As outlined in separate letters submitted to Sunrise REIT and to HCPI on Feb. 20, 2007 (and filed with the SEC this week), the HCPI confidentiality and standstill agreement from the original competition contains provisions that prohibit HCPI from, among other actions, making any proposal to acquire any securities or all or any assets of Sunrise REIT, and remains in effect for a period of 18 months, ending in May 2008. Ventas also informed HCPI that it intends to avail itself of all of its rights in respect of HCPI's breaches of its confidentiality and standstill agreement.

Aside from the fact that it should be allowed because of the aforementioned prohibitions, Ventas says HCPI's bid is modeled after the binding agreement Ventas negotiated with Sunrise Inc. but "requires Sunrise Inc. to accede to certain provisions significantly less favorable to Sunrise Inc. than those to which Ventas agreed." HCPI has not yet responded to the statement.

Ventas signed its purchase agreement with Sunrise in January after an auction process conducted by independent trustees of Sunrise REIT. At the conclusion of the process, HCPI withdrew from the process and declined to submit a final binding proposal and the Sunrise board approved the Ventas transaction in January. HCPI then submitted a competing bid in mid-February.