30.0 foot sewer easement by 0.30 feet
                and
                overhang by 2.3 feet along the west
                line.

            

    

     

    

     

    

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-18:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Anderson Place

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              Easements
                granted to City of Anderson, its successors and assigns, dated
                October 13, 1986 for the purpose of operating, maintaining,
                repairing; altering and replacing and/or removing sewer pipelines
                recorded
                in Record Book 20X, at page 394 on October 14,
                1986 fifteen
                feet wide as shown on the Farmers & Simpson Engineers plat dated
                February 24, 1999.

            

    

     

    
      	3.  	
              Easement
                granted to Duke Power Company dated November 23, 1983 for
                the
                overhead or underground lines for transmitting and distributing power
                by
                electricity over a portion of said land recorded in Record Book 20D,
                at page 907 on January 13,
                1984.

            

    

     

    
      	4.  	
              Easement
                granted to Duke Power Company dated April 16, 1984 for the
                overhead
                or underground lines for transmitting and distributing power by
                electricity, and for communicative purposes over a portion of said
                land
                recorded in Record Book 20T, at page 567 on April 22,
                1984.

            

    

     

    
      	5.  	
              Easement.
                Protective Covenants and Restrictions, and the terms and provisions
                contained therein dated October 31, 1983 and recorded in Record
                Book 20C, at page 744 on November 3, 1983. These
                recorded
                restrictive covenants reserve a 10 foot easement for the purpose
                of
                installing and maintaining municipal and public utility facilities,
                and
                for such other purposes incidental to the development of the property
                across and through the property.

            

    

     

    
      	6.  	
              Rights
                of the public and others in and to the use of the portion of premises
                within the bounds of Simpson Road.

            

    

     

    
      	7.  	
              Rights
                of parties in possession, as tenants only; under unrecorded occupancy
                agreements.

            

    

     

    

     

    

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-19:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Elmbrook Estates

     

    
      	1.  	
              Shortages
                in area.

            

    

     

    
      	2.  	
              Homestead
                or community property or survivorship rights, if any, of any spouse
                of any
                insured.

            

    

     

    
      	3.  	
              Any
                titles or rights asserted by anyone, including but not limited to,
                persons, the public, corporations, governments or other
                entities:

            

    

     

    
      	a.  	
              to
                tidelands, or lands comprising the shores or beds of navigable or
                perennial rivers and streams, lakes, bays, gulfs or oceans;
                or

            

    

    
      	b.  	
              to
                lands beyond the line of the harbor or bulkhead lines as established
                or
                changed by any government; or

            

    

    
      	c.  	
              to
                filled-in lands, or artificial islands;
                or

            

    

    
      	d.  	
              to
                statutory water rights, including riparian rights,
                or

            

    

    
      	e.  	
              to
                the area extending from the line of mean low tide to the line of
                vegetation, or the right of access to that area or easement along
                and
                across that area.

            

    

     

    
      	4.  	
              Standby
                fees, taxes and assessments by any taxing authority for the year
                2003 and
                subsequent years, and subsequent taxes and assessments by any taxing
                authority for prior years due to change in land usage or
                ownership.

            

    

     

    
      	5.  	
              The
                following matters and all terms of the documents creating or offering
                evidence of the matters:

            

    

     

    
      	a.  	
              Rights
                or claims of parties in possession, as residents only, with no purchase
                options and no rights of first
                refusal.

            

    

    
      	b.  	
              Mineral
                estate and interest described in instrument recorded in Volume 253,
                Page 272, Deed Records, Lubbock County,
                Texas.

            

    

    
      	c.  	
              Rights
                incident to the ownership and lessees of 1/4th
                non-participating royalty of the minerals reserved in Volume 253,
                Page 282, Deed Records, Lubbock County,
                Texas.

            

    

     

    

     

    

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-20:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Loyalton of Staunton

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              A
                30-foot wide easement granted to Virginia Electric and Power Company
                by
                Gail G. Brown by instrument dated June 30, 1997, recorded
                in
                Deed Book 394, page 236, located as shown on plat of
                ALTA/ACSM
                Land Title Survey prepared by Jerry L. Brunk, R.P.L.S. No. 1323
                of Brunk & Hylton Engineering, Inc., dated July 7, 1999,
                last revised August 6, 1999, Project No. 97007.4.
                (Parcels 1 and 2)

            

    

     

    
      	3.  	
              A
                15-foot wide easement granted to Virginia Electric and Power Company
                by
                Meditrust Company, LLC, by instrument dated January 22, 1999,
                recorded in Deed Book 418, page 354, located as shown
                on plat of
                ALTA/ACSM Land Title Survey prepared by Jerry L. Brunk, R.P.L.S.
                No. 1323 of Brunk & Hylton Engineering, Inc., dated
                July 7, 1999, last revised August 6, 1999, Project
                No. 97007.4. (Parcel 1)

            

    

     

    
      	4.  	
              A
                20-foot wide easement for sanitary sewer lines granted to the City
                of
                Staunton, Virginia, by Gail G. Brown and David W. Brown by instrument
                dated July 2, 1997, recorded in Deed Book 394, page 241,
                located as shown on plat of ALTA/ACSM Land Title Survey prepared
                by Jerry
                L. Brunk, R.P.L.S. No. 1323 of Brunk & Hylton Engineering,
                Inc., dated July 7, 1999, last revised August 6, 1999,
                Project
                No. 97007.4. (Parcel 2)

            

    

     

    
      	5.  	
              A
                20-foot wide easement for sanitary sewer lines granted to the City
                of
                Staunton, Virginia, by Gail G. Brown and David W. Brown by instrument
                dated July 11, 1994, recorded in Deed Book 353, page 414,
                located as shown on plat of ALTA/ACSM Land Title Survey prepared
                by
                Jerry L. Brunk, R.P.L.S. No. 1323 of Brunk & Hylton
                Engineering, Inc., dated July 7, 1999, last revised August 6,
                1999, Project No. 97007.4.
                (Parcel 2)

            

    

     

    
      	6.  	
              A
                20-foot wide easement for water lines granted to the Augusta County
                Service Authority by Gail G. Brown by instrument dated June 6,
                1989, recorded in Deed Book 296, page 781, located
                as shown on
                plat of ALTA/ACSM Land Title Survey prepared by Jerry L. Brunk,
                R.P.L.S. No. 1323 of Brunk & Hylton Engineering, Inc., dated
                July 7, 1999, last revised August 6, 1999, Project
                No. 97007.4. (Parcels 2 and
                3)

            

    

     

    
      	7.  	
              A
                30-foot wide easement for water lines granted to the City of Staunton
                by
                Gail G. Brown by instrument dated September 26, 1988,
                recorded
                in Deed Book 289, page 220, located as shown on plat
                of
                ALTA/ACSM Land Title Survey prepared by Jerry L. Brunk, R.P.L.S.
                No. 1323 of Brunk & Hylton Engineering, Inc., dated
                July 7, 1999, last revised August 6, 1999, Project
                No. 97007.4. (Parcels 2 and
                3)

            

    

     

    
      	8.  	
              A
                10-foot wide easement for water lines granted to the City of Staunton,
                Virginia, by Russell S. Harper and Eleanor G. Harper,
                by
                instrument dated March 22, 1955, recorded in Augusta County
                Deed
                Book 408, page 474, located as shown on plat of ALTA/ACSM
                Land
                Title Survey prepared by Jerry L. Brunk, R.P.L.S. No. 1323
                of
                Brunk & Hylton Engineering, Inc., dated July 7, 1999, last
                revised August 6, 1999, Project No. 97007.4.
                (Parcel 2)

            

    

     

    
      	9.  	
              A
                30-foot wide easement for water lines granted to the City of Staunton,
                Virginia, by Flora A. Harper and Samuel H. Harper,
                by instrument
                dated October 5, 1925, recorded in Augusta County Deed Book 223,
                page 175, located as shown on plat of ALTA/ACSM Land Title
                Survey
                prepared by Jerry L. Brunk, R.P.L.S. No. 1323 of
                Brunk & Hylton Engineering, Inc., dated July 7, 1999, last
                revised August 6, 1999, Project No. 97007.4. (Parcels 2
                and
                3)

            

    

     

    
      	10.  	
              A
                20-foot wide drainage easement granted to the City of Staunton, Virginia,
                by Russell S. Harper and Eleanor F. Harper, by instrument
                dated
                August 11, 1983, recorded in Augusta County Deed Book 802,
                page 427, crossing the land near its southeast corner as shown
                on
                plat of Hillsmere Subdivision, made by Brunk & Hylton
                Engineering, Inc., dated February 20, 1998, recorded in Deed
                Book 401, page 135, located as shown on plat of ALTA/ACSM
                Land
                Title Survey prepared by Jerry L. Brunk, R.P.L.S. No. 1323
                of
                Brunk & Hylton Engineering, Inc., dated July 7, 1999, last
                revised August 6, 1999, Project No. 97007.4. (Parcels 1
                and
                2)

            

    

     

    
      	11.  	
              Terms
                and provisions of Easement Agreement between Emeritus Corporation
                and
                Meditrust Company LLC, dated June 15, 1998, recorded in Deed
                Book 404, page 356.

            

    

     

    
      	12.  	
              The
                following matters shown on plat of ALTA/ACSM Land Title Survey prepared
                by
                Jerry L. Brunk, R.P.L.S. No. 1323 of Brunk & Hylton
                Engineering, Inc., dated July 7, 1999, last revised August 6,
                1999, Project No. 97007.4:

            

    

     

    
      	(a)  	
              storm
                sewer extending from easterly portion of the land into the right
                of way of
                Hillsmere Lane;

            

    

    
      	(b)  	
              underground
                telephone lines extending from the easterly portion of the land into
                the
                right of way of Hillsmere Lane.

            

    

     

    

     

    

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-21:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Fairhaven Estates

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              General
                property taxes and service charges, as follows, together with interest,
                penalty and statutory foreclosure costs, if any, after delinquency
                (1st half
                delinquent on May 1; 2nd half
                delinquent on November 1):

            

    

     

    
      	
              Tax
                Account No.:

            	
              370307 079462 0000

            
	
              Year

            	
              Billed

            	
              Paid

            	
              Balance

            
	
              2003

            	
              $27,230.99

            	
              $13,615.50

            	
              $13,615.49

            

    

    

    
      	3.  	
              Terms
                and conditions, provisions contained in the document entitled “Planned
                Development Contract” recorded June 30, 1988 under Recording
                No. 1606595.

            

    

     

    
      	4.  	
              Easement
                and the terms and conditions
                thereof:

            

    

     

    
      	
              Grantee:

            	
              Puget
                Sound Power and Light Company, a Washington corporation

            
	
              Purpose:

            	
              Electric
                transmission and/or distribution system

            
	
              Area
                Affected:

            	
              A
                portion of said premises and other property

            
	
              Recorded:

            	
              September 9,
                1988

            
	
              Recording
                No.:

            	
              1613831

            

    

    

    
      	5.  	
              Easement
                and the terms and conditions
                thereof:

            

    

     

    
      	
              Grantee:

            	
              City
                of Bellingham

            
	
              Purpose:

            	
              Water
                line

            
	
              Area
                Affected:

            	
              A
                portion of said premises and other property

            
	
              Recorded:

            	
              September 6,
                1996

            
	
              Recording
                No.:

            	
              960906061

            

    

    

    
      	6.  	
              MDU
                Service Agreement and the terms and conditions
                thereof:

            

    

     

    
      	
              Recording
                No.:

            	
              1980901943

            
	
              Regarding:

            	
              Between
                TCI Cablevision of Washington, Inc. and Fairhaven
                Estates

            

    

    

    
      	7.  	
              All
                covenants, conditions, restrictions, reservations, easements or other
                servitudes, if any, disclosed by lot line adjustment recorded under
                Recording No. 940208060.

            

    

     

    
      	8.  	
              The
                following matters shown on the survey prepared by Bock & Clark’s
                National Surveyors Network, dated April 28, 2003, last revised
                May 23, 2003, designated as Project
                No. 20030006-008:

            

    

     

    
      	a.  	
              There
                exists an observable encroachment on the West property line which
                consists
                of a board fence.

            

    

    
      	b.  	
              Waterline
                easement to City of Bellingham, Auditor’s File Number 960906061,
                Easement “A” extends 0.54 feet onto neighbors property at the
                Southeast corner of said easement.

            

    

    
      	c.  	
              Waterline
                easement to City of Bellingham, Auditor’s File Number 960906061 also
                extends 4.72 feet into the Southeast wing of onsite
                building.

            

    

     

    
      	9.  	
              Amended
                and Restated Leasehold Mortgage/Deed of Trust, Security Agreement,
                Assignment of Leases and Rents, Financing Statement and Fixture Filing
                and
                the terms and conditions thereof:

            

    

     

    
      	
              Grantor:

            	
              Emeritus
                Corporation, a Washington corporation

            
	
              Trustee:

            	
              Transnation
                Title Insurance Company and others for other property on Deed of
                Trust

            
	
              Beneficiary:

            	
              Health
                Care REIT, Inc., a Delaware corporation

            
	
              Original
                Amount:

            	
              $25,800,000.00

            
	
              Dated:

            	
              September 30,
                2003

            
	
              Recorded:

            	
              October 2,
                2003

            
	
              Recording
                No.:

            	
              2031000435

            

    

    

    

     

    

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-22:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Evergreen Lodge

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              General
                property taxes and service charges, as follows, together with interest,
                penalty and statutory foreclosure costs, if any, after delinquency
                (1st half
                delinquent on May 1; 2nd half
                delinquent on November 1):

            

    

     

    
      	
              Tax
                Account No.:

            	
              0821049088

            
	
              Year

            	
              Billed

            	
              Paid

            	
              Balance

            
	
              2003

            	
              $76,424.92

            	
              $38,212.46

            	
              $38,212.46

            

    

    

    
      	3.  	
              Easement
                and the terms and conditions
                thereof:

            

    

     

    
      	
              Grantee:

            	
              The
                Pacific Telephone and Telegraph Company

            
	
              Purpose:

            	
              Telephone
                and telegraph system(s)

            
	
              Area
                Affected:

            	
              A
                portion of said premises

            
	
              Recorded:

            	
              March 25,
                1941

            
	
              Recording
                No.:

            	
              3153813

            

    

    

    
      	4.  	
              Easement
                and the terms and conditions
                thereof:

            

    

     

    
      	
              Grantee:

            	
              The
                Pacific Telephone and Telegraph Company

            
	
              Purpose:

            	
              Telephone
                and telegraph system(s)

            
	
              Area
                Affected:

            	
              A
                portion of said premises

            
	
              Recorded:

            	
              March 25,
                1941

            
	
              Recording
                No.:

            	
              3153814

            

    

    

    
      	5.  	
              Right
                to make necessary slopes for cuts or fills upon the land herein described
                as granted to King County by deed recorded under Recording
                Nos. 4612073 and 4612074.

            

    

     

    
      	6.  	
              Easement
                and the terms and conditions
                thereof:

            

    

     

    
      	
              Grantee:

            	
              Pacific
                Northwest Bell Telephone Company

            
	
              Purpose:

            	
              Underground
                communication lines

            
	
              Area
                Affected:

            	
              A
                portion of said premises

            
	
              Recorded:

            	
              August 24,
                1978

            
	
              Recording
                No.:

            	
              7808240902

            

    

    

    
      	7.  	
              Easement
                and the terms and conditions
                thereof:

            

    

     

    
      	
              Grantee:

            	
              Puget
                Sound Power & Light Company

            
	
              Purpose:

            	
              Underground
                electric system

            
	
              Area
                Affected:

            	
              The
                east and south 10 feet of said premises

            
	
              Recorded:

            	
              December 13,
                1978

            
	
              Recording
                No.:

            	
              7812130802

            

    

    

    
      	8.  	
              Easement
                and the terms and conditions
                thereof:

            

    

     

    
      	
              Recorded:

            	
              January 17,
                1992

            
	
              Recording
                No.:

            	
              9201070879

            
	
              Regarding:

            	
              Easement
                and Right of Entry Agreement for cable television distribution
                system

            

    

    

    
      	9.  	
              Easement
                and the terms and conditions
                thereof:

            

    

     

    
      	
              Recorded:

            	
              June 11,
                1979

            
	
              Recording
                No.:

            	
              7906110870

            
	
              Regarding:

            	
              Domestic
                water supply and costs related
                thereto

            

    

    

    
      	10.  	
              The
                following matters shown on the survey prepared by DRYCO Surveying,
                Incorporated, dated March 7, 2000, last revised March 30,
                2000,
                designated as Project
                No. _______________:

            

    

     

    
      	a.  	
              Paving
                encroaches into Easterly and Southerly
                adjoiners.

            

    

    
      	b.  	
              18 inch
                C.M.P. encroaching from Southerly property line onto adjacent
                property.

            

    

    
      	c.  	
              Existing
                wooden crossarms on power poles along West line encroach
                2 feet.

            

    

     

    
      	11.  	
              Amended
                and Restated Leasehold Mortgage/Deed of Trust, Security Agreement,
                Assignment of Leases and Rents, Financing Statement and Fixture Filing
                and
                the terms and conditions thereof:

            

    

     

    
      	
              Grantor:

            	
              Emeritus
                Corporation, a Washington corporation

            
	
              Trustee:

            	
              Transnation
                Title Insurance Company, and others for other properties on Deed
                of
                Trust

            
	
              Beneficiary:

            	
              Health
                Care REIT, Inc., a Delaware corporation

            
	
              Original
                Amount:

            	
              $25,800,000.00

            
	
              Dated:

            	
              September 30,
                2003

            
	
              Recorded:

            	
              October 2,
                2003

            
	
              Recording
                No.:

            	
              20031002001513

            

    

    

     

    

     

    

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B-23:
      PERMITTED EXCEPTIONS

     

    Facility
      Name: Hearthstone Inn

     

    
      	1.  	
              Taxes
                and assessments not yet due and
                payable.

            

    

     

    
      	2.  	
              General
                property taxes and service charges, as follows, together with interest,
                penalty and statutory foreclosure costs, if any, after delinquency
                (1st half
                delinquent on May 1; 2nd half
                delinquent on November 1):

            

    

     

    
      	
              Tax
                Account No.:

            	
              31-1317-000

            
	
              Year

            	
              Billed

            	
              Paid

            	
              Balance

            
	
              2003

            	
              $57,027.94

            	
              $28,513.97

            	
              $28,513.97

            

    

    

    
      	3.  	
              Easement
                and the terms and conditions
                thereof:

            

    

     

    
      	
              Grantee:

            	
              Public
                Utility District No. 2

            
	
              Purpose:

            	
              Electric
                distribution lines together with necessary
                appurtenances

            
	
              Area
                Affected:

            	
              A
                portion of Lot 16, Block 1, Lakeview Terrace Unit 1,
                addition to Moses Lake

            
	
              Recorded:

            	
              April 2,
                1953

            
	
              Recording
                No.:

            	
              200051

            

    

    

    
      	4.  	
              Easement
                and the terms and conditions
                thereof:

            

    

     

    
      	
              Grantee:

            	
              Public
                Utility District No. 2

            
	
              Purpose:

            	
              Electric
                distribution lines together with necessary
                appurtenances

            
	
              Area
                Affected:

            	
              Over
                the above described parcel of land as being 20 feet in width,
                10 feet on either side of the distribution line and/or appurtenances
                as constructed

            
	
              Recorded:

            	
              December 26,
                1985

            
	
              Recording
                No.:

            	
              780267

            

    

    

    
      	5.  	
              Easement
                and the terms and conditions
                thereof:

            

    

     

    
      	
              Grantee:

            	
              Pacific
                Northwest Bell Telephone Company

            
	
              Purpose:

            	
              Electric
                distribution lines, together with necessary
                appurtenances

            
	
              Area
                Affected:

            	
              A
                5 foot by 5 foot easement in the extreme northeast
                corner of
                Lot 1

            
	
              Recorded:

            	
              March 25,
                1986

            
	
              Recording
                No.:

            	
              783646

            

    

    

    
      	6.  	
              All
                covenants, conditions, restrictions, reservations, easements or other
                servitudes, if any, disclosed by short plat recorded under Recording
                No. 805501.

            

    

     

    
      	7.  	
              All
                covenants, conditions, restrictions, reservations, easements or other
                servitudes, if any, disclosed by the recorded plat of Lakeview Terrace
                Unit 1, addition to Moses Lake Volume 3,
                page 34.

            

    

     

    
      	8.  	
              The
                following matters shown on the survey prepared by Bock & Clark’s
                National Surveyors Network, dated September 16, 2003, designated
                as
                Project No. 20030006-009:

            

    

     

    a.  Encroachment
      of sign onto City Right of Way by 1.5 feet.

    b.  Encroachment
      of building onto City 15 feet minimum sideyard setback by
      0.68 feet.

    c.  Encroachment
      of building onto City 15 feet minimum sideyard setback by
      0.69 feet.

     

    
      	12.  	
              Deed
                of Trust and the terms and conditions
                thereof:

            

    

     

    
      	
              Grantor:

            	
              Amended
                and Restated Leasehold Mortgage/Deed of Trust, Security Agreement,
                Assignment of Leases and Rents, Financing Statement and Fixture
                Filing

            
	
              Trustee:

            	
              Transnation
                Title Insurance Company and others for other property on Deed of
                Trust

            
	
              Beneficiary:

            	
              Health
                Care REIT, Inc., a Delaware corporation

            
	
              Original
                Amount:

            	
              $25,800,000.00

            
	
              Dated:

            	
              September 30,
                2003

            
	
              Recorded:

            	
              October 3,
                2003

            
	
              Recording
                No.:

            	
              1135311

            

    

    

    

     

    

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT C:
      FACILITY INFORMATION

     

    
      	
              Facility
                Name

              Licensed
                Operator

            	
              Street
                Address

              County

            	
              Facility
                Type (per license)

              Beds/Units

            
	
              Loyalton
                at Rancho Solano

               

              (“Fairfield
                Facility”)

               

              Fairfield
                Retirement Center, LLC

            	
              3350 Cherry
                Hills Street

              Fairfield,
                CA 94533

              County:
                Solano

            	
              Residential
                Care Facility for the Elderly

              250 licensed
                beds

              172 units

            
	
              Creston
                Village

               

              (“Paso
                Robles Facility”)

               

              Emeritus
                Corporation

            	
              1919 Creston
                Road

              Paso
                Robles, CA 93446

              County:
                San Louis Obispo

            	
              Residential
                Care Facility for the Elderly/Dementia

              115 licensed
                beds

              100 units

            
	
              Canterbury
                Ridge

               

              (“Urbana
                Facility”)

               

              Emeritus
                Corporation

            	
              1706 East
                Amber Lane

              Urbana,
                IL 61802

              County:
                Champaign

            	
              Retirement

              89 units

            
	
              Loyalton
                of Hattiesburg

               

              (“Hattiesburg
                Facility”)

               

              Emeritus
                Corporation

            	
              103 Fox
                Chase Street

              Hattiesburg,
                MS 39402

              County:
                Forrest

            	
              Institution
                for the Aged or Infirmed

              83 licensed
                beds

              82 units

            
	
              Loyalton
                of Flagstaff

               

              (“Flagstaff
                Facility”)

               

              Emeritus
                Corporation

            	
              2100 N.
                Woodlands Village Blvd.

              Flagstaff,
                AZ 86001

              County:
                Coconino

            	
              Assisted
                Living

              67 licensed
                beds

              61 units

            
	
              Loyalton
                of Phoenix

               

              (“Phoenix
                Facility”)

               

              Emeritus
                Corporation

            	
              4050 Bluefield
                Ave.

              Phoenix,
                AZ 85032

              County:
                Maricopa

            	
              Assisted
                Living

              101 licensed
                beds

              101 units

            
	
              Park
                Club of Brandon

               

              (“Brandon
                Facility”)

               

              Emeritus
                Corporation

            	
              700 S.
                Kings Ave.

              Brandon,
                FL 33511

              County:
                Hillsborough

            	
              Assisted
                Living

              100 licensed
                beds

              89 units

            
	
              Park
                Club of Fort Myers

               

              (“Fort
                Myers Facility”)

               

              Emeritus
                Corporation

            	
              1896 Park
                Meadows Dr.

              Fort
                Myers, FL 33907

              County:
                Lee

            	
              Assisted
                Living

              116 beds

              74 units

            
	
              Park
                Club of Oakbridge

               

              (“Lakeland
                Facility”)

               

              Emeritus
                Corporation

            	
              3110 Oakbridge
                Blvd. East

              Lakeland,
                FL 33803

              County:
                Polk

            	
              Assisted
                Living

              110 licensed
                beds

              87 units

            
	
              Colonial
                Park Club

               

              (“Sarasota
                Facility”)

               

              Emeritus
                Corporation

            	
              4730 Bee
                Ridge Rd.

              Sarasota,
                FL 34231

              County:
                Sarasota

            	
              Assisted
                Living

              110 licensed
                beds

              86 units

            

    

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    

    
      	
              Ridgewind

               

              (“Chubbuck
                Facility”)

               

              Emeritus
                Corporation

            	
              4080 Hawthorne
                Rd.

              Chubbuck,
                ID 83202

              County:
                Bannock

            	
              Assisted
                Living

              109 licensed
                beds

              79 units

            
	
              Loyalton
                of Coeur D’Alene

               

              (“Coeur
                D’Alene Facility”)

               

              Emeritus
                Corporation

            	
              205 E.
                Anton

              Coeur
                D’Alene, ID 83815

              County:
                Kootenai

            	
              Assisted
                Living

              96 licensed
                beds

              50 units

            
	
              Highland
                Hills

               

              Pocatello
                Facility”)

               

              Emeritus
                Corporation

            	
              1501 Baldy

              Pocatello,
                ID 83201

              County:
                Bannock

            	
              Assisted
                Living

              57 licensed
                beds

              47 units

            
	
              Loyalton
                of Hagerstown

               

              “Hagerstown
                Facility”)

               

              Emeritus
                Corporation

            	
              20009 Rosebank
                Way

              Hagerstown,
                MD 21742

              County:
                Washington

            	
              Assisted
                Living

              110 licensed
                beds

              100 units

            
	
              Pines
                of Tewksbury

               

              “Tewksbury
                Facility”)

               

              Emeritus
                Corporation

            	
              2580 Main
                St.

              Tewksbury,
                MA 01876

              County:
                Middlesex

            	
              Assisted
                Living

              69 licensed
                beds

              49 units

            
	
              Loyalton
                of Lakewood

               

              “Lakewood
                Facility”)

               

              Emeritus
                Corporation

            	
              220 Southwestern
                Dr.

              Lakewood,
                NY 14750

              County:
                Chautauqua

            	
              Enriched
                Housing Program

              100 licensed
                beds

              78 units

            
	
              Meadowbrook

               

              (“Ontario
                Facility”)

               

              Emeritus
                Corporation

            	
              1372 Southwest 8th Ave.

              Ontario,
                OR 97914

              County:
                Malheur

            	
              Assisted
                Living

              82 beds

              53 units

            
	
              Anderson
                Place

               

              (“Anderson
                Facility”)

               

              Emeritus
                Corporation

            	
              311 Simpson
                Rd.

              Anderson,
                SC 29621

              County:
                Anderson

            	
              Assisted
                Living and Nursing Home

              84 beds

              127 units

              75 independent
                cottages

            
	
              Elmbrook
                Estates

               

              (“Lubbock
                Facility”)

               

              Texas-ESC-Lubbock,
                L.P.

            	
              5301 66th St.

              Lubbock,
                TX 79424

              County:
                Lubbock

            	
              Assisted
                Living

              100 licensed
                beds

              97 units

            
	
              Loyalton
                of Staunton

               

              (“Staunton
                Facility”)

               

              Emeritus
                Corporation

            	
              1900 Hillsmere
                Lane

              Staunton,
                VA 24401

              County:
                Augusta

            	
              Assisted
                Living

              144 licensed
                beds

              101 units

            

    

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    

    
      	
              Fairhaven
                Estates

               

              (“Bellingham
                Facility”)

               

              Emeritus
                Corporation

            	
              2600 Old
                Fairhaven Pkwy.

              Bellingham,
                WA 98225

              County:
                Whatcom

            	
              Boarding
                Home

              60 licensed
                beds

              50 units

            
	
              Evergreen
                Lodge

               

              (“Federal
                Way Facility”)

               

              Emeritus
                Corporation

            	
              31002 14th Avenue
                South

              Federal
                Way, WA 98003

              County:
                King

            	
              Boarding
                Home

              105 beds

              98 units

            
	
              Hearthstone
                Inn

               

              (“Moses
                Lake Facility”)

               

              Emeritus
                Corporation

            	
              905 S.
                Pioneer Way

              Moses
                Lake, WA 98837

              County:
                Grant

            	
              Boarding
                Home

              92 licensed
                beds

              83 units

            

    

     

    
 

    
      
        
        

      

      
        37EX 10.68.25 3RD Amend to lease Henderson TX jun 30 05

    THIRD
      AMENDMENT TO LEASE AGREEMENT

    (HENDERSON,
      TX)

    

    Dated
      as
      of June 30, 2005 (the “Effective Date”) 

    

    HR
      ACQUISITION OF SAN ANTONIO, LTD.  (f/k/a
      Capstone Capital of San Antonio, Ltd.), an Alabama limited partnership
      (“Lessor”), ESC
      IV, L.P.,
      a
      Washington limited partnership doing business in Texas as Texas-ESC IV, L.P.
      (“Lessee”), and EMERITUS
      CORPORATION,
      a
      Washington corporation and DANIEL
      R. BATY,
      an
      individual resident of the State of Washington (collectively, “Guarantor”),
      agree as follows:

     

    
      	1.  	
              Preliminary
                Statements.
                Lessor entered into that certain Lease Agreement dated as of December
                31,
                1996, with Integrated Living Communities of Henderson, L.P. (the
“Original
                Lessee”), as amended by that certain First Amendment to Lease Agreement
                dated as of December 1, 1997, as assigned by the Original Lessee
                to HB-ESC
                V, L.P., a Washington limited partnership (“HB-ESC”) by Assignment and
                Assumption Agreement dated as of May 9, 2002, as further amended
                by Second
                Amendment to Lease Agreement dated as of May 9, 2002, as further
                assigned
                by HB-ESC to Lessee by Assignment and Assumption of Lease Agreement
                dated
                as of December, 31, 2003 (as amended to date and as further amended
                hereby
                and as assigned, the “Lease”). Pursuant to the Lease, Lessor, as landlord,
                and Lessee, as tenant, have leased certain real property and improvements
                located at 1000 Richardson Drive, Henderson, Texas 75654, together
                with
                all Personal Property (as defined in the Lease). Lessee has requested,
                and
                Lessor has agreed, to further amend the Lease in the manner set forth
                in
                this Third Amendment to Lease Agreement (this “Amendment”), effective as
                of the date hereof. 

            

    

     

     

    
      	2.  	
              Definitions.
                As used herein, the term “Lease” means the Lease as hereby amended and
                modified. Unless the context otherwise requires, all capitalized
                terms
                used herein without definition shall have the definitions provided
                therefore in the Lease. 

            

    

     

     

    
      	3.  	
              Amendments.
                The Lease is hereby amended as
                follows:

            

    

     

     

    
      	a.  	
              The
                caption on Section 7.3 is hereby revised to read as follows: “Rent
                Coverage—Consolidated and Facility”

            

    

     

     

    
      	b.  	
              Section
                7.3(a) is hereby deleted in its entirety and the following inserted
                in
                lieu thereof:

            

    

     

     

    
      	(a)  	
              As
                used herein, the following terms shall have the meanings
                indicated:

            

    

     

     

    “Consolidated
      Coverage Ratio” means, as of the end of each quarterly reporting period, the
      ratio of (i) EBITDARM on a consolidated basis 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    for
      the
      Facility and the Related Facilities during the preceding twelve month period
      to
      (ii) the principal (excluding any prepayments or principal at maturity),
      interest and lease (capital and operating) payment obligations of Lessee with
      respect to the Facility and the Related Facilities (including the Minimum Rent
      but excluding the Minimum Rent Adjustment and any principal and interest
      payments on the Loan (as defined in Section 2.5 hereof)) during the preceding
      twelve month period. 

     

     

    “EBITDARM”
      means, as of the end of each quarterly reporting period, the income (or deficit)
      from all operations related to the Facility or the Facility and the Related
      Facilities, as applicable, during the preceding twelve month period before
      any deduction for
      (i)
      interest charges paid or accrued during the preceding twelve month period
      (including imputed interest) on any lease (capital or operating) obligations
      (including this Lease), (ii) income taxes for such period, (iii) any amounts
      in
      respect of depreciation or amortization for such period, (iv) the rent due
      under
      all leases (capital and operating) including this Lease and the leases for
      the
      Related Facilities, as applicable, during the preceding twelve month period
      and
      (v) any actual or assumed management fees paid or incurred during the preceding
      twelve month period.

     

     

    “Facility
      Coverage Ratio” means, as of the end of each quarterly reporting period, the
      ratio of (i) EBITDARM on a consolidated basis for the Facility during the
      preceding twelve month period to (ii) the principal (excluding any prepayments
      or principal at maturity), interest and lease (capital and operating) payment
      obligations of Lessee with respect to the Facility (including the Minimum Rent
      but excluding the Minimum Rent Adjustment and any principal and interest
      payments on the Loan) during the preceding twelve month period. 

     

     

    
      	c.  	
              The
                lead in language in Section 7.3(b) is hereby deleted in its entirety
                and
                the following inserted in lieu
                thereof:

            

    

     

     

    Lessee
      agrees and covenants with Lessor that, so long as this Lease is in  effect,
      Lessee will achieve and maintain, on a consolidated basis, the  Consolidated
      Coverage Ratios set forth below: 

     

     

    Period   Required
      Consolidated Coverage Ratio

     

    (i) Prior
      to
      the date in (ii)   No
      requirement

    

    
      	(ii)  	
              For
                each calendar quarter 1.05
                to 1.0

            

    

    during
      the calendar year 

    beginning
      1/1/07

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    
      	(iii)  	
              For
                each calendar quarter 1.10
                to 1.0

            

    

    during
      the calendar year 

    beginning
      1/1/08

    

    
      	(iv)  	
              For
                each calendar quarter 1.15
                to 1.0

            

    

    during
      the calendar year

    beginning
      1/1/09

    

    
      	(v)  	
              For
                each calendar quarter1.20
                to 1.0

            

    

    during
      the calendar year

    beginning
      1/1/10 and during

    each
      calendar year thereafter

     

    
      	d.  	
              Section
                7.3(c) of the Lease is hereby deleted in its entirety and the following
                is
                substituted therefore:

            

    

     

     

    Lessee
      agrees and covenants with Lessor that, so long as this Lease is in  effect,
      Lessee will achieve and maintain the Facility Coverage Ratios set  forth
      below:

     

     

    Period    Required
      Facility Coverage Ratio

     

    
      	(i)  	
              Prior
                to the date in (ii)No
                requirement

            

    

    

    
      	(ii)  	
              For
                each calendar quarter 1.0
                to 1.0

            

    

    during
      the calendar year 

    beginning
      1/1/08

    

    
      	(iii)  	
              For
                each calendar quarter 1.05
                to 1.0

            

    

    during
      the calendar years

    beginning
      1/1/09 and 1/1/10

    

    
      	(iv)  	
              For
                each calendar quarter1.10
                to 1.0

            

    

    during
      the calendar year

    beginning
      1/1/11 and during

    each
      calendar year thereafter

    

    e. The
      following shall be added as new Section 7.3(d):

    Lessee
      acknowledges that the reporting requirements set forth in Section 24 hereof
      shall not be affected by the provisions of this Section 7.3 and accordingly
      that
      Lessee shall be required to provide all the financial reports and information
      contained therein whether or not Lessee is then required to comply with the
      covenants set forth above.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    f. The
      following shall be added as new Section 2.5:

    

    
      	(a)  	
              As
                used herein, the following terms shall have the meanings
                indicated:

            

    

    

    “Borrower”
      means Emeritus Corporation, a corporation organized under the laws of the State
      of Washington, its successors and permitted assigns. 

    

    “Lender”
      means Healthcare Realty Trust Incorporated, its successors and
      assigns.

    

    “Loan” 
      has
      meaning set forth in Section 1.2 of the Loan  Agreement.

    

    “Loan
      Agreement” means the loan agreement of even date herewith made between Lender
      and Borrower together with all other documents evidencing, securing, amending,
      supplementing, extending, renewing or otherwise related thereto.  

     

    “Minimum
      Rent Adjustment” shall mean the dollar amount which would be required to be paid
      on a monthly basis from the Minimum Rent Adjustment Effective Date in order
      to
      fully amortize the then current balance of the Loan allocated to this Lease
      (the
“Fixed Component of the Minimum Rent Adjustment”), together with a monthly
      return at the rate stated in Section 2(a) of the Note (the “Return Component of
      the Minimum Rent Adjustment”), over a period of time until midnight on April 30,
      2013. 

     

    “Minimum
      Rent Adjustment Effective Date” means the date of the occurrence of an Event of
      Default (as defined in the Loan Agreement) under the Loan Agreement, which
      is
      not waived by Lender.

    

    “Minimum
      Rent Adjustment Schedule” means a schedule setting out the Fixed Component of
      the Minimum Rent Adjustment and the Return Component of the Minimum Rent
      Adjustment payable by Lessee to Lessor each month in respect of this
      Lease.

    

    “Note”
      means the Promissory Note of even date herewith made by Borrower in favor of
      Lender pursuant to the Loan Agreement, together with all other documents
      evidencing, securing, amending, supplementing, extending, renewing or otherwise
      related thereto.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    “Rent
      Adjustment Notice” means a written notice from the Lender to the Borrower and
      Lessee requiring the Minimum Rent Adjustment to be paid from and after the
      Minimum Rent Adjustment Effective Date. 

    

    
      	(b)  	
              In
                the event Lessee receives a Rent Adjustment Notice, Lessor and Lessee
                shall prepare a Minimum Rent Adjustment Schedule in accordance with
                the
                provisions of this Agreement within ten (10) days after receipt by
                Lessee
                of the Rent Adjustment Notice and thereafter, Lessee shall pay to
                Lessor
                each month, the Minimum Rent Adjustment in accordance with the Minimum
                Rent Adjustment Schedule. The first installment of the Minimum Rent
                Adjustment shall be payable on the first day of the calendar month
                following the date on which the Minimum Rent Adjustment Schedule
                is agreed
                upon. Each payment of the Minimum Rent Adjustment is to be made in
                the
                same manner and at the same time as the Minimum Rent provided however,
                for
                all other purposes, the Minimum Rent Adjustment shall not be included
                within the definition of Minimum Rent.

            

    

    

    
      	(c)  	
              Payment
                of the Minimum Rent Adjustment shall be effective as of the Minimum
                Rent
                Adjustment Effective Date and shall last until the repayment in full
                of
                the sums due under the Loan allocated to this
                Lease.

            

    

    

    
      	(d)  	
              The
                Minimum Rent Adjustment shall be paid in addition to the Minimum
                Rent,
                Additional Charges or any other amounts due under this Lease; provided
                however, (i) no rent cap or other maximum rental increase in this
                Lease
                shall be affected in any manner by the application of the Minimum
                Rent
                Adjustment; (ii) annual Minimum Rent increases and other rent increases
                provided for in this Lease shall be calculated as though no Minimum
                Rent
                Adjustment is payable and (iii) no determination of Fair Market Rental
                Value shall be affected in any manner by the Minimum Rent Adjustment.
                

            

    

    

    
      	(e)  	
              From
                and after the date on which the first installment of Minimum Rent
                Adjustment becomes payable by Lessee pursuant to Section 2.5(b) above,
                all
                payments received by Lessor and denominated by Lessee as payments
                of
                Minimum Rent and Minimum Rent Adjustment, shall be first applied
                towards
                payment of the Minimum Rent due in respect of the period to which
                the
                payment relates and then towards payment of the Minimum Rent Adjustment
                due in accordance with the Minimum Rent Adjustment Schedule. The
                payment
                allocated to the Minimum Rent 

            

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    Adjustment
      shall then be applied first to the Return Component of the Minimum Rent
      Adjustment (with such amount being credited dollar for dollar against the Return
      Component of the Minimum Rent Adjustment due) and second, to the Fixed Component
      of the Minimum Rent Adjustment due in accordance with the Minimum Rent
      Adjustment Schedule (such amount to be credited dollar for dollar against the
      Fixed Component of the Minimum Rent Adjustment due). 

    

    
      	(f)  	
              If
                any installment of Minimum Rent Adjustment is not paid within ten
                days
                after the date when due, Lessee shall pay to Lessor interest at the
                Overdue Rate on the amount unpaid, from the date when due to the
                payment
                thereof.

            

    

     

    g. The
      language appearing at (c) of Article XVIII is hereby deleted in its entirety
      and
      the following inserted in lieu thereof:

     

    

    all
      other
      sums (other than the Minimum Rent Adjustment), if any, payable pursuant to
      the
      provisions of this Lease with respect to the Leased Property. 

    

    
      	h.  	
              Section
                19.2 of the Lease is hereby deleted in its
                entirety.

            

    

    

    
      	i.  	
              Section
                19.4 of the Lease is hereby deleted in its entirety and the following
                is
                substituted therefor:

            

    

    

    Lessee
      shall have the option to purchase the Leased Property as of the last day of
      the
      Initial Term (the “Closing Date”) upon written notice to Lessor delivered no
      later than 180 days prior to the end of the Initial Term (the “Option Exercise
      Notice”) for a purchase price equal to the Minimum Purchase Price, provided that
      no Event of Default has occurred and is continuing on the date of the Option
      Exercise Notice and no Event of Default has occurred and is continuing on the
      Closing Date. If not sooner exercised, the option to purchase granted hereby
      will expire and be of no further force and effect upon the expiration of the
      Initial Term or the earlier termination of this Lease. As a condition to the
      exercise of the option to purchase, Lessee shall be required to simultaneously
      exercise its option to purchase set forth in all the Related Leases still in
      existence at the time of the Lessee’s exercise of the option relating to the
      Leased Property. Notwithstanding anything in this Lease or the Related Leases
      to
      the contrary, Lessee shall have no option to purchase the Leased Property or
      any
      other Leased Property under any Related
      Leases
      so long as any Event of Default has occurred and is continuing on the Option
      Exercise Date or on the Closing Date for any such Leased
      Property.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    j. The
      following shall be added to Section 37.1 after the definition of
“Land”:

    

    “Landlord’s
      Investment” means $6,198,517 plus the sum of all Capital Addition Costs relating
      to the Leased Property paid for or financed by Lessor which as of the date
      of
      repurchase of the Leased Property have not been repaid by Lessee, less the
      net
      amount (after deduction of all reasonable legal fees and other costs and
      expenses, including expert witness fees, incurred by Lessor in connection with
      obtaining any such award or proceeds) of all Awards received by Lessor from
      Condemnation of the Leased Property. 

    

    k. The
      definition of “Minimum Purchase Price” set forth in Section 37.1 of this Lease
      is hereby amended to read as follows:

    

    “Minimum
      Purchase Price” means the greater of (i) the Fair Market Value of the Leased
      Property at the time of delivery of the Option Exercise Notice or (ii) the
      Landlord’s Investment as such amount is increased at the rate of three percent
      compounded annually for each year (to be prorated for partial years) between
      the
      Effective Date and the Closing Date.

    

    l. The
      definition of “Rent” set forth in Section 37.1 of this Lease is hereby amended
      to read as follows:

    

    “Rent” means,
      collectively, the Minimum Rent, the Additional Charges and if applicable, the
      Minimum Rent Adjustment (the latter being separate from the Minimum
      Rent). 

     

    
      	4.  	
              Counterparts.
                This Amendment may be executed in one or more counterparts, each
                of which
                shall be an original and taken together shall constitute one and
                the same
                document. Signature and acknowledgment pages, if any, may be detached
                from
                the counterparts and attached to a single copy of this document to
                physically form one document. The failure of any party hereto to
                execute
                this Amendment or any counterpart hereof, shall not relieve the other
                signatories from their obligations hereunder.

            

    

     

     

    
      	5.  	
              Waivers.
                Lessee hereby (i) acknowledges that, as of the date hereof, to Lessee’s
                knowledge there is no default on the part of Lessor under the Lease,
                and
                (ii) acknowledges that, as of the date hereof, there are no offsets
                or
                defenses to payment of the obligations of the Lessee under the
                Lease. Lessor
                acknowledges and agrees that Lessee has not been in compliance prior
                to
                the date of this Amendment with the Facility Coverage Ratio set forth
                in
                the Lease prior to the date of this Amendment and agrees that, by
                execution of this Amendment, any such non-compliance is and shall
                be
                waived. 

            

    

     

     

    
      	6.  	
              Execution
                by Guarantor.
                Guarantor has joined in the execution of this Amendment for the purpose
                of
                (i) agreeing to the terms and conditions of this Amendment, and (ii)
                confirming Guarantor’s guaranty of payment and performance of all of the
                Obligations, which in the case of the guaranty by Daniel R. Baty,
                shall
                not include any obligations relating to payment of the Minimum Rent
                Adjustment. 

            

    

     

     

    
      	7.  	
              Entire
                Agreement.
                This Amendment, the Loan Agreement and the documents executed pursuant
                to
                the terms of the Loan Agreement, set forth the entire understanding
                and
                agreement of the parties hereto in relation to the subject matter
                hereof
                and supersede any prior negotiations and agreements between the parties
                relative to the subject matter
                hereof.

            

    

     

     

    
      	8.  	
              Force
                and Effect of Amendment.
                Except as specifically amended, modified, or supplemented as set
                forth in
                this Amendment, the Lease remains in full force and effect.
                

            

    

     

     

    
      	9.  	
              Execution
                by Telefacsimile.
                Any copy of this Amendment bearing a signature of a party to this
                Amendment and sent by facsimile to any other party shall be deemed
                a
                manually-executed original of this Amendment, and shall be deemed
                sufficient to bind such party. 

            

    

     

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      intending to be legally bound hereby, the parties hereto have caused this Third
      Amendment to Lease Agreement to be executed as of the day and year first above
      written. 

    

    

    LESSOR:

    

    HR
      ACQUISITION OF SAN ANTONIO, LTD.

    

    By
      its
      general partner:

    HR
      Acquisition of Texas, Inc.

                            /s/
      J.D. Carter
      Steele

    By: 
      J.D. Carter Steele      

    Title: 
      Senior Vice President and Chief Operating Officer      

    

    

    LESSEE:

    

    ESC
      IV,
      L.P.

    

    By
      ESC GP
      II, Inc.

    Its:
      General Partner

    

    By:
      :/s/
      William M. Shorten   

    William
      M. Shorten

    Title:
      Director of Real Estate Finance 

    

    GUARANTOR:

    

    

    Emeritus
      Corporation

    

    

    By: :/s/
      William M. Shorten 

    William
      M. Shorten

    Title: Director
      of Real Estate Finance 

    

    

    

    :/s/
      Daniel R. Baty 

    Daniel
      R.
      Baty

     

    
      
        
        

      

      
        8

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