UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended September 30, 2005.

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-8895

HEALTH CARE PROPERTY INVESTORS, INC.

(Exact name of registrant as specified in its charter)

Maryland		33-0091377
(State or other jurisdiction of incorporation of organization)		(I.R.S. Employer Identification No.)

3760 Kilroy Airport Way, Suite 300
Long Beach, CA 90806
(Address of principal executive offices)

(562) 733-5100
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: YES ý NO o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
YES ý NO o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES o NO ý

As of October 28, 2005, there were 135,863,587 shares of $ 1.00 par value common stock outstanding.

HEALTH CARE PROPERTY INVESTORS, INC.

INDEX

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements:

	Condensed Consolidated Balance Sheets

	Condensed Consolidated Statements of Income

	Condensed Consolidated Statement of Stockholders’ Equity

	Condensed Consolidated Statements of Cash Flows

	Notes to Condensed Consolidated Financial Statements

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.	Quantitative and Qualitative Disclosures About Market Risk

Item 4.	Controls and Procedures

Item 5.	Other Information
PART II. OTHER INFORMATION

Item 6.	Exhibits

Signatures

HEALTH CARE PROPERTY INVESTORS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	September 30, 2005			December 31, 2004
	(Unaudited)
ASSETS
Real estate:
Buildings and improvements	$	3,418,604		$	3,025,707
Developments in process	13,532			25,777
Land	347,164			299,461
Less accumulated depreciation and amortization	590,284			533,764
Net real estate	3,189,016			2,817,181

Loans receivable, net:
Joint venture partners	7,006			6,473
Others	142,868			139,919
Investments in and advances to unconsolidated joint ventures	49,750			60,506
Accounts receivable, net of allowance of $933 and $1,070, respectively	13,507			14,834
Cash and cash equivalents	38,174			16,962
Restricted cash	2,390			4,678
Intangibles, net	23,236			18,872
Other assets, net	28,997			24,294

Total assets	$	3,494,944		$	3,103,719

LIABILITIES AND STOCKHOLDERS’ EQUITY

Bank line of credit	$	170,000		$	300,100
Senior unsecured notes	1,470,386			1,046,690
Mortgage debt	213,726			140,501
Accounts payable and accrued liabilities	70,527			59,905
Deferred revenue	19,018			15,300

Total liabilities	1,943,657			1,562,496

Minority interests	140,903			121,781

Stockholders’ equity:
Preferred stock, $1.00 par value: 50,000,000 shares authorized; 11,820,000 shares issued and outstanding, liquidation preference of $25 per share	285,173			285,173
Common stock, $1.00 par value: 750,000,000 shares authorized; 135,858,452 and 133,658,318 shares issued and outstanding, respectively	135,858			133,658
Additional paid-in capital	1,446,496			1,403,335
Cumulative net income	1,479,635			1,348,089
Cumulative dividends	(1,925,725		)	(1,739,859		)
Other equity	(11,053		)	(10,954		)

Total stockholders’ equity	1,410,384			1,419,442
Total liabilities and stockholders’ equity	$	3,494,944		$	3,103,719

See accompanying Notes to Condensed Consolidated Financial Statements.

HEALTH CARE PROPERTY INVESTORS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Revenues and other income:
Rental revenues	$	117,117		$	98,110		$	332,270		$	275,655
Equity income (loss) from unconsolidated joint ventures	(531		)	(459		)	(232		)	1,627
Interest and other income	7,806			11,480			19,002			29,984
	124,392			109,131			351,040			307,266

Costs and expenses:
Interest	28,262			23,167			76,872			64,125
Depreciation and amortization	27,631			22,412			78,607			62,574
Operating	13,387			10,866			42,122			30,005
General and administrative	7,301			9,446			23,447			24,849
Impairments	—			1,305			—			1,305
	76,581			67,196			221,048			182,858

Income before minority interests	47,811			41,935			129,992			124,408
Minority interests	(3,415		)	(2,946		)	(9,593		)	(9,099		)

Income from continuing operations	44,396			38,989			120,399			115,309

Discontinued operations:
Operating income	372			1,537			1,970			6,804
Gain (loss) on sales of real estate, net of impairments	273			(6,036		)	9,177			796
	645			(4,499		)	11,147			7,600

Net income	45,041			34,490			131,546			122,909
Preferred stock dividends	(5,282		)	(5,282		)	(15,848		)	(15,847		)

Net income applicable to common shares	$	39,759		$	29,208		$	115,698		$	107,062

Basic earnings per common share:
Continuing operations	$	0.29		$	0.26		$	0.78		$	0.76
Discontinued operations	—			(0.04		)	0.08			0.05

Net income applicable to common shares	$	0.29		$	0.22		$	0.86		$	0.81

Diluted earnings per common share:
Continuing operations	$	0.29		$	0.25		$	0.78		$	0.75
Discontinued operations	—			(0.03		)	0.08			0.05

Net income applicable to common shares	$	0.29		$	0.22		$	0.86		$	0.80

Weighted average shares used to calculate earnings per share:
Basic	135,225			132,182			134,385			131,525
Diluted	136,135			133,584			135,291			133,047

See accompanying Notes to Condensed Consolidated Financial Statements.

HEALTH CARE PROPERTY INVESTORS, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

							Additional
	Preferred Stock			Common Stock			Paid-In		Cumulative					Other
	Shares	Amount		Shares	Amount		Capital		Net Income		Dividends			Equity			Total
December 31, 2004	11,820	$	285,173	133,658	$	133,658	$	1,403,335	$	1,348,089	$	(1,739,859	)	$	(10,954	)	$	1,419,442
Issuances of common stock, net	—	—		776	776		19,503		—		—			(2,750		)	17,529
Exercise of stock options	—	—		1,424	1,424		21,220		—		—			—			22,644
Net income	—	—		—	—		—		131,546		—			—			131,546
Preferred stock dividends	—	—		—	—		—		—		(15,848		)	—			(15,848		)
Common stock dividends	—	—		—	—		—		—		(170,018		)	—			(170,018		)
Changes in other comprehensive income	—	—		—	—		—		—		—			310			310
Amortization of deferred compensation	—	—		—	—		2,438		—		—			2,341			4,779
September 30, 2005	11,820	$	285,173	135,858	$	135,858	$	1,446,496	$	1,479,635	$	(1,925,725	)	$	(11,053	)	$	1,410,384

See accompanying Notes to Condensed Consolidated Financial Statements.

HEALTH CARE PROPERTY INVESTORS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2005			2004
Cash flows from operating activities:
Net income	$	131,546		$	122,909
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of real estate and in-place lease intangibles:
Continuing operations	78,607			62,574
Discontinued operations	500			3,046
Amortization of above and below market lease intangibles	(1,708		)	—
Stock-based compensation	4,779			3,579
Debt issuance costs amortization	2,344			2,261
Impairments	—			16,617
Provision (recovery) for loan losses	(56		)	70
Straight-line rents	(4,651		)	(1,152		)
Equity loss (income) from unconsolidated joint ventures	232			(1,627		)
Distributions of earnings from unconsolidated joint ventures	—			1,627
Minority interests	9,593			9,099
Net gain on sales of real estate	(9,177		)	(17,850		)
Changes in:
Accounts receivable	1,327			713
Other assets	(1,405		)	(4,092		)
Accounts payable, accrued liabilities and deferred revenue	11,968			2,967
Net cash provided by operating activities	223,899			200,741

Cash flows from investing activities:
Acquisition and development of real estate	(376,713		)	(219,012		)
Lease commissions and tenant and capital improvements	(4,474		)	(2,951		)
Net proceeds from sales of real estate	46,328			120,632
Distributions from unconsolidated joint ventures and other	6,712			93,994
Principal repayments on loans receivable and other	12,589			28,731
Decrease (increase) in restricted cash	2,288			(5		)
Investment in loans receivable	(9,787		)	(832		)
Net cash (used in) provided by investing activities	(323,057		)	20,557

Cash flows from financing activities:
Repayments under bank line of credit	(130,100		)	(55,200		)
Repayment of mortgage debt	(15,295		)	(12,788		)
Repayment of senior unsecured notes	(22,500		)	(87,000		)
Issuance of senior unsecured notes	445,471			87,000
Net proceeds from the issuance of common stock and exercise of options	39,788			32,611
Dividends paid on common and preferred stock	(185,866		)	(182,373		)
Distributions to minority interests	(11,128		)	(9,947		)

Net cash provided by (used in) financing activities	120,370			(227,697		)

Net increase (decrease) in cash and cash equivalents	21,212			(6,399		)
Cash and cash equivalents, beginning of period	16,962			16,829
Cash and cash equivalents, end of period	$	38,174		$	10,430

See accompanying Notes to Condensed Consolidated Financial Statements.

HEALTH CARE PROPERTY INVESTORS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) Business

Health Care Property Investors, Inc. is a real estate investment trust (“REIT”) that, together with its consolidated entities (collectively, “HCP” or the “Company”), invests directly, or through joint ventures and mortgage loans, in healthcare related properties located throughout the United States.

(2) Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“ GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2005 are not necessarily indicative of the results that may be expected for the year ending December 31, 2005. For further information, refer to the consolidated financial statements and notes thereto included in Health Care Property Investors, Inc. Annual Report on Form 10-K for the year ended December 31, 2004 filed with the Securities and Exchange Commission.

Use of Estimates

Management is required to make estimates and assumptions in the preparation of financial statements in conformity with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ.

Principles of Consolidation

The consolidated financial statements include the accounts of HCP, its wholly owned subsidiaries and its controlled, through voting rights or other means, joint ventures. All material intercompany transactions and balances have been eliminated in consolidation.

The Company adopted Interpretation No. 46R, Consolidation of Variable Interest Entities , as revised (“FIN 46R”), effective January 1, 2004 for variable interest entities created before February 1, 2003 and effective in fiscal year 2003 for variable interest entities created after January 31, 2003. FIN 46R provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise is the primary beneficiary of the VIE. A variable interest entity is broadly defined as an entity where either (i) the equity investors as a group, if any, do not have a controlling financial interest or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional financial support. The Company consolidates investments in VIEs when it is determined that the Company is the primary beneficiary of the VIE. The adoption of FIN 46R resulted in the consolidation of five joint ventures with aggregate assets of $18.5 million, effective January 1, 2004, that were previously accounted for under the equity method. The consolidation of these joint ventures did not have a significant effect on the Company’s consolidated financial statements or results of operations.

Investments in entities which the Company does not consolidate but has the ability to exercise significant influence over operating and financial policies are reported under the equity method. Generally, under the equity method of accounting, the Company’s share of the investee’s earnings or loss is included in the Company’s operating results.

Revenue Recognition

Rental income from tenants is recognized in accordance with GAAP, including Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 104, Revenue Recognition (“SAB 104”). For leases with minimum scheduled rent increases, the Company recognizes income on a straight-line basis over the lease term when collectibility is reasonably assured. Recognizing rental income on a straight-line basis for leases results in recognized revenue exceeding

amounts contractually due from tenants. Such cumulative excess amounts are included in other assets and were $15.8 million and $11.0 million, net of allowances, at September 30, 2005, and December 31, 2004, respectively. In the event the Company determines that collectibility of straight-line rents is not reasonably assured, the Company limits future recognition to amounts contractually owed, and, where appropriate, the Company establishes an allowance for estimated losses. Certain leases provide for additional rents based upon a percentage of the facility’s revenue in excess of specified base periods or other thresholds. Such revenue is deferred until the related thresholds are achieved.

The Company monitors the liquidity and creditworthiness of its tenants and borrowers on an ongoing basis. This evaluation considers industry and economic conditions, property performance, security deposits and guarantees, and other matters. The Company establishes provisions and maintains an allowance for estimated losses resulting from the possible inability of its tenants and borrowers to make payments sufficient to recover recognized assets. For straight-line rent amounts, the Company’s assessment is based on income recoverable over the term of the lease. At September 30, 2005 and December 31, 2004, respectively, the Company had an allowance of $20.2 million and $15.8 million, included in other assets, as a result of the Company’s determination that collectibility is not reasonably assured for certain straight-line rent amounts.

Loans Receivable

Loans receivable are classified as held-to-maturity because the Company has the intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost. The Company recognizes interest income on loans, including the amortization of discounts and premiums, using the effective interest method.

Income Taxes

The Company has elected and believes it operates so as to qualify as a REIT under Sections 856 to 860 of the Internal Revenue Code of 1986, as amended (the “Code”). Under the Code, the Company generally is not subject to federal income tax on its taxable income distributed to stockholders if certain distribution, income, asset, and shareholder tests are met. A REIT must distribute to stockholders at least 90% of its annual taxable income.

Certain activities the Company undertakes must be conducted by entities which elect to be treated as taxable REIT subsidiaries (“TRSs”). TRSs are subject to both federal and state income taxes. The Company’s income taxes for the nine months ended September 30, 2005 and 2004 was a benefit of $0.2 million and an expense of $1.4 million, respectively.

Discontinued Operations

Certain long lived assets are classified as discontinued operations in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets . Long-lived assets to be disposed of are reported at the lower of their carrying amount or their fair value less cost to sell. Further, depreciation of these assets ceases at the time the assets are classified as discontinued operations. Discontinued operations are defined in SFAS No. 144 as a component of an entity that has either been disposed of or is deemed to be held for sale if both the operations and cash flows of the component have been or will be eliminated from ongoing operations as a result of the disposal transaction and the entity will not have any significant continuing involvement in the operations of the component after the disposal transaction.

The Company periodically sells assets based on market conditions and the exercise of purchase options by tenants. The operating results of properties meeting the criteria established in SFAS No. 144 are reported as discontinued operations in the Company’s Condensed Consolidated Statements of Income. Discontinued operations for the three and nine months ended September 30, 2005, include 12 and 20 properties with revenues of $0.6 and $2.8 million, respectively. The Company had 31 and 52 properties classified as discontinued operations for the three and nine months ended September 30, 2004, respectively, with revenue of $2.7 and $12.2 million, respectively. While SFAS No. 144 provides that the assets and liabilities of discontinued operations be presented separately in the balance sheet, such amounts are immaterial for the Company. Accordingly, such reclassification has not been made.

Stock-Based Compensation

On January 1, 2002, the Company adopted the fair value method of accounting for stock-based compensation in accordance with SFAS No. 123, Accounting for Stock-Based Compensation (“SFAS 123”), as amended by SFAS No. 148, Accounting for Stock-Based Compensation — Transition and Disclosure (“SFAS 148”). The fair value provisions of SFAS 123 were adopted prospectively with the fair value of all new stock option grants recognized as compensation expense beginning January 1, 2002. Since only new grants are accounted for under the fair value method, stock-based compensation expense is less than that which would have been recognized if the fair value method had been applied to all awards. Compensation expense for awards with graded vesting is generally recognized ratably over the vesting period.

The following table reflects net income and earnings per share, adjusted as if the fair value based method had been applied to all outstanding stock awards in each period (in thousands, except per share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Net income, as reported	$	45,041		$	34,490		$	131,546		$	122,909
Add: Stock-based compensation expense included in reported net income	1,581			1,241			4,779			3,579
Deduct: Stock-based employee compensation expense determined under the fair value based method	(1,660		)	(1,385		)	(5,018		)	(4,010		)

Pro forma net income	$	44,962		$	34,346		$	131,307		$	122,478

Earnings per share:
Basic – as reported	$	0.29		$	0.22		$	0.86		$	0.81
Basic – pro forma	$	0.29		$	0.22		$	0.86		$	0.81
Diluted – as reported	$	0.29		$	0.22		$	0.86		$	0.80
Diluted – pro forma	$	0.29		$	0.22		$	0.85		$	0.80

Derivatives

The Company adopted SFAS No. 133, “ Accounting for Derivative Instruments and Hedging Activities, ” as amended by SFAS No. 137, SFAS No. 138 and SFAS No. 148 (“SFAS No. 133”), as of January 1, 2001. SFAS No. 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and hedging activities. It requires the recognition of all derivative instruments as assets or liabilities in the Company’s condensed consolidated balance sheets at fair value. Changes in the fair value of derivative instruments that are not designated as hedges or that do not meet the hedge accounting criteria of SFAS No. 133 are recognized in earnings. For derivatives designated as hedging instruments in qualifying cash flow hedges, the effective portion of changes in fair value of the derivatives is recognized in accumulated other comprehensive income (loss) whereas the ineffective portions are recognized in earnings.

The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as cash flow hedges to specific assets and liabilities in the balance sheet. The Company also assesses and documents, both at the hedging instrument’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows associated with the hedged items. When it is determined that a derivative ceases to be highly effective as a hedge, the Company discontinues hedge accounting prospectively.

Cash and Cash Equivalents

Cash and cash equivalents represent short term investments with original maturities of three months or less when purchased.

Reclassifications

Certain reclassifications have been made for comparative financial statement presentation.

New Accounting Pronouncements

SFAS No. 123R, Share-Based Payments , which is a revision of SFAS No. 123, Accounting for Stock-Based Compensation, was issued in December 2004. Generally, the approach in SFAS 123R is similar to that in SFAS 123. However, SFAS 123R requires all share-based payments to employees, including grants of employee stock options, be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. SFAS 123R must be adopted no later than January 1, 2006 for the Company. The Company believes the adoption of SFAS 123R will not have a significant impact on its consolidated financial statements since it previously adopted the fair value method prospectively under SFAS 123.

In May 2005, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 154, Accounting Changes and Error Corrections (“SFAS No. 154”), which replaces Accounting Principles Board Opinion No. 20, Accounting Changes and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements . SFAS No. 154 changes the requirements for the accounting for and reporting of a change in accounting principles. It requires retrospective application to prior periods’ financial statements of changes in accounting principles, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. This statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The adoption of SFAS No. 154 is not expected to have a significant impact on the Company’s financial position or results of operations.

Emerging Issues Task Force Issue 04-5, Investor’s Accounting for an Investment in a Limited Partnership When the Investor is the Sole General Partner and the Limited Partners Have Certain Rights (“EITF 04-5”), was ratified by the FASB in June 2005. The issue is what rights held by the limited partner(s) preclude consolidation in circumstances in which the sole general partner would otherwise consolidate the limited partnership in accordance with GAAP. The assessment of limited partners’ rights and their impact on the presumption of control of the limited partnership by the sole general partner should be made when an investor becomes the sole general partner and should be reassessed if (i) there is a change to the terms or in the exercisability of the rights of the limited partners, (ii) the sole general partner increases or decreases its ownership of limited partnership interests, or (iii) there is an increase or decrease in the number of outstanding limited partnership interests. This issue is effective no later than for fiscal years beginning after December 15, 2005 and as of June 29, 2005 for new or modified arrangements. The impact of adopting EITF 04-5 is not expected to have a significant impact on the Company’s financial position or results of operations.

(3) Revenue Concentration

Tenet Healthcare Corporation (NYSE: THC) and American Retirement Corporation (NYSE: ARC) accounted for 11% and 9%, respectively, of the Company’s revenue during the nine months ended September 30, 2005, and accounted for 13% and 7%, respectively, of the Company’s revenue during the nine months ended September 30, 2004. The carrying amount of the Company’s real estate assets leased to Tenet and ARC was $373.9 million and $345.8 million, respectively, at September 30, 2005.

These companies are publicly traded and are subject to the informational filing requirements of the Securities and Exchange Act of 1934, as amended. Accordingly, each is required to file periodic reports on Form 10-K and Form 10-Q with the Securities and Exchange Commission.

Certain operators of our properties are experiencing financial, legal and regulatory difficulties. The loss of a significant operator or a combination of smaller operators could have a material impact on our financial position or results of operations.

(4) Acquisitions and Dispositions

A summary of acquisitions through September 30, 2005, is as follows (in thousands):

Acquisitions (1)	Cash Paid		Debt Assumed		DownREIT Units (2)		Real Estate		Intangibles
Medical office buildings	$	55,260	$	36,460	$	—	$	88,215	$	3,505
Assisted living facilities	295,520		52,060		19,431		361,852		5,159
	$	350,780	$	88,520	$	19,431	$	450,067	$	8,664

(1) Includes transaction costs, if any.

(2) Non-managing member LLC units.

On April 20, 2005, the Company acquired five assisted living facilities for $58 million through a sale-leaseback transaction. These facilities have an initial lease term of 15 years, with two ten-year renewal options. The initial annual lease rate is approximately 9.0% with annual escalators based on the Consumer Price Index (“CPI”) that have a floor of 2.75%. These properties are included in a new master lease that includes 14 other properties currently leased to the operator.

On April 28, 2005, the Company acquired five medical office buildings for approximately $81 million including assumed debt valued at $29 million. The initial yield is 7.0% with two properties currently in lease-up. The yield following lease-up is expected to be 8.2%.

On July 1, 2005, the Company acquired an assisted living facility for approximately $16 million through a sale-leaseback transaction. The facility has an initial lease term of 15 years, with two ten-year renewal options. The initial annual lease rate is approximately 8.75% with annual CPI-based escalators that have a floor of 2.75%. The property has a planned 60-unit expansion.

On July 22, 2005, the Company acquired twelve independent and assisted living facilities for approximately $252 million, including assumed debt and DownREIT units valued at approximately $52 million and $19 million, respectively, through a sale-leaseback transaction. These facilities have an initial lease term of 15 years, with three ten-year renewal options. The initial annual lease rate is approximately 7.1% with annual CPI-based escalators that have a floor of 3%.

On August 31, 2005, the Company acquired five assisted living facilities for $41 million through a sale-leaseback transaction. These facilities have an initial lease term of 15 years, with two ten-year renewal options. The initial annual lease rate is approximately 8.5% with annual CPI-based escalators that have a floor of 2.75%. These properties are included in a new master lease that includes 14 other properties currently leased to the operator.

During the nine months ended September 30, 2005, the Company sold 12 properties for approximately $46 million and recognized a gain of approximately $9 million. During the quarter ended September 30, 2005, the Company sold 4 properties for approximately $5 million and recognized a gain of approximately $0.3 million.

See Note 15 to the Condensed Consolidated Financial Statements for a discussion of acquisitions subsequent to September 30, 2005.

(5) Investments in and Advances to Unconsolidated Joint Ventures

HCP Medical Office Portfolio, LLC

HCP Medical Office Portfolio, LLC (“HCP MOP”) is a joint venture formed in June 2003 between the Company and an affiliate of General Electric Company (“GE”). HCP MOP is engaged in the acquisition, development, and operation of medical office building (“MOB”) properties. The Company has a 33% ownership interest therein and is the managing member. Activities of the joint venture requiring equity capital are generally funded on a transactional basis by the members in proportion to their ownership interests. Cash distributions are made to the members in proportion to their ownership interests until GE’s cumulative return, as defined, exceeds specific thresholds. Thereafter, the Company’s economic interest increases.

The Company uses the equity method of accounting for its investment in HCP MOP because it exercises significant influence through voting rights and its position as managing member. However, the Company does not consolidate HCP MOP since it does not control, through voting rights or other means, the joint venture, as GE has substantive participating decision-making rights and has the majority of the economic interest.

Summarized unaudited condensed financial information of HCP MOP follows:

Balance Sheets	September 30, 2005		December 31, 2004
	(In thousands)
Real estate, at cost	$	471,672	$	455,741
Less accumulated depreciation and amortization	23,171		13,950
Net real estate	448,501		441,791
Other assets, net	39,883		52,405
Total assets	$	488,384	$	494,196
Mortgage loans and notes payable	$	320,891	$	322,559
Other liabilities	21,115		22,220
GE’s capital	98,073		100,109
HCP’s capital	48,305		49,308
Total liabilities and members’ capital	$	488,384	$	494,196

	Three Months Ended September 30,						Nine Months Ended September 30,
	(in thousands)						(in thousands)
Statement of Operations	2005			2004			2005			2004
Rental and other income	$	20,973		$	19,684		$	63,389		$	60,049
Net income (loss)	$	(1,540	)	$	(1,966	)	$	(1,655	)	$	3,461
HCP’s equity income (loss)	$	(511	)	$	(608	)	$	(549	)	$	1,145
Fees earned by HCP	$	775		$	772		$	2,326		$	2,323
Distributions received by HCP	$	1,560		$	3,217		$	4,942		$	96,723

The Company has not guaranteed any indebtedness or other obligations of HCP MOP. Generally, the Company may only be required to provide additional funding to HCP MOP under limited circumstances as specified in the related agreements. At September 30, 2005, investments in and advances to unconsolidated joint ventures include outstanding advances to HCP MOP of $0.8 million.

In January 2004, HCP MOP completed $288 million of non-recourse mortgage financings, including $254 million at a weighted average fixed interest rate of 5.57% with the balance based on LIBOR plus 1.75%. The Company received $92 million of distributions from HCP MOP in connection with this financing during early 2004.

During the three month period ended June 30, 2005, HCP MOP revised its purchase price allocation related to its 2003 acquisition of certain properties acquired from MedCap Properties, LLC. The revisions made by HCP MOP to the purchase price allocation attributed more value to below-market lease intangibles, other intangibles and real estate assets. Lease intangibles generally amortize over a shorter period of time relative to tangible real estate assets. The impact to net income for HCP MOP resulting from the purchase price allocation revisions was a charge of $1.4 million.

In late August and early September 2005, ten medical office buildings owned by HCP MOP, principally in Louisiana and the surrounding area, sustained varying degrees of damage due to hurricanes Katrina and Rita. Due to the nature and extent of the overall damage to the area, the Company has not been able to completely inspect all damaged properties and finalize damage assessments. Preliminary estimates indicate that four of the buildings have incurred substantial damage, and may be a total loss. For the nine months ended September 30, 2005 and 2004, the four buildings generated revenues of $0.9 million, had an aggregate carrying value of $3.8 million, and were encumbered by mortgage debt of approximately $2.9 million. At September 30, 2005, the carrying value of these four buildings was written off and an equal amount was recorded as a receivable for the probable insurance proceeds up to the carrying value of each building.

At September 30, 2005, the remaining six buildings had resumed operations with repairs underway. Revenues for the six facilities undergoing repair were $4.2 million and $4.5 million for the nine months ended September 30, 2005, and 2004, respectively.

Repair costs and other related expenses for damages caused by hurricanes Katrina and Rita during the three months ended September 30, 2005, were approximately $0.3 million. The Company has property, business interruption and other related insurance coverage to mitigate the financial impact of these types of events, which are subject to various limits and deductible provisions based on the terms of the policies. Any excess insurance recovery above the carrying value of the assets is expected to be recognized by HCP MOP as a gain at the time the claims settle with the insurance carrier.

Other Unconsolidated Joint Ventures

The Company owns minority interests in the following entities, which are accounted for on the equity method at September 30, 2005 (dollars in thousands):

Entity	Investment (1)		Ownership (2)
Arborwood Living Center, LLC	$	303	45	%
Edgewood Assisted Living Center, LLC	—		45	%
Greenleaf Living Center, LLC	166		45	%
Seminole Shores Living Center, LLC	—		50	%
	$	469

(1) Represents the Company’s net equity investment in the identified unconsolidated joint venture.

(2) The Company’s ownership interest and economic interest are substantially the same.

On June 30, 2005, the Company sold its minority interests in two joint ventures with American Retirement Corporation (“ARC”) for $6.2 million in exchange for a note collateralized by certain partnership interests of ARC. The note bears interest at 9% per annum. The gain on the sale was deferred and will be recognized under the installment method of accounting as the principal balance of the note is repaid. These joint ventures were accounted for by the Company under the equity method prior to June 30, 2005.

Summarized unaudited condensed combined financial information for the other unconsolidated joint ventures follows:

Balance Sheets	September 30, 2005			December 31, 2004 (1)
	(In thousands)
Real estate, at cost	$	20,071		$	135,048
Less accumulated depreciation and amortization	5,398			17,491
Net real estate	14,673			117,557
Other assets, net	1,417			1,376
Total assets	$	16,090		$	118,933
Notes payable	$	15,473		$	15,361
Mortgage notes payable	—			15,862
Accounts payable	352			767
Entrance fee liabilities and deferred life estate obligations	—			75,746
Other partners’ capital (deficit)	(204		)	6,855
HCP’s capital	469			4,342

Total liabilities and partners’ capital	$	16,090		$	118,933

(1) Includes financial information related to two joint ventures with ARC that were sold on June 30, 2005.

	Three Months Ended September 30,					Nine Months Ended September 30,
	(in thousands)					(in thousands)
Statement of Operations	2005			2004		2005		2004
Rental and other income	$	814		$	2,372	$	4,365	$	11,420
Net income	$	32		$	466	$	333	$	3,116
HCP’s equity income (loss)	$	(20	)	$	149	$	317	$	482
Distributions received	$	—		$	102	$	359	$	535

As of September 30, 2005, the Company has guaranteed approximately $7.2 million of a total of $15.5 million of notes payable for the joint ventures.

(6) Loans Receivable

Loans receivable consist of the following:

	September 30, 2005								December 31, 2004
	Secured		Unsecured			Total			Secured		Unsecured			Total
	(In thousands)
Joint venture partners	$	—	$	7,006		$	7,006		$	5,694	$	779		$	6,473
Other	138,402		6,730			145,132			135,006		7,340			142,346
Loan loss allowance	—		(2,264		)	(2,264		)	—		(2,427		)	(2,427		)

	$	138,402	$	11,472		$	149,874		$	140,700	$	5,692		$	146,392

(7) Bank Line of Credit, Senior Unsecured Notes and Mortgage Debt

Bank line of credit. At September 30, 2005, borrowings under the Company’s $500 million three-year line of credit were $170.0 million with a weighted average interest rate of 4.50%. Borrowings under the bank line of credit accrue interest at 65 basis points over LIBOR with a 15 basis point facility fee. In addition, a negotiated rate option, whereby the lenders participating in the credit facility bid on the interest to be charged and which may result in a reduced interest rate, is available for up to 50% of borrowings. The credit facility also contains an “accordion” feature allowing borrowings to be increased by $100 million under certain conditions.

The credit agreement contains certain financial restrictions and requirements customary in transactions of this type. The more significant covenants, using terms defined in the agreement, limit (i) Consolidated Total Indebtedness to Consolidated Total Asset Value to 60%, (ii) Secured Debt to Consolidated Total Asset Value to 30% and (iii) Unsecured Debt to Consolidated Unencumbered Asset Value to 60%. The Company must also maintain (i) a Fixed Charge Coverage ratio, as defined, of 1.75 times and (ii) a formula-determined Minimum Tangible Net Worth. As of September 30, 2005, the Company was in compliance with each of these restrictions and requirements.

Senior unsecured notes. At September 30, 2005, the Company had $1.5 billion in aggregate principal amount of senior unsecured notes outstanding. Interest rates on the notes ranged from 4.31% to 7.88% with a weighted average rate of 6.22% at September 30, 2005.

On April 27, 2005, the Company issued $250 million of 5 5/8% senior unsecured notes due 2017. The notes were priced at 99.585% of the principal amount with an effective yield of 5.673%. The Company received proceeds of $247 million, which were used to repay outstanding indebtedness and for general corporate purposes.

Senior unsecured notes at December 31, 2004 included $200 million principal amount of Mandatory Par Put Remarketed Securities (“MOPPRS”), due June 8, 2015. The MOPPRS contained an option (the “MOPPRS Option”) exercisable by the Remarketing Dealer, an investment bank affiliate, which derived its value from the yield on ten-year U.S. Treasury rates relative to a fixed strike rate of 5.565%. Generally, the value of the option to the Remarketing Dealer increased as ten-year Treasury rates declined and the option’s value to the Remarketing Dealer decreased as ten-year Treasury rates increased.

On June 3, 2005, the Remarketing Dealer exercised its option to redeem the Company’s $200 million principal amount of 6.875% MOPPRS. The Remarketing Dealer redeemed the securities from the holders at par plus accrued interest,

and reissued ten-year senior notes with a coupon of 7.072%. The reissued notes are at an effective interest rate which is higher than what would otherwise have been available if the Company had issued new ten-year notes at par value. The Company determined that the Remarketing Dealer acted as principal in the transaction, which resulted in the Company not accounting for the transaction as an extinguishment.

On June 15, 2005, the Company repaid $10 million of maturing senior unsecured notes which accrued interest at a rate of 7.55%. These notes were repaid with funds available under the Company’s bank line of credit.

On September 16, 2005, the Company issued $200 million of 4 7/8% senior unsecured notes due September 15, 2010. The notes were priced at 99.567% of the principal amount with an effective yield of 4.974%. The Company received net proceeds of $198 million, which were used to repay outstanding indebtedness and for general corporate purposes.

During the three months ended September 30, 2005, the Company repaid $12.5 million of maturing senior unsecured notes which accrued interest at a rate of 7.69%. These notes were repaid with funds available under the Company’s bank line of credit.

Mortgage debt. At September 30, 2005, the Company had $213.7 million in mortgage debt secured by 34 healthcare facilities with a carrying amount of $397.7 million. Interest rates on the mortgage notes ranged from 2.75% to 9.32% with a weighted average rate of 6.53% at September 30, 2005.

The instruments encumbering the properties restrict title transfer of the respective properties subject to the terms of the mortgage, prohibit additional liens, require payment of real estate taxes, maintenance of the properties in good condition, maintenance of insurance on the properties and include a requirement to obtain lender consent to enter into material tenant leases.

(8) Shareholders’ Equity

Common Stock

During the nine months ended September 30, 2005 and 2004, the Company issued 674,000 and 638,000 shares of common stock under its Dividend Reinvestment and Stock Purchase Plan, respectively. The Company issued 1,424,000 and 1,104,000 shares upon exercise of stock options during the nine months ended September 30, 2005 and 2004, respectively.

On July 27, 2005, the Company announced that its Board declared a quarterly cash dividend of $0.42 per share of common stock. The common stock cash dividend was paid on August 19, 2005 to stockholders of record as of the close of business on August 8, 2005.

On October 26, 2005, the Company announced that its Board declared a quarterly cash dividend of $0.42 per share of common stock. The common stock cash dividend will be paid on November 18, 2005 to stockholders of record as of the close of business on November 7, 2005.

Preferred Stock

On July 27, 2005, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.45313 per share on its Series E cumulative redeemable preferred stock and $0.44375 per share on its Series F cumulative redeemable preferred stock. These dividends were paid on September 30, 2005 to stockholders of record as of the close of business on September 15, 2005.

On October 26, 2005, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.45313 per share on its Series E cumulative redeemable preferred stock and $0.44375 per share on its Series F cumulative redeemable preferred stock. These dividends will be paid on December 30, 2005 to stockholders of record as of the close of business on December 15, 2005.

Comprehensive Income and Other Equity

	September 30, 2005		December 31, 2004
	(In thousands)
Unamortized balance of deferred compensation	$	9,194	$	8,786
Accumulated other comprehensive loss	1,859		2,168

Total other equity	$	11,053	$	10,954

Other comprehensive loss is a reduction of net income in calculating comprehensive income. Comprehensive income for the nine months ended September 30, 2005, and 2004 was $131.9 million and $123.2 million, respectively.

(9) Rental Revenues

Rental and other property income consists of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2005		2004		2005		2004
	(in thousands)				(in thousands)
Medical office buildings	$	31,841	$	23,994	$	92,927	$	68,445
Other properties	85,276		74,116		239,343		207,210
	$	117,117	$	98,110	$	332,270	$	275,655

Included in rental revenues are tenant expense reimbursements of $5.0 million and $15.4 million for the three and nine months ended September 30, 2005, respectively. Amounts for the three and nine months ended September 30, 2004, have been reclassified to conform to the current period presentation.

(10) Earnings Per Share of Common Stock

The Company computes earnings per share in accordance with SFAS No. 128, Earnings Per Share. Basic earnings per common share is computed by dividing net income applicable to common shares by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share is calculated including the effect of dilutive securities. Approximately 0.9 million and 1.0 million options to purchase shares of common stock that had an exercise price in excess of the average market price of the common stock during the three months ended September 30, 2005 and 2004, respectively, were not included because they are anti-dilutive. Additionally, 5.7 million shares issuable upon conversion of 3.2 million DownREIT units during the three months ended September 30, 2005, and 5.1 million shares issuable upon the conversion of 2.6 million non-managing member units during the three months ended September 30, 2004, were not included because they are anti-dilutive.

	Three Months Ended September 30,
	2005					2004
	Income		Shares	Per Share		Income		Shares	Per Share
	(In thousands, except per share amounts)
Basic earnings per common share:
Net income applicable to common shares	$	39,759	135,225	$	0.29	$	29,208	132,182	$	0.22
Dilutive options and unvested restricted stock	—		910	—		—		1,402	—
Diluted earnings per common share	$	39,759	136,135	$	0.29	$	29,208	133,584	$	0.22

	Nine Months Ended September 30,
	2005					2004
	Income		Shares	Per Share		Income		Shares	Per Share
	(In thousands, except per share amounts)
Basic earnings per common share:
Net income applicable to common shares	$	115,698	134,385	$	0.86	$	107,062	131,525	$	0.81
Dilutive options and unvested restricted stock	—		906	—		—		1,522	(0.01		)
Diluted earnings per common share	$	115,698	135,291	$	0.86	$	107,062	133,047	$	0.80

(11) Supplemental Cash Flow

Supplemental Cash Flow Information

	Nine Months Ended September 30,
	2005		2004
	(In thousands)
Interest paid, net of capitalized interest and other	$	68,383	$	59,911
Taxes paid	106		456
Capitalized interest	482		881
Loans received upon sale of unconsolidated joint venture investments	6,228		—
Loans receivable settled through real estate acquisitions	—		94,768
Mortgages assumed with real estate purchases	88,520		81,386
Mortgages included with real estate dispositions	—		31,397
Non-managing member units issued in connection with acquisition	19,431		—
Restricted stock issued, net of cancellations	2,750		1,993
Conversion of non-managing member units into common stock	385		2,766

(12) Derivative Financial Instruments

In July 2005, the Company entered into three interest-rate swap contracts that are designated as hedging the variability in expected cash flows for variable rate debt assumed in connection with the acquisition of a portfolio of real estate assets in July 2005. The cash flow hedges have a notional amount of $45.6 million and expire in July 2020. The fair value of these contracts at September 30, 2005, was $0.3 million and is included in other assets. For the three months ended September 30, 2005, the Company recognized increased interest expense of $0.2 million attributable to the contracts. The Company determined that these swap agreements were highly effective in offsetting future variable-interest cash flows related to the assumed mortgages. The effective portion of gains and losses on these contracts are recognized in accumulated other comprehensive income (loss) whereas the ineffective portions are recognized in earnings. During the three months ended September 30, 2005, the ineffective portion of these hedges was not significant.

(13) Commitments and Contingencies

The Company, from time to time, is party to legal proceedings, lawsuits and other claims in the ordinary course of business. These claims, even if not meritorious, could force the Company to spend significant financial resources. The Company is not aware of any legal proceedings or claims that it believes will have, individually or taken together, a material adverse effect on its business, prospects, financial condition or results of operations.

On September 26, 2005, the Company filed a lawsuit in Superior Court of California, County of San Diego entitled Health Care Property Investor, Inc. v. Fenton Partners, Fenton & Grust, LLC and SRG Holdco, LP. The Company holds an option to acquire certain limited partnership units in SRG Holdco, LP. In the lawsuit the Company alleges that defendants undertook certain actions and activities that had the effect of devaluing the units for which the Company has an option. It is uncertain whether the Company will recover any or all of the amounts it believes it is entitled to.

One of the Company’s hospitals, located in Tarzana, California, is affected by State of California Senate Bill 1953 (SB 1953), which requires certain seismic safety building standards for acute care hospital facilities. This hospital is operated by Tenet under a lease expiring in February 2009. The Company and Tenet are currently reviewing the SB 1953 compliance of this hospital, multiple plans of action to cause such compliance, the estimated time for completing the same, and the cost of performing necessary remediation of the property. The Company cannot currently estimate the remediation costs that will need to be incurred prior to 2013 in order to make the facility SB 1953-compliant through 2030, and the final allocation of such remediation costs between the Company and Tenet. Rent on the hospital for the nine months ended September 30, 2005 was $7.9 million and for years ended December 31, 2004 and 2003, was $10.6 million and $10.8 million, respectively. The carrying amount of the hospital was $76.7 million at September 30, 2005.

Certain residents of two of the Company’s Continuing Care Retirement Communities (“CCRCs”) have entered into a master trust agreement with the operator of the facilities whereby amounts paid upfront by such residents were deposited into a trust account. These funds were then made available to the CCRC operator in the form of a non-interest bearing loan to provide permanent financing for the related communities. The operator of the CCRC is the borrower under these arrangements; however, two of the Company’s properties are collateral under the master trust agreements. As of September 30, 2005, the remaining obligation under the master trust agreements for these two properties is $11.0 million. The Company’s property will be released as collateral as the master trust liabilities are extinguished.

See Note 14 to the Condensed Consolidated Financial Statements for a discussion of the sale of the Company’s Securities in SCCI Healthcare Services Corporation and related indemnities.

(14) Related Party Transactions

Pursuant to the original purchase agreement dated October 2, 2003, the Company paid $9.8 million during the nine months ended September 30, 2005, in additional purchase consideration in the form of an earn-out to the former members of MedCap Properties, LLC related to the Company’s 2003 acquisition of four MOBs that were under development at the time of acquisition. The amounts paid included $3.7 million paid to former members who are now senior officers of the Company. At the time that the original purchase agreement was entered into, the former members were not officers of the Company.

On July 28, 2005, in connection with the acquisition of SCCI Healthcare Services Corporation (“SCCI”) by Triumph Healthcare Holdings, Inc. (“Buyer”), the Company sold its securities in SCCI, with a carrying value of zero, and received proceeds of $2.9 million. Pursuant to certain indemnities specified in the related Stock Purchase Agreement (“SPA”), the Company could be required to return or pay to the Buyer a portion of the proceeds received from the sale of its shares in certain circumstances. Specifically, the SPA provides that each seller under the SPA, severally but not jointly, indemnifies Buyer for damages relating to certain legal proceedings, which are defined in the SPA. The SPA generally imposes an aggregate cap on the liability of the sellers for indemnities under the SPA in the amount of $17.5 million, which sum was deposited into escrow at the closing of the sale as a holdback. The Company accounted for the transfer of this financial asset as a sale and recognized a gain of approximately $2.8 million based on the proceeds received less the estimated fair value of the indemnities. The gain from the sale of these securities is included in interest and other income in the Company’s results of operations for the three and nine months ended September 30, 2005. Mr. Sullivan, a director of the Company, is a director of SCCI.

(15) Subsequent Events

On October 19, 2005, the Company acquired seven medical office buildings for approximately $52 million, including assumed debt and DownREIT units valued at $25 million and $11 million, respectively. The medical office buildings include approximately 351,000 rentable square feet and have an initial yield of approximately 8.2%.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Language Regarding Forward-looking Statements

Statements in this Quarterly Report that are not historical factual statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The statements include, among other things, statements regarding the intent, belief or expectations of Health Care Property Investors, Inc. and its officers and can be identified by the use of terminology such as “may,” “will,” “expect,” “believe,” “intend,” “plan,” “estimate,” “should” and other comparable terms or the negative thereof. In addition, we, through our senior management, from time to time make forward-looking oral and written public statements concerning our expected future operations and other developments. Readers are cautioned that, while forward-looking statements reflect our good faith belief and best judgment based upon current information, they are not guarantees of future performance and are subject to known and unknown risks and uncertainties. Actual results may differ materially from the expectations contained in the forward-looking statements as a result of various factors. In addition to the factors set forth under “Risk Factors” in the Company’s Annual Report, readers should consider the following:

(a) Legislative, regulatory, or other changes in the healthcare industry at the local, state or federal level which increase the costs of or otherwise affect the operations of, our tenants and mortgagors;

(b) Changes in the reimbursement available to our tenants and mortgagors by governmental or private payors, including changes in Medicare and Medicaid payment levels and the availability and cost of third party insurance coverage;

(c) Competition for tenants and mortgagors, including with respect to new leases and mortgages and the renewal or rollover of existing leases;

(d) Availability of suitable healthcare facilities to acquire at a favorable cost of capital and the competition for such acquisition and financing of healthcare facilities;

(e) The ability of our tenants and mortgagors to operate our properties in a manner sufficient to maintain or increase revenues and to generate sufficient income to make rent and loan payments;

(f) The financial weakness of some operators, including potential bankruptcies, which results in uncertainties in our ability to continue to realize the full benefit of such operators’ leases;

(g) Changes in national or regional economic conditions, including changes in interest rates and the availability and cost of capital;

(h) The risk that we will not be able to sell or lease facilities that are currently vacant;

(i) The potential costs of SB 1953 compliance with respect to our hospital in Tarzana, California;

(j) The financial, legal and regulatory difficulties of two significant operators, Tenet and HealthSouth; and

(k) The potential impact of existing and future litigation matters.

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Executive Summary

We are a real estate investment trust (“REIT”) that invests in healthcare related properties located throughout the United States. We develop, acquire and manage healthcare real estate, and provide mortgage financing to healthcare providers. We invest directly, often structuring sale-leaseback transactions, and through joint ventures. At September 30, 2005, our real estate portfolio, including properties held through joint ventures and mortgage loans, consisted of interests in 542 facilities located in 42 states.

Our business strategy is based on three principles: (i) opportunistic investing, (ii) portfolio diversification, and (iii) conservative financing. We actively redeploy capital from investments with lower return potential into assets with higher

return potential, and recycle capital from shorter-term to longer-term investments. We make investments where the expected risk-adjusted return exceeds our cost of capital and strive to leverage our operator and other business relationships.

Our strategy contemplates acquiring and developing properties on favorable terms. We attempt to structure transactions that are tax-advantaged and mitigate risks in our underwriting process. Generally, we prefer larger, more complex “negotiated” transactions that leverage our management team’s experience and infrastructure. We follow a disciplined approach to enhancing the value of our existing portfolio, including the ongoing evaluation of properties that no longer fit our strategy for potential disposition.

We primarily generate revenue by leasing healthcare related properties under long-term operating leases. Most of our rents are received under triple net leases; however, medical office building (“MOB”) rents are typically structured as gross or modified gross leases. Accordingly, for MOBs we incur certain property operating expenses, such as real estate taxes, repairs and maintenance, property management fees, utilities and insurance. Our growth depends, in part, on our ability to (i) increase rental income by increasing occupancy levels and rental rates, (ii) maximize tenant recoveries and (iii) control operating and other expenses. Our operations are impacted by property specific, market specific, general economic and other conditions.

Access to external capital on favorable terms is critical to the success of our strategy. We attempt to match the long-term duration of our leases with long-term fixed rate financing. At September 30, 2005, 11% of our consolidated debt was at variable interest rates or fixed through interest rate swaps. We intend to maintain an investment grade rating on our fixed income securities and manage various capital ratios and amounts within appropriate parameters. Our senior debt is rated BBB+ by both Standard & Poor’s and Fitch Ratings and Baa2 by Moody’s Investors Service.

Access to capital markets impacts our cost of capital and our ability to refinance existing indebtedness as it matures, as well as to fund future acquisitions and development through the issuance of additional securities. Our ability to access capital on favorable terms is dependent on various factors, including general market conditions, interest rates, credit ratings on our securities, perception of our potential future earnings and cash distributions, and the market price of our capital stock.

2005 Overview

Real Estate Transactions

Year-to-date through October 31, 2005, we have acquired interests in properties and made secured loans aggregating $556 million, including the following:

• On October 19, 2005, we acquired seven medical office buildings for approximately $52 million, including assumed debt and non-managing member LLC units (“DownREIT units”) valued at $25 million and $11 million, respectively. The medical office buildings include approximately 351,000 rentable square feet and have an initial yield of approximately 8.2%.

• On August 31, 2005, we acquired five assisted living facilities for $41 million through a sale-leaseback transaction. These facilities have an initial lease term of 15 years, with two ten-year renewal options. The initial annual lease rate is approximately 8.5% with annual escalators based on the Consumer Price Index (“CPI”) that have a floor of 2.75%. These properties are included in a new master lease along with 14 other properties currently leased to the operator.

• On July 22, 2005, we acquired twelve independent and assisted living facilities for approximately $252 million, including assumed debt and DownREIT units valued at approximately $52 million and $19 million, respectively, through a sale-leaseback transaction. These facilities have an initial lease term of 15 years, with three ten-year renewal options. The initial annual lease rate is approximately 7.1% with annual CPI-based escalators that have a floor of 3%.

• On July 1, 2005, we acquired an assisted living facility for approximately $16 million through a sale-leaseback transaction. The facility has an initial lease term of 15 years, with two ten-year renewal options. The initial annual lease rate is approximately 8.75% with annual CPI-based escalators that have a floor of 2.75%.

• On April 28, 2005, we acquired five medical office buildings for approximately $81 million including assumed debt valued at $29 million. The initial yield is 7.0% with two properties currently in lease-up. The yield following lease-up is expected to be 8.2%. The medical office buildings include approximately 537,000 rentable square feet.

• On April 20, 2005, we acquired five assisted living facilities for $58 million through a sale-leaseback transaction. These facilities have an initial lease term of 15 years, with two ten-year renewal options. The initial annual lease rate is approximately 9.0% with annual CPI-based escalators that have a floor of 2.75%. These properties are included in a new master lease that includes 14 other properties currently leased to the operator.

Year-to-date through October 31, 2005, we sold interests in 14 properties for approximately $53 million and recognized gains of approximately $9 million. During the quarter ended September 30, 2005, we sold interests in four properties for approximately $5 million and recognized a gain of approximately $0.3 million.

On July 28, 2005, in connection with the acquisition of an operator by a third party healthcare services company, the Company sold its securities in the operator and recognized a gain of approximately $2.8 million.

Capital Market Transactions

On September 16, 2005, we issued $200 million of 4 7/8% senior unsecured notes due September 15, 2010. The notes were priced at 99.567% of the principal amount with an effective yield of 4.974%. We received net proceeds of $198 million, which were used to repay outstanding indebtedness and for general corporate purposes.

On April 27, 2005, we issued $250 million of 5 5/8% senior unsecured notes due 2017. The notes were priced at 99.585% of the principal amount with an effective yield of 5.673%. We received proceeds of $247 million, which were used to repay outstanding indebtedness and for general corporate purposes.

Other Events

On October 26, 2005, we announced that our Board declared a quarterly cash dividend of $0.42 per share of common stock. The common stock cash dividend will be paid on November 18, 2005 to stockholders of record as of the close of business on November 7, 2005.

Critical Accounting Policies

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to use judgment in the application of accounting policies, including making estimates and assumptions. We base estimates on our experience and on various other assumptions believed to be reasonable under the circumstances. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, it is possible that different accounting would have been applied, resulting in a different presentation of our financial statements. From time to time, we re-evaluate our estimates and assumptions. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. The critical accounting policies used in the preparation of our financial statements are described in our 2004 Annual Report on Form 10-K.

Results of Operations

Three Months Ended September 30, 2005 Compared to Three Months Ended September 30, 2004

Rental revenues. Medical office building rental income increased 33% to $31.8 million for the three months ended September 30, 2005. The increase is primarily related to significant MOB acquisitions in December 2004 and April 2005 and development properties placed in service in mid-2004. Other property rental income increased 15% to $85.3 million primarily due to acquisitions completed in 2004 and 2005.

Equity income (loss). Equity losses of $0.5 million are primarily due to our investment in HCP MOP, for which we recorded equity losses of $0.5 million and $0.6 million for the three months ended September 30, 2005 and 2004, respectively. See Note 5 to the Condensed Consolidated Financial Statements for additional information on HCP MOP.

Interest and other income. Interest and other income decreased 32% to $7.8 million for the three months ended September 30, 2005. The change reflects the effects of a reduced level of loans receivable following an $83 million repayment from ARC and a $17 million repayment from Emeritus during the third quarter of 2004. During the three months ended September 30, 2005 and 2004, we also recognized management and other fees from HCP MOP of $0.8 million in each period. During the three months ended September 30, 2005, we recognized a $2.8 million gain from the sale of an investment that had a carrying amount of zero. See Note 14 to the Condensed Consolidated Financial Statements for a discussion of the sale of our Securities in SCCI Healthcare Services Corporation.

Interest expense. Interest expense increased 22% to $28.3 million for the three months ended September 30, 2005. The increase was due to the issuance of $450 million of senior unsecured notes and the assumption of $89 million of mortgages in connection with the acquisitions of real estate properties during the nine months ended September 30, 2005, and increases in average borrowing levels and a higher interest rate on our bank line of credit.

Operating costs and expenses. Operating costs increased 23% to $13.4 million for the three months ended September 30, 2005. Operating costs are predominantly related to MOB properties that are leased under gross or modified gross lease agreements where we share certain costs with tenants. Additionally, we contract with third party property managers on most of our MOB properties. Accordingly, the number of properties in our MOB portfolio directly impacts operating costs. The increase was primarily attributable to significant MOB acquisitions in December 2004 and April 2005.

The presentation of expenses between general and administrative and operating expenses is based on the underlying nature of the costs. Periodically, we review the classification of expenses between categories and make revisions based on changes in the underlying nature of the expense.

General and administrative expenses . General and administrative expenses decreased 23% to $7.3 million for the three months ended September 30, 2005. The decrease was due to higher costs in 2004 primarily resulting from income tax on income from certain assets held in a taxable REIT subsidiary, the implementation of a new information system and considerable resources that were expended towards compliance with certain regulatory requirements, principally Section 404 of the Sarbanes-Oxley Act of 2002.

Depreciation and amortization . Real estate depreciation and amortization increased 23% to $27.6 million for the three months ended September 30, 2005, primarily due to development properties placed in service and acquisitions aggregating approximately $459 million for the nine months ended September 30, 2005 and $538 million during 2004.

Discontinued operations . Income from discontinued operations for the three months ended September 30, 2005 was $0.6 million compared to a loss of $4.5 million for the comparable period in the prior year. The change is due to recognizing a net gain on real estate dispositions of $0.3 million for the three months ended September 30, 2005, while we recognized a net loss on real estate dispositions and impairments of $6.0 million for the three months ended September 30, 2004.

Nine Months Ended September 30, 2005 Compared to Nine Months Ended September 30, 2004

Rental revenues. Medical office building rental income increased 36% to $92.9 million for the nine months ended September 30, 2005. The increase is primarily related to significant MOB acquisitions in December 2004 and April 2005 and development properties placed in service in mid-2004. Other property rental income increased 16% to $239.3 million, primarily due to acquisitions completed in 2004 and 2005.

Equity income (loss). Equity income decreased to a loss of $0.2 million primarily due to our investment in HCP MOP, for which we recorded equity losses of $0.5 million and equity income of $1.1 million for the nine months ended September 30, 2005 and 2004, respectively. During the nine months ended September 30, 2005 and 2004, HCP MOP revised its purchase price allocation and attributed more of the purchase price of the properties acquired from MedCap Properties, LLC to below-market lease intangibles, other intangibles and real estate assets. Lease intangibles generally amortize over a shorter period of time relative to tangible real estate assets. The decrease in the equity income from our investment in HCP MOP was primarily due to the revisions to the purchase price allocations referred to above. See Note 5 to the Condensed Consolidated Financial Statements for additional information on HCP MOP.

Interest and other income. Interest and other income decreased 37% to $19.0 million for the nine months ended September 30, 2005. The change reflects a reduced level of loans receivable following an $83 million repayment from ARC and a $17 million repayment from Emeritus during the third quarter of 2004. During the nine months ended September 30, 2005 and 2004, we also recognized management and other fees from HCP MOP of $2.3 million in each period. During the nine months ended September 30, 2005, we recognized a $2.8 million gain from the sale of an investment that had a carrying amount of zero. See Note 14 to the Condensed Consolidated Financial Statements for a discussion of the sale of our Securities in SCCI Healthcare Services Corporation.

Interest expense. Interest expense increased 20% to $76.9 million for the nine months ended September 30, 2005. The increase was due to the issuance of $450 million of senior unsecured notes, the assumption of $89 million of mortgages in connection with the acquisitions of real estate properties, and increases in average borrowing levels and a higher interest rate on our bank line of credit during the nine months ended September 30, 2005.

Operating costs and expenses. Operating costs increased 40% to $42.1 million for the nine months ended September 30, 2005. Operating costs are predominantly related to MOB properties that are leased under gross or modified gross lease agreements where we share certain costs with tenants. Additionally, we contract with third party property managers on most of our MOB properties. Accordingly, the number of properties in our MOB portfolio directly impacts operating costs. The increase was primarily attributable to significant MOB acquisitions in December 2004 and April 2005 and four development properties placed in service in mid-2004.

The presentation of expenses between general and administrative and operating expenses is based on the underlying nature of the expense. Periodically, we review the classification of expenses between categories and makes revisions based on changes in the underlying nature of the expense.

General and administrative expenses . General and administrative expenses decreased 6% to $23.4 million for the nine months ended September 30, 2005. The decrease was due to higher costs in 2004 primarily resulting from income tax expense on income from certain assets held in a taxable REIT subsidiary, the implementation of a new information system and considerable resources that were expended towards compliance with certain regulatory requirements, principally Section 404 of the Sarbanes-Oxley Act of 2002.

Depreciation and amortization . Real estate depreciation and amortization increased 26% to $78.6 million for the nine months ended September 30, 2005, primarily due to acquisitions aggregating approximately $459 million for the nine months ended September 30, 2005 and $538 million during 2004 and development properties placed in service in 2004.

Discontinued operations . Income from discontinued operations for the nine months ended September 30, 2005 was $11.1 million compared to $7.6 million for the comparable period in the prior year. The change is due to recognizing a net gain on real estate dispositions of $9.2 million for the nine months ended September 30, 2005 compared to $0.8 million for the comparable period in the prior year, partially offset by a decline in operating income from discontinued operations of $4.8 million to $2.0 million for the nine months ended September 30, 2005. Discontinued operations include impairment charges of zero and $15.3 million for the nine months ended September 30, 2005 and 2004, respectively.

Liquidity and Capital Resources

Our principal liquidity needs are to (i) fund normal operating expenses, (ii) meet debt service requirements, (iii) fund capital expenditures, including tenant improvements and leasing costs, (iv) fund acquisition and development activities and (v) make minimum distributions required to maintain our REIT qualification under the Internal Revenue Code.

We believe these needs will be satisfied from cash flows provided by operations and provided by financing activities. We intend to repay maturing debt with proceeds from future debt and/or equity offerings and anticipate making future investments dependent on the availability of cost-effective sources of capital. We use the public debt and equity markets as our principal source of financing. As of September 30, 2005, our senior debt is rated BBB+ by both Standard & Poor’s Ratings Group and Fitch Ratings and Baa2 by Moody’s Investors Service.

Net cash provided by operating activities was $223.9 million and $200.7 million for the nine months ended September 30, 2005 and 2004, respectively. Cash flow from operations reflects increased revenues, offset by higher costs and expenses, and changes in receivables, payables, accruals, and deferred revenue. Our cash flows from operations are dependent upon the occupancy level of multi-tenant buildings, rental rates on leases, our tenants’ performance on their lease obligations, the level of operating expenses and other factors.

Net cash used by investing activities was $323.1 million during the nine months ended September 30, 2005 and principally reflects $376.7 million to acquire and develop real estate, net of $46.3 million in proceeds from the sale of real estate properties. During the nine months ended September 30, 2005 and 2004, we invested $4.5 million and $3.0 million, respectively, to fund lease commissions and tenant and capital improvements.

Net cash provided by financing activities was $120.4 million during the nine months ended September 30, 2005 and includes (i) payment of common and preferred dividends aggregating $185.9 million and (ii) net repayments on our bank line of credit of $130.1 million. These uses were offset by proceeds of $445.5 million from the issuance of senior unsecured notes and $39.8 million from common stock issuances. In order to qualify as a REIT for federal income tax purposes, we must distribute at least 90% of our taxable income to our shareholders. Accordingly, we intend to continue to make regular quarterly distributions to holders of our common and preferred stock.

At September 30, 2005, we held approximately $16.1 million in deposits and $45.4 million in irrevocable letters of credit from commercial banks securing tenants’ lease obligations and borrowers’ loan obligations. We may draw upon the letters of credit or depository accounts if there are defaults under the related leases or loans. Amounts available under letters of credit could change based upon facility operating conditions and other factors and such changes may be material.

Debt

Bank line of credit. At September 30, 2005, borrowings under our $500 million three-year bank line of credit were $170.0 million with a weighted average interest rate of 4.50%. Borrowings under the bank line of credit accrue interest at 65 basis points over LIBOR with a 15 basis point facility fee. In addition, a negotiated rate option, whereby the lenders participating in the credit facility bid on the interest to be charged and which may result in a reduced interest rate, is available for up to 50% of borrowings. The credit facility also contains an “accordion” feature allowing borrowings to be increased by $100 million in certain conditions.

The credit agreement contains certain financial restrictions and requirements customary in transactions of this type. The more significant covenants, using terms defined in the agreement, limit (i) Consolidated Total Indebtedness to Consolidated Total Asset Value to 60%, (ii) Secured Debt to Consolidated Total Asset Value to 30% and (iii) Unsecured Debt to Consolidated Unencumbered Asset Value to 60%. We must also maintain (i) a Fixed Charge Coverage ratio, as defined, of 1.75 times and (ii) a formula-determined Minimum Tangible Net Worth. As of September 30, 2005, we were in compliance with each of these restrictions and requirements.

Senior unsecured notes. At September 30, 2005, we had $1.5 billion in aggregate principal amount of senior unsecured notes outstanding. Interest rates on the notes ranged from 4.31% to 7.88% with a weighted average rate of 6.22% at September 30, 2005.

Senior unsecured notes at December 31, 2004, included $200 million principal amount of Mandatory Par Put Remarketed Securities (“MOPPRS”), due June 8, 2015. The MOPPRS contained an option (the “MOPPRS Option”) exercisable by the Remarketing Dealer, an investment bank affiliate, which derived its value from the yield on ten-year U.S. Treasury rates relative to a fixed strike rate of 5.565%. Generally, the value of the option to the Remarketing Dealer increased as ten-year Treasury rates declined and the option’s value to the Remarketing Dealer decreased as ten-year Treasury rates increased.

On June 3, 2005, the Remarketing Dealer exercised its option to redeem our $200 million principal amount of 6.875% MOPPRS. The Remarketing Dealer redeemed the securities from the holders at par plus accrued interest, and reissued ten-year senior notes with a coupon of 7.072%. The reissued notes are at an effective interest rate which is higher than what would otherwise have been available if we had issued new ten-year notes at par value.

On June 15, 2005, we repaid $10 million of maturing senior unsecured notes which accrued interest at a rate of 7.55%. These notes were repaid with funds available under our bank line of credit.

During the three months ended September 30, 2005, we repaid $12.5 million of maturing senior unsecured notes which accrued interest at a rate of 7.69%. These notes were repaid with funds available under our bank line of credit.

Mortgage debt. At September 30, 2005, we had $213.7 million in mortgage debt secured by 34 healthcare facilities with a carrying amount of $397.7 million. Interest rates on the mortgage notes ranged from 2.75% to 9.32% with a weighted average rate of 6.53% at September 30, 2005.

Debt Maturities

The following table summarizes our stated debt maturities and scheduled principal repayments at September 30, 2005 (in thousands):

Year	Amount
2005 (three months)	$	9,980
2006	140,053
2007	315,454
2008	8,651
2009	6,178
Thereafter	1,376,867
	$	1,857,183

Equity

At September 30, 2005, we had outstanding 4,000,000 shares of 7.25% Series E cumulative redeemable preferred stock, 7,820,000 shares of 7.10% Series F cumulative redeemable preferred stock, and 135.9 million shares of common stock.

During the nine months ended September 30, 2005, we issued approximately 674,000 shares of our common stock under our Dividend Reinvestment and Stock Purchase Plan at an average price per share of $25.76 for an aggregate amount of $17.4 million. We also received $22.6 million in proceeds from stock option exercises. At September 30, 2005, stockholders’ equity totaled $1.4 billion and our equity securities had a market value of $4.1 billion.

As of September 30, 2005, there were a total of 3.2 million DownREIT units outstanding in five limited liability companies in which we are the managing member (i) HCPI/Tennessee, LLC; (ii) HCPI/Utah, LLC; (iii) HCPI/Utah II, LLC; (iv) HCPI/Indiana, LLC; and (v) HCP DR California, LLC. The DownREIT units are exchangeable for an amount of cash approximating the then-current market value of shares of our common stock or, at our option, shares of our common stock (subject to certain adjustments, such as stock splits and reclassifications).

As of September 30, 2005, we had $1.06 billion available for future issuances of debt and equity securities under a shelf registration statement filed with the Securities and Exchange Commission. These securities may be issued from time to time in the future based on our needs and the then-existing market conditions.

Off-Balance Sheet Arrangements

We own interests in certain unconsolidated joint ventures, including HCP MOP, as described under Note 5 to the Condensed Consolidated Financial Statements. Except in limited circumstances, our risk of loss is limited to our investment carrying amount and any outstanding loans receivable. We have no other off-balance sheet arrangements that we expect to materially affect our liquidity and capital resources except those described under “Contractual Obligations.”

Contractual Obligations

The following schedule summarizes our material contractual payment obligations and commitments at September 30, 2005 (in thousands):

	Less than One Year		2006-2007		2008-2009		More than Five Years		Total

Senior unsecured notes and mortgage debt	$	9,980	$	285,507	$	14,829	$	1,376,867	$	1,687,183
Bank line of credit	—		170,000		—		—		170,000
Ground and other operating leases	259		2,139		2,227		95,725		100,350
Acquisition and construction commitments	20,748		—		—		—		20,748
Interest expense	26,300		154,487		140,266		304,870		625,923

Total	$	57,287	$	612,133	$	157,322	$	1,777,462	$	2,604,204

Inflation

Our leases often provide for either fixed increases in base rents or indexed escalators, based on the Consumer Price Index or other measures, and/or additional rent based on increases in our tenants’ operating revenues. Substantially all of our MOB leases require the tenant to pay a share of property operating costs such as real estate taxes, insurance, utilities, etc. We believe that inflationary increases in expenses will be offset, in part, by the tenant expense reimbursements and contractual rent increases described above.

New Accounting Pronouncements

See Note 2 to the Condensed Consolidated Financial Statements for the impact of new accounting standards.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

At September 30, 2005, we are exposed to market risks related to fluctuations in interest rates on $57.3 million of variable rate mortgage notes payable, $170.0 million of variable rate bank debt and $25.0 million of variable rate senior unsecured notes. Of the $57.3 million outstanding of variable rate mortgage notes payable, $45.6 million have been hedged through interest rate swap contracts. We do not have any, and do not plan to enter into, derivative financial instruments for trading or speculative purposes. Of our consolidated debt of $1.9 billion at September 30, 2005, excluding the $45.6 million of variable rate debt where the rates have been hedged to fixed rate, approximately 11% is at variable interest rates.

Fluctuation in the interest rate environment will not affect our future earnings and cash flows on our fixed rate debt until that debt must be replaced or refinanced. However, interest rate changes will affect the fair value of our fixed rate instruments and our hedge contracts. Conversely, changes in interest rates on variable rate debt would change our future earnings and cash flows, but not affect the fair value of those instruments. Assuming a one percentage point increase in the interest rate related to the variable-rate debt and related swap contracts, and assuming no change in the outstanding balance as of September 30, 2005, interest expense for 2005 would increase by approximately $2.1 million, or $0.02 per common share on a diluted basis.

Item 4. Controls and Procedures

Disclosure Controls and Procedures . We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Also, we have investments in certain unconsolidated entities. Our disclosure controls and procedures with respect to such entities are substantially more limited than those we maintain with respect to our consolidated subsidiaries.

As required by Rule 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2005. Based on the foregoing, our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting . There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonable likely to materially affect, the Company’s internal control over financial reporting.

Item 5. Other Information

(a)

Employment Agreement . The Company has entered into an Employment Agreement, dated as of October 26, 2005 (the “Employment Agreement”), with James F. Flaherty III, the Company’s Chief Executive Officer and President and a current director of the Company. The Employment Agreement is for a three-year term, with automatic one-year extensions each year unless terminated by either party, and provides for Mr. Flaherty’s service to the Company during that term as its Chief Executive Officer and President. A copy of the Employment Agreement is attached hereto as Exhibit 10.13 and incorporated herein by reference.

The Employment Agreement provides, among other things, that Mr. Flaherty will be entitled to:

• Base salary at an annualized rate of $575,000 per annum and an annual bonus opportunity. Mr. Flaherty’s target bonus each year will be 200% of his annualized base salary for that year. The Compensation Committee of the Company’s Board of Directors will determine Mr. Flaherty’s actual bonus amount each year.

• The Restricted Stock Unit grant described below.

• Participation in the Company’s usual benefit programs for senior executives, term life insurance provided by the Company in the aggregate amount of $2,000,000 payable to Mr. Flaherty’s beneficiaries, five weeks’ vacation each year (increasing to six weeks per year upon Mr. Flaherty’s completing 15 years of service with the Company), reimbursement of business expenses, reimbursement of Mr. Flaherty’s costs and expenses in entering into the Employment Agreement and the other agreements described below, and a “gross-up” payment in the event of a change in control of the Company to cover, on an after-tax basis, any excise taxes payable by Mr. Flaherty under Section 4999 of the Internal Revenue Code of 1986, as amended, with respect to his benefits.

• In the event Mr. Flaherty’s employment is terminated during the employment term either by the Company pursuant to a “Termination Other Than For Cause” or by Mr. Flaherty pursuant to a “Termination For Good Reason” (as those terms are defined in the Employment Agreement), severance pay that includes (1) a lump sum cash payment equal to two times the sum of (a) Mr. Flaherty’s base salary (at the greater of the highest annualized rate in effect in the year preceding the termination date or the year in which the termination date occurs), plus (b) the greater of Mr. Flaherty’s target bonus for the year in which the termination occurs or the highest annual bonus he received in any of the preceding three years; (2) a pro-rata portion of Mr. Flaherty’s prorated bonus for the year of the termination; and (3) continued medical and dental benefits for Mr. Flaherty and his family members and continued payment by the Company of the premiums for Mr. Flaherty’s term life insurance for two years after the termination. In addition, Mr. Flaherty’s equity-based awards will also generally become fully vested, to the extent then outstanding and not otherwise vested, in connection with such a termination of employment, and any stock options granted on or after the date of the Employment Agreement that are so accelerated will remain exercisable until the later of three years after the date Mr. Flaherty’s employment terminates or the date specified in the applicable plan or award agreement (but in no event later than the expiration date of the option).

• In the event Mr. Flaherty’s employment is terminated during the employment term pursuant to a “Termination Upon a Change in Control” (as defined in the Employment Agreement), severance pay as described above except that the severance multiplier to determine the amount of Mr. Flaherty’s lump sum cash payment will be three, and the period of continued medical and dental benefits for Mr. Flaherty and his family and continued payment of Mr. Flaherty’s term life insurance premiums will be three years. In addition, Mr. Flaherty will become fully vested in his accrued benefits under the Company’s retirement arrangements (or be entitled to a cash payment equal to the value of such accelerated vesting) and will be entitled to payment of an amount equal to the present value of the matching contributions the Company would have made to Mr. Flaherty’s account under the Company’s 401(k) plan had Mr. Flaherty remained employed by the Company for the three years after the date his employment terminated and made the maximum elected deferral contributions permitted under the 401(k) plan.

• In the event Mr. Flaherty’s employment is terminated during the employment term due to his death or “Disability” (as defined in the Employment Agreement), a pro-rata portion of his target bonus for the year of the termination, the accelerated vesting of equity-based awards and post-termination exercise period for options described above and continued medical and dental benefits from Mr. Flaherty and his family members for one year after termination.

Restricted Stock Unit Agreement . The Company has also entered into a Restricted Stock Unit Agreement, dated as of October 26, 2005 (the “Stock Unit Agreement”), with James F. Flaherty III. The Stock Unit Agreement is attached hereto as Exhibit 10.29 and incorporated herein by reference. The Restricted Stock Unit Agreement evidences the grant by the Company to Mr. Flaherty of 58,500 “Restricted Stock Units.” The Restricted Stock Units that become vested will be paid, on a one-for-one basis, in shares of the Company’s common stock. Subject to Mr. Flaherty’s continued employment with the Company, the Restricted Stock Units will generally vest at a rate of 20% per year over the five-year period following the date of grant, but the Restricted Stock Units may vest on an accelerated basis if Mr. Flaherty’s employment terminates under certain circumstances. The Restricted Stock Units will generally be paid as they become vested although Mr. Flaherty may elect to have the units paid on a deferred basis.

Indemnification Agreements . On October 31, 2005, the Company entered into an indemnification agreement with each of the directors (Richard M. Rosenberg, Robert R. Fanning, Jr., David B. Henry, Michael D. McKee, Harold M. Messmer, Jr., Mary Cirillo, Peter L. Rhein, Kenneth B. Roath and Joseph P. Sullivan), executive officers (Charles A. Elcan, Paul Gallagher, Stephen R. Maulbetsch, Edward J. Henning, F. Scott Kellman, Talya Nevo-Hacohen, Mark A Wallace and George P. Doyle), and executive officer and director (James F. Flaherty III) of the Company (each, an “Indemnitee”). A copy of the Form of Indemnifcation Agreement is attached hereto as Exhibit 10.30.

The indemnification agreements were approved by the Board of Directors of the Company and generally require the Company to indemnify the Indemnitee, in whole or in part, as the case may be, to the fullest extent permitted by applicable law, from and against all expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by the Indemnitee, or on his or her behalf, in connection with any proceeding (including any appeals), in the event that the Indemnitee was, is or becomes a party to or witness or other participant in, or is threatened to be made a party to, or witness or other participant in, any such proceeding by reason of (or arising in whole or in part from) an indemnifiable event (other than a proceeding by or in the right of the Company, with respect to which the Company must indemnify the Indemnitee, to the fullest extent permitted by applicable law, from and against all expenses and amounts paid in settlement actually and reasonably incurred by the Indemnitee, or on his or her behalf). If the Indemnitee is not wholly successful in a proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such proceeding, the Company must indemnify the Indemnitee against all expenses actually and reasonably incurred by the Indemnitee or on his or her behalf in connection with each successfully resolved claim, issue or matter.

The indemnification agreements also require the Company to advance all expenses reasonably incurred by or on behalf of the Indemnitee in connection with any proceeding to which the Indemnitee is, or is threatened to be, made a party or with respect to which the Indemnitee is, or is threatened to be made, a witness or other participant, by reason of (or arising in whole or in part from) an indemnifiable event, prior to the final disposition of such proceeding, to the fullest extent permitted by applicable law and without requiring a preliminary determination as to the Indemnitee’s ultimate entitlement to indemnification. In addition, the indemnification agreements provide that the Indemnitee generally may recover his or her costs and expenses (including attorneys’ fees) incurred in enforcing his or her rights thereunder.

The indemnification provided by the indemnification agreements is not exclusive of, and is in addition to, any indemnification or other rights to which the Indemnitee may be entitled under the charter or bylaws of the Company, any vote of stockholders or disinterested directors, applicable law or otherwise. The Company may from time to time enter into additional indemnification agreements with future, or additional, directors and officers of the Company.

PART II. OTHER INFORMATION

Item 6. Exhibits

3.1		Articles of Restatement of HCP (incorporated by reference to exhibit 3.1 to HCP’s report on form 10-Q for the period of September 30, 2004).

3.2		Third Amended and Restated Bylaws of HCP. (incorporated by reference to exhibit 3.2 to HCP’s is report on form 10-Q for the period of September 30, 2004).

4.1		Indenture, dated as of September 1, 1993, between HCP and The Bank of New York, as Trustee (incorporated by reference to exhibit 4.1 to HCP’s registration statement on Form S-3 dated September 9, 1993).

4.2		Form of Fixed Rate Note (incorporated by reference to exhibit 4.2 to HCP’s registration statement on Form S-3 dated March 20, 1989).

4.3		Form of Floating Rate Note (incorporated by reference to exhibit 4.3 to HCP’s registration statement on Form S-3 dated March 20, 1989).

4.4		Registration Rights Agreement dated November 20, 1998 between HCP and James D. Bremner (incorporated by reference to exhibit 4.8 to HCP’s annual report on Form 10-K for the year ended December 31, 1999). This exhibit is identical in all material respects to two other documents except the parties thereto. The parties to these other documents, other than HCP, were James P. Revel and Michael F. Wiley.

4.5		Registration Rights Agreement dated January 20, 1999 between HCP and Boyer Castle Dale Medical Clinic, L.L.C. (incorporated by reference to exhibit 4.9 to HCP’s annual report on Form 10-K for the year ended December 31, 1999). This exhibit is identical in all material respects to 13 other documents except the parties thereto. The parties to these other documents, other than HCP, were Boyer Centerville Clinic Company, L.C., Boyer Elko, L.C., Boyer Desert Springs, L.C., Boyer Grantsville Medical, L.C., Boyer-Ogden Medical Associates, LTD., Boyer Ogden Medical Associates No. 2, LTD., Boyer Salt Lake Industrial Clinic Associates, LTD., Boyer-St. Mark’s Medical Associates, LTD., Boyer McKay-Dee Associates, LTD., Boyer St. Mark’s Medical Associates #2, LTD., Boyer Iomega, L.C., Boyer Springville, L.C., and—Boyer Primary Care Clinic Associates, LTD. #2.

4.6		Indenture, dated as of January 15, 1997, between American Health Properties, Inc. and The Bank of New York, as trustee (incorporated herein by reference to exhibit 4.1 to American Health Properties, Inc.’s current report on Form 8-K (file no. 001-09381), dated January 21, 1997).

4.7		First Supplemental Indenture, dated as of November 4, 1999, between HCP and The Bank of New York, as trustee (incorporated by reference to HCP’s quarterly report on Form 10-Q for the period ended September 30, 1999).

4.8		Registration Rights Agreement dated August 17, 2001 between HCP, Boyer Old Mill II, L.C., Boyer-Research Park Associates, LTD., Boyer Research Park Associates VII, L.C., Chimney Ridge, L.C., Boyer-Foothill Associates, LTD., Boyer Research Park Associates VI, L.C., Boyer Stansbury II, L.C., Boyer Rancho Vistoso, L.C., Boyer-Alta View Associates, LTD., Boyer Kaysville Associates, L.C., Boyer Tatum Highlands Dental Clinic, L.C., Amarillo Bell Associates, Boyer Evanston, L.C., Boyer Denver Medical, L.C., Boyer Northwest Medical Center Two, L.C., and Boyer Caldwell Medical, L.C. (incorporated by reference to exhibit 4.12 to HCP’s annual report on Form 10-K for the year ended December 31, 2001).

4.9		Acknowledgment and Consent dated as of March 1, 2005 by and among Merrill Lynch Bank USA, Gardner Property Holdings, L.C., HCPI/Utah, LLC, the unit holders of HCPI/Utah, LLC and HCP (incorporated by reference to exhibit 4.12 to HCP’s annual report on Form 10-K for the year ended December 31, 2004).*

4.10		Acknowledgment and Consent dated as of March 1, 2005 by and among Merrill Lynch Bank USA, The Boyer Company, L.C., HCPI/Utah, LLC, the unit holders of HCPI/Utah, LLC and HCP (incorporated by reference to exhibit 4.13 to HCP’s annual report on Form 10-K for the year ended December 31, 2004).*

4.11		Officers’ Certificate pursuant to Section 301 of the Indenture dated as of September 1, 1993 between the Company and The Bank of New York, as Trustee, establishing a series of securities entitled “6.5% Senior Notes due February 15, 2006” (incorporated by reference to exhibit 4.1 to HCP’s report on form 8-K, dated February 21, 1996).

4.12		Officers’ Certificate pursuant to Section 301 of the Indenture dated as of September 1, 1993 between the Company and The Bank of New York, as Trustee, establishing a series of securities entitled “6 7/8% MandatOry Par Put Remarketed Securities due June 8, 2015” (incorporated by reference to exhibit 4.1 to HCP’s report on form 8-K, dated June 3, 1998).

4.13		Officers’ Certificate pursuant to Section 301 of the Indenture dated as of September 1, 1993 between the Company and The Bank of New York, as Trustee, establishing a series of securities entitled “6.45% Senior Notes due June 25, 2012” (incorporated by reference to exhibit 4.1 to HCP’s report on form 8-K, dated June 19, 2002).

4.14		Officers’ Certificate pursuant to Section 301 of the Indenture dated as of September 1, 1993 between HCP and the Bank of New York, as Trustee, establishing a series of securities entitled “6.00% Senior Notes due March 1, 2015” (incorporated by reference to exhibit 3.1 to HCP’s report on form 8-K (file no. 001-08895), dated February 25, 2003).

4.15		Officers’ Certificate pursuant to Section 301 of the Indenture dated as of September 1, 1993 between the Company and The Bank of New York, as Trustee, establishing a series of securities entitled “5 5/8% Senior Notes due May 1 , 2017” (incorporated by reference to exhibit 4.2 to HCP’s report on form 8-K, dated April 22, 2005).

4.16		Registration Rights Agreement dated October 1, 2003 between HCP, Charles Crews, Charles A. Elcan, Thomas W. Hulme, Thomas M. Klaritch, R. Wayne Price, Glenn T. Preston, Janet Reynolds, Angela M. Playle, James A. Croy, John Klaritch as Trustee of the 2002 Trust F/B/O Erica Ann Klaritch, John Klaritch as Trustee of the 2002 Trust F/B/O Adam Joseph Klaritch, John Klaritch as Trustee of the 2002 Trust F/B/O Thomas Michael Klaritch, Jr. and John Klaritch as Trustee of the 2002 Trust F/B/O Nicholas James Klaritch (incorporated by reference to exhibit 4.16 to HCP’s quarterly report on Form 10-Q for the period ended September 30, 2003).

4.17		Amended and Restated Dividend Reinvestment and Stock Purchase Plan, dated October 23, 2003 (incorporated by reference to HCP’s registration statement on Form S-3 dated December 5, 2003, registration number 333-110939).

4.18		Specimen of Stock Certificate representing the Series E Cumulative Redeemable Preferred Stock, par value $1.00 per share (incorporated herein by reference to exhibit 4.1 of HCP’s 8-A12B filed on September 12, 2003).

4.19		Specimen of Stock Certificate representing the Series F Cumulative Redeemable Preferred Stock, par value $1.00 per share (incorporated herein by reference to exhibit 4.1 of HCP’s 8-A12B filed on December 2, 2003).

4.20		Form of Floating Rate Note (incorporated by reference to exhibit 4.3 to HCP’s Current Report on Form 8-K dated November 19, 2003).

4.21		Form of Fixed Rate Note (incorporated by reference to exhibit 4.4 to HCP’s Current Report on Form 8-K dated November 19, 2003).

4.22		Acknowledgment and Consent dated as of March 1, 2005 by and among Merrill Lynch Bank USA, Gardner Property Holdings, L.C., HCPI/Utah II, LLC, the unit holders of HCPI/Utah II, LLC and HCP (incorporated by reference to exhibit 4.21 to HCP’s annual report on Form 10-K for the year ended December 31, 2004).*

4.23		Acknowledgment and Consent dated as of March 1, 2005 by and among Merrill Lynch Bank USA, The Boyer Company, L.C., HCPI/Utah II, LLC, the unit holders of HCPI/Utah II, LLC and HCP (incorporated by reference to exhibit 4.22 to HCP’s annual report on Form 10-K for the year ended December 31, 2004).*

4.24		Registration Rights Agreement dated July 22, 2005 between HCP, William P. Gallaher, Trustee for the William P. & Cynthia J. Gallaher Trust, Dwayne J. Clark, Patrick R. Gallaher, Trustee for the Patrick R. & Cynthia M. Gallaher Trust, Jeffrey D. Civian, Trustee for the Jeffrey D. Civian Trust dated August 8, 1986, Jeffrey Meyer, Steven L. Gallaher, Richard Coombs, Larry L. Wasem, Joseph H. Ward, Jr., Trustee for the Joseph H. Ward, Jr. and Pamela K. Ward Trust, Borue H. O’Brien, William R. Mabry, Charles N. Elsbree, Trustee for the Charles N. Elsbree Jr. Living Trust dated February 14, 2002, Gary A. Robinson, Thomas H. Persons, Trustee for the Persons Family Revocable Trust under trust dated February 15, 2005, Glen Hammel, Marilyn E. Montero, Joseph G. Lin, Trustee for the Lin Revocable Living Trust, Ned B. Stein, John Gladstein, Trustee for the John & Andrea Gladstein Family Trust dated February 11, 2003, John Gladstein, Trustee for the John & Andrea Gladstein Family Trust dated February 11, 2003, Francis Connelly, Trustee for the The Francis J & Shannon A Connelly Trust, Al

		Coppin, Trustee for the Al Coppin Trust, Stephen B. McCullagh, Trustee for the Stephen B. & Pamela McCullagh Trust dated October 22, 2001, and Larry L. Wasem – SEP IRA (incorporated by reference to exhibit 4.24 to HCP’s quarterly report on Form 10-Q for the period ended June 30, 2005).

4.25		Registration Rights Agreement dated October 19, 2005 between HCP and A. Daniel Weyland.

10.1		Amendment No. 1, dated as of May 30, 1985, to Partnership Agreement of Health Care Property Partners, a California general partnership, the general partners of which consist of HCP and certain affiliates of Tenet (incorporated by reference to exhibit 10.1 to HCP’s annual report on Form 10-K for the year ended December 31, 1985).

10.2		HCP Second Amended and Restated Directors Stock Incentive Plan (incorporated by reference to exhibit 10.43 to HCP’s quarterly report on Form 10-Q for the period ended March 31, 1997).*

10.2.1		First Amendment to Second Amended and Restated Directors Stock Incentive Plan, effective as of November 3, 1999 (incorporated by reference to exhibit 10.1 to HCP’s quarterly report on Form 10-Q for the period ended September 30, 1999).*

10.2.2		Second Amendment to Second Amended and Restated Directors Stock Incentive Plan, effective as of January 4, 2000 (incorporated by reference to exhibit 10.15 to HCP’s annual report on Form 10-K for the year ended December 31, 1999).*

10.3		HCP Second Amended and Restated Stock Incentive Plan (incorporated by reference to exhibit 10.44 to HCP’s quarterly report on Form 10-Q for the period ended March 31, 1997).*

10.3.1		First Amendment to Second Amended and Restated Stock Incentive Plan effective as of November 3, 1999 (incorporated by reference to exhibit 10.3 to HCP’s quarterly report on Form 10-Q for the period ended September 30, 1999).*

10.4		HCP 2000 Stock Incentive Plan, effective as of May 7, 2003 (incorporated by reference to HCP’s Proxy Statement regarding HCP’s annual meeting of shareholders held May 7, 2003).*

10.4.1		Amendment to the Company’s Amended and Restated 2000 Stock Incentive Plan (effective as of May 7, 2003) (incorporated herein by reference to exhibit 10.1 to HCP’s current report on Form 8-K, dated January 28, 2005).*

10.5		HCP Second Amended and Restated Directors Deferred Compensation Plan (incorporated by reference to exhibit 10.45 to HCP’s quarterly report on Form 10-Q for the period ended September 30, 1997).*

10.5.1		First Amendment to Second Amended and Restated Directors Deferred Compensation Plan, effective as of April 11, 1997 (incorporated by reference to exhibit 10.5.1 to HCP’s quarterly report on Form 10-Q for the period ended March 31, 2005).*

10.5.2		Second Amendment to Second Amended and Restated Directors Deferred Compensation Plan, effective as of July 17, 1997 (incorporated by reference to exhibit 10.5.2 to HCP’s quarterly report on Form 10-Q for the period ended March 31, 2005).*

10.5.3		Third Amendment to Second Amended and Restated Directors Deferred Compensation Plan, effective as of November 3, 1999 (incorporated by reference to exhibit 10.2 to HCP’s quarterly report on Form 10-Q for the period ended September 30, 1999).*

10.5.4		Fourth Amendment to Second Amended and Restated Director Deferred Compensation Plan, effective as of January 4, 2000 (incorporated by reference to exhibit 10.19 to HCP’s annual report on Form 10-K for the year ended December 31, 1999).*

10.6		Various letter agreements, each dated as of October 16, 2000, among HCP and certain key employees of the Company (incorporated by reference to exhibit 10.12 to HCP’s annual report on Form 10-K for the year ended December 31, 2000).*

10.7		HCP Amended and Restated Executive Retirement Plan (incorporated by reference to exhibit 10.13 to HCP’s annual report on Form 10-K for the year ended December 31, 2001).*

	10.8	Amended and Restated Limited Liability Company Agreement dated November 20, 1998 of HCPI/Indiana, LLC (incorporated by reference to exhibit 10.15 to HCP’s annual report on Form 10-K for the year ended December 31, 1998).

10.9		Amended and Restated Limited Liability Company Agreement dated January 20, 1999 of HCPI/Utah, LLC (incorporated by reference to exhibit 10.16 to HCP’s annual report on Form 10-K for the year ended December 31, 1998).

10.10		Cross-Collateralization, Cross-Contribution and Cross-Default Agreement, dated as of July 20, 2000, by HCP Medical Office Buildings II, LLC, and Texas HCP Medical Office Buildings, L.P., for the benefit of First Union National Bank (incorporated by reference to exhibit 10.20 to HCP’s annual report on Form 10-K for the year ended December 31, 2000).

10.11		Cross-Collateralization, Cross-Contribution and Cross-Default Agreement, dated as of August 31, 2000, by HCP Medical Office Buildings I, LLC, and Meadowdome, LLC, for the benefit of First Union National Bank (incorporated by reference to exhibit 10.21 to HCP’s annual report on Form 10-K for the year ended December 31, 2000).

10.12		Amended and Restated Limited Liability Company Agreement dated August 17, 2001 of HCPI/Utah II, LLC (incorporated by reference to exhibit 10.21 to HCP’s annual report on Form 10-K for the year ended December 31, 2001).

10.12.1		First Amendment to Amended and Restated Limited Liability Company Agreement dated October 30, 2001 of HCPI/Utah II, LLC (incorporated by reference to exhibit 10.22 to HCP’s annual report on Form 10-K for the year ended December 31, 2001).

10.13		Employment Agreement dated October 26, 2005 between HCP and James F. Flaherty III.*

10.14		Amended and Restated Limited Liability Company Agreement dated as of October 2, 2003 of HCPI/Tennessee, LLC (incorporated by reference to exhibit 10.28 to HCP’s quarterly report on Form 10-Q for the period ended September 30, 2003).

10.14.1		Amendment No.1 to Amended and Restated Limited Liability Company Agreement dated September 29, 2004 of HCPI/Tennessee, LLC (incorporated by reference to exhibit 10.37 to HCP’s quarterly report on Form 10-Q for the period ended September 30, 2004).

10.14.2		Amendment No.2 to Amended and Restated Limited Liability Company Agreement dated October 29, 2004 of HCPI/Tennessee, LLC (incorporated by reference to exhibit 10.43 to HCP’s annual report on Form 10-K for the year ended December 31, 2004).

10.14.3		Amendment No.3 to Amended and Restated Limited Liability Company Agreement and New Member Joinder Agreement dated October 19, 2005 of HCPI/Tennessee, LLC.

10.15		Employment Agreement dated October 1, 2003 between HCP and Charles A. Elcan (incorporated by reference to exhibit 10.29 to HCP’s quarterly report on Form 10-Q for the period ended September 30, 2003).*

10.15.1		Amendment No.1 to the Employment Agreement dated October 1, 2003 between HCP and Charles A. Elcan (incorporated herein by reference to exhibit 10.5 to HCP’s current report on Form 8-K, dated January 28, 2005).*

10.16		Form of Restricted Stock Agreement for employees and consultants effective as of May 7, 2003, as approved by the Compensation Committee of the Board of Directors of the Company, relating to the Company’s Amended and Restated 2000 Stock Incentive Plan (incorporated by reference to exhibit 10.30 to HCP’s annual report on Form 10-K for the year ended December 31, 2003).*

10.17		Form of Restricted Stock Agreement for directors effective as of May 7, 2003, as approved by the Compensation Committee of the Board of Directors of the Company, relating to the Company’s Amended and Restated 2000 Stock Incentive Plan (incorporated by reference to exhibit 10.31 to HCP’s annual report on Form 10-K for the year ended December 31, 2003).*

10.18		Form of Performance Award Letter for employees effective as of May 7, 2003, as approved by the Compensation Committee of the Board of Directors of the Company, relating to the Company’s Amended and Restated 2000 Stock Incentive Plan (incorporated by reference to exhibit 10.32 to HCP’s annual report on Form 10-K for the year ended December 31, 2003).*

10.19		Form of Stock Option Agreement for eligible participants effective as of May 7, 2003, as approved by the Compensation Committee of the Board of Directors of the Company, relating to the Company’s Amended and Restated 2000 Stock Incentive Plan (incorporated by reference to exhibit 10.33 to HCP’s annual report on Form 10-K for the year ended December 31, 2003).*

10.20		Amended and Restated Executive Retirement Plan effective as of May 7, 2003 (incorporated by reference to exhibit 10.34 to HCP’s annual report on Form 10-K for the year ended December 31, 2003).*

10.21		Revolving Credit Agreement, dated as of October 26, 2004, among HCP, each of the banks identified on the signature pages hereof, Bank of America, N.A., as administrative agent, JPMorgan Chase Bank, as syndicating agent, Barclays Bank PLC, Wachovia Bank , National Association, and Wells Fargo Bank, N.A., as documentation agents, with Calyon New York Branch, Citicorp, USA, and Key National Association as managing agents, and Banc of America Securities LLC and J.P. Morgan Securities, Inc., as joint lead arrangers and joint book managers (incorporated herein by reference to exhibit 10.1 to HCP’s current report on Form 8-K (file no. 001-08895), dated November 1, 2004).

10.22		Form of CEO Performance Restricted Stock Unit Agreement with a five year installment vesting effective as of March 15, 2004, as approved by the Compensation Committee of the Board of Directors of the Company, relating to the Company’s Amended and Restated 2000 Stock Incentive Plan (incorporated herein by reference to exhibit 4.22 to HCP’s current report on Form 10-K, dated March 15, 2005).*

10.23		Form of CEO Performance Restricted Stock Unit Agreement with a three year cliff vesting effective as of March 15, 2004, as approved by the Compensation Committee of the Board of Directors of the Company, relating to the Company’s Amended and Restated 2000 Stock Incentive Plan (incorporated herein by reference to exhibit 4.22 to HCP’s current report on Form 10-K, dated March 15, 2005).*

10.24		Form of employee Performance Restricted Stock Unit Agreement with a five year installment vesting effective as of March 15, 2004, as approved by the Compensation Committee of the Board of Directors of the Company, relating to the Company’s Amended and Restated 2000 Stock Incentive Plan (incorporated herein by reference to exhibit 4.22 to HCP’s current report on Form 10-K, dated March 15, 2005).*

10.25		Form of employee Performance Restricted Stock Unit Agreement with a three year cliff vesting effective as of March 15, 2004, as approved by the Compensation Committee of the Board of Directors of the Company, relating to the Company’s Amended and Restated 2000 Stock Incentive Plan (incorporated herein by reference to exhibit 4.22 to HCP’s current report on Form 10-K, dated March 15, 2005).*

10.26		Form of CEO Performance Restricted Stock Unit Agreement with a five year installment vesting effective as of March 15, 2004, as approved by the Compensation Committee of the Board of Directors of the Company, relating to the Company’s Amended and Restated 2000 Stock Incentive Plan (incorporated herein by reference to exhibit 10.4 to HCP’s current report on Form 8-K, dated January 28, 2005).*

10.27		Form of CEO Performance Restricted Stock Unit Agreement with a three year cliff vesting, as approved by the Compensation Committee of the Board of Directors of the Company, relating to the Company’s Amended and Restated 2000 Stock Incentive Plan (incorporated herein by reference to exhibit 10.2 to HCP’s current report on Form 8-K, dated January 28, 2005).*

10.28		Form of employee Performance Restricted Stock Unit Agreement with a five year installment vesting, as approved by the Compensation Committee of the Board of Directors of the Company, relating to the Company’s Amended and Restated 2000 Stock Incentive Plan (incorporated herein by reference to exhibit 10.3 to HCP’s current report on Form 8-K, dated January 28, 2005).*

10.29		CEO Performance Restricted Stock Unit Agreement, as approved by the Compensation Committee of the Board of Directors of the Company, relating to the Company’s Amended and Restated 2000 Stock Incentive Plan.*

10.30		Form of directors and officers Indemnification Agreement as approved by the Board of Directors of the Company.*

31.1		Certification by James F. Flaherty III, the Company’s Principal Executive Officer, Pursuant to Securities Exchange Act Rule 13a-14(a).

31.2		Certification by Mark A. Wallace, the Company’s Principal Financial Officer, Pursuant to Securities Exchange Act Rule 13a-14(a).

32.1		Certification by James F. Flaherty III, the Company’s Principal Executive Officer, Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.

32.2

Certification by Mark A. Wallace, the Company’s Principal Financial Officer, Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.

* Management Contract or Compensatory Plan or Arrangement.

For the purposes of complying with the amendments to the rules governing Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned registrant hereby undertakes as follows, which undertaking shall be incorporated by reference into registrant’s Registration Statement on Form S-8 Nos. 33-28483 and 333-90353 filed May 11, 1989 and November 5, 1999, respectively, Form S-8 Nos. 333-54786 and 333-54784 each filed February 1, 2001, and Form S-8 No. 333-108838 filed September 16, 2003.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: October 31, 2005	H EALTH CARE PROPERTY INVESTORS, INC. (Registrant)

	/s/ Mark A. Wallace
	Mark A. Wallace
	Senior Vice President and Chief Financial Officer (Principal Financial Officer)

	/s/ George P. Doyle
	George P. Doyle
	Vice President and Chief Accounting Officer (Principal Accounting Officer)

EXHIBIT 4.25

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT , dated as of October 19, 2005, is entered into by and between Health Care Property Investors, Inc., a Maryland corporation (the “ Company” ), and the parties identified on the signature page hereof as a “Unitholder” (each, a “ Unitholder ” and collectively the “ Unitholders ”).

RECITALS

WHEREAS, the Company, HCPI/Tennessee, LLC, a Delaware limited liability company (the “ Operating LLC ”), A. Daniel Weyland, an individual, and certain other parties have entered into that certain Contribution Agreement and Escrow Instructions dated as of October , 2005 (the “ Contribution Agreement ”) providing, among other things, for the contribution of certain property interests by certain of the parties thereto to the Operating LLC, the contribution of cash by the Company to the Operating LLC and the issuance by the Company to the Unitholders of LLC Units (as defined below); and

WHEREAS, it is a condition to the closing of the transactions contemplated by the Contribution Agreement that the parties hereto enter into this Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I.
DEFINITIONS

Section 1.1 Definitions. The following capitalized terms, as used in this Agreement, have the following meanings:

“Agreement” means this Registration Rights Agreement, as it may be amended, supplemented or restated from time to time.

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York, New York, Los Angeles, California, Nashville, Tennessee or Denver, Colorado are authorized by law to close.

“Closing Price” means (i) the closing price of a share of Common Stock on the principal exchange on which shares of Common Stock are then trading, if any, or (ii) if the Common Stock is not traded on an exchange but is quoted on the NASDAQ or a successor quotation system, (1) the last sales price (if the Common Stock is then listed as a National Market Issue under the NASD National Market System) or (2) the mean between the closing representative bid and asked prices (in all other cases) for the Common Stock as reported by NASDAQ or such successor quotation system or (iii) if the Common Stock is not publicly traded on an exchange and not quoted on NASDAQ or a successor quotation system, the mean between the closing bid and asked prices for the Common Stock.

“Commission” means the Securities and Exchange Commission.

“Common Stock” means the common stock, par value $1.00 per share, of the Company.

“Company” has the meaning set forth in the preamble to this Agreement.

“Contribution Agreement” has the meaning set forth in the recitals to this Agreement.

“Demand Registration” has the meaning set forth in Section 3.1(a) hereof.

“Demand Registration Statement” has the meaning set forth in Section 3.1(a) hereof.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Filing Date” has the meaning set forth in Section 2.1 hereof.

“Full Conversion Date” has the meaning set forth in Section 2.1 hereof.

“Holder” means a Unitholder who is the record or beneficial owner of any Registrable Security or any assignee or transferee of such Registrable Security (including assignments or transfers of Registrable Securities to such assignees or transferees as a result of the foreclosure on any loans secured by such Registrable Securities) unless such Registrable Security is acquired in a sale pursuant to a registration statement under the Securities Act or pursuant to a transaction exempt from registration under the Securities Act, in each such case where the security sold in such transaction may be resold without subsequent registration under the Securities Act.

“Inspectors” has the meaning set forth in Section 3.2(h).

“Issuance Registration Statement” has the meaning set forth in Section 2.1.

“LLC Agreement” means the Amended and Restated Limited Liability Company Agreement of HCPI/Tennessee, LLC, effective as of October 24, 2003, as amended by that certain Amendment No. 1 to Amended and Restated Limited Liability Company Agreement of HCPI/Tennessee, LLC dated September 29, 2004, as further amended by that certain Amendment No. 2 to Amended and Restated Limited Liability Company Agreement of HCPI/Tennessee, LLC dated October 27, 2004, and as further amended by that certain Amendment No. 3 to Amended and Restated Limited Liability Company Agreement of HCP/Tennessee, LLC dated as of even date herewith, as the same may be further amended, modified or restated from time to time.

“LLC Units” has the meaning set forth in the LLC Agreement.

“Operating LLC” has the meaning set forth in the recitals to this Agreement.

“Person” means an individual or a corporation, partnership, limited liability company, association, trust, or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Piggyback Registration Statement” means any registration statement of the Company in which Registrable Securities are included pursuant to Section 3.1(b) hereof.

“Records” has the meaning set forth in Section 3.2(h).

“Redeemable LLC Units” means LLC Units which may be redeemed for Common Stock pursuant to the LLC Agreement.

“Registration Expenses” has the meaning set forth in Section 3.4.

“Registrable Securities” means shares of Common Stock of the Company issued upon exchange of Redeemable LLC Units pursuant to the terms of the LLC Agreement at any time owned, either of record or beneficially, by any Holder unless and until (i) a registration statement covering such shares has been declared effective by the Commission and (A) the shares have been issued by the Company to a Holder upon exchange of Redeemable LLC Units pursuant to an effective registration statement or (B) have been sold or transferred by a Holder to another Person pursuant to an effective registration statement, (ii) such shares are sold pursuant to the provisions of Rule 144 under the Securities Act (or any similar provisions then in force) (“ Rule 144 ”), (iii) such shares are held by a Holder who is not an affiliate of the Company within the meaning of Rule 144 (a “Rule 144 Affiliate” ) and may be eligible for immediate sale pursuant to Rule 144(k) under the Securities Act, (iv) such shares are held by a Holder who is a Rule 144 Affiliate and all such shares may be sold pursuant to Rule 144 within a period of three months in accordance with the volume limitations set forth in Rule 144(e)(1), or (iv) such shares have been otherwise transferred in a transaction that would constitute a sale under the Securities Act and such shares may be resold without subsequent registration under the Securities Act.

“Resale Prospectus” has the meaning set forth in Section 3.5.

“Resale Registration Statement” has the meaning set forth in Section 3.5.

“S-3 Expiration Date” means the date on which Form S-3 (or a similar successor form of registration statement) is not available to the Company for the registration of Registrable Securities pursuant to the Securities Act.

“Secondary Offering Security Holders” has the meaning set forth in Section 3.1(b).

“Securities Act” means the Securities Act of 1933, as amended.

“Selling Holder” means a Holder who is selling Registrable Securities pursuant to a Demand Registration Statement or a Piggyback Registration Statement.

“Supplemental Rights Period” has the meaning set forth in Section 3.1.

“Unitholder” has the meaning set forth in the preamble to this Agreement.

ARTICLE II.
REGISTRATION

Section 2.1 Registration Statement Covering Issuance of Common Stock. Subject to the provisions of Article III hereof, the Company will use commercially reasonable efforts to file with the Commission a registration statement on Form S-3 (the “ Issuance Registration Statement ”) under Rule 415 under the Securities Act covering the issuance to Holders of shares of Common Stock pursuant to the redemption of the Redeemable LLC Units, such filing to be made within the four (4) week period following the date (the “ Filing Date ”) which is the later of (i) a date which is fourteen (14) days prior to the first date on which the Redeemable LLC Units issued pursuant to the Contribution Agreement may be redeemed for shares of Common Stock pursuant to the provisions of the LLC Agreement or (ii) such other date as may be required by the Commission pursuant to its interpretation of applicable federal securities laws and the rules and regulations promulgated thereunder. The Company shall use its commercially reasonable efforts to cause the Issuance Registration Statement filed with the Commission to be declared effective by the Commission as soon as practicable following the filing and within sixty (60) days after the filing. In the event the Company is unable to cause the Issuance Registration Statement to be declared effective by the Commission, then the rights of the Holders set forth in Sections 3.1 and 3.2 hereof shall apply to Common Stock received by Holders upon redemption of the Redeemable LLC Units for shares of Common Stock. Notwithstanding the availability of rights under Section 3.1 hereof, the Company shall continue to use its commercially reasonable efforts to cause the Issuance Registration Statement to be declared effective by the Commission and if it shall be declared effective by the Commission, the obligations of the Company under Section 3.1 hereof shall cease. The Company agrees to use its commercially reasonable efforts to keep the Issuance Registration Statement continuously effective (a) until the earlier of (i) the S-3 Expiration Date, or (ii) the first date (the “ Full Conversion Date ”) on which no Redeemable LLC Units (other than those held by the Company) remain outstanding.

ARTICLE III.
REGISTRATION RIGHTS

Section 3.1 Registration Rights. The following provisions shall apply with respect to Registrable Securities during the period, if any, beginning on the earlier of (a) the S-3 Expiration Date (or, if the S-3 Expiration Date shall occur before the 30th day prior to the first date on which the Redeemable LLC Units issued pursuant to the Contribution Agreement may be exchanged for shares of Common Stock, beginning on such 30th prior day) and (b) the Company’s failure to file the Issuance Registration Statement within the four (4) week period specified in Section 2.1, and ending on the date when the Company would no longer be obligated to maintain the applicable registration statement in effect pursuant to the terms of Section 2.1 if the S-3 Expiration Date had not occurred or the Company had not failed to file the Issuance Registration Statement (the “ Supplemental Rights Period ”). During the Supplemental Rights Period, the Holders shall have the following rights:

(a) Demand Rights . Holders may make a written demand for registration under the Securities Act of all or part of the Registrable Securities (a “ Demand Registration ”); provided , however , that (i) the Company shall not be obligated to effect more than one Demand Registration for Holders in any twelve month period, and (ii) the number of Registrable Securities proposed to be sold by the Holders making such written demand either (x) shall be all the Registrable Securities owned by all Holders of all Registrable Securities or (y) shall have an estimated market value at the time of such demand (based upon the then market price of a share of Common Stock) of at least $2,000,000 or (z) shall be less than 100,000 shares of Common Stock. The Company shall file any registration statement required by this Section 3.1(a) (a “ Demand Registration Statement ”) with the Commission within thirty (30) days after receipt of the requisite Holder demand and shall use its commercially reasonable efforts to cause the Demand Registration Statement to be declared effective by the Commission as soon as practicable thereafter. The Company shall give written notice of the proposed filing of the Demand Registration Statement to the Holders of Registrable Securities and Redeemable LLC Units as soon as practicable (but in no event less than twenty (20) days before the anticipated filing date), and such notice shall offer such Holders the opportunity to participate in such Demand Registration and to register such number of shares of Registrable Securities as each such Holder may request. The Company shall use its commercially reasonable efforts to keep each such Demand Registration Statement continuously effective for a period of forty five (45) days, unless the offering pursuant to the Demand Registration Statement is an underwritten offering and the managing underwriter requires that the Demand Registration Statement be kept effective for a longer period of time, in which event the Company shall maintain the effectiveness of the Demand Registration Statement for such longer period up to one hundred twenty (120) days (such period, in each case, to be extended by the number of days, if any, during which Holders were not permitted to make offers or sales under the Demand Registration Statement by reason of Section 3.3 hereof). The Company may elect to include in any Demand Registration Statement additional shares of Common Stock to be issued by the Company, subject, in the case of an underwritten secondary Demand Registration, to cutback by the managing underwriters. A registration shall not constitute a Demand Registration under this Section 3.1(a) until the Demand Registration Statement has been declared effective.

(b) Piggyback Rights . If the Company at any time during the Supplemental Rights Period proposes to file a registration statement under the Securities Act with respect to an offering of shares of Common Stock for its own account or for the account of any holders of shares of its Common Stock, in each case solely for cash (other than a Demand Registration Statement (in which case the ability of a Holder to participate in such Demand Registration Statement shall be governed by Section 3.1(a) hereof) or a registration statement (i) on Form S-8 or any successor form to Form S-8 or in connection with any employee or director welfare, benefit or compensation plan, (ii) in connection with an exchange offer or an offering of securities exclusively to existing security holders of the Company or its subsidiaries or (iii) relating to a transaction pursuant to Rule 145 of the Securities Act), the Company shall give written notice of the proposed registration to the record owners of Registrable Securities and Redeemable LLC Units at least twenty (20) days prior to the filing of the registration statement. The Holders of Registrable Securities shall have the right to request that all or any part of the Registrable Securities be included in the registration statement by giving written notice to the Company within ten (10) days after the giving of the foregoing notice by the Company; provided , however , (A) if the registration relates to an underwritten primary offering on behalf of

the Company and the managing underwriters of the offering determine in good faith that the aggregate amount of securities of the Company which the Company, Holders of Registrable Securities and holders of other piggyback registration rights propose to include in the registration statement exceeds the maximum amount of securities that could practicably be included therein, the Company will include in the registration, up to such maximum amount, first, the securities which the Company proposes to sell, and second, pro rata, the Registrable Securities and the securities proposed to be included by any holders of other piggyback registration rights, and (B) if the registration is an underwritten secondary registration on behalf of any of the other security holders of the Company (the “ Secondary Offering Security Holders ”) and the managing underwriters determine in good faith that the aggregate amount of securities which the Holders of Registrable Securities, the Secondary Offering Security Holders and the holders of other piggyback registration rights propose to include in such registration statement exceeds the maximum amount of securities that could practicably be included therein, the Company will include in the registration, up to such maximum amount, first, the securities to be sold for the account of the Secondary Offering Security Holders, and second, pro rata, the Registrable Securities and the securities proposed to be included by any holders of other piggyback registration rights. The Company shall use its commercially reasonable efforts to cause, but shall not be obligated to cause, the managing underwriter or underwriters of a proposed underwritten offering to permit the Registrable Securities requested to be included in a piggyback registration to be included on the same terms and conditions as any similar securities of the Company included therein. (It is understood, however, that the underwriters shall have the right to terminate entirely the participation of the Holders of Registrable Securities if the underwriters eliminate entirely the participation in the registration of all the other holders electing to include securities in the registration (other than the Company and the Secondary Offering Security Holders) because it is not practicable to include such securities in the registration.) If the registration is not an underwritten registration, then all of the Registrable Securities requested to be included in the registration shall be included. Registrable Securities proposed to be registered and sold pursuant to an underwritten offering for the account of the Holders of Registrable Securities shall be sold to prospective underwriters selected by the Company and on the terms and subject to the conditions of one or more underwriting agreements negotiated between the Company, the Secondary Offering Security Holders, the Holders of Registrable Securities and any other holders demanding registration and the prospective underwriters. Registrable Securities need not be included in any registration statement pursuant to this provision if in the opinion of counsel to the Company (a copy of which opinion is delivered to the record owners of Registrable Securities) registration under the Securities Act is not required for public distribution of the Registrable Securities. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 3.1(b) prior to the effectiveness of the registration statement whether or not any holder has elected to include any Registrable Securities in the registration statement.

(c) Company Repurchase . Upon receipt by the Company of a registration demand pursuant to Section 3.1(a), the Company may, but will not be obligated to, purchase for cash from any Holder so requesting registration all, but not less than all, of the Registrable Securities which are the subject of the request at a price per share equal to the average of the Closing Prices of a share of Common Stock for the ten (10) trading days immediately preceding the date of receipt by the Company of the registration request. In the event the Company elects to purchase the Registrable Securities which are the subject of a

registration request, the Company shall notify the Holder within five Business Days of the date of receipt of the request by the Company, which notice shall indicate (i) that the Company will purchase for cash the Registrable Securities held by the Holder which are the subject of the request, (ii) the price per share, calculated in accordance with the preceding sentence, which the Company will pay the Holder and (iii) the date upon which the Company shall purchase the Registrable Securities, which date shall not be later than the tenth business day after receipt of the registration request. If the Company so elects to purchase the Registrable Securities which are the subject of a registration request, then upon such purchase the Company shall be relieved of its obligations under this Section 3.1 with respect to such Registrable Securities.

Section 3.2 Additional Registration Procedures. In connection with any registration statement covering Registrable Securities filed by the Company pursuant to Section 2.1 or 3.1 hereof:

(a) Each Holder agrees to provide in a timely manner information requested by the Company regarding the proposed distribution by that Holder of the Registrable Securities and all other information reasonably requested by the Company in connection with the preparation of the registration statement covering the Registrable Securities.

(b) The Company will, if requested by any of the Holders, prior to filing a registration statement or prospectus, or any amendment or supplement thereto in connection with any Demand Registration Statement or Piggyback Registration Statement, furnish to each Selling Holder and each underwriter, if any, of the Registrable Securities covered by such registration statement or prospectus copies of such registration statement or prospectus or any amendment or supplement thereto as proposed to be filed, and thereafter furnish to such Selling Holder and underwriter, if any, such number of conformed copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as such Selling Holder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Selling Holder.

(c) After the filing of the registration statement, the Company will promptly notify each Selling Holder of Registrable Securities covered by the registration statement of any stop order issued or threatened by the Commission and take all commercially reasonable actions required to prevent the entry of such stop order or to remove it if entered.

(d) In connection with any Demand Registration Statement or Piggyback Registration Statement, the Company will use reasonable efforts to register or qualify the Registrable Securities under such securities or blue sky laws of those jurisdictions in the United States (where an exemption is not available) as any Selling Holder or managing underwriter or underwriters, if any, reasonably (in light of the Selling Holder’s intended plan of distribution) requests; provided , however , that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (d), (ii) subject itself to taxation in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction.

(e) In connection with any Demand Registration Statement or Piggyback Registration Statement, the Company will enter into customary agreements (including an underwriting agreement, if any, in customary form) as are reasonably required in order to expedite or facilitate the disposition of Registrable Securities pursuant to the Demand Registration Statement or Piggyback Registration Statement. Each Selling Holder participating in an underwritten offering shall also enter into and perform its or his obligations under the underwriting agreement.

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

(g) The Company will promptly notify each Selling Holder of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statement therein, in light of the circumstances then existing, not misleading and promptly make available to each Selling Holder a reasonable number of copies of any such supplement or amendment.

(h) The Company will make available for inspection by any Selling Holder of such Registrable Securities, any underwriter participating in any disposition pursuant to such Registrable Securities, any underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other professional retained by any such Selling Holder or underwriter (collectively, the “ Inspectors ”), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “ Records ”) as shall be reasonably necessary to enable them to discharge their due diligence responsibility under the Securities Act, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any Inspectors in connection with the discharge of their due diligence responsibility. Records which the Company determines, in good faith, to be confidential and which it notifies the Inspectors are confidential shall not be disclosed by the Inspectors unless the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction. Each Selling Holder of such Registrable Securities agrees that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Company or its Affiliates or otherwise disclosed by it unless and until such is made generally available to the public and further agrees, if the Company so requests, to enter into a confidentiality agreement with the Company that is reasonably acceptable to the Company. Each Selling Holder of such Registrable Securities further agrees that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential.

(i) In connection with a disposition of the Registrable Securities in which there is a participating underwriter or underwriters, the Company will furnish to each Selling Holder and to each underwriter, a signed counterpart, addressed to such Selling Holder or

underwriter, of (i) an opinion or opinions of counsel to the Company and (ii) a comfort letter or comfort letters from the Company’s independent public accountants (to the extent permitted by the standards of the American Institute of Certified Public Accountants), each in customary form and covering such matters of the type customarily covered by opinions or comfort letters, as the case may be, as the Holders of a majority of the Registrable Securities included in such offering or the managing underwriter or underwriters therefor reasonably requests.

(j) The Company will otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering a period of twelve (12) months, beginning within three (3) months after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder (or any successor rule or regulation hereafter adopted by the Commission).

Section 3.3 Material Developments; Suspension of Offering.

(a) Notwithstanding the provisions of Sections 2.1 or 3.1 hereof or any other provisions of this Agreement to the contrary, the Company shall not be required to file a registration statement or to keep any registration statement effective if the negotiation or consummation of a transaction by the Company or any of its subsidiaries is pending or an event has occurred, which negotiation, consummation or event would require additional disclosure by the Company in the registration statement of material information which the Company (in the judgment of management of the Company) has a bona fide business purpose for keeping confidential and the nondisclosure of which in the registration statement might cause the registration statement to fail to comply with applicable disclosure requirements; provided , however , that the Company (i) will promptly notify the Holders of Registrable Securities otherwise entitled to registration of a delay, suspension or withdrawal pursuant to this Section 3.3(a) and (ii) may not delay, suspend or withdraw the registration statement for such reason under this Section 3.3(a) more than twice in any twelve (12) month period or three times in any twenty-four (24) month period or for more than ninety (90) days at any time. Upon receipt of any notice from the Company of the happening of any event during the period the registration statement is effective which is of a type specified in the preceding sentence or as a result of which the registration statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statement therein, in light of the circumstances under which they were made not misleading, Holders agree that they will immediately discontinue offers and sales of the Registrable Securities under the registration statement (until they receive copies of a supplemental or amended prospectus that corrects the misstatements or omissions and receive notice that any post-effective amendment has become effective). If so directed by the Company, Holders will deliver to the Company any copies of the prospectus covering the Registrable Securities in their possession at the time of receipt of such notice. In the event the Company shall give notice of the happening of an event of the kind described in this Section 3.3(a), the Company shall extend the period during which the affected registration statement is required to be maintained pursuant to this Agreement by the number of days during the period from and including the date of the giving of notice pursuant to this Section 3.3(a) to the date when the Company shall make available a prospectus supplemented or amended to conform with the requirements of the

Securities Act. Each Holder agrees to keep confidential the fact that the Company has exercised its rights under this Section 3.3 and all facts and circumstances relating to such exercise until such information is made public by the Company.

(b) If all reports required to be filed by the Company pursuant to the Exchange Act have not been filed by the required date without regard to any extension, or if the consummation of any business combination by the Company has occurred or is probable for purposes of Rule 3-05 or Article 11 of Regulation S-X under the Securities Act, upon written notice thereof by the Company to the Holders, the rights of the Holders to acquire Registrable Securities pursuant to the Issuance Registration Statement or to offer, sell or distribute any Registrable Securities pursuant to any Demand Registration Statement or Piggyback Registration Statement or to require the Company to take action with respect to the registration of any Registrable Securities pursuant to this Agreement shall be suspended until the date on which the Company has filed such reports or obtained and filed the financial information required by Rule 3-05 or Article 11 of Regulation S-X to be included or incorporated by reference, as applicable, in the Issuance Registration Statement, the Demand Registration Statement or the Piggyback Registration Statement and the Company shall notify the Holders as promptly as practicable when such suspension is no longer required. The Company’s rights to suspend its obligations under this Section 3.3(b) shall be in additional to its rights under Section 3.3(a).

Section 3.4 Registration Expenses. In connection with any registration statement required to be filed hereunder, the Company shall pay the following registration expenses incurred in connection with the registration (the “Registration Expenses” ): (i) all registration and filing fees, (ii) fees and expenses of compliance with securities or blue sky laws (including the reasonable fees and expenses of counsel to the Company), (iii) printing expenses, (iv) internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), (v) the fees and expenses incurred in connection with the listing of the Registrable Securities on each securities exchange on which similar securities issued by the Company are then listed, (vi) fees and disbursements of counsel for the Company and the independent public accountants of the Company, and (vii) the fees and expenses of any experts retained by the Company in connection with such registration. The Holders shall be responsible for the payment of any and all other expenses incurred by them in connection with the registration and sale of Registrable Securities, including, without limitation, brokerage and sales commissions, underwriting fees, discounts and commissions attributable to the Registrable Securities, fees and disbursements of counsel engaged by the Holders, and any transfer taxes relating to the sale or disposition of the Registrable Securities.

Section 3.5 Indemnification by the Company. The Company agrees to indemnify and hold harmless each Selling Holder, its officers, directors, employees, representatives, and agents, and each Person, if any, who controls such Selling Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, actions, damages, liabilities, costs and expenses (including, without limitation, but subject to the provisions of Section 3.7 hereof, reasonable attorneys’ fees and disbursements) caused by any untrue statement or alleged untrue statement of a material fact contained in any Demand Registration Statement or Piggyback Registration Statement (individually, a “ Resale Registration Statement” ) or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein,

in light of the circumstances in which they were made, not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact contained in any prospectus contained in a Resale Registration Statement at the time it became effective (a “Resale Prospectus ”), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information furnished in writing to the Company by such Selling Holder or on such Selling Holder’s behalf expressly for inclusion therein; provided , however , that the Company will not be liable in any case to the extent that any such claim, loss, damage, liability or expense arises out of or is based upon any untrue statement or omission contained in a Resale Prospectus which was corrected in a supplement or amendment thereto if such claim is brought by a purchaser of Registrable Securities from the Selling Holder and the Selling Holder failed to deliver to such purchaser the supplement or amendment to the Resale Prospectus in a timely manner.

Section 3.6 Indemnification by Holders of Registrable Securities. Each Selling Holder of Registrable Securities covered by a Resale Registration Statement agrees to indemnify and hold harmless the Company, its officers, directors and agents and each Person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in Section 3.5 from the Company to Selling Holders, but only with respect to information relating to such Selling Holder furnished in writing by such Selling Holder or on such Selling Holder’s behalf expressly for use in any Resale Registration Statement or Resale Prospectus or any amendment or supplement thereto. Each Holder also agrees to indemnify and hold harmless underwriters of the Registrable Securities, their officers and directors and each Person who controls such underwriters within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act on substantially the same basis as that of the indemnification of the Company provided in this Section 3.6.

Section 3.7 Conduct of Indemnification Proceedings. Each indemnified party shall give reasonably prompt notice to each indemnifying party of any action or proceeding commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify the indemnifying party (i) shall not relieve it from any liability which it may have under the indemnity agreement provided in Section 3.5 or 3.6 above, unless and to the extent it did not otherwise learn of such action and the lack of notice by the indemnified party results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) shall not, in any event, relieve the indemnifying party from any obligations to the indemnified party other than the indemnification obligation provided under Section 3.5 or 3.6 above. If the indemnifying party so elects within a reasonable time after receipt of notice, the indemnifying party may assume the defense of the action or proceeding at the indemnifying party’s own expense with counsel chosen by the indemnifying party and approved by the indemnified party, which approval shall not be unreasonably withheld; provided , however , that if the defendants in any such action or proceeding include both the indemnified party and the indemnifying party and the indemnified party reasonably determines based upon advice of legal counsel experienced in such matters, that there may be legal defenses available to it which are different from or in addition to those available to the indemnifying party, then the indemnified party shall be entitled to separate counsel at the indemnifying party’s expense, which counsel shall be chosen by the indemnified

party and approved by the indemnifying party, which approval shall not be unreasonably withheld; provided further , that it is understood that the indemnifying party shall not be liable for the fees, charges and disbursements of more than one separate firm. If the indemnifying party does not assume the defense, after having received the notice referred to in the first sentence of this Section, the indemnifying party will pay the reasonable fees and expenses of counsel for the indemnified party; in that event, however, the indemnifying party will not be liable for any settlement effected without the written consent of the indemnifying party. If an indemnifying party assumes the defense of an action or proceeding in accordance with this Section, the indemnifying party shall not be liable for any fees and expenses of counsel for the indemnified party incurred thereafter in connection with that action or proceeding except as set forth in the proviso in the second sentence of this Section 3.7. Unless and until a final judgment is rendered that an indemnified party is not entitled to the costs of defense under the provisions of this Section, the indemnifying party shall reimburse, promptly as they are incurred, the indemnified party’s costs of defense.

Section 3.8 Contribution.

(a) If the indemnification provided for in Section 3.5 or 3.6 hereof is applicable in accordance with its terms, but if determined by a court of competent jurisdiction to be legally unenforceable in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by indemnified party as a result of such losses, claims, damages or liabilities as between the Company on the one hand and each Selling Holder on the other, in such proportion as is appropriate to reflect the relative fault of the Company and of each Selling Holder in connection with such statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of each Selling Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or such Selling Holder, and the Company’s and the Selling Holder’s relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

(b) The Company and the Selling Holders agree that it would not be just and equitable if contribution pursuant to this Section 3.8 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in Section 3.8(a). The amount paid or payable by an indemnifying party as a result of the losses, claims, damages or liabilities referred to in Sections 3.5 and 3.6 hereof shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by the indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 3.8, no Selling Holder shall be required to contribute any amount in excess of the amount by which the total price at which the securities of such Selling Holder were offered to the public exceeds the amount of any damages which such Selling Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

Section 3.9 Participation in Underwritten Registrations. No Holder may participate in any underwritten registration hereunder unless the Holder (a) agrees to sell his or its Registrable Securities on the basis provided in the applicable underwriting arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents in customary form as reasonably required under the terms of such underwriting arrangements.

Section 3.10 Holdback Agreements. Each Holder whose securities are included in a Demand Registration Statement or Piggyback Registration Statement agrees not to effect any sale or distribution of the securities registered or any similar security of the Company, or any securities convertible into or exchangeable or exercisable for such securities, including a sale pursuant to Rule 144 under the Securities Act, during the fourteen (14) days prior to, and during the ninety (90)-day period beginning on, the effective date of such registration statement (except as part of such registration), if and to the extent requested in writing by the Company in the case of a non-underwritten public offering or if and to the extent requested in writing by the managing underwriter or underwriters in the case of an underwritten public offering.

ARTICLE IV.
MISCELLANEOUS

Section 4.1 Specific Performance. The parties hereto acknowledge that there would be no adequate remedy at law if any party fails to perform any of its obligations hereunder, and accordingly agree that each party, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to seek specific performance of the obligation of any other party under this Agreement in accordance with the terms and conditions of this Agreement in any court of the United States or any State thereof having jurisdiction.

Section 4.2 Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given without the prior written consent of the Company and the Holders holding at least a majority of the then outstanding Registrable Securities and Redeemable LLC Units, taken together as one class assuming all Redeemable LLC Units were exchanged for Registrable Securities. No failure or delay by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon any breach thereof shall constitute a waiver of any such breach or any other covenant, duty, agreement or condition.

Section 4.3 Notices. Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given (a) when delivered by hand or upon transmission by telecopier or similar facsimile transmission device, (b) on the date delivered by a courier service, or (c) on the third Business Day after mailing by registered or certified mail, postage prepaid, return receipt requested, in any case addressed as follows:

(a) if to any Holder, to such Holder at the address set forth under such Holder’s name on the signature page hereto, or to such other address and to such other Persons as the Holders may hereafter notify the Company in writing; and

(b) if to the Company, to Health Care Property Investors, Inc., 3760 Kilroy Airport Way, Suite 300, Long Beach, California 90806 (Attention: Legal Department), or to such other address as the Company may hereafter specify in writing.

Section 4.4 Successors and Assigns. The rights and obligations of the Holders under this Agreement shall not be assignable by any Holder to any Person that is not a Holder. This Agreement shall be binding upon the parties hereto, the Holders and their respective successors and assigns (including lenders in foreclosure).

Section 4.5 Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

Section 4.6 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without regard to the conflicts of law provisions thereof.

Section 4.7 Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

Section 4.8 Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to the subject matter of this Agreement.

Section 4.9 Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning of any provision of this Agreement.

Section 4.10 Selling Holders Become Party to this Agreement. By asserting or participating in the benefits of registration of Registrable Securities pursuant to this Agreement, each Holder agrees that it or he will be deemed a party to this Agreement and be bound by each of its terms.

Section 4.11 Rule 144. The Company covenants that it will file any reports required to be filed by it under the Securities Act and the Exchange Act to the extent required from time to time to enable Holders to sell Registrable Securities without registration under the Securities Act within the limitations of the exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the Commission. Upon the request of any Holder, the Company will deliver to such Holder a written statement as to whether it has filed such reports.

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

	COMPANY:

	HEALTH CARE PROPERTY INVESTORS, INC.,
	a Maryland corporation


	By:	/s/ Talya Nevo-Hacohen
	Name:	Talya Nevo-Hacohen
	Title:	Senior Vice President

	UNITHOLDER:


	/s/ A. Daniel Weyland

	A. Daniel Weyland


	Address:

EXHIBIT 10.13

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of October 26, 2005 (the “Effective Date”) by and between HEALTH CARE PROPERTY INVESTORS, INC., a Maryland corporation (together with its successors and assigns, “Corporation”), and JAMES F. FLAHERTY III (“Officer”).

RECITALS

A. Corporation and Officer desire to enter into a new employment agreement upon the terms set forth in this Agreement; and

B. Corporation desires to continue to employ Officer as its Chief Executive Officer and President, and Officer is willing to accept such employment by Corporation, on the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto do hereby agree as follows:

AGREEMENT

THE PARTIES AGREE AS FOLLOWS:

1. Duties . During the Employment Period (as defined below), Officer agrees to be employed by and to serve Corporation as its Chief Executive Officer and President. Corporation agrees to employ and retain Officer in such capacities. Officer shall report to Corporation’s Board of Directors (the “Board”) and at all times during the Employment Period shall have powers and duties commensurate with the positions of Chief Executive Officer and President of a company the size and nature of the Corporation. Officer shall devote substantially all of Officer’s business time, energy, and skill to the performance of Officer’s duties for Corporation and shall hold no other employment. Nothing herein shall preclude Officer from serving on (and receiving compensation for) boards of directors of other for-profit business entities as the Board approves in writing, which approval shall not be unreasonably withheld or engaging in a reasonable level of charitable activities and community affairs, including serving on charitable, community or educational boards or from managing his personal and family investments provided that such activities do not materially interfere with the effective discharge of his duties and responsibilities to Corporation. For purposes of clarity, the Board has approved Officer’s service on the board of directors of Quest Diagnostics.

2. Term of Employment .

(a) Definitions . For purposes of this Agreement the following terms shall have the following meanings:

(i) “ Termination For Cause ” shall mean termination by the Board of Officer’s employment with Corporation by reason of Officer’s: (A) willful and

continued failure to substantially perform his duties with Corporation after a written demand for substantial performance is delivered to Officer by the Board, which demand, based on a good faith determination of the Board after reasonable inquiry, specifically identifies the manner in which the Board believes that Officer has not substantially performed his duties (except for any such failure resulting from his incapacity due to physical or mental illness or any such actual or anticipated failure after Officer’s issuance of a Notice of Termination (as defined in Section 2(a)(viii)) either (1) for Good Reason (as defined in Section 2(a)(iii), or (2) in connection with a Covered Resignation (as defined in Section 2(a)(iv)), (B) willful and continued failure to substantially follow and comply with the specific and lawful directives of the Board, as reasonably determined by the Board after a written demand for substantial performance is delivered to Officer by the Board, which demand, based on a good faith determination of the Board after reasonable inquiry, specifically identifies the manner in which the Board believes that Officer has not substantially performed his duties (except for any such failure resulting from Officer’s incapacity due to physical or mental illness or any such actual or anticipated failure after his issuance of a Notice of Termination for Good Reason or in connection with a Covered Resignation), (C) willful commission of an act of fraud or dishonesty resulting in material economic or financial injury to Corporation, or (D) willful engagement in illegal conduct or gross misconduct, in each case which is materially and demonstrably injurious to Corporation; provided, however, that Officer’s employment shall not be deemed to have been terminated in a Termination For Cause if such termination took place as a result of any act or omission believed by Officer in good faith to have been in the best interests of Corporation. Notwithstanding the foregoing, Officer shall not be deemed to have been terminated in a Termination for Cause unless and until there shall have been delivered to Officer a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board (after reasonable notice to Officer and an opportunity for Officer, together with Officer’s counsel, to be heard before the Board, and after the reasonable opportunity to cure contemplated by clause (A) or (B) above in the case of a termination pursuant to either such clause), finding that in the Board’s good faith opinion Officer had engaged in conduct set forth above in this Section 2(a)(i) and specifying the particulars thereof in reasonable detail.

(ii) “ Termination Other Than For Cause ” shall mean termination by Corporation of Officer’s employment hereunder other than (A) a Termination For Cause, (B) a termination due to Officer’s Disability, or (C) in circumstances where a Termination Upon a Change in Control is applicable.

(iii) “ Termination For Good Reason ” shall mean termination by Officer of his employment hereunder for Good Reason, other than in circumstances where a Termination Upon a Change in Control is applicable. “ Good Reason ” shall mean, without Officer’s express written consent (except in the case of Section 2(a)(iii)(G)), the occurrence of any of the following circumstances unless, in the case of Sections 2(a)(iii)(A), (B), (D), (E), (F), (G), (H) or (I), such circumstances are fully corrected (provided such circumstances are capable of correction) within 30 days after a written demand for substantial performance is delivered to Corporation by Officer:

(A) the assignment to Officer of any duties inconsistent with Officer’s duties pursuant to Section 1, the failure to elect or reelect Officer as Chief

Executive Officer and President of Corporation and as a member of the Board, or the removal by Corporation or the Board of Officer from any such position, or any other action by Corporation that results in a material diminution in Officer’s position, authority, duties or responsibilities as Chief Executive Officer and President of Corporation;

(B) a change in the reporting structure such that Officer reports to someone other than the Board;

(C) Corporation’s reduction of Officer’s rate of Base Salary or Target Bonus as in effect on the Effective Date or as the same may be increased from time to time;

(D) the relocation of Corporation’s offices at which Officer is principally employed as of the Effective Date (“Officer’s Principal Location”) to a location more than thirty (30) miles from such location, or Corporation’s requiring Officer to be based anywhere other than Officer’s Principal Location, except for required travel on Corporation’s business to an extent substantially consistent with Officer’s business travel obligations prior to the Effective Date;

(E) Corporation’s failure to pay to Officer any portion of Officer’s current compensation or to pay to Officer any portion of an installment of deferred compensation due under any deferred compensation program of Corporation, including any deferred performance award, within seven (7) days of the date such compensation is due;

(F) a material reduction in Officer’s level of participation in any of Corporation’s short and/or long-term incentive compensation plans, employee benefit or retirement plans, or policies, practices or arrangements in which Officer participated in during the Employment Period; provided, however, except as set forth in clause (C) above, that reductions in the levels of participation in any such plan, policy, practice or arrangement shall not be deemed to be “Good Reason” if Officer’s reduced level of participation in each such plan, policy, practice or arrangement remains substantially consistent (both in terms of the amount of benefits provided and the level of Officer’s participation relative to other participants as existed prior to the reduction) with the level of participation of Corporation’s other senior executive officers in each such plan, policy, practice or arrangement;

(G) Corporation’s failure to obtain the assumption in writing of its obligation to perform this Agreement by any successor to all or substantially all of the business assets of Corporation within 15 days after a merger, consolidation, sale or similar transaction (without regard to whether or not Officer consented to such transaction); or

(H) any purported termination of Officer’s employment that is not effected pursuant to a Notice of Termination satisfying the requirements of Section 2(a)(viii) hereof (and, if applicable, the requirements of Section 2(a)(i) hereof), which purported termination shall not be effective for purposes of this Agreement.

Officer’s right to terminate Officer’s employment pursuant to this Section 2(a)(iii) shall not be affected by Officer’s incapacity due to physical or mental illness. Officer’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any

circumstance constituting Good Reason hereunder. After a Change in Control, any good faith determination by Officer that Good Reason exists as to circumstances arising upon, after or in connection with such Change in Control shall be presumed correct and shall be binding upon Corporation.

(iv) “ Covered Resignation ” shall mean a termination by Officer of Officer’s employment with Corporation by Officer providing a Notice of Termination within the thirty (30) day period following the first anniversary of the occurrence of a Change in Control.

(v) “ Voluntary Termination ” shall mean termination by Officer of Officer’s employment by Corporation other than (i) a Termination For Good Reason, (ii) a termination pursuant to a Covered Resignation, or (iii) a termination by reason of Officer’s death or Disability.

(vi) “ Termination Upon a Change in Control ” shall mean (A) a termination by Officer of Officer’s employment with Corporation (1) pursuant to a Covered Resignation, or (2) for Good Reason at any time by delivering upon or within the two-year period following a Change in Control a Notice of Termination to Corporation, or (B) a termination by Corporation of Officer’s employment, other than a Termination For Cause or upon Disability, at any time by delivering upon or within the two-year period following a Change in Control a Notice of Termination to Officer; in each case other than a termination by reason of Officer’s death.

(vii) “ Change in Control ” shall be deemed to occur if:

(A) any Person (as defined in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)) is or becomes the Beneficial Owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Corporation representing 25% or more of the combined voting power of Corporation’s then outstanding securities entitled to vote generally in the election of directors (“ Outstanding Corporation Voting Securities ”); provided, however, that for purposes of this subsection (A), the following shall not constitute a Change in Control: (1) any acquisition by Corporation or any corporation controlled by Corporation, (2) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Corporation or any corporation controlled by Corporation, or (3) any acquisition by a Person of 25% of the Outstanding Corporation Voting Securities as a result of an acquisition of common stock of Corporation by Corporation which, by reducing the number of shares of common stock of Corporation outstanding, increases the proportionate number of shares beneficially owned by such Person to 25% or more of the Outstanding Corporation Voting Securities; provided, however, that if a Person shall become the beneficial owner of 25% or more of the Outstanding Corporation Voting Securities by reason of a share acquisition by Corporation as described above and shall, after such share acquisition by Corporation, become the beneficial owner of any additional shares of common stock of Corporation, then such acquisition of additional shares shall constitute a Change in Control;

(B) during any period of not more than two consecutive years commencing after the execution of this Agreement, individuals who at the beginning of such period constitute the Board, together with any new director(s) whose election by the Board or nomination for election by Corporation’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved in the manner set forth in this clause (B) (which shall not include any director designated by a person who has entered into an agreement with Corporation to effect a transaction described in Sections 2(a)(vii)(A), (C) or (D)), cease for any reason to constitute at least a majority of the Board;

(C) the consummation by Corporation of a merger or consolidation, or a sale or other disposition of all or substantially all of the assets of Corporation (“ Business Combination ”), except for a merger or consolidation which would result in the beneficial owners of the Outstanding Corporation Voting Securities immediately prior thereto continuing to beneficially own (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 66-2/3% of the combined voting power of the then-outstanding voting securities of the corporation resulting from such Business Combination (including, without limitation, a corporation that, as a result of such transaction, owns Corporation or all or substantially all of Corporation’s assets either directly or through one or more subsidiaries) in substantially the same proportion as their ownership immediately prior to such Business Combination; provided, however, that a merger or consolidation effected to implement a recapitalization of Corporation (or similar transaction) in which no Person acquires beneficial ownership of more than 25% of the Outstanding Corporation Voting Securities shall not constitute a Change in Control except as otherwise provided above in clause (A); or

(D) the stockholders of Corporation approve a plan of complete liquidation of Corporation or an agreement for the sale or disposition by Corporation of all or substantially all of Corporation’s business assets.

(viii) “ Notice of Termination ” shall mean a notice that indicates the specific termination provision in this Agreement relied upon and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Officer’s employment under the provision so indicated. The Notice of Termination shall also set forth the applicable Date of Termination (which date shall be consistent with Section 2(ix) hereof).

(ix) “ Date of Termination ” shall mean (A) if Officer’s employment is terminated due to Officer’s death, the date of Officer’s death; (B) if Officer’s employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that Officer shall not have returned to the full-time performance of Officer’s duties during such thirty (30)-day period), and (C) if Officer’s employment is terminated pursuant to Section 2(a)(i), Section 2(a)(ii), Section 2(a)(iii) or Section 2(a)(iv) or for any other reason (other than death or Disability (as defined in Section 2(c)), the date specified in the Notice of Termination (which shall not be less than thirty (30) days from the date such Notice of Termination is given, except that in the case of a Termination for Cause the Date of Termination may be as early as the date such Notice of Termination is given, and in the case of a termination for Good Reason or in connection with a Covered Resignation the Date of Termination shall not be less than sixty (60) days from the date such Notice of Termination is given, and in all cases

the Date of Termination shall not be more than ninety (90) days from the date such Notice of Termination is given).

(x) “ Accrued and Other Obligations ” shall mean:

(A) any Base Salary that had accrued, but had not been paid (including accrued and unpaid vacation time), as of the Date of Termination, which will be paid upon or promptly following the Date of Termination; and

(B) any bonus payable pursuant to Section 3(b) with respect to any fiscal year (if Officer was employed by Corporation on the last day of that fiscal year) that had not previously been paid, which will be paid upon or promptly following the Date of Termination or, if later, at the same time bonuses are paid by Corporation generally to other executives with respect to such fiscal year; and

(C) any reimbursement due to Officer pursuant to Section 3(c)(iv) for expenses incurred by Officer prior to the Date of Termination, which will be paid upon or promptly following the Date of Termination or, if later, promptly following Officer’s request for reimbursement of such expenses and submission of receipts and other appropriate documentation thereof in accordance with Corporation’s usual policies; and

(D) any vested deferred compensation, including, without limitation, any deferred and vested performance award, any stock units or other equity-based awards that were vested and subject to a deferral election by Officer as of the Date of Termination, and any pension plan, profit sharing plan, and supplemental retirement plan benefits of Officer that were accrued and vested as of the Date of Termination; which, in each case, will be paid in accordance with the terms and conditions of the applicable plan, program, award or agreement; and

(E) any rights, payments or benefits under any other applicable plans, programs, policies or arrangements of Corporation in which Officer participated as of the Date of Termination (or if the basis for Good Reason is pursuant to Section 2(a)(iii)(F), the plan, program, policy or arrangement in which Officer participated in immediately prior to the action giving rise to Good Reason), including, without limitation, any equity or long-term incentive plan or pursuant to any then-outstanding equity awards granted by Corporation to Officer, to the full extent of Officer’s rights under any such plans, policies, arrangements or agreements.

(b) Basic Term . The term of employment hereunder shall commence on the Effective Date and continue for a continuous period of three (3) years, subject to earlier termination as provided in this Section 2 (the “Employment Period”). Thereafter, unless either party provides written notice to the other of its intent not to extend the Employment Period at least sixty (60) days prior to each anniversary of the Effective Date, the Employment Period shall be extended for an additional year, so that at all times the Employment Period shall be for a period of at least three (3) years, unless earlier terminated as provided in this Agreement; provided, further, that if a Change in Control occurs during the Employment Period, the term of this Agreement shall continue in effect for a period of not less than thirty-six (36) months beyond

the month in which such Change in Control occurred. A determination by either party not to renew the Employment Period in accordance herewith and delivery of a notice of such non-renewal shall not be deemed a breach of this Agreement. The Employment Period shall terminate at Corporation’s regular close of business on the Date of Termination (or, if the Date of Termination is not a regular business day, at 6:00 p.m. Pacific Time on the Date of Termination).

(c) Termination by Corporation . Corporation may terminate Officer’s employment hereunder (i) for Cause (but only in accordance with Section 2(a)(i) and only after the requisite Board vote has been obtained), or (ii) without Cause, or (iii) in the event of Officer’s Disability. For purposes of this Agreement, the term “Disability” shall mean a physical or mental impairment which renders Officer unable to perform the essential functions of his position, even with reasonable accommodation which does not impose an undue hardship on Corporation, for a period of at least six (6) months. Except as provided below, the determination of whether a Disability exists shall be made by a medical doctor selected by Corporation and Officer. If the parties cannot agree on a medical doctor, each party shall select a medical doctor and the two doctors shall select a third medical doctor who shall be the approved medical doctor for this purpose.

(d) Termination by Officer . Officer may terminate his employment hereunder at any time (i) for Good Reason (subject to Corporation’s opportunity to cure, if applicable, the circumstance(s) giving rise to Good Reason in the time period set forth in Section 2(a)(iii)), or (ii) pursuant to a Covered Resignation, or (iii) pursuant to a Voluntary Termination or upon thirty (30) days’ written Notice of Termination to Corporation, in the event of Officer’s Disability.

(e) Termination by Death . Officer’s employment hereunder shall terminate upon Officer’s death.

(f) Terminations in General . Any termination of Officer’s employment pursuant to Section 2(c), 2(d) or 2(e) shall not be deemed to be a breach of this Agreement. Any termination of Officer’s employment pursuant to Section 2(c), 2(d) or due to Officer’s Disability shall be communicated by the terminating party by a Notice of Termination.

3. Salary, Benefits and Bonus Compensation .

(a) Base Salary . During the Employment Period, Corporation agrees to pay to Officer a base salary at an annualized rate of $575,000.00 per annum (“Base Salary”) payable in accordance with Corporation’s regular payroll practices in effect from time to time, but not less frequently than monthly installments. Officer’s Base Salary and other incentives shall be reviewed annually by the Compensation Committee of the Board (the “Compensation Committee”), which may increase (but not decrease) Officer’s Base Salary and grant such other incentives as it, in its sole discretion, determines appropriate. After any such increase in Base Salary, the term “Base Salary” shall refer to the increased amount.

(b) Bonuses . Officer shall be eligible to receive a bonus for each year (or portion thereof) during the Employment Period and any extensions thereof, provided that,

except as otherwise provided herein, Officer has remained employed by Corporation for the entire year. Officer’s target bonus opportunity for any particular year (“Target Bonus”) shall equal two hundred percent (200%) of Officer’s Base Salary in effect for that year. The amount of bonus payable to Officer for any particular year will be determined by the Compensation Committee, in its sole discretion, taking into account the performance of the Corporation and Officer for that particular year. All such bonuses shall be payable within 45 days after the end of the year to which such bonus relates.

(c) Additional Benefits . During the Employment Period, Officer shall be entitled to the following employee and fringe benefits:

(i) Officer Benefits . Officer shall be eligible to participate in such of Corporation’s benefits and deferred compensation plans as are now generally available or later made generally available to executive officers of Corporation on a basis no less favorable than provided to such other executive officers, including, without limitation, profit sharing plans, annual physical examination, dental and medical plans, personal catastrophe and disability insurance, and retirement plans. Officer shall be eligible to participate in Corporation’s 2000 Stock Incentive Plan and any successor plan or any other equity or long-term incentive plan of Corporation. On the Effective Date, Corporation also agrees to grant Officer a restricted stock unit award in the form attached hereto as Exhibit A. Notwithstanding anything else contained herein to the contrary, during the Employment Period in no event shall Officer be eligible to participate in or receive benefits under any severance plan, program, policy, arrangement or agreement of Corporation other than this Agreement. Section 4(b)(viii) of this Agreement shall apply in the event that any payment, entitlement, benefit or distribution to Officer or for Officer’s benefit during the Employment Period (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise and whether pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, restricted stock, restricted stock unit, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing) would be subject to the excise tax imposed by Section 4999 of the Code or to any similar tax imposed by federal, state or local law or any interest or penalties imposed with respect to such excise or other similar tax.

(ii) Vacation . Officer shall be entitled to five (5) weeks of vacation during each year during the Employment Period, prorated for partial years. Upon Officer’s completion of fifteen (15) years of service to Corporation, Officer’s vacation accrual rate shall increase to six (6) weeks per year effective on and after such date.

(iii) Life Insurance . During the Employment Period, Corporation shall at its expense procure and keep in effect term life insurance on the life of Officer, payable to such beneficiaries as Officer may from time to time designate, in the aggregate amount of $2,000,000. Such policy shall be owned by Officer or by a member of his immediate family.

(iv) Reimbursement for Expenses . During the Employment Period, Corporation shall reimburse Officer for reasonable and properly documented (in accordance with the Corporation’s policies as in effect from time to time) out-of-pocket business

and/or entertainment expenses incurred by Officer in connection with his duties under this Agreement. In addition, Corporation shall promptly pay Officer’s legal fees and other expenses incurred in the negotiation and preparation of this Agreement (including its Exhibits) and the Indemnification Agreement to be entered into by and between Corporation and Officer on or about the date of this Agreement (the “ Indemnification Agreement ”) promptly upon receiving copies of the invoices for such fees and expenses.

4. Severance Compensation . If Officer’s employment by Corporation is terminated during the Employment Period for any reason by Corporation or Officer, or upon or following the Employment Period in the absence of a successor employment agreement by and between Officer and Corporation to the contrary, Corporation shall have no further obligation to provide to Officer, and Officer shall have no further right to receive or obtain from Corporation, any severance payments or benefits except:

(a) Accrued and Other Obligations . Corporation shall pay Officer (or, in the event of his death, Officer’s estate) the Accrued and Other Obligations, subject to tax withholding and other authorized deductions. Officer shall also be entitled to any amounts or advances required by Section 6(h)(iii) or pursuant to the Indemnification Agreement or any similar successor indemnification agreement by and between Officer and Corporation. If Officer’s employment by Corporation terminates after (but not during) the Employment Period, Officer shall be eligible for participation in any severance program, plan or policy then in effect on the same terms and conditions generally applicable to Corporation’s senior executives (other than as provided in individual employment agreements) or, if the program, plan or policy is of general applicability, to Corporation’s employees generally. For purposes of clarity, this Section 4(a) does not require a duplication of any Accrued or Other Obligation, reimbursement or other payment or benefit, otherwise payable in the circumstances pursuant to any other applicable plan, program, policy, arrangement or award.

(b) Termination Upon a Change in Control . If, during the Employment Period (but not following the expiration of the Employment Period), Officer’s employment is terminated in a Termination Upon a Change in Control, Corporation shall pay or provide Officer (in addition to the payments and entitlements in Section 4(a)) the following benefits, subject to tax withholding and other authorized deductions:

(i) Corporation shall pay Officer, at the time specified in Section 4(e), a lump sum cash amount equal to Officer’s Target Bonus for the year in which the Date of Termination occurs, pro-rated based on the number of days in such year that had elapsed as of the Date of Termination.

(ii) Corporation shall pay to Officer, at the time specified in Section 4(e), a lump sum cash severance payment equal to the sum of (x) three (3) times Officer’s Base Salary (at the greater of the highest annualized rate in effect in the year preceding the Date of Termination or the year in which the Date of Termination occurs), plus (y) three (3) times the greater of Officer’s Target Bonus for the year in which the Date of Termination occurs or the highest annual bonus received by Officer in the three (3) years immediately prior to the Change in Control (for purposes of the foregoing clause, Corporation and Officer hereby agree

that Officer’s annual bonuses for the years 2002, 2003 and 2004 were $100,000, $1 million, and $1 million, respectively).

(iii) For a period of three (3) years following the Date of Termination, Corporation shall continue to provide Officer and Officer’s eligible family members, based on the cost sharing arrangement between Officer and Corporation on the date of the Change in Control, with medical and dental health benefits at least equal in the aggregate to those which would have been provided to Officer and Officer’s eligible family members if Officer’s employment had not been terminated or, if more favorable to Officer, as in effect generally at any time thereafter; provided, however, that if Officer becomes re-employed with another employer and he and his dependents are eligible to receive medical and dental health benefits under another employer’s plans, Corporation’s obligations under this Section 4(b)(iii) shall be reduced to the extent comparable benefits with respect to Officer and his dependents are actually received by Officer following Officer’s termination, and any such benefits actually received by Officer shall be reported to Corporation. In the event Officer and his dependents are or become ineligible under the terms of such benefit plans or programs to continue to be so covered through the end of the three-year period following the Date of Termination, in such event, Corporation shall provide Officer and his dependents with substantially equivalent coverage through other sources or shall provide Officer with a lump sum payment in such amount that, after all taxes on that amount, shall be equal to the cost to Officer of providing Officer such benefit coverage until the end of such period. The lump sum payment shall be determined on a present value basis using the interest rate provided in Section 1274(b)(2)(B) of the Internal Revenue Code of 1986, as amended (the “Code”) on the Date of Termination (the “Interest Rate”). In addition, during the three-year period following the Date of Termination, Corporation shall continue to pay the premiums for the term life insurance policy described in Section 3(c) above. At the end of the three-year period following the Date of Termination, Officer, Officer’s spouse and Officer’s dependents shall be entitled to continuation coverage pursuant to Section 4980B of the Code, Sections 601-608 of the Employee Retirement Income Security Act of 1974, as amended, and under any other applicable law, to the extent required by such laws, as if Officer had then terminated employment with Corporation.

(iv) Officer shall be fully vested in Officer’s accrued benefits under any qualified or nonqualified pension, profit sharing, deferred compensation or supplemental plans maintained by Corporation for Officer’s benefit, except to the extent the acceleration of vesting of such benefits would violate any applicable law or require Corporation to accelerate the vesting of the accrued benefits of all participants in such plan or plans, in which case Corporation shall pay Officer a payment at the time such benefit would have otherwise been paid pursuant to the applicable plan in an amount equal to the value of such accrued benefits that would have become vested but for the application of the preceding clause, plus Corporation shall pay Officer at the time specified in Section 4(e) an amount equal to the present value (calculated using the Interest Rate) of the amounts Corporation would have contributed to Officer’s account under Corporation’s 401(k) plan as a matching contribution had Officer remained employed by Corporation for three (3) years after Officer’s Date of Termination and had Officer made the maximum elected deferral contributions (based on the 401(k) contribution formula and plan limits in effect on the Date of Termination).

(v) Officer shall be entitled to accelerated vesting as of the Date of Termination of any then-outstanding awards granted to Officer under Corporation’s stock and other equity and long-term incentive plans (to the extent such awards have not previously become vested). Any stock options that are then vested (including any that become vested pursuant to the preceding sentence) and that are granted to Officer on or after the Effective Date shall, notwithstanding any provision of any applicable plan or award agreement, remain exercisable until the later of (x) three (3) years after the Date of Termination or (y) the date specified in the applicable plan or award agreement; provided in no event shall any stock option be exercisable beyond its original expiration date. Notwithstanding the foregoing two sentences, any equity-based awards that are subject to forfeiture and/or vesting requirements based on the satisfaction of performance-based criteria, to the extent that such awards are outstanding as of the Date of Termination, shall continue to be governed by the provisions of the applicable award agreement in the circumstances; provided, however, that to the extent that any such then-outstanding equity-based awards are subject to forfeiture and/or vesting requirements based on the passage of time, such awards shall be fully accelerated with respect to such time-based forfeiture and/or vesting provisions.

(vi) Corporation shall furnish Officer for six (6) years following the Date of Termination (without reference to whether the Employment Period continues in effect) with directors’ and officers’ liability insurance insuring Officer against insurable events which occur or have occurred while Officer was a director or officer of Corporation, such insurance to have policy limits aggregating not less than the amount in effect immediately prior to the Change in Control, and otherwise to be in substantially the same form and to contain substantially the same terms, conditions and exceptions as the liability issuance policies provided for officers and directors of Corporation in force from time to time, provided, however, that such terms, conditions and exceptions shall not be, in the aggregate, materially less favorable to Officer than those in effect on the Effective Date; provided, further, that if the aggregate annual premiums for such insurance at any time during such period exceed one hundred and fifty percent (150%) of the per annum rate of premium currently paid by Corporation for such insurance, then Corporation shall provide the maximum coverage that will then be available at an annual premium equal to one hundred and fifty percent (150%) of such rate.

(vii) In any situation where under applicable law Corporation has the power to indemnify (or advance expenses to) Officer in respect of any judgments, fines, settlements, loss; cost or expense (including attorneys’ fees) of any nature related to or arising out of Officer’s activities as an agent, employee, officer or director of Corporation or in any other capacity on behalf of or at the request of Corporation, Corporation shall promptly on written request, indemnify (and advance expenses to) Officer to the fullest extent permitted by applicable law, including but not limited to making such findings and determinations and taking any and all such actions as Corporation may, under applicable law, be permitted to have the discretion to take so as to effectuate such indemnification or advancement. Such agreement by Corporation shall not be deemed to impair any other obligation of Corporation respecting Officer’s indemnification (or advancement of expenses) otherwise arising out of this or any other agreement or promise of Corporation or under any corporate governance document of Corporation or under statute or applicable law.

(viii) (A) Anything in this Agreement to the contrary notwithstanding, if it shall be determined that any payment, entitlement, benefit or distribution to Officer or for Officer’s benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise and whether pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, restricted stock, restricted stock unit, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing) (the “ Payments ”) would be subject to the excise tax imposed by Section 4999 of the Code or to any similar tax imposed by federal, state or local law or any interest or penalties imposed with respect to such excise or other similar tax (such tax or taxes, together with any such interest or penalties, are collectively referred to as the “ Excise Tax ”), then Officer shall, be entitled to receive from Corporation an additional payment (the “ Gross-Up Payment ”) in an amount such that the net amount of the Payments and the Gross-Up Payment retained by Officer after the calculation and deduction of all Excise Taxes (including any interest or penalties imposed with respect to such taxes) on the Payment and all federal, state and local income tax, employment tax and Excise Tax (including any interest or penalties imposed with respect to such taxes) on the Gross-Up Payment provided for in this Section 4(b)(viii), and taking into account any lost or reduced tax deductions on account of the Gross-Up Payment, shall be equal to the Payments;

(B) All determinations required to be made under this Section 4(b)(viii), including whether and when the Gross-Up Payment is required and the amount of such Gross-Up Payment, and the assumptions to be utilized in arriving at such determinations shall be made by the Accountants (as defined below) which shall provide Officer and Corporation with detailed supporting calculations with respect to such Gross-Up Payment within fifteen (15) business days of the receipt of notice from Officer or Corporation that Officer has received or will receive a Payment. For purposes of making the determinations and calculations required herein; the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Section 280G and 4999 of the Code, provided that the Accountant’s determinations must be made on the basis of “substantial authority” (within the meaning of Section 6662 of the Code). For the purposes of this Section 4(b)(viii), the “ Accountants ” shall mean Corporation’s independent certified public accountants serving immediately prior to the Change in Control to the extent they may lawfully perform such services. In the event that the Accountants are prohibited from providing such services or are also serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Officer shall appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accountants hereunder). All fees and expenses of the Accountants shall be borne solely by Corporation.

(C) For the purposes of determining whether any of the Payments will be subject to the Excise Tax and the amount of such Excise Tax, such Payments will be treated as “parachute payments” within the meaning of Section 280G of the Code, and all “parachute payments” in excess of the “base amount” (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless and except to the extent that in the opinion of the Accountants such Payments (in whole or in part) either do not constitute “parachute payments” or represent reasonable compensation for services actually rendered (within the

meaning of Section 280G(b)(4) of the Code) in excess of the “base amount,” or such “parachute payments” are otherwise not subject to such Excise Tax. For purposes of determining the amount of the Gross-Up Payment, Officer shall be deemed to pay Federal income taxes at the highest applicable marginal rate of Federal income taxation for the calendar year in which the Gross-Up Payment is to be made and to pay any applicable state and local income taxes at the highest applicable marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in Federal income taxes which could be obtained from the deduction of such state or local taxes if paid in such year (determined without regard to limitations on deductions based upon the amount of Officer’s adjusted gross income); and to have otherwise allowable deductions for Federal, state and local income tax purposes at least equal to those disallowed because of the inclusion of the Gross-Up Payment in Officer’s adjusted gross income. To the extent practicable, any Gross-Up Payment with respect to any Payment shall be paid by Corporation at the time Officer is entitled to receive the Payments and in no event will any Gross-Up Payment be paid later than five days after the receipt by Officer of the Accountant’s determination. Any determination by the Accountants shall be binding upon Corporation and Officer.

(D) As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accountants hereunder, it is possible that the Gross-Up Payment made will have been an amount less than Corporation should have paid pursuant to this Section 4(b)(viii) (the “ Underpayment ”). In the event that Corporation exhausts its remedies pursuant to Section 4(b)(viii)(F) and Officer is required to make a payment of any Excise Tax, the Underpayment shall be promptly paid by Corporation to or for Officer’s benefit;

(E) Officer and Corporation shall each provide the Accountants access to and copies of any books, records and documents in the possession of Corporation or Officer, as the case may be, reasonably requested by the Accountants, and otherwise cooperate with the Accountants in connection with the preparation and issuance of the determination contemplated by this Section 4(b)(viii); and

(F) Officer shall notify Corporation in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by Corporation of the Gross-Up Payment. Such notification shall be given as soon as practicable after Officer is informed in writing of such claim and shall apprise Corporation of the nature of such claim and the date on which such claim is requested to be paid. Officer shall not pay such claim prior to the expiration of the 30-day period following the date on which Officer give such notice to Corporation (or such shorter period ending on the date that any payment of taxes, interest and/or penalties with respect to such claim is due). If Corporation notifies Officer in writing prior to the expiration of such period that it desires to contest such claim, Officer shall:

• give Corporation any information reasonably requested by Corporation relating to such claim;

• take such action in connection with contesting such claim as Corporation shall reasonably request in writing from time to time, including, without limitation,

accepting legal representation with respect to such claim by an attorney reasonably selected by Corporation;

• cooperate with Corporation in good faith in order to effectively contest such claim; and

• permit Corporation to participate in any proceedings relating to such claims; provided, however, that Corporation shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify Officer for and hold Officer harmless from, on an after-tax basis, any Excise Tax or income tax or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of all related costs and expenses. Without limiting the foregoing provisions of this Section 4(b)(viii), Corporation shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Officer to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Officer agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as Corporation shall determine; provided, however, that if Corporation directs Officer to pay such claim and sue for a refund, Corporation shall make such payment on behalf of Officer, and shall indemnify Officer for and hold Officer harmless from, on an after-tax basis, any Excise Tax or income or other tax (including interest or penalties with respect thereto) imposed with respect to such payment or with respect to any imputed income in connection with such payment, but shall be entitled to any refund received by or on behalf of Officer because of the claim Corporation has directed him to pay; provided, further, that any extension of the statute of limitations relating to the payment of taxes for the taxable year of Officer with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, Corporation’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Officer shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority;

(c) Termination Other Than For Cause or Termination For Good Reason . If, during the Employment Period (but not following the expiration of the Employment Period), Officer’s employment is terminated by Corporation in a Termination Other Than For Cause or by Officer in a Termination For Good Reason, Officer shall be entitled to the benefits provided below (in addition to the payments and entitlements in Section 4(a)), subject to tax withholding and other authorized deductions:

(i) Corporation shall pay Officer, at the time specified in Section 4(e), a lump sum cash amount equal to Officer’s Target Bonus for the year in which the Date of Termination occurs, pro-rated based on the number of days in such year that had elapsed as of the Date of Termination.

(ii) Corporation shall pay to Officer, at the time specified in Section 4(e), a lump sum cash severance payment equal to the sum of (x) two (2) times Officer’s Base Salary (at the greater of the highest annualized rate in effect in the year preceding the Date of Termination or the year in which the Date of Termination occurs), plus (y) two (2) times the greater of Officer’s Target Bonus for the year in which the Date of Termination occurs or the highest annual bonus received by Officer in the three (3) years immediately prior to the year in which the Date of Termination occurs (for purposes of the foregoing clause, the amounts set forth in Section 4(b)(ii) above shall be used to determine Officer’s annual bonuses for the years 2002, 2003 and 2004).

(iii) Officer shall be entitled to accelerated vesting as of the Date of Termination of any then-outstanding awards granted to Officer under Corporation’s stock and other equity and long-term incentive plans (to the extent such awards have not previously become vested). Any stock options that are then vested (including any that become vested pursuant to the preceding sentence) and that are granted to Officer on or after the Effective Date shall, notwithstanding any provision of any applicable plan or award agreement, remain exercisable until the later of (x) three (3) years after the Date of Termination or (y) the date specified in the applicable plan or award agreement; provided in no event shall any stock option be exercisable beyond its original expiration date. Notwithstanding the foregoing two sentences, any equity-based awards that are subject to forfeiture and/or vesting requirements based on the satisfaction of performance-based criteria, to the extent that such awards are outstanding as of the Date of Termination, shall continue to be governed by the provisions of the applicable award agreement in the circumstances; provided, however, that to the extent that any such then-outstanding equity-based awards are subject to forfeiture and/or vesting requirements based on the passage of time, such awards shall be fully accelerated with respect to such time-based forfeiture and/or vesting provisions.

(iv) Officer and his family members shall be entitled to continuation of medical and dental benefits on the same basis as provided in Section 4(b)(iii), except the maximum time period for such coverage shall be two years following the Date of Termination. In addition, during the two-year period following the Date of Termination, Corporation shall continue to pay the premiums for the term life insurance policy described in Section 3(c) above.

(v) Section 4(b)(viii) of this Agreement shall apply in the event that any payment, entitlement, benefit or distribution to Officer or for Officer’s benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise and whether pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, restricted stock, restricted stock unit, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing) would be subject to the excise tax imposed by Section 4999 of the Code or to any similar tax imposed by federal, state or local law or any interest or penalties imposed with respect to such excise or other similar tax.

(d) Termination Upon Death or Disability . If, during the Employment Period (but not following the expiration of the Employment Period), Officer’s employment is terminated due to his death or Disability, Officer (or Officer’s estate) shall be entitled to the

benefits provided below (in addition to the payments and entitlements in Section 4(a)), subject to tax withholding and other authorized deductions:

(i) Corporation shall pay Officer (or Officer’s estate), at the time specified in Section 4(e), a lump sum cash amount equal to Officer’s Target Bonus for the year in which the Date of Termination occurs, pro-rated based on the number of days in such year that had elapsed as of the Date of Termination.

(ii) Officer (or Officer’s estate) shall be entitled to accelerated vesting as of the Date of Termination of any then-outstanding awards granted to Officer under Corporation’s stock and other equity and long-term incentive plans (to the extent such awards have not previously become vested). Any stock options that are then vested (including any that become vested pursuant to the preceding sentence) and that are granted to Officer on or after the Effective Date shall, notwithstanding any provision of any applicable plan or award agreement, remain exercisable until the later of (x) three (3) years after the Date of Termination or (y) the date specified in the applicable plan or award agreement; provided in no event shall any stock option be exercisable beyond its original expiration date. Notwithstanding the foregoing two sentences, any equity-based awards that are subject to forfeiture and/or vesting requirements based on the satisfaction of performance-based criteria, to the extent that such awards are outstanding as of the Date of Termination, shall continue to be governed by the provisions of the applicable award agreement in the circumstances; provided, however, that to the extent that any such then-outstanding equity-based awards are subject to forfeiture and/or vesting requirements based on the passage of time, such awards shall be fully accelerated with respect to such time-based forfeiture and/or vesting provisions.

(iii) Officer and his family members shall be entitled to continuation of medical and dental benefits on the same basis as provided in Section 4(b)(iii), except the maximum time period for such coverage shall be one year following the Date of Termination.

(e) Timing of Payments . Subject to Section 6(n), the payments provided for, as applicable, in Sections 4(b)(i), (ii) and (iv) (to the extent provided therein) or Sections 4(c)(i) and (ii) or Section 4(d)(i) shall be made not later than the fifth (5 ^th ) day following the Date of Termination.

(f) No Mitigation . Officer shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise nor, except as provided in Section 4(b)(iii) or Section 4(c)(iv), shall the amount of any payment or benefit provided for in this Section 4 be reduced by any compensation earned by Officer as the result of employment by another employer or self-employment, by retirement benefits or by offset against any claim or amount claimed to be owed by Officer to Corporation, or otherwise.

(g) Exclusive Remedy . Officer agrees that the payments, benefits and entitlements contemplated by this Section 4 (and any applicable acceleration of vesting of an equity-based award in accordance with the terms of such award) shall, if such payments, benefits or entitlements are actually made or provided and such accelerated vesting and any other equity provision is actually effected (including with respect to delivery of shares and the

post-termination exercise period for options) as contemplated by the applicable provisions of this Section 4 depending upon the circumstances in which the termination occurs, constitute the sole and exclusive remedy for such termination of his employment, and, provided such payments, benefits or entitlements are actually made as set forth herein, Officer covenants not to assert or pursue any other remedies, at law or in equity, with respect to such termination of employment. This Section 4(g) does not in any way limit any right of either party to contest the characterization of a termination of employment (for example, and without limitation, the right of Officer to contest whether Corporation had Cause to terminate Officer’s employment in a purported Termination For Cause) and, if successful, to receive the payments, benefits or entitlements due for such a termination in accordance with the terms hereof.

5. Covenants .

(a) Confidentiality . Officer hereby agrees that Officer shall not at any time (whether during or after Officer’s employment with Corporation), directly or indirectly, other than in the course of Officer’s duties hereunder, disclose or make available to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, any Confidential Information (as defined below); provided, however, that this Section 5(a) shall not apply when (i) disclosure is required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with actual or apparent jurisdiction to order Officer to disclose or make available such information (provided, however, that Officer shall promptly notify Corporation in writing upon receiving a request for such information), or (ii) with respect to any other litigation, arbitration or mediation involving this Agreement or any other agreement between Officer and Corporation, including but not limited to enforcement of such agreements. Officer agrees that, upon termination of Officer’s employment with Corporation, all Confidential Information in Officer’s possession that is in written or other tangible form (together with all copies or duplicates thereof, including computer files) shall be returned to Corporation and shall not be retained by Officer or furnished to any third party, in any form except as provided herein; provided, however, that Officer shall not be obligated to treat as confidential, or return to Corporation copies of any Confidential Information that (a) was publicly known at the time of disclosure to Officer, (b) becomes publicly known or available thereafter other than by any means in violation of this Agreement or any other duty owed to Corporation by Officer, or (c) is lawfully disclosed to Officer by a third party. As used in this Agreement, the term “ Confidential Information ” means: information disclosed to Officer or known by Officer as a consequence of or through Officer’s relationship with Corporation, about the customers, employees, business methods, public relations methods, organization, procedures or finances, including, without limitation, information of or relating to customer lists, of Corporation and its affiliates. Anything elsewhere to the contrary notwithstanding, Officer shall be entitled to retain (i) papers and other materials of a personal nature, including, but not limited to, photographs, correspondence, personal diaries, calendars and Rolodexes, personal files and phone books, (ii) information showing his compensation or relating to reimbursement of expenses, (iii) information that Officer reasonably believes may be needed for tax purposes, (iv) copies of plans, programs and agreements relating to his compensation, or employment or termination thereof, with Corporation and (v) minutes, presentation materials and personal notes from any meeting of the Board, or any committee thereof, while Officer was a member of the Board or such committee.

(b) Noncompetition . Officer acknowledges and agrees that Officer’s services pursuant to this Agreement are unique and extraordinary, and that Officer will have access to and control of Confidential Information of Corporation which is vital to the success of Corporation’s business. Officer further acknowledges that because of Officer’s knowledge of Corporation’s Confidential Information it is unlikely that Officer could work for a competitor of Corporation without divulging such Confidential Information. Officer further acknowledges that the business of Corporation is national in scope and cannot be confined to any particular geographic area of the United States. For the foregoing reasons, and in consideration for the benefits offered by Corporation under this Agreement, Officer hereby agrees that during the Employment Period, Officer shall not accept employment nor engage as a consultant with a competitor of Corporation in the real estate investment trust industry.

(c) Non-Solicitation .

(i) Officer promises and agrees that during the Employment Period and for a period of one (1) year thereafter, Officer will not, directly or indirectly, individually or as a consultant to, or as an employee, officer, stockholder, director or other owner or participant in any business, influence or attempt to influence customers, vendors, suppliers, joint venturers, associates, consultants, agents, or partners of any entity within the Company Group, either directly or indirectly, to divert their business away from the Company Group, to any individual, partnership, firm, corporation or other entity then in competition with the business of any entity within the Company Group, and he will not otherwise materially interfere with any business relationship of any entity within the Company Group. For purposes of this Agreement, “ Company Group ” means Corporation and its subsidiaries.

(ii) Officer promises and agrees that during the Employment Period and for a period of one (1) year thereafter, Officer will not, directly or indirectly, individually or as a consultant to, or as an employee, officer, stockholder, director or other owner of or participant in any business, solicit (or assist in soliciting) any person who is then, or at any time within six (6) months prior thereto was, an employee of an entity within the Company Group who earned annually $25,000 or more as an employee of such entity during the last six (6) months of his or her own employment to work for (as an employee, consultant or otherwise) any business, individual, partnership, firm, corporation, or other entity whether or not engaged in competitive business with any entity in the Company Group.

6. Miscellaneous .

(a) Payment Obligations . Corporation’s obligation to pay Officer the compensation and to make the arrangements provided herein shall be unconditional, and Officer shall have no obligation whatsoever to mitigate damages hereunder.

(b) Business Clubs . Officer may designate up to two dining clubs, country clubs, athletic clubs, or similar organizations in which Officer has membership interests (in addition to his membership in Virginia Country Club in Long Beach, California), and for the Employment Period, Corporation shall reimburse Officer for the monthly dues and for all charges for use of such clubs or organizations for business purposes on behalf of Corporation. The “Agreement Concerning Club Membership” by and between Officer and Corporation

effective as of July 22, 2004 (the “VCC Agreement”) continues in effect in accordance with its terms.

(c) Waiver . The waiver of the breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of the same or other provision hereof. Any waiver to be effective must be in writing, specifically referring to the provision being waived and signed by the party against whom the waiver is being enforced.

(d) Entire Agreement; Modifications . Except as otherwise provided herein, this Agreement, together with the Non-Integrated Agreements, represents the entire understanding among the parties with respect to the subject matter hereof, and this Agreement and the Non-Integrated Agreements supersede any and all prior understandings, agreements, plans and negotiations, whether written or oral, with respect to the subject matter hereof, including without limitation, any understandings, agreements or obligations respecting any past or future compensation, bonuses, reimbursements or other payments to Officer from Corporation (provided that in no event does this Agreement or any of the Non-Integrated Agreements supersede Officer’s outstanding equity award agreements). All modifications to the Agreement must be in writing and signed by the party against whom enforcement of such modification is sought. The “Non-Integrated Agreements” are the following: (i) the VCC Agreement, (ii) Corporation’s Insider Trading Policy in effect as of the Effective Date which has been acknowledged by Officer, and (iii) the Indemnification Agreement.

(e) Notices . All notices and other communications under this Agreement shall be in writing and shall be given (i) when personally delivered to the recipient (provided a written acknowledgement of receipt is obtained), (ii) three days after mailing by first class mail, postage pre-paid, certified or registered with return receipt requested or (iii) one day after being sent by a nationally recognized overnight courier (provided that a written acknowledgement of receipt is obtained by the overnight courier), to the party concerned at the address indicated below:

If to Corporation:	Health Care Property Investors, Inc.
	3760 Kilroy Airport Way, Suite 300
	Long Beach, California 90806
	Attention: Chairman of the Board

copy to:	Health Care Property Investors, Inc.
	3760 Kilroy Airport Way, Suite 300
	Long Beach, California 90806
	Attention: General Counsel

If to Officer:	To most recent home address in Corporation’s records.

Any party may change such party’s address for notices by notice duly given pursuant to this Section 6(e).

(f) Headings . The Section headings herein are intended for reference and shall not by themselves determine the construction or interpretation of this Agreement.

(g) Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to contracts entered into and wholly to be performed within the State of California by California residents, without reference to principles of conflicts of law.

(h) Arbitration; Dispute Resolution, etc .

(i) Arbitration Procedure . Any disagreement, dispute, controversy or claim arising out of or relating to this Agreement or the interpretation of this Agreement or any arrangements relating to this Agreement or contemplated in this Agreement or the breach, termination or invalidity thereof, or any other dispute between Officer and Corporation arising out of or related to Officer’s employment by Corporation (each of the foregoing, a “Dispute”), shall be settled by final and binding arbitration administered by the JAMS/Endispute in Los Angeles, California in accordance with its then existing JAMS/Endispute Arbitration Rules and Procedures for Employment Disputes. In the event of such an arbitration proceeding, Officer and Corporation shall select a mutually acceptable neutral arbitrator from among the JAMS/Endispute panel of arbitrators. In the event Officer and Corporation cannot agree on an arbitrator, the Administrator of JAMS/Endispute will appoint an arbitrator. Neither Officer nor Corporation nor the arbitrator shall disclose the existence, content, or results of any arbitration hereunder without the prior written consent of all parties. Except as provided herein, the Federal Arbitration Act shall govern the interpretation, enforcement and all proceedings under this Section 6(h)(i). The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the state of California, or federal law, or both, as applicable and the arbitrator is without jurisdiction to apply any different substantive law. The arbitrator shall have the authority to entertain a motion to dismiss and/or a motion for summary judgment by any party and shall apply the standards governing such motions under the Federal Rules of Civil Procedure. The arbitrator shall render an award and a written, reasoned opinion in support thereof. Judgment upon the award may be entered in any court having jurisdiction thereof. Corporation shall pay all fees and expenses of the Arbitrator regardless of the result and shall provide all witnesses and evidence reasonably required by Officer to present Officer’s case. For purposes of this Section 6(h), references to “this Agreement” shall include its Exhibits.

(ii) Advance of Payment . In the event of any arbitration brought in good faith which involves a determination as to whether Officer is entitled to the benefits contemplated by Section 4(b) or 4(c), Corporation shall advance the Advancement Amount to Officer within thirty (30) days after Corporation receives from Officer a written agreement (in a form reasonably acceptable to Corporation) pursuant to which Officer agrees that if the arbitration is not resolved in Officer’s favor, Officer shall promptly repay to Corporation the entire Advancement Amount plus interest at the Interest Rate, compounded quarterly (but subject to offset for any amounts and/or entitlements that the arbitrator deems Officer is entitled to under this Agreement) and in all cases provided that, in the opinion of counsel to Corporation, such arrangement will not violate any provision of law applicable to Corporation. In the event that the arbitrator determines that Officer is entitled to the benefits contemplated by Section 4(b) or 4(c), then the Corporation shall promptly pay to Officer the net additional amount due (the total payment contemplated by Section 4(b) or 4(c), as applicable, less the Advancement Amount) together with interest at the Interest Rate, compounded quarterly

from the commencement of the arbitration to the date of such payment. In no event shall Officer be entitled to the benefits contemplated by Section 4(b) and the benefits contemplated by Section 4(c). In the event there is a dispute as to whether Officer is entitled to the benefits provided by Section 4(b), the “ Advancement Amount ” is equal to fifty percent (50%) of the amount of Corporation’s obligations pursuant to Section 4(b)(i) and Section 4(b)(ii) (calculated assuming that Officer was entitled to the benefits set forth therein). In the event there is a dispute as to whether Officer is entitled to the benefits provided by Section 4(c), and assuming Section 4(b) reasonably does not apply, the “ Advancement Amount ” is equal to fifty percent (50%) of the amount of Corporation’s obligations pursuant to Section 4(c)(i) and Section 4(c)(ii) (calculated assuming that Officer was entitled to the benefits set forth therein). Corporation and Officer agree that it would not be in good faith for Corporation to dispute any good-faith determination by Officer that Good Reason exists as to circumstances arising upon, after or in connection with a Change in Control.

(iii) Legal Fees . In addition to all other amounts payable to Officer under this Agreement, Corporation shall pay to Officer all reasonable legal fees and expenses incurred by Officer in connection with any Dispute arising out of or relating to this Agreement or the interpretation thereof (including, without limitation, all such fees and expenses, if any, incurred in contesting or disputing any termination of Officer’s employment or in seeking to obtain or enforce any right or benefit provided by this Agreement, or in connection with any tax audit or proceeding to the extent attributable to the application of Section 4999 of the Code to any payment or benefit provided hereunder), regardless of the outcome of such proceeding; provided, however, that in the event Officer commences such action, Officer shall not be entitled to recover such fees and costs if the arbitrator determines that Officer brought the claim in bad faith or the claim was frivolous. Any attorney’s fees incurred by Officer shall be paid by Corporation in advance of the final disposition of such action or challenge, as such fees and expenses are incurred; provided, however, that any award against Officer shall require him to repay such amounts, net of any income taxes paid or payable by Officer with respect to such amounts, if such amounts are incurred in connection with an action commenced by Officer if it is ultimately determined by the court that Officer brought, such action in bad faith or the claim was frivolous. Notwithstanding the foregoing, any payment pursuant to this Section 6(h)(iii) is subject to compliance with Section 2-418 of the Maryland General Corporation Law.

(i) Severability . Should a court or other body of competent jurisdiction, or an arbitrator selected pursuant to Section 6(h), determine that any provision of this Agreement is excessive in scope or otherwise invalid or unenforceable, such provision shall be adjusted (but in no event beyond the scope and/or time period contemplated by this Agreement) rather than voided, if possible, taking into account the intent of the parties when they entered into this Agreement and all other provisions of this Agreement shall be deemed valid and enforceable to the extent possible.

(j) Survival of Corporation’s Obligations . Corporation’s obligations hereunder shall not be terminated by reason of any liquidation, dissolution, bankruptcy, cessation of business, or similar event relating to Corporation. This Agreement shall not be terminated by any merger or consolidation or other reorganization of Corporation, including a sale, transfer or other disposition of all or substantially all of Corporation’s assets. In the event any merger, consolidation or reorganization of Corporation, or a sale of all or substantially all of the business

assets of Corporation, this Agreement shall be binding upon and inure to the benefit of the surviving or resulting corporation or person or the successor to all or substantially all of the business assets of Corporation, as applicable. This Agreement shall be binding upon and inure to the benefit of the executors, administrators, heirs, successors and assigns of the parties; provided, however, that except as herein expressly provided, this Agreement shall not be assignable either by Corporation (except to an affiliate of Corporation in which event Corporation shall remain liable if the affiliate fails to meet any obligations to make payments or provide benefits or otherwise) or by Officer. Officer shall be entitled, to the extent permitted under any applicable law or any Corporation plan, policy, program, arrangement or agreement, to select or change a beneficiary or beneficiaries to receive any compensation or benefit payable or provided to Officer pursuant to this Agreement following Officer’s death by giving Corporation written notice thereof. In the event of Officer’s death or a judicial determination of his incompetence, references in this Agreement to Officer shall be deemed, where appropriate, to refer to his beneficiary, estate or legal representative, as the case may be and, in all events, in the case of Officer’s death any payments or benefits due to Officer that remain unpaid or outstanding hereunder shall be paid or provided to his designated beneficiary or, in the absence of such designation, his estate.

(k) Survivorship . The terms of this Agreement to the extent necessary to carry out the intentions of the parties underlying their respective rights and obligations shall survive any termination of the Employment Period. For this purpose, the parties intend that the following provisions of this Agreement shall survive any termination or expiration of the Employment Period to the extent necessary to carry out the intentions of the parties as embodied in this Agreement: Sections 2(a), 4 and 5, and this Section 6. This Agreement shall continue in effect until there are no further rights or obligations of the parties outstanding hereunder and shall not be terminated by either party without the express written consent of both parties.

(l) Representations and Warranties . Corporation represents and warrants to Officer that (i) execution, delivery and performance of this Agreement by Corporation has been fully and validly authorized by all necessary corporate action, (ii) the officer signing this Agreement on behalf of Corporation is duly authorized to do so, (iii) the execution, delivery and performance of this Agreement does not violate any applicable law, regulation, order, judgment or decree or any agreement, plan or corporate governance document to which Corporation is a party or by which it is bound and (iv) upon execution and delivery of this Agreement by the parties, it shall be a valid and binding obligation of Corporation, enforceable against it in accordance with its terms. Officer hereby represents to Corporation that execution, delivery and performance of this Agreement by Officer and the performance by Officer of Officer’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any other agreement to which Officer is a party or otherwise bound (other than any agreement with Corporation).

(m) Non-Exclusivity of Rights . Nothing in this Agreement shall prevent or limit Officer’s continuing or future participation in, or entitlements under, any benefit, bonus, incentive or other plan or program of Corporation or any of its subsidiaries or affiliates and for which Officer may qualify, nor shall anything herein limit or reduce such rights as Officer may have under any other agreement with Corporation or its subsidiaries or affiliates, provided that in no event shall Officer be entitled to duplication of payments or benefits.

(n) Code Section 409A . To the extent that this Agreement or any plan, program or award of Corporation in which Officer participates or which has been or is granted by Corporation to Officer, as applicable, is subject to Section 409A of the Code, Corporation and Officer agree to cooperate and work together in good faith to timely amend each such plan, program or award to comply with Section 409A of the Code. In the event that Officer and Corporation do not agree as to the necessity, timing or nature of a particular amendment intended to satisfy Section 409A of the Code, reasonable deference will be given to Officer’s reasonable interpretation of such provisions. In the event that Officer is subject to any payment or benefit at a time when he is a “specified employee” (within the meaning of Section 409A), Corporation shall delay the making of such payment or benefit to a date which is six months after the date of Officer’s “separation from service” (within the meaning of Section 409A) (or, if earlier, the date of Officer’s death) to the extent reasonably necessary to satisfy Section 409A of the Code. In addition, references to payments to be paid “promptly following the Date of Termination” shall mean no later than two and one-half months after the Date of Termination.

(o) Counterparts . This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same Agreement.

(p) Withholdings . All compensation and benefits to Officer hereunder shall be reduced by all federal, state, local and other withholdings and similar taxes and withholdings required by applicable law.

(q) Undertakings . Corporation agrees that with respect to any undertaking required by Officer in connection with any advancement of expenses or other amounts, whether pursuant to the Bylaws of Corporation, the Indemnification Agreement (or any successor agreement), applicable law or otherwise, and whether or not Officer is employed by Corporation on such date, such undertaking shall condition repayment upon its being ultimately determined by a court having jurisdiction in the matter in a final adjudication from which there is no further right of appeal that Officer is not entitled to be indemnified against such expenses or other amounts by Corporation. To the extent any such undertaking does not condition repayment in this manner, such undertaking shall be interpreted consistent with this paragraph.

(r) Inconsistencies . In the event of any inconsistency between any provision of this Agreement and any provision of any equity award granted by Corporation or the Indemnification Agreement, the provision most favorable to Officer shall govern.

(s) Legal Counsel; Mutual Drafting . Each party recognizes that this is a legally binding contract and acknowledges and agrees that they have had the opportunity to consult with legal counsel of their choice. Each party has cooperated in the drafting, negotiation and preparation of this Agreement. Hence, in any construction to be made of this Agreement, the same shall not be construed against either party on the basis of that party being the drafter of such language. Officer agrees and acknowledges that he has read and understands this Agreement, is entering into it freely and voluntarily, and has been advised to seek counsel prior to entering into this Agreement and has had ample opportunity to do so.

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

	HEALTH CARE PROPERTY INVESTORS, INC.

	By:	/s/ Edward J. Henning
		Edward J. Henning Senior Vice President, General Counsel and Corporate Secretary

	/s/ James F. Flaherty III
	James F. Flaherty III

EXHIBIT A

RESTRICTED STOCK UNIT AGREEMENT

EXHIBIT 10.14.3

AMENDMENT NO. 3

TO AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF HCPI/TENNESSEE, LLC AND NEW MEMBER JOINDER AGREEMENT

THIS AMENDMENT NO. 3 TO AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF HCPI/TENNESSEE, LLC AND NEW MEMBER JOINDER AGREEMENT (this “Amendment”) is made effective as of the 19 day of October, 2005 (the “ Effective Date ”) by and among HEALTH CARE PROPERTY INVESTORS, INC., a Maryland corporation (the “ Managing Member ”), HCPI/TENNESSEE, LLC, a Delaware limited liability company (the “ Company ”) and A. Daniel Weyland, an individual (“ New Member ”).

RECITALS

A. The Managing Member and each of the persons whose names are set forth on Exhibit A thereto entered into the Amended and Restated Limited Liability Company Agreement of HCPI/Tennessee, LLC effective as of October 2, 2003 (the “ Original Agreement ”), as amended by that certain Amendment No. 1 to Amended and Restated Limited Liability Company Agreement of HCPI/Tennessee, LLC dated September 29, 2004 (the “ First Amendment ”), and that certain Amendment No. 2 to Amended and Restated Limited Liability Company Agreement of HCPI/Tennessee, LLC dated October 27, 2004 (the “ Second Amendment , and together with the Original Agreement and the First Amendment, the “ Operating Agreement ”), which provides that the Managing Member is the Managing Member of Company. Capitalized terms used in this Amendment and not otherwise defined in this Amendment shall have the meanings given to such terms in the Operating Agreement.

B. Managing Member, the Company, New Member and each entity identified as a “Contributing Transferor” on the signature page thereto (each, a “ Contributor ”) entered into that certain Contribution Agreement and Escrow Instructions dated as of October , 2005 (collectively, the “ Denver Contribution Agreement ”), providing, among other things, for the contribution by each Contributor of its respective right, title and interest to the Company, and the acquisition by the Company of all right, title and interest of each such Contributor (the “ Contributed Denver Property Interests ”), in and to seven (7) medical office buildings in or around Denver, Colorado, as more particularly described therein (the “ Denver Properties ”). The Company, HCA-HealthOne LLC, a Colorado limited liability company (“ HealthOne ”), and each entity identified as a “Seller” on the signature page thereto (each, a “ Seller ”) have also entered into that certain Purchase Agreement and Escrow Instructions dated of even date with the Denver Contribution Agreement (the “ Purchase Agreement ”), providing, among other things, for the purchase by the Company of all right, title and interest of each Seller, in and to such Denver Properties (the “ Purchased Denver Property Interests ”).

C. Pursuant to the Contribution Agreement, New Member will receive Non-Managing Member Units in the Company, and desires to be admitted to the Company as an Additional Member and Non-Managing Member pursuant to the Operating Agreement, as hereby amended.

D. In connection with the closing of the transactions contemplated by the Contribution Agreement and Purchase Agreement, Managing Member desires to amend the Operating Agreement, and the Company desires to admit New Member as an Additional Member and Non-Managing Member to the Company, but only upon the terms and conditions set forth herein.

E. Pursuant to that certain Written Consent of the Members the Company effective as of September 30, 2005 (the “ Denver Consent ”), Managing Member has received the requisite consent of the current Non-Managing Members of the Company to the transactions contemplated by the Contribution Agreement and the Purchase Agreement, this Amendment and the admission of New Member as an Additional Member and Non-Managing Member in the Company.

AGREEMENT

NOW, THEREFORE, the Operating Agreement is hereby amended as of the Effective Date as follows:

1. Admission of New Member .

(a) The Company hereby admits New Member as an Additional Member and Non-Managing Member of the Company, and, in connection therewith, Exhibit A to the Operating Agreement is hereby amended to reflect the information on Exhibit A attached hereto, including the Capital Contributions of New Member for the number of Non-Managing Units reflected thereon and the Capital Contribution by the Managing Member for the number of Managing Member Units reflected thereon.

(b) New Member hereby agrees to be bound by the Operating Agreement, as hereby amended, including, without limitation, Section 2.4 of the Original Agreement [Power of Attorney], as a Non-Managing Member of the Company.

(c) New Member hereby represents and warrants to the Company, the Managing Member and each other Member that the representations and warranties set forth in Section 3.4 of the Original Agreement are true and correct as of the Effective Date hereof.

2. Amendments to Operating Agreement .

(a) Definitions . The following definitions appearing in Article 1 of the Original Agreement are hereby amended or supplemented as follows:

(i) Adjustment Factor . As of the Effective Date, and after giving effect to the REIT Shares stock split in the form of a stock dividend to the holders of REIT Shares with a record date of February 4, 2004, and dividends issued to such holders on March 1, 2004, the Adjustment Factor is 2.0, subject to further adjustment pursuant to the definition thereof.

(ii) Contribution Agreement . With respect to the New Member, “ Contribution Agreement ” shall mean the Denver Contribution Agreement.

(iii) Contribution Indemnity . With respect to the New Member, “ Contribution Indemnity ” shall have no application with respect to the Denver Contribution Agreement.

(iv) Initial Value . With respect to the Contributed Denver Property Interests, the amount set forth with respect to the “Contributed Denver Property Interests” as set forth on Exhibit B to this Amendment.

(v) Preferred Return Per Unit . Notwithstanding anything to the contrary in the definition of “ Preferred Return Per Unit ” with respect to the New Member and each Non-Managing Member Unit issued to New Member on the Effective Date, the increase in the Preferred Return Per Unit with respect to each such Non-Managing Member Unit on the first LLC Record Date following the Effective Date hereof shall be the product of (i) and (ii) of such definition multiplied by a fraction, the numerator of which shall be the number of days in the period commencing on the Effective Date hereof and ending on the first LLC Record Date following the Effective Date hereof, and the denominator of which shall be the number of days in the period commencing on August 9, 2005, and ending the first LLC Record Date following the Effective Date hereof.

(vi) Real Properties . “ Real Properties ” shall mean and include the Denver Properties and, where appropriate, ownership interests in the Subsidiaries holding the Denver Properties.

(vii) Tax Protection Period . With respect to the New Member, “ Tax Protection Period ” shall mean the period beginning on the Effective Date hereof and ending on the earlier of (i) the tenth (10 ^th ) anniversary of the Effective Date hereof or (ii) the Threshold Date with respect to the New Member.

(viii) Threshold Date . With respect to the New Member, “ Threshold Date ” means the date on which Eighty Percent (80%) of the LLC Units issued by the Company to the New Member on the Effective Date hereof have been disposed of pursuant to a Taxable Disposition or Series of Taxable Dispositions. As used herein, “ Taxable Disposition ” means a transaction in which an LLC Unit has either (a) been disposed of to the extent such disposition is a taxable transaction (including, without limitation, a Redemption or exchange pursuant to Section 8.6.A of the Operating Agreement) or (b) received a “ step-up ” in tax basis to its fair market value at the time of such “ step-up ” (e.g., as a result of the death of a holder of LLC Units who is an individual).

(ix) Transferred Properties . With respect to the New Member, “ Transferred Properties ” shall mean the Contributed Denver Property Interests pursuant to the applicable Contribution Agreement.

(b) Capital Contributions . The Members acknowledge that the Capital Contributions of the New Member and the Managing Member pursuant to Section 4.2 of the Original Agreement and upon consummation of the transactions contemplated by the Denver Contribution Agreement and the Denver Purchase Agreement shall be as set forth on Exhibit A hereto and the same shall become part of Exhibit A to the Operating Agreement.

(i) The provisions of Section 12.2.C. of the Original Agreement shall apply with respect to the New Member.

(ii) Notwithstanding anything to the contrary in Section 6.3.B of the Original Agreement, all excess non-recourse liabilities, as defined in Regulations Section 1.752-3(a)(3), attributable to the Existing Indebtedness (as defined below) shall be allocated as follows: (x) first to the New Member in an amount equal to the built-in gain that is allocable to the New Member on section 704(c) property (as defined in Regulations Section 1.704-3(a)(ii)) or property for which reverse section 704(c) allocations are applicable (as described in Regulations Section 1.704-3(a)(6)(i)) where such property is subject to the non-recourse liability to the extent that such built-in gain exceeds the gain described in Regulations Section 1.752-3(a)(2) with respect to such property; and (y) the balance, if any, in accordance with the New Member profit sharing ratio.

(d) Restrictions on Managing Member’s Authority .

(i) At all times during the Tax Protection Period applicable to the New Member, the Company shall not prepay ( i.e. , make payments in addition to scheduled interest and principal amortization), and shall not repay at maturity, the Debt set forth on Schedule 2(d) attached hereto (the “ Existing Indebtedness ”), unless all or a portion of the Existing Indebtedness is replaced or refinanced with other Debt. or other Debt is incurred, satisfying the requirements set forth below (“ Replacement Indebtedness ”). From and after or concurrent with the date the Company incurs Replacement Indebtedness, this Section 2(d) shall not restrict the Company’s ability to make payments with respect to the Existing Indebtedness, including, without limitation, repayment of all or any portion of the Existing Indebtedness at or prior to the stated maturity date thereof. Any Replacement Indebtedness shall, during the Tax Protection Period:

(A) be comprised of one or more loans in a total principal amount of $9m (the “ Guaranteed Loan Amount ”);

(B) not require principal repayments during such period that would cause the principal balance of such Replacement Indebtedness to be less than the Guaranteed Loan Amount at any time during the Tax Protection Period applicable to the New Member or, alternatively, the Company shall finance any such shortfall with Replacement Indebtedness;

(D) be secured by Real Properties or any Successor Properties with a Loan-to-Value Ratio of not greater than Seventy Percent (70%) determined at the time such Replacement Indebtedness is incurred;

(E) not result in the Equity Coverage of the Company being less than Twenty Million Dollars ($20,000,000.00) (the “ Minimum

Equity ”) determined at the time such Replacement Indebtedness is incurred;

(F) allow the New Member to execute and deliver to the lender thereunder a Bottom Guarantee (as defined below) and require that such lender accept such Bottom Guarantee; and

(G) be either (1) provided by a lender that does not have an interest in the Company and is not related to the Company in any manner (other than as a lender) within the meaning of Section 465(b)(3)(A) of the Code, or (2) of a nature and source such that it would not disqualify the guarantee of such indebtedness from preventing the recapture pursuant to Section 465(e) of the Code of losses claimed by the New Member prior to the Effective Date (with the Company permitted to assume for this purpose that a Bottom Guarantee is effective to make the guarantor “at risk” for purposes of Section 465 of the Code with respect to debt that otherwise satisfies the requirements of Section 465); and

(H) either (1) not be subject to a guarantee, reimbursement or indemnity agreement provided by any Person other than the Company or the New Member that is executing a Bottom Guarantee pursuant to clause (ii) of this Section 2(d), and except for a customary non-recourse carve-out guarantee, environmental indemnity or similar guarantee or indemnity given by the Managing Member or its Affiliates, or (2) not have any Person who might be considered to “bear the economic risk of loss” or to be “at risk” with respect to such Replacement Indebtedness unless such Person is the Managing Member or one of its Affiliates and the New Member is permitted to enter into an indemnity agreement with such Person so as to cause the New Member to “bear the economic risk of loss” or to be “at risk” with respect to such Debt vis-à-vis such Person, which indemnity shall be substantially in accordance with the terms and provisions of the Bottom Guarantee pursuant to clause (ii) of this Section 2(d).

The Managing Member shall provide the New Member written notice of its desire to incur Replacement Indebtedness, or to refinance or repay the Existing Indebtedness or any permitted Replacement Indebtedness with Replacement Indebtedness, not less than thirty (30) days prior to the incurrence by the Company of such Replacement Indebtedness. In connection with the incurrence of any Replacement Indebtedness, the Managing Member shall also provide to the New Member (1) financial or other information concerning any Existing Indebtedness being refinanced and the terms of the Replacement Indebtedness to be incurred, in each case as reasonably requested by the New Member, and (2) a written statement that in the opinion of the Managing Member the requirements of clause (i) this Section 2(d) are satisfied with respect to the Replacement Indebtedness.

(ii) During the Tax Protection Period applicable to the New Member, the New Member shall have the option from time to time to execute Bottom Guarantees for any Replacement Indebtedness in any amount (in the aggregate) up to the Guaranteed Loan Amount. If the New Member elects to execute Bottom Guarantees (in the aggregate) for less than the Guaranteed Loan Amount, then upon written notice to the Company, the Managing Member and the lender under any Replacement Indebtedness, not more frequently than one time per year during the Tax Protection Period applicable to the New Member, the New Member may elect to increase the New Member’s Bottom Guarantees (in the aggregate) in any amount up to the Guaranteed Loan Amount. As used herein, “ Bottom Guarantee ” means an agreement in substantially the form attached hereto as Exhibit C or in such other form as may be reasonably acceptable to the lender and the New Member and providing substantively the same benefits to the New Member as the form attached hereto as Exhibit C . The New Member shall deliver to the Company a copy of any Bottom Guarantee (including any amendment or modification thereof) promptly upon execution and delivery of the same to the lender under any Replacement Indebtedness.

(iii) If the Company incurs Replacement Indebtedness pursuant to clause (i) of this Section 2(d) and the New Member exercises its option to deliver one or more Bottom Guarantees pursuant to clause (ii) of this Section 2(d) for any amount up to the Guaranteed Loan Amount with respect to such Replacement Indebtedness, then during the Tax Protection Period the Company shall not:

(A) sell, exchange or further encumber or otherwise dispose of any Real Properties or Successor Properties securing the any such Replacement Indebtedness therefore (herein, a “ Collateral Change Transaction ”), if immediately following such Collateral Change Transaction the Loan-to-Value Ratio is greater than Seventy Percent (70%); provided, however, that nothing contained herein shall prohibit the Company upon the closing of any such Collateral Change Transaction from providing additional collateral of the Company so that the Loan-to-Value Ratio as of the date thereof is not greater than Seventy Percent (70%); or

(B) engage in any sale, financing, exchange or similar transaction involving any of the Properties (herein, a “ Capital Transaction ”) if immediately following such Capital Transaction the Equity Coverage is less than the Minimum Equity.

The Managing Member shall give the New Member written notice of any proposed Collateral Change Transaction and/or any proposed Capital Transaction not less than forty-five (45) days prior to the closing thereof, together with such financial or other information concerning such transaction as the New Member shall reasonably request, and a written statement that in the opinion of the Managing Member (1) in connection with any Collateral Change Transaction, the Loan-to-Value Ratio immediately following such Collateral Change Transaction shall not be greater than Seventy Percent (70%), and (2) in connection with any Capital Transaction, the Company’s Equity Coverage immediately following such Capital Transaction shall not be less

than the Minimum Equity. If the New Member reasonably disagrees with the Managing Member’s opinion of such Equity Coverage, the New Member shall notify the Company and the Managing Member thereof within ten (10) days after the New Member’s receipt of such notice and opinion, and for a period of ten (10) days thereafter the parties shall in good faith attempt to agree upon the same. If the parties are unable to so agree, then either the New Member or the Managing Member may at anytime thereafter submit the matter to binding appraisal as provided in clause (iv) of this Section 2(d).

If (x) the Managing Member notifies the New Member that the Loan-to-Value immediately following any Collateral Change Transaction shall be greater than Seventy Percent (70%), or (y) the Managing Member notifies the New Member that the Equity Coverage immediately following a Capital Transaction shall be less than the Minimum Equity or the same is determined by the agreement of the parties or pursuant to the appraisal procedures specified in clause (iv) of this Section 2(d), then in the event of either (x) or (y), New Member may at anytime thereafter give the Company and the Managing Member sixty (60) days written notice of its intent to cancel and terminate its Bottom Guarantee. If the Company fails within such sixty (60) day period to (aa) in the case of a Collateral Change Transaction, reduce the Loan-to-Value Ratio to Seventy Percent (70%) or less or (bb) in the case of a Capital Transaction, achieve an Equity Coverage not less than the Minimum Equity, then the New Member shall be entitled to cancel and terminate the Bottom Guarantee by a second written notice to the Managing Member and the Company at anytime after such sixty (60) day period and prior to the Company’s satisfaction of the requirements in either subclause (aa) or subclause (bb), as applicable. If the New Member is entitled to and so cancels and terminates such Bottom Guarantee pursuant to the provisions of this clause (iii), the effective date of cancellation and termination thereof shall be referred to herein, as a “ Company Caused Bottom Guarantee Termination. ”

(iv) If it becomes necessary to determine the Equity Coverage by binding appraisal as a result of a Capital Transaction as provided in clause (iii) of this Section 2(d), the same shall be determined by an independent appraisal firm, in which one or more of the members, officers or principals of such firm are Members of the Appraisal Institute (or any successor organization thereto), as may be reasonably selected by the Managing Member (the “ Appraiser ”). In such event, the Managing Member shall cause such Appraiser to determine the Equity Coverage as of the relevant date and the determination of such Appraiser shall be final and binding upon the parties. A written report of such Appraiser shall be delivered and addressed to each of the Company, the Managing Member and the New Member. This provision for determination by appraisal shall be specifically enforceable to the extent such remedy is available under applicable law, and any determination hereunder shall be final and binding upon the parties. The Managing Member and the New Member shall each pay one-half of the fees and expenses of the Appraiser and one-half of all other costs and expenses incurred in connection with such appraisal.

(v) Notwithstanding anything to the contrary in the Operating Agreement, as hereby amended, in addition to the provisions of Sections 7.3.E. and 7.3.F. of the Original Agreement, each of the following shall be deemed for all purposes of the Operating Agreement as a “ Triggering Event ” with respect to the New Member (but not with respect to any other Non-Managing Member) and entitle the New Member to receive a “ Make Whole

Payment ” pursuant and subject to the provisions of Sections 7.3.G. and 7.3.H. of the Original Agreement, unless the New Member consents to the following in writing, which consent shall expressly state that the right to the Make Whole Payment is being waived:

(A) the failure of the Company at anytime during the Tax Protection Period applicable to the New Member to keep in place the Existing Indebtedness or any permitted Replacement Indebtedness therefore;

(B) a Company Caused Bottom Guarantee Termination; provided, however, that any other cancellation or termination of a Bottom Guarantee by the New Member, the failure of any Bottom Guarantee to achieve the New Member’s objectives, and/or the failure of the New Member to avail itself of the opportunity to execute and deliver a Bottom Guarantee as provided herein shall not be deemed a “Triggering Event” with respect to the New Member;

(C) prior to the payment in full of any Existing Indebtedness, any change in the allocation of excess non-recourse liabilities, with respect to such Existing Indebtedness, from the allocation provided in clause (ii) of Section 2(c) hereof; or

(D) the failure of the Company at any time during the Tax Protection Period to hold the ownership interests in the Denver Properties (or any Successor Properties) either directly or through Subsidiaries whose separate existence from the Company is disregarded for federal income tax purposes.

(vi) As used in this Amendment, “ Loan-to-Value Ratio ” shall mean the ratio, as of the date of any incurrence of Replacement Indebtedness (or any refinance of Replacement Indebtedness with other Replacement Indebtedness) or any Collateral Change Transaction in accordance with the provisions of this Section 2(d), in which the numerator is equal to the outstanding principal balance of all Debt, including any Replacement Indebtedness, secured by the Real Properties (or any Successor Properties) serving as collateral for the Replacement Indebtedness and the denominator is equal to the fair market value of such Real Properties (or any Successor Properties), as reasonably and in good faith determined by the Managing Member.

(e) Redemption Rights . With respect to the New Member and the Non-Managing Member Units issued to the New Member on the Effective Date hereof, the Redemption Right provided for in Section 8.6 of the Original Agreement shall not be exercisable until the first anniversary of the Effective Date hereof and the phrase “ending on the ninth anniversary of the Effective Date” as provided therein shall have no application with respect to the New Member or its Non-Managing Member Units.

3. The provisions of this Amendment relating to the New Member (including, without limitation, Sections 2(c) and (d) hereof) shall not be amended or modified without the written consent of the New Member.

4. Except as expressly amended hereby, the Operating Agreement remains in full force and effect in accordance with its terms.

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date first written above.

MANAGING MEMBER:	HEALTH CARE PROPERTY INVESTORS, INC., a Maryland corporation


	By:	/s/ Talya Nevo-Hacohen
	Name:	Talya Nevo-Hacohen
	Title:	Senior Vive President

NEW MEMBER:	/s/ A. Daniel Weyland
	A. Daniel Weyland

EXHIBIT A

NEW CAPITAL CONTRIBUTIONS

Non-Managing Members

Non-Managing Member Name and Address	New Capital Contribution		Number of Non-Managing Member Units
A. Daniel Weyland 601 East Hampden Avenue Suite 590 Englewood, Colorado 80113	$	10,983,403.62	214,872.13

Managing Member

Managing Member
Name and Address

Capital Contribution

Gross Asset Value of
Capital Contribution

Number of
Managing
Member Units

Health Care Property Investors, Inc.
3760 Kilroy Airport Way
Suite 300
Long Beach, California 90806

Attention: Edward J. Henning, Esq.
Telephone No.: (562) 733-5100
Facsimile No.: (562) 733-5200

New Cash Contribution

15,297,220.28

299,264.81

EXHIBIT B

INITIAL VALUES OF CONTRIBUTED
DENVER PROPERTY INTERESTS

Real Property	Initial Value		Type of Transfer
601 East Hampden Avenue Englewood, Colorado	$	1,325,722.03	Equity – 50% undivided tenant-in-common interest

701 East Hampden Avenue Englewood, Colorado	$	1,821,625.27	Equity – 50% undivided tenant-in-common interest

799 East Hampden Avenue Englewood, Colorado	$	1,845,772.27	Equity – 50% undivided tenant-in-common interest

499 East Hampden Avenue Englewood, Colorado	$	1,891,789.61	Equity – 50% undivided tenant-in-common interest

6169 South Balsam Way Littleton, Colorado	$	1,257,419.80	Equity – 53.25% undivided tenant-in-common interest

6179 South Balsam Way Littleton, Colorado	$	2,725,082.32	Equity – Fee Title

26659 Pleasant Park Road Conifer, Colorado	$	115,992.32	Equity – 50% undivided tenant-in-common interest

EXHIBIT C

FORM OF BOTTOM DOLLAR GUARANTEE

Schedule 2(d)

EXISTING INDEBTEDNESS

Property		Existing Indebtedness
601 East Hampden Avenue Englewood, Colorado		Loan made by Heller Financial, Inc. in the original principal sum of $6,640,000.00, which loan is secured by a lien on the Property.

799 East Hampden Avenue Englewood, Colorado		Loan made by Allstate Life Insurance Company in the original principal sum of $6,350,000.00, which loan is secured by a lien on the Property.

499 East Hampden Avenue Englewood, Colorado		Loan made by Allstate Life Insurance Company in the original principal sum of $6,000,000.00, which loan is secured by a lien on the Property.

6169 South Balsam Way Littleton, Colorado		Loan made by Ameriprise Certificate Company in the original principal sum of $3,300,000.00, which loan is secured by a lien on the Property.

6179 South Balsam Way Littleton, Colorado		Loan made by Ameriprise Certificate Company in the original principal sum of $3,700,000.00, which loan is secured by a lien on the Property.

26659 Pleasant Park Road Conifer, Colorado		Loan made by Ameriprise Certificate Company in the original principal sum of $1,050,000.00, which loan is secured by a lien on the Property.

EXHIBIT 10.29

RESTRICTED STOCK UNIT AGREEMENT

James F. Flaherty III, Grantee:

As of the 26th day of October 2005 (the “ Grant Date ”), Health Care Property Investors, Inc., a Maryland corporation (the “ Company ”), pursuant to the Health Care Property Investors, Inc. 2000 Stock Incentive Plan, as amended and/or restated from time to time (the “ Plan ”), has granted to you, the Grantee named above, 58,500 restricted stock units (the “ Units ”) with respect to 58,500shares of Common Stock on the terms and conditions set forth in this Restricted Stock Unit Agreement (this “ Agreement ”) and the Plan. The Units are subject to adjustment as provided in Section 11(a) of the Plan. Capitalized terms not defined herein shall have the meanings assigned to such terms in the Plan. The Compensation Committee (the “ Committee ”) of the Board of Directors of the Company (the “ Board ”) is the administrator of the Plan for purposes of your Units.

I. Vesting .

(a) Vesting of Units . Subject to the terms and conditions of this Agreement, your Units shall vest in accordance with the following schedule, subject to your continuous service to the Company until the applicable vesting date. (Vesting amounts pursuant to the following schedule are cumulative.)

Tranche	Percentage of Units that Vest	Vesting Date
1	20%	13 Months After the Grant Date

2	20%	2nd Anniversary of Grant Date

3	20%	3rd Anniversary of Grant Date

4	20%	4th Anniversary of Grant Date

5	20%	5th Anniversary of Grant Date

The vesting schedule requires continued employment through each applicable Vesting Date as a condition to vesting of the applicable Tranche and the corresponding rights and benefits under this Agreement. Unless otherwise expressly provided herein with respect to accelerated vesting of the Units under certain circumstances, employment for only a portion of a vesting period, even if a substantial portion, will not entitle you to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment as provided in this Agreement.

(b) Acceleration on Certain Terminations . If at any time prior to the date your Units become fully vested in accordance with Section 1(a), your employment with the Company is terminated as a result of (i) your death or Disability), (ii) a Termination Other Than For Cause (iii) a Termination For Good Reason, or (iv) a Termination Upon a Change in Control (including a Covered Resignation), your Units (to the extent then outstanding and otherwise unvested) shall fully vest immediately upon such termination of employment. For purposes of this Agreement, the terms “ Covered Resignation ,” “ Disability ,” “ Termination Other Than For Cause ,” “ Termination For Good Reason ,” and “ Termination Upon a Change in Control ” shall have the meanings ascribed to such terms in your Employment Agreement with the Company dated October 26, 2005 (the “ Employment Agreement ”). Such meanings shall continue to apply for purposes of this Agreement notwithstanding any termination of the “ Employment Period ” (as such term is defined in the Employment Agreement) in accordance with the Employment Agreement.

(c) No Acceleration or Vesting Upon Other Terminations . Except as otherwise provided in the Plan, if at any time your employment with the Company is terminated (i) by the Company, or (ii) by you, under any circumstances (other than as a result of your death or Disability, a Termination Other Than For Cause, a Termination For Good Reason, or a Termination Upon a Change in Control, including a Covered Resignation), any of your Units that remain outstanding and otherwise unvested at the time of such termination of employment shall be automatically forfeited and cancelled in full, effective as of such termination of employment.

(d) Employment Termination Date . If the Employment Period is in effect, the date of your termination of employment for purposes of this Agreement shall be no earlier than the “ Date of Termination ,” as such term is defined in the Employment Agreement.

II. Timing and Form of Payment .

(a) Distribution Date . Unless you elect otherwise not more than thirty (30) days after the Grant Date, the distribution date (the “Distribution Date”) for your Units that become vested pursuant to this Agreement will be the date that such Units vest. Distribution of your vested Units will be made by the Company in shares of Common Stock (on a one-to-one basis) on or as soon as practicable after the Distribution Date with respect to such vested Units. You will only receive distributions in respect of your vested Units and will have no right to distribution of your unvested Units unless and until such Units vest. Once a vested Unit has been paid pursuant to this Agreement, you will have no further rights with respect to that Unit. You may, however, elect (a “ Distribution Election ”) to (A) defer your Distribution Date with respect to some or all of your vested Units and/or (B) have your vested Units distributed to you in annual installments as provided in Section II(b), provided that such election complies with this Section II. You may change your Distribution Election with respect to each Tranche (set forth in Section I(a) above) up to three times without the approval of the Committee, provided such Distribution Election is made in a timely manner. Any Distribution Elections with respect to a Tranche in addition to the three provided in the preceding sentence may only be made with the approval of the Committee, in its sole discretion. In order for a Distribution Election to be valid, it must be made at least one year prior to the then-existing Distribution Date with respect to the Units subject to such Distribution Election, the new Distribution Date must be at least five years after the then-existing Distribution Date with respect to such Units, and the election must otherwise be

consistent with Section 409A of the Code. Your Distribution Date with respect to any portion of your Units may not be prior to the Vesting Date for such Units. Distribution Elections may only be made by delivering a written election to the Company care of its General Counsel in the form attached as Exhibit A hereto.

(b) Form of Distribution . Unless you elect otherwise, distribution of your vested Units with respect to any Tranche will be made in a lump sum on or as soon as practicable after your Distribution Date. You may, however, elect to have vested Units with respect to any Tranche distributed in the form of two or more annual installments over a fixed number of years, provided that each installment payment must be for a minimum of 1,000 shares of Common Stock. If you elect to have some or all of your vested Units underlying a Tranche distributed in annual installments, the first installment will be paid on or as soon as practicable after the Distribution Date with respect to such Tranche and subsequent installments will be paid on or as soon as practicable after each of the anniversaries of the Distribution Date with respect to such Tranche during your elected installment period. You may change an election you make pursuant to this Section II(b) (or you may make an initial election in the event that you did not elect a form of payment at the time of your award and, accordingly, your Units were subject to the lump sum default payment rule) by filing a new written election with the Committee; provided that you must also elect a later Distribution Date pursuant to Section II(a) as to any Units that are subject to such election and in no event may such an election result in an acceleration of distributions within the meaning of Section 409A of the Code. Distribution Elections may only be made by delivering a written election to the Company care of its General Counsel in the form attached as Exhibit A hereto.

(c) Hardship Distribution . If you experience an Unforeseeable Emergency (as defined below) you may elect to receive immediate distribution of some or all or your vested Units upon such Unforeseeable Emergency. Distribution upon an Unforeseeable Emergency shall be made no later than thirty (30) days following written notice to the Company care of its General Counsel of the Unforeseeable Emergency. For purposes of this Agreement, an “Unforeseeable Emergency” shall mean a severe financial hardship resulting from (i) an illness or accident of you, your spouse, or your dependent (as defined in Section 152(a) of the Code), (ii) loss of your property due to casualty, or (iii) any other similar extraordinary and unforeseeable circumstances arising as a result of events beyond your control, all as reasonably determined by the Committee in good faith. No distribution shall be made in respect of an Unforeseeable Emergency to the extent that such Unforeseeable Emergency is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of your assets (to the extent the liquidation of such assets would not cause severe financial hardship). Any distribution of your vested Units as a result of an Unforeseeable Emergency shall be limited to the amount reasonably necessary to relieve the Unforeseeable Emergency (which may include amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the distribution).

III. Dividend Equivalent Rights . During such time as each Unit remains outstanding and prior to the distribution of such Unit in accordance with Section II, you will have the right to receive, in cash, with respect to such Unit, the amount of any cash dividend paid on a share of Common Stock (a “ Dividend Equivalent Right ”). You will have a Dividend Equivalent Right with respect to each Unit that is outstanding on the record date of such dividend. Dividend

Equivalent Rights will be paid to you at the same time or within 30 days after dividends are paid to stockholders of the Company. Dividend Equivalent Rights will not be paid to you with respect to any Units that are forfeited pursuant to Section I(c), effective as of the date such Units are forfeited. You will have no Dividend Equivalent Rights as of the record date of any cash dividend in respect of any Units that have been paid in Common Stock; provided that you are the record holder of such Common Stock on or before such record date.

IV. Transferability . No benefit payable under, or interest in, the Units or this Agreement shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge and any such attempted action shall be void and no such benefit or interest shall be, in any manner, liable for, or subject to, your or your beneficiary’s debts, contracts, liabilities or torts; provided, however, nothing in this Section IV shall prevent transfers of your Units to the Company or by will or applicable laws of descent and distribution. You may designate a beneficiary to receive distribution of your vested Units upon your death by submitting a written beneficiary designation to the Committee in the form attached hereto as Exhibit A . You may revoke a beneficiary designation by submitting a new beneficiary designation.

V. Withholding . You will be required to pay in cash or deduction from other compensation payable to you by the Company any sums required by federal, state or local tax law to be withheld with respect to the issuance, vesting or payment of Units and the payment of Dividend Equivalent Rights. At your election and in satisfaction of the foregoing requirement, the Company will withhold shares of Common Stock underlying the Units and otherwise issuable in accordance with Section II hereof, in the manner prescribed by, and subject to the limitations of, Section 12 of the Plan, in satisfaction of such withholding obligations.

VI. No Contract for Employment . This Agreement is not an employment or service contract and nothing in this Agreement shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ or service of the Company, or of the Company to continue your employment or service with the Company.

VII. Notices . Any notices provided for in this Agreement or the Plan, including a Distribution Election, shall be given in writing and shall be deemed effectively given upon receipt if delivered by hand or, in the case of notices delivered by United States mail, five (5) days after deposit in the United States mail, postage prepaid, addressed, as applicable, to the Company or if to you, at such address as is currently maintained in the Company’s records or at such other address as you hereafter designate by written notice to the Company.

VIII. Plan . The provisions of the Plan are hereby made a part of this Agreement. In the event of any conflict between the provisions of this Agreement and those of the Plan, the provisions of this Agreement shall control.

IX. Entire Agreement . This Agreement, together with the Employment Agreement, contains the entire understanding of the parties in respect of the Units and supersedes upon its effectiveness all other prior agreements and understandings between the parties with respect to the Units. In the event of any discrepancy between this Agreement and the Employment Agreement, the Employment Agreement shall control.

X. Amendment . This Agreement may be amended by the Committee; provided, however that no such amendment shall, without your prior written consent, alter, terminate, impair or adversely affect your rights under this Agreement.

XI. Governing Law . This Agreement shall be construed and interpreted, and the rights of the parties shall be determined, in accordance with the laws of the State of California, without regard to conflicts of law provisions thereof.

XII. Tax Consequences . You may be subject to adverse tax consequences as a result of the issuance, vesting and/or distribution of your Units. YOU ARE ENCOURAGED TO CONSULT A TAX ADVISOR AS TO THE TAX CONSEQUENCES OF YOUR UNITS AND SUBSEQUENT DISTRIBUTION OF COMMON STOCK.

XIII. Construction . To the extent that this Agreement is subject to Section 409A of the Code, you and the Company agree to cooperate and work together in good faith to timely amend this Agreement to comply with Section 409A of the Code. In the event that you and the Company do not agree as to the necessity, timing or nature of a particular amendment intended to satisfy Section 409A of the Code, reasonable deference will be given to your reasonable interpretation of such provisions.

[Remainder of page intentionally left blank]

		Very truly yours,

		HEALTH CARE PROPERTY INVESTORS, INC.


		By:	/s/	Edward J. Henning
		Name:		Edward J. Henning
		Title:		Senior Vice President, General Counsel and
				Corporate Secretary

Accepted and Agreed,
effective as of the date first written above.


By:	/s/ James F. Flaherty III
Name: James F. Flaherty III

EXHIBIT A

HEALTH CARE PROPERTY INVESTORS, INC.
2000 STOCK INCENTIVE PLAN

RESTRICTED STOCK UNITS
DISTRIBUTION ELECTION AND BENEFICIARY DESIGNATION FORM

Name: James F. Flaherty III

Social Security No.:

In connection with your award of Restricted Stock Units on October 26, 2005 under the Health Care Property Investors, Inc. 2000 Stock Incentive Plan, as amended and/or restated from time to time (the “Plan”), you have the option of selecting the timing and form of payment of the shares of Common Stock underlying your vested Units.

Please complete this election form and return it to Edward J. Henning, the Company’s General Counsel and Corporate Secretary.

Deferral of Distribution Date

Unless you elect otherwise, the Distribution Date for your Units that vest will be the vesting date of such Units. You may elect a new Distribution Date with respect to some or all of the Tranches by completing the deferral election grid below. Please note that, subject to the restrictions set forth below and in the Agreement, your new Distribution Date with respect to a Tranche can take any of the following forms:

• You may elect a date certain for your Distribution Date (e.g., January 1, 2010),

• You may elect that your Distribution Date will be the date of your death or termination of employment, or

• You may elect a Distribution Date that is the earlier of two dates/events (e.g., the earlier of January 1, 2010, or termination of your employment).

If you do not elect a Distribution Date by the date that is 30 days after the Grant Date, you will be deemed to have elected distribution of your vested Units on or as soon as administratively practical after the applicable vesting date of your Units. If, after the date that is 30 days after the Grant Date, you want to change the Distribution Date with respect to any of your vested Units, your new election must be made at least one year prior to the then-existing Distribution Date, the new Distribution Date you elect must be at least five years after the then-existing Distribution Date, and the change must otherwise satisfy Section 409A of the Code. If your election to defer your Distribution Date is not timely, it will not be valid.

You acknowledge and understand that by electing a new Distribution Date with respect to one or more of the Tranches, you are hereby revoking the then-existing Distribution Date with respect to such Tranche(s). You further acknowledge and agree that the distribution

A-1

of the shares of Common Stock underlying your Units may coincide with a period during which you are prohibited from selling, disposing or otherwise transferring such shares pursuant to the Company’s Insider Trading Policy, or by law, and therefore, you may not be able to sell, dispose or otherwise transfer such shares to pay any sums required by federal, state or local tax law to be withheld with respect to the issuance of such shares.

Tranche	Vesting Date	Distribution Date *
1	13 Months After the Grant Date

2	2 ^nd Anniversary of Grant Date

3	3 ^rd Anniversary of Grant Date

4	4 ^th Anniversary of Grant Date

5	5 ^th Anniversary of Grant Date

* Specify “Vesting Date” if you desire payment of the vested Units on or as soon as administratively practical after the vesting date of the Units. Otherwise, indicate the Distribution Date you elect. In all events your election is subject to the rules stated above (including, without limitation, the 5-year deferral requirement set forth above if you are electing a change on or after the date that is 30 days after the Grant Date).

Form of Payment

Distribution of all of your vested Units underlying a Tranche will be made in shares of Common Stock in a lump sum on or as soon as practicable after the Distribution Date with respect to such Units. For example, all of your vested Units under Tranche 1 will be distributed to you on or as soon as practicable after the Vesting Date with respect to Tranche 1 (unless you elect a later Distribution Date as provided above). You may, however, elect at the time of your award to have vested Units with respect to any Tranche distributed in the form of two or more annual installments over a fixed number of years. For example, if you elect to have your vested Units underlying Tranche 1 distributed in five installments, your vested Units will be distributed to you in five equal payments on or as soon as practicable after the Distribution Date with respect to Tranche 1 and each of the first four anniversaries of the Distribution Date for Tranche 1.

If you elect to have any or all of your vested Units underlying a Tranche distributed in installments, you must elect a number of equal annual installments which will result in a distribution of at least 1,000 shares of Common Stock per installment with respect to such Tranche (otherwise, the number of installments you elected will be reduced by the Company to produce a distribution of at least 1,000 shares of Common Stock per installment). If you would like to change a form of distribution election you have made (or if you would like to make an initial form of distribution election in the event that you did not make such an election at the time of the award), your election must be made at least one year prior to the then-existing Distribution Date, and you must elect a new Distribution Date that is at least five years after the then-existing Distribution Date. If your election to defer your Distribution Date is not timely, it will not be valid. Furthermore, if you are

A-2

changing an existing form of distribution election, your election change cannot result in an acceleration (within the meaning of Section 409A of the Code) of payments, and your change must otherwise be consistent with Section 409A of the Code.

Tranche	Vesting Date	Number of Installments (Shares of Common Stock per Installment)
1	13 Months After the Grant Date	( )

2	2 ^nd Anniversary of Grant Date	( )

3	3 ^rd Anniversary of Grant Date	( )

4	4 ^th Anniversary of Grant Date	( )

5	5 ^th Anniversary of Grant Date	( )

Beneficiary Designation

I hereby designate the following individual as beneficiary to receive distribution of my vested Units, if any, in the event of my death. Distribution of such vested Units will be in the form, and on the Distribution Date(s), in effect with respect to such vested Units as of the date of my death.

Beneficiary Information

Name:

(Please print)

Last

First

Middle Initial

Sex:

Relationship to Participant:

Social Security No.:

Date of Birth:

Address:

City:

State:

Zip Code:

Please retain a copy of this Distribution Election Form for your records.

Signature: James F. Flaherty III

Date Signed

A-3

EXHIBIT 10.30

INDEMNIFICATION AGREEMENT

This INDEMNIFICATION AGREEMENT is made this day of , 2005 (“Agreement”), by and between HEALTH CARE PROPERTY INVESTORS, INC., a Maryland corporation (the “Company”), and (“Indemnitee”).

RECITALS

WHEREAS, at the request of the Company, the Indemnitee currently serves as a [director/officer] of the Company and renders valuable services to the Company; and

WHEREAS, the Company desires to attract and retain the services of highly qualified individuals, such as Indemnitee, to serve as directors and officers of the Company and its related entities; and

WHEREAS, both the Company and the Indemnitee recognize the increased legal risks and potential liabilities to which directors and officers of corporations are subject in connection with their positions and that liability insurance for directors and officers and statutory indemnification provisions may be inadequate to provide proper protection to individuals requested to serve as directors and officers of the Company; and

WHEREAS, in order to induce Indemnitee to continue to provide services to the Company as an officer and/or director, the Company desires to provide for the indemnification of, and the advancement of expenses to, Indemnitee as set forth in this Agreement.

NOW THEREFORE, in consideration of the foregoing premises, the covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Indemnitee do hereby agree as follows:

1. Certain Definitions . For purposes of this Agreement the following terms should have the following meanings:

(a) “Board of Directors” means the Board of Directors of the Company.

(b) “Bylaws” mean the bylaws of the Company, as the same may be amended from time to time.

(c) “Change in Control” shall be deemed to have occurred if (i) any “person” (as that term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of

the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifteen percent (15%) or more of the total voting power represented by the Company’s then outstanding voting securities, or (ii) during any period of two consecutive years, individuals who at the beginning of the two year period constitute the Board of Directors of the Company and any new director whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board of Directors, or (iii) there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter.

(d) “Charter” means the corporate charter of the Corporation, as the same may be amended from time to time.

(e) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification or advance of Expenses is sought by Indemnitee.

(f) “Expenses” shall mean any and all expenses, including, without limitation, reasonable attorneys fees, disbursements and retainers, accounting and witness fees, travel and deposition costs, transcript costs, fees of experts, expenses of investigations and court costs, customarily incurred in connection with investigating, prosecuting, defending, being a witness in or participating in (including on appeal), or preparing to prosecute or defend, to be a witness or other participant, in a Proceeding.

(g) “Indemnifiable Event” shall mean any actual or asserted event or occurrence related to the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Company, or is or was serving at the request of the Company as a director, officer, partner, employee, trustee, manager, member, agent or fiduciary of another corporation, partnership, limited liability company, association, joint venture, trust, employee benefit plan or other entity or enterprise, or by reason of any action or inaction on the part of Indemnitee while serving in such capacity.

(h) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. If a Change of Control has not occurred, Independent Counsel shall be selected by the Board of Directors, with the approval of Indemnitee, which

approval will not be unreasonably withheld. If a Change of Control has occurred, Independent Counsel shall be selected by Indemnitee, with the approval of the Board of Directors, which approval will not be unreasonably withheld, and by such approval, the Board of Directors shall be deemed to have joined in such selection.

(i) “Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding (including any appeals in any of the foregoing), whether civil, criminal, administrative or investigative, except one initiated by an Indemnitee pursuant to Section 6 of this Agreement to enforce Indemnitee’s rights under this Agreement.

2. Indemnification .

2.1 Indemnification with Respect to Proceedings Other Than Proceedings by or in the Right of the Company . In the event that Indemnitee was, is or becomes a party to or witness or other participant in, or is threatened to be made a party to, or witness or other participant in, any Proceeding (other than a Proceeding by or in the right of the Company) by reason of (or arising in whole or in part from) an Indemnifiable Event, the Company shall indemnify the Indemnitee, to the fullest extent permitted by applicable law, from and against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee, or on behalf of Indemnitee, in connection with such Proceeding, provided that, in the case of amounts paid in settlement, any settlement of such Proceeding is approved in advance by the Company in writing, which approval shall not be unreasonably withheld, delayed or applied in an inconsistent manner.

2.2 Indemnification with Respect to Proceedings by or in the Right of the Company . In the event that Indemnitee was, is or becomes a party to, or witness or other participant in, any Proceeding brought by or in the right of the Company to procure a judgment in favor of the Company by reason of (or arising in whole or in part from) an Indemnifiable Event, the Company shall indemnify Indemnitee, to the fullest extent permitted by applicable law, from and against all Expenses and amounts paid in settlement actually and reasonably incurred by Indemnitee, or on behalf of Indemnitee, in connection with such Proceeding.

2.3 Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some portion of the Expenses, judgments, penalties, fines and amounts paid in settlement of a Proceeding which Indemnitee was, is or becomes a party to, or witness or other participant in, or is threatened to be made a party to, or witness or other participant in, by reason of an Indemnifiable Event, but not, however, for all of the total amount of such Expenses, judgments, fines, penalties and amounts paid in settlement, the Company will nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

2.4 Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of an Indemnifiable Event, made a party to and is successful, on the merits or otherwise, in the defense of, any Proceeding, Indemnitee shall be indemnified against

all Expenses actually and reasonably incurred by Indemnitee, or on behalf of Indemnitee, in connection therewith. Without limiting any other rights of Indemnitee in this Agreement, if Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

3. Advance of Expenses . The Company shall advance all Expenses reasonably incurred by or on behalf of Indemnitee in connection with any Proceeding to which Indemnitee is, or is threatened to be made, a party or with respect to which Indemnitee is, or is threatened to be made, a witness or other participant, by reason of (or arising in whole or in part from) an Indemnifiable Event, prior to final disposition of such Proceeding, to the fullest extent permitted by applicable law and without requiring a preliminary determination as to Indemnitee’s ultimate entitlement to indemnification, within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and, if required by applicable law, shall include or be preceded or accompanied by (a) a written affirmation by the Indemnitee of the Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and (b) a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that such standard of conduct has not been met. Any advances to, and undertakings to repay by, Indemnitee pursuant to this Section 3 shall be unsecured and shall not bear interest.

4. Procedure for Determination of Entitlement to Indemnification .

4.1 Request for Indemnification . To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. Promptly upon receipt of such a request for indemnification, the Company shall cause its Board of Directors to be so advised in writing that Indemnitee has requested indemnification.

4.2 Determination of Right to Indemnification . Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 4.1 hereof, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors, or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a

written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or expenses (including reasonable attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person making such determination, in response to a request by such person, shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification).

5. Presumptions and Effect of Certain Proceedings .

(a) In making a determination with respect to entitlement to indemnification hereunder, (i) the person making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 4.1 of this Agreement, and (ii) the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.

(b) The termination of any proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that the Indemnitee did not meet the requisite standard of conduct required under applicable law for indemnification.

6. Remedies of Indemnitee .

(a) In the event that (i) a determination is made pursuant to Section 4.2 that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 3, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 4.2 within sixty days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 2.4 within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Maryland, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advancement of Expenses. Neither the failure of the Board of Directors or a committee thereof, or the stockholders of the Company, or Independent Counsel to have made a determination pursuant to Section 4.2 that Indemnitee is entitled to indemnification, nor an actual determination by the Board of Directors or a committee thereof, or the stockholders, of the Company, or Independent Counsel, that Indemnitee is not entitled to indemnification shall be a defense to any judicial adjudication sought by Indemnitee or create a presumption that the Indemnitee is not entitled to indemnification or advancement of Expenses.

(b) In any judicial proceeding commenced pursuant to this Section 6, the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

(c) If a determination shall have been made pursuant to Section 4.2 of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 6, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(d) In the event that Indemnitee, pursuant to this Section 6, seeks a judicial adjudication to establish or enforce Indemnitee’s rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any and all expenses (of the types described in the definition of Expenses in Section 1) actually and reasonably incurred by Indemnitee in connection with such judicial adjudication, regardless of the outcome of such judicial adjudication unless the court in such judicial adjudication determines that the material assertions made by Indemnitee in such judicial adjudication were not made in good faith or were frivolous.

7. Indemnification Hereunder Not Exclusive . The indemnification provided by this Agreement shall not be deemed exclusive of, and shall be in addition to, any indemnification or other rights to which the Indemnitee may be entitled under the Charter, the Bylaws, any vote of stockholders or Disinterested Directors, applicable law, or otherwise, both as to action in his official capacity and as to action in another capacity on behalf of the Company while holding office; provided, however, that to the extent that the Indemnitee otherwise would have any greater right to indemnification under any provision of the Charter or Bylaws as in effect on the date hereof, the Indemnitee shall be deemed to have such greater right hereunder; and provided, further, that to the extent that any change is made to the Charter and/or Bylaws which permits any greater right to indemnification than that provided under this Agreement, the Indemnitee shall be entitled to have such greater right. No modification or amendment of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any Indemnifiable Event prior to such modification or amendment.

8. Liability Insurance . To the extent that the Company maintains liability insurance for directors, officers, employees, or agents of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies.

9. Subrogation . In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the related rights of recovery of Indemnitee against other person or entities, and Indemnitee shall execute all papers required and

take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

10. No Duplication of Payment . The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received payment of such amount under any insurance policy, contract, agreement, any provision of the Charter or Bylaws, or otherwise.

11. Exclusions . Notwithstanding any other provision of this Agreement to the contrary, the Company shall not be liable for, and the Indemnitee shall not be entitled to, indemnification or advance of Expenses under this Agreement with respect to: (i) any settlement or judgment for insider trading or for disgorgement of profits pursuant to Section 16(b) of the Securities Exchange Act of 1934; or (ii) any Proceeding initiated or brought by Indemnitee, and not by way of defense (other than an action or proceeding under Section 6 of this Agreement), unless the bringing of such Proceeding has been approved by the Board of Directors.

12. Duration of Agreement . This Agreement shall continue until and terminate ten years after the date that Indemnitee shall have ceased to serve as a director, officer, employee, or agent of the Company or of any other corporation, partnership, limited liability company, association, joint venture, trust, employee benefit plan or other enterprise which Indemnitee served at the request of the Company; provided , that the rights of Indemnitee hereunder shall continue until the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 6 relating thereto.

13. Successors and Assigns . This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators.

14. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (i) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (ii) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

15. Counterparts . This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

16. Headings . The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

17. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

18. Notice by Indemnitee; Company Participation.

(a) Indemnitee shall promptly notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advance of Expenses covered hereunder.

(b) With respect to any Proceeding which may be subject to indemnification or advance of Expenses under this Agreement, unless Indemnitee waives its indemnification rights under this Agreement with respect to such Proceeding, the Company will be entitled to participate in the Proceeding at its own expense and, except as otherwise provided below, if it so elects, the Company may assume the defense of the Proceeding, with counsel satisfactory to the Indemnitee. After notice from the Company to the Indemnitee of its election to assume the defense of a Proceeding, during the Company’s good faith active defense, the Company will not be liable to the Indemnitee under this Agreement for any Expenses subsequently incurred by the Indemnitee in connection with the defense of the Proceeding, other than reasonable costs of investigation or as otherwise provided below. The Company shall not settle any such Proceeding in any manner which would impose any penalty or limitation on the Indemnitee without the Indemnitee’s written consent. The Indemnitee shall have the right to employ separate counsel in any such Proceeding, but the fees the expenses of such counsel incurred after notice from the Company of its assumption of the defense of the Proceeding shall be at the expense of the Indemnitee, unless (i) the employment of counsel by Indemnitee has been authorized by the Company, (ii) the Indemnitee shall have reasonably concluded that there may be conflict of interest between the Company and the Indemnitee in the conduct of the defense of the Proceeding, or (iii) the Company shall not in fact have employed counsel to assume the defense of a Proceeding, in each of which cases the fees and expenses of Indemnitee’s counsel shall be Expenses for which Indemnitee may receive indemnification or advances under this Agreement. The Company shall not be entitled to assume the defense of any Proceeding bought by or on behalf of the Company or as to which the Indemnitee has reasonably concluded there may be a conflict of interest between the Company and the Indemnitee.

19. Notices . All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given when hand-delivered or dispatched by electronic facsimile transmission (with receipt thereof orally confirmed) or three calendar days after having been mailed by United States registered or certified mail, return

receipt requested, postage prepaid or one business day after having been sent for next day delivery by a nationally recognized courier service, addressed as follows:

(a) If to Indemnitee, to:

(b) If to the Company to:

Health Care Property Investors, Inc.

3760 Kilroy Airport Way

Suite 300

Long Beach, California 90806

Attn: Legal Department

or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

20. Governing Law . This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland.

21. Entire Agreement . This Agreement constitutes the entire understanding and agreement of the parties with respect to the subject matter hereof and supersedes all prior written or oral negotiations, understandings or agreements between the parties with respect to the subject matter hereof; provided however that this Agreement is not intended to, and does not, supersede any indemnification or other rights to which the Indemnitee may be entitled under the Charter, the Bylaws or applicable law, or pursuant to any employment agreement between Indemnitee and the Company.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.

	HEALTH CARE PROPERTY INVESTORS, INC.

	By:
		Name:
		Title:

	INDEMNITEE:


	Name:

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, James F. Flaherty III, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Health Care Property Investors, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: October 31, 2005	/s/ JAMES F. FLAHERTY III
	James F. Flaherty III
	Chairman and Chief Executive Officer (Principal Executive Officer)

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Mark A. Wallace, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Health Care Property Investors, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: October 31, 2005	/s/ MARK A. WALLACE
	Mark A. Wallace
	Senior Vice President and Chief Financial Officer (Principal Financial Officer)

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Health Care Property Investors, Inc., a Maryland corporation (the “Company”), hereby certifies, to his knowledge, that:

(i) the accompanying quarterly report on Form 10-Q of the Company for the period ended September 30, 2005 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: October 31, 2005	/s/ JAMES F. FLAHERTY III
	James F. Flaherty III
	Chairman and Chief Executive Officer (Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to Health Care Property Investors, Inc. and will be retained by Health Care Property Investors, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EXHIBIT 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

(ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: October 31, 2005	/s/ MARK A. WALLACE
	Mark A. Wallace
	Senior Vice President and Chief Financial Officer (Principal Financial Officer)

ARTICLE I. DEFINITIONS

ARTICLE II. REGISTRATION

ARTICLE III. REGISTRATION RIGHTS

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

(i) In connection with a disposition of the Registrable Securities in which there is a participating underwriter or underwriters, the Company will furnish to each Selling Holder and to each underwriter, a signed counterpart, addressed to such Selling Holder or

Section 3.3 Material Developments; Suspension of Offering.

Securities Act. Each Holder agrees to keep confidential the fact that the Company has exercised its rights under this Section 3.3 and all facts and circumstances relating to such exercise until such information is made public by the Company.

Section 3.8 Contribution.

ARTICLE IV. MISCELLANEOUS

(a) if to any Holder, to such Holder at the address set forth under such Holder’s name on the signature page hereto, or to such other address and to such other Persons as the Holders may hereafter notify the Company in writing; and

(b) if to the Company, to Health Care Property Investors, Inc., 3760 Kilroy Airport Way, Suite 300, Long Beach, California 90806 (Attention: Legal Department), or to such other address as the Company may hereafter specify in writing.

A. Corporation and Officer desire to enter into a new employment agreement upon the terms set forth in this Agreement; and

B. Corporation desires to continue to employ Officer as its Chief Executive Officer and President, and Officer is willing to accept such employment by Corporation, on the terms and subject to the conditions set forth in this Agreement.

2. Term of Employment .

(a) Definitions . For purposes of this Agreement the following terms shall have the following meanings:

(i) “ Termination For Cause ” shall mean termination by the Board of Officer’s employment with Corporation by reason of Officer’s: (A) willful and

(ii) “ Termination Other Than For Cause ” shall mean termination by Corporation of Officer’s employment hereunder other than (A) a Termination For Cause, (B) a termination due to Officer’s Disability, or (C) in circumstances where a Termination Upon a Change in Control is applicable.

(A) the assignment to Officer of any duties inconsistent with Officer’s duties pursuant to Section 1, the failure to elect or reelect Officer as Chief

(B) a change in the reporting structure such that Officer reports to someone other than the Board;

(C) Corporation’s reduction of Officer’s rate of Base Salary or Target Bonus as in effect on the Effective Date or as the same may be increased from time to time;

(iv) “ Covered Resignation ” shall mean a termination by Officer of Officer’s employment with Corporation by Officer providing a Notice of Termination within the thirty (30) day period following the first anniversary of the occurrence of a Change in Control.

(v) “ Voluntary Termination ” shall mean termination by Officer of Officer’s employment by Corporation other than (i) a Termination For Good Reason, (ii) a termination pursuant to a Covered Resignation, or (iii) a termination by reason of Officer’s death or Disability.

(vii) “ Change in Control ” shall be deemed to occur if:

(D) the stockholders of Corporation approve a plan of complete liquidation of Corporation or an agreement for the sale or disposition by Corporation of all or substantially all of Corporation’s business assets.

the Date of Termination shall not be more than ninety (90) days from the date such Notice of Termination is given).

(x) “ Accrued and Other Obligations ” shall mean:

(A) any Base Salary that had accrued, but had not been paid (including accrued and unpaid vacation time), as of the Date of Termination, which will be paid upon or promptly following the Date of Termination; and

(e) Termination by Death . Officer’s employment hereunder shall terminate upon Officer’s death.

3. Salary, Benefits and Bonus Compensation .

(b) Bonuses . Officer shall be eligible to receive a bonus for each year (or portion thereof) during the Employment Period and any extensions thereof, provided that,

(c) Additional Benefits . During the Employment Period, Officer shall be entitled to the following employee and fringe benefits:

(iv) Reimbursement for Expenses . During the Employment Period, Corporation shall reimburse Officer for reasonable and properly documented (in accordance with the Corporation’s policies as in effect from time to time) out-of-pocket business

(i) Corporation shall pay Officer, at the time specified in Section 4(e), a lump sum cash amount equal to Officer’s Target Bonus for the year in which the Date of Termination occurs, pro-rated based on the number of days in such year that had elapsed as of the Date of Termination.

ARTICLE I.
DEFINITIONS

ARTICLE II.
REGISTRATION

ARTICLE III.
REGISTRATION RIGHTS

ARTICLE IV.
MISCELLANEOUS