LOAN PURCHASE AGREEMENT AMONG HEALTHCARE REALTY TRUST INCORPORATED AND HEALTH CARE REIT, INC. AND EMERITUS CORPORATION MARCH 3, 2005

THIS LOAN PURCHASE AGREEMENT (“Agreement”) is made and entered into effective as of March 3, 2005 (the “Effective Date”) among HEALTH CARE REIT, INC ., a corporation organized under the laws of the State of Delaware (“HCN”), having an address of One Seagate, Suite 1500, P.O. Box 1475, Toledo, Ohio 43603, EMERITUS CORPORATION , a corporation organized under the laws of the State of Washington (“Tenant”), having an address of 3131 Elliott Avenue, Suite 500, Seattle, Washington 98121, and HEALTHCARE REALTY TRUST INCORPORATED , a corporation organized under the laws of the State of Maryland (“HRT”), having an address of 3310 West End Avenue, Suite 400, Nashville, Tennessee, 37203.

A.   HCN purchased four certain properties for a purchase price of $39,700,000.00 and leased said properties to Tenant, pursuant to a Master Lease Agreement dated March 28, 2002, and in connection therewith, HCN also provided a line of credit to Tenant in the maximum amount of $6,800,000.00 (“Original Loan”), subject to the terms and conditions of a Loan Agreement dated as of April 1, 2002.

B.   HCN subsequently purchased 19 additional properties for a purchase price of $110,000,000.00 and leased said properties to Tenant by amending and restating the Master Lease Agreement pursuant to that certain Amended and Restated Master Lease Agreement dated as of September 30, 2003 between Tenant and HCN (as amended, the “Master Lease”). HCN agreed to increase the line of credit in an amount of $11,500,000.00 and to consolidate two additional loans made on August 28, 2003 in the amount of $3,100,000.00 and $4,400,000.00, for a total indebtedness of $25,800,000.00 (collectively, the “Loan”) subject to the terms of that certain Amended and Restated Loan Agreement, dated as of September 30, 2003 (the “Loan Agreement”).

C.   The Loan is secured by first priority leasehold mortgages or deeds of trust (each, a “Mortgage, and collectively, the Mortgages”) from Tenant to HCN encumbering the leasehold interest of Tenant in twenty six (26) assisted living and long term care facilities (each a “Facility, and collectively, the “Facilities”). Twenty three (23) of the Facilities (the “Master Lease Facilities”) are leased pursuant to the Master Lease and each Mortgage with respect to a Master Lease Facility are the only Mortgages being assigned under this Agreement.

D.   HCN has agreed to sell the Loan to HRT for the outstanding principal Loan balance and any other amounts due under the Loan Documents, and to assign to HRT all of the Mortgages (the “Transaction”).

E.   The principal balance of the Loan is currently Nineteen Million Four Hundred Sixty Six Thousand Four Hundred Eighty Four and 86/100 Dollars ($19,466,484.86). HRT shall advance additional funds to Tenant in the amount of One Million Eight Hundred Twenty Two Thousand One Hundred Fifty One Dollars ($1,822,151.00) plus funds for certain closing costs and as a result, the principal balance of the Loan shall increase to Twenty One Million Four Hundred Twenty Six Thousand Dollars ($21,426,000.00).

NOW, THEREFORE, in consideration of the mutual covenants and the premises contained herein, the parties agree as follows:

1.1   Purpose . The purpose of this Agreement is to establish the terms and conditions of the Transaction.

1.2   Definitions . Except as otherwise expressly provided, [i] the terms defined in this section have the meanings assigned to them in this section and include the plural as well as the singular; [ii] all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles as of the time applicable; and [iii] the words “herein”, “hereof”, and “hereunder” and similar words refer to this Agreement as a whole and not to any particular section.

“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 a referenced party. “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.

“Closing” means the closing of the purchase and sale of the Loan.

“Commitment” means the non-binding letter of understanding dated January 27, 2005 between HCN, HRT and Tenant.

“Effective Date” means the effective date of Closing.

“Event of Default” means any material default under this Agreement not cured within any applicable notice and cure period, and, where the context so provides, any such uncured default under any Loan Documents (as hereinafter defined) or Lease Documents (as hereinafter defined).

“Facility” means each skilled nursing, assisted living or retirement facility leased to Tenant pursuant to the Master Lease..

“HCN” means Health Care REIT, Inc., a Delaware corporation, its successors and assigns.

“HRT” means Healthcare Realty Trust Incorporated, a Maryland corporation, its successors and assigns.

“Lease” means the Master Lease.

“Lease Documents” means the Lease and all other documents executed by Tenant in connection with the Lease, each as amended from time to time.

“Loan” means the loan by HCN to Tenant with a current principal balance equal to the Loan Amount.

“Loan Amount” means $21,426,000.00

“Loan Documents” means [i] the Note; [ii] the Amended and Restated Loan Agreement, of even date therewith, between said parties; and [iii] the Mortgage, each as amended from time to time.

“Master Lease” means the Amended and Restated Master Lease Agreement dated September 30, 2003 by which HCN leased each Master Lease Facility to Tenant, as amended from time to time.

“Mortgage” means the Amended and Restated Leasehold Mortgage/Deed of Trust, Security Agreement, Assignment of Leases and Rents, Financing Statement and Fixture Filing granted by Tenant to HCN, dated as of September 30, 2003.

“Note” means the Amended and Restated Note, dated as of September 30, 2003, made by Tenant in favor of HCN in the original principal amount of Twenty Five Million Eight Hundred Thousand Dollars ($25,800,000.00), and any extensions, modifications, substitutions or renewals thereof.

“State” means the State of Ohio.

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

“Transaction Documents” mean the endorsed Note, the Loan Documents, all instruments of assignment of HCN’s rights, title and interest under the Loan Documents, and all other documents to be executed and delivered in connection with the Closing of the Transaction.

1.3   Incorporation of Amendments . The definition of any agreement, document, or instrument set forth in this Agreement shall be deemed to incorporate all amendments, modifications, and renewals thereof and all substitutions and replacements therefor.

1.4   Exhibits . The following exhibits are attached hereto and incorporated herein:

Exhibit A - Schedule of Loan Documents

Exhibit B - Post Closing Deliverables

2.1   Sale of the Loan . HCN hereby agrees to sell, transfer, convey, and assign to HRT all of its rights, title and interest with respect to the Loan, the Loan Documents, and otherwise with respect to the Loan. The purchase price for the Loan shall be the principal balance of the Loan, all accrued but unpaid interest thereon as of the Effective Date and all other amounts due to HCN under the Loan Documents (the “Purchase Price”). At Closing, HRT shall pay to HCN the Purchase Price by federally wired funds, available for immediate disbursement. The Transaction shall be closed in escrow by a title insurance company mutually selected by HRT and HCN and pursuant to escrow instructions acceptable to HCN and HRT. The sale of the Loan shall be subject to the terms of this Agreement.

2.2   Closing . The Closing of the sale of the Loan shall occur as of the Effective Date, as agreed by HCN and HRT, but no later than March 3, 2005.

2.3   Endorsement of the Note and Delivery of Loan Documents . At Closing, HCN shall properly endorse the original Note to the order of HRT and shall deliver to HRT the endorsed Note, together with all original Loan Documents, which shall all be assigned by HCN to HRT.

2.4   Assignments of Mortgages . At Closing, HCN shall execute and deliver to HRT assignments of the Mortgages in form and substance satisfactory to HRT (collectively, the “Assignment of Mortgage”). The Assignment of Mortgage shall be executed in multiple originals, in forms acceptable for recording in the real estate records in the county in which each Facility is located.

2.5   Assignment of Additional Loan Documents . At Closing, HCN shall also assign to HRT, by instrument or instruments in form and substance acceptable to HRT, any and all and all other documents, agreements, or rights otherwise securing, evidencing, or relating to the Loan or any Loan Documents.

2.6   Other Assurances . At Closing, HCN shall deliver to HRT such additional documents at HRT may reasonably require in order to consummate the sale of the Loan, the assignment of all Loan Documents, and the other provisions of this Agreement.

3.1   Conditions Precedent to Purchase of the Loan . HRT’s obligation to purchase the Loan shall be conditioned upon the following conditions precedent:

3.1.1   Amendment of Loan . HRT and Tenant shall have executed agreements amending and restating the Loan in such form and substance as are acceptable to HRT and Tenant and consented to in writing by HCN. Each such agreement shall have been deposited in escrow pending completion of the sale of the Loan.

3.1.2   Completion of Due Diligence Review . HRT shall have completed all Facility level and Loan due diligence review which it deems appropriate, and must be satisfied with the results of its due diligence review. The due diligence review shall include, without limitation, review of the Loan Documents, the Lease, the Mortgages, and all related surveys, title insurance policies, UCC filings, environmental assessments, engineering studies, opinions of counsel, appraisals, operational data, financial data, and updated information with respect to each Facility, and the Loan.

3.1.3   Intercreditor Agreement . HRT and HCN shall have entered into an Intercreditor Agreement on mutually agreed terms (the “Intercreditor Agreement”).

3.1.4   Estoppel Certificates . HRT shall have received one or more estoppel certificates (individually and collectively the “Estoppel Certificates”) from HCN and Emeritus in form mutually acceptable to HRT and HCN with respect to both the Loan and the Lease confirming that, except as otherwise disclosed to HRT therein, no Events of Default or potential Events of Default have occurred, the date through which all rent has been paid under the Lease, the principal balance of the Loan, any accrued but unpaid interest thereon, the date through which all interest accrued under the Loan has been paid, the absence of any claims, defenses, counterclaims, offsets, or unfulfilled obligations of either party to the other, and such other matters as HRT may reasonably request.

3.1.5   Loan Documents . HCN shall have delivered to HRT fully executed originals of the Loan Documents, properly endorsed and properly assigned to HRT.

3.1.6   Legal Opinion . Tenant shall have delivered to HRT an opinion of its primary outside counsel, and, to the extent reasonab