EX-10.75.03
 
FOURTH AMENDMENT TO LOAN AGREEMENT
 
THIS FOURTH AMENDMENT TO LOAN AGREEMENT (this “Agreement”) is made as of
November 1, 2010 (the “Effective Date”) by and between EMERITUS CORPORATION, a
Washington corporation (“Borrower”), and NATIONWIDE HEALTH PROPERTIES, INC., a
Maryland corporation (“Lender”), with respect to the following:
 
RECITALS:
 
A. Borrower and Lender (as successor to Healthcare Realty Trust Incorporated, a
Maryland corporation (“HRT”)) are parties to that certain Second Amended and
Restated Loan Agreement dated as of March 3, 2005, as amended by that certain
Amendment to Loan Agreement dated as of August 6, 2007, that certain Second
Amendment to Loan Agreement dated as of March 3, 2008 and that certain Third
Amendment to Loan Agreement dated as of October 22, 2008 (the “Third Amendment”)
(as amended, the “Loan Agreement”), pursuant to the terms and conditions of
which a loan in the principal amount of Twenty-One Million Four Hundred
Twenty-Six Thousand Dollars ($21,426,000) is due from Borrower to Lender (the
“Loan”).  Unless otherwise defined herein, all initially-capitalized terms
herein shall have the same meanings given to such terms in the Loan Agreement.
 
B. The Loan is evidenced by that certain Second Amended and Restated Note dated
March 3, 2005, in the original principal amount of the Loan, executed by
Borrower in favor of HRT (the “Note”), which Note has been assigned from HRT to
Lender pursuant to that certain Allonge dated as of April 26, 2007.
 
C. Borrower has requested that Lender extend the Maturity Date of the Note and
modify certain other terms of the Loan.  Lender is willing to grant Borrower’s
request upon the terms and subject to the conditions set forth in this
Agreement.
 
NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual covenants
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Lender and
Borrower hereto agree as follows:
 
1. Modification to Loan Documents.  Subject to Section 2 below, the Loan
Documents shall be deemed amended as follows effective as of the Effective Date:
 
(a) The term “Maturity Date” as defined in Section 1 of the Note shall mean
March 31, 2017.
 
(b) Section 2(a) of the Note shall be deleted in its entirety and the following
substituted therefor:
 
“Interest shall accrue on the principal amount outstanding hereunder at the
following rates of interest:  (i) commencing on November 1, 2010 and continuing
through the expiration of the first (1st) Loan Year (as defined below), a per
annum rate equal to eight and one-half percent (8.50%), and (ii) commencing with
the second Loan Year and
 

 
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continuing on the commencement of each subsequent Loan Year thereafter, the
interest rate shall be increased to equal the applicable per annum rate for the
corresponding Loan Year as set forth in the following table:
 
Loan Year
Basic Interest Rate
2
8.65%
3
8.80%
4
8.95%
5
9.10%
6
9.25%
7
9.40%

As used herein, “Loan Year” shall mean the twelve (12) month period commencing
on November 1st of each year.”
 
(c) Section 5 of the Note, including, but not limited to, the last paragraph of
Section 5 of the Note that was added pursuant to Section 1(c) of the Third
Amendment, shall be deleted in its entirety and the following substituted
therefor:
 
“Provided that Borrower has provided Lender with not less than one hundred
eighty (180) nor more than two hundred forty (240) days’ prior written notice of
its election to prepay principal amounts outstanding under this Note, Borrower
shall have the right prepay the Loan, in whole or in part, together with all
accrued but unpaid interest and other sums owed to Lender hereunder, at any time
prior to the Maturity Date.”
 
(d) The term “Affiliate Obligation” as defined in Section 1.2 of the Loan
Agreement is hereby deleted in its entirety and the following substituted
therefor:
 
“Affiliate Obligation” means all indebtedness and obligations of Borrower and
any Affiliate of Borrower to Lender or any Affiliate of Lender now existing or
hereafter arising, including, without limitation, obligations arising under the
Lease Documents and the Existing HRT Leases, indebtedness evidenced by
promissory notes, lease agreements, guaranties or otherwise and obligations
under such indebtedness documents and all other documents executed by Borrower
or any Affiliate of Borrower in connection therewith, and any extensions,
modifications, substitutions or renewals thereof.  Without limiting the
generality of the foregoing, as used herein the term “Affiliate Obligation”
shall be deemed and construed to include: (a) the obligations of the tenant
under that certain Master Lease dated as of October 2, 2006 by and among Lender
and its Affiliates, as landlord, and Summerville at Camelot Place LLC, a
Delaware limited liability company, Summerville at Hillen Vale LLC, a Delaware
limited liability company, Summerville at Lakeview LLC, a Delaware limited
liability company, Summerville at Ridgewood Gardens LLC, a Delaware limited
liability company, Summerville at North Hills LLC, a Delaware limited liability
company, and The Inn at Medina LLC, a Delaware limited liability company,
collectively, as tenant; as amended by (i) that certain First Amendment to
Master Lease dated as of
 

 
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December 1, 2006, (ii) that certain Second Amendment to Master Lease dated as of
January 2, 2007, (iii) that certain Third Amendment to Master Lease dated as of
March 3, 2008, and (iv) that certain Fourth Amendment to Master Lease dated as
of November 1, 2010 (as amended, the “Summerville Master Lease”); (b) the
obligations of Borrower and/or its Affiliate(s) under the terms of that certain
Amended and Restated Promissory Note in the original principal amount of Thirty
Million Dollars ($30,000,000) dated as of November 1, 2010 executed and
delivered by Borrower, as maker, in favor of Lender, as holder.
 
(e) The term “State” as defined in Section 1.2 of the Loan Agreement shall mean
the State of California.
 
(f) The paragraph following Section 9.10 of the Loan Agreement under the heading
“Consent to Jurisdiction” is hereby amended by replacing Davidson County,
Tennessee with Orange County, California.
 
(g) All of the other Loan Documents not specifically described in this Section 1
shall be deemed amended to reflect the amendments described herein.
 
2. Amendment Conditions.  Notwithstanding Lender’s negotiation, preparation or
execution of this Agreement or any of the instruments or documents required
herein and notwithstanding anything else to the contrary, no modification or
amendment to the Loan, the Note or the Loan Documents shall be deemed to have
occurred unless and until all of the following conditions (the “Amendment
Conditions”) have been satisfied:
 
(a) Borrower shall execute and acknowledge, where applicable, and deliver to
Lender each of the following:
 
(i) this Agreement in form and substance satisfactory to Lender;
 
(ii) that certain Amended and Restated Promissory Note in the original principal
amount of Thirty Million Dollars ($30,000,000) dated as of the date hereof in
form and substance satisfactory to Lender;
 
(iii) that certain Fourth Amendment to Master Lease dated as of the date hereof
in form and substance satisfactory to Lender;
 
(iv) amendments to the Mortgages in form and substance satisfactory to Lender
(the “Mortgage Amendments”); and
 
(v) any instructions to Fidelity National Title Insurance Company (the “Title
Company”) as may be requested by the Title Company as necessary to carry out the
terms of this Agreement.
 
(b) The Title Company shall be unconditionally and irrevocably committed to
issue to Lender, at Borrower’s sole cost and expense, such endorsements to the
existing lender’s title insurance policies covering the facilities known as (i)
Anderson Place, in Anderson, South
 

 
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Carolina, and (ii) Creston Village, in Paso Robles, California (collectively,
the “Title Policies”), as Lender may reasonable require, including a CLTA 110.5
endorsement or its equivalent.
 
(c) Borrower shall deposit with the Title Company an amount sufficient to pay
for the cost of all endorsements to the Title Policies required pursuant to
Section 2(b) above and all other fees and expenses, including recording fees,
incurred by the Title Company in connection with this transaction.
 
(d) The Mortgage Amendments shall have been properly recorded in the applicable
counties and states.
 
3. Reaffirmation of Obligations.
 
(a) Borrower hereby acknowledges and reaffirms its obligations under the Note
and the other Loan Documents, as such documents have been amended by this
Agreement, and agrees that all references to a particular Loan Document in the
Loan Documents shall be deemed to refer to such Loan Document as amended by this
Agreement.
 
(b) Borrower hereby acknowledges and agrees that the execution and delivery of
this Agreement by Lender shall not be deemed or construed to constitute a waiver
by Lender of any default existing under any of the Loan Documents or a
commitment by Lender to otherwise modify the Loan Documents.
 
4. Representations and Warranties.  As a material inducement for Lender to enter
into this Agreement, Borrower represents and warrants to Lender that the
following matters are true and correct as of the execution of this Agreement and
also will be true and correct as of the Third Amendment Effective Date:
 
(a) To the best of Borrower’s knowledge and after giving effect to all of the
amendments reflected in this Agreement, no Event of Default by Borrower exists
under the Loan Agreement, the Note, or any of the other Loan Documents, and no
event exists which, with the giving of notice or the passage of time, or both,
would give rise to an Event of Default by Borrower hereunder or under any of the
Loan Documents; and
 
(b) To the best of Borrower’s knowledge, Lender is not in default and has
performed all of its obligations under the Loan Agreement and the other Loan
Documents, and Borrower does not have any claim against Lender or defense
against the enforcement of the Note, the Loan Agreement or any of the other Loan
Documents.
 
5. Effect on Loan Documents.  Except as specifically amended pursuant to the
terms of this Agreement, the terms and conditions of the Loan Documents shall
remain unmodified and in full force and effect.  In the event of any
inconsistencies between the terms of this Agreement and any terms of any of the
Loan Documents, the terms of this Agreement shall govern and prevail.
 
6. Governing Law.  This Agreement and the Loan Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of
California without giving effect to the conflicts-of-law rules and principles of
such state.
 

 
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7. Counterparts.  This Agreement may be executed and acknowledged in any number
of counterparts, all of which executed and acknowledged counterparts shall
together constitute a single document.  Signature and acknowledgment pages may
be detached from the counterparts and attached to a single copy of this document
to physically form one document, which may be recorded.
 
8. Further Assurances.  At any time or from time to time upon the reasonable
request of Lender, Borrower shall, at its expense, promptly execute, acknowledge
and deliver, or cause to be executed, acknowledged, or delivered, such further
instruments and documents and perform such other acts as may be necessary or
advisable, in the reasonable discretion of Lender, for carrying out the
intention or facilitating the performance of the terms of this Agreement, or for
assuring the validity of, perfecting, or preserving the lien of any other Loan
Documents, as modified by this Agreement.
 
9. Attorneys’ Fees.  In the event of any dispute or litigation concerning the
enforcement, validity or interpretation of this Agreement, or any part thereof,
the losing party shall pay all costs, charges, fees and expenses (including
reasonable attorneys’ fees) paid or incurred by the prevailing party, regardless
of whether any action or proceeding is initiated relative to such dispute and
regardless of whether any such litigation is prosecuted to judgment.
 
10. Entire Agreement.  This Agreement contains the entire agreement between the
parties relating to the subject matters contained herein.  Any oral
representations or statements concerning the subject matters herein shall be of
no force or effect.
 

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

 
“BORROWER”
 
EMERITUS CORPORATION,
 
a Washington corporation
 
By:           /s/ Robert C. Bateman
 
Name:      Robert C. Bateman
 
Title:        EVP & CFO
 

 
 
 

 
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“LENDER”
 
NATIONWIDE HEALTH PROPERTIES, INC.,
 
a Maryland corporation
 
By:           /s/ Brent Chappell
 
Name:     Brent Chappell
 
Title:       V.P. Portfolio Management
 

 
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