EXHIBIT 10.3

ADDENDUM #4 TO MASTER LEASE AND SECURITY AGREEMENT

This ADDENDUM #4 TO MASTER LEASE AND SECURITY AGREEMENT (this “Addendum”) is
made and entered into as of February 16, 2016, by and between the parties
signatory hereto, as lessors (collectively, “Lessor”) and HCR III Healthcare,
LLC, as lessee (“Lessee”).

RECITALS

A.     Lessor is the current “Lessor” and Lessee is the current “Lessee”
pursuant to that certain Master Lease and Security Agreement dated as of April
7, 2011 (as the same may have been amended, restated or otherwise modified prior
to the date hereof, the “Master Lease”). Capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Master Lease.

B.     Lessee’s obligations under the Master Lease are guaranteed by HCR
ManorCare, Inc., a Delaware corporation, successor in interest to HCR ManorCare,
LLC, a Delaware limited liability company, pursuant to that certain Guaranty of
Obligations dated as of April 7, 2011 (as the same may heretofore have been or
may hereafter be further amended, modified or reaffirmed from time to time in
accordance with the terms thereof, the “Guaranty”).

C.     Pursuant to Section 12 of that certain Tenth Amendment to Master Lease
and Security Agreement, dated as of March 29, 2015 and effective as of April 1,
2015 (the “Tenth Amendment”), by and among Lessor, Lessee and Guarantor, Lessor,
Lessee and Guarantor desire to add the real property more particularly described
on Exhibit A attached hereto (the “Additional Facility”) to the Leased Property
under the Master Lease.

AGREEMENT

NOW THEREFORE, in consideration of the foregoing Recitals and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Lessor and Lessee hereby agree as follows:

1.     Lessee’s Representations and Warranties.  Lessee hereby represents and
warrants to Lessor that the Additional Facilities Owners have delivered to
Lessor the materials and documentation required pursuant to Section 12 of the
Tenth Amendment and that, to Lessee’s knowledge, (i) all such materials and
documentation were true, correct and complete at the time delivered and (ii)
there have been no changes affecting any such materials or documentation or any
information disclosed thereby, that would interfere with or materially adversely
affect the consummation of the transactions contemplated hereby, that have not
been previously disclosed by Lessee or Guarantor to Lessor in writing.

2.     Additional Facility. The Master Lease is hereby amended to modify the
“Pool 4 Facilities” to add the Additional Facility thereto and Lessor hereby

 

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leases to Lessee, and Lessee hereby leases from Lessor, as part of the Leased
Property, all of Lessor’s right, title and interest in and to the Additional
Facility, including any improvements currently and to be located thereon,
subject to all of the terms, conditions and provisions of the Master Lease, as
it is hereby, and may be hereafter, amended, supplemented, restated or otherwise
modified.

3.     Additional Lessors.  In connection with the Additional Facility, the
Master Lease is hereby amended to add the following entity as Lessor under the
Master Lease:  HCR Sterling Heights MI Property, LLC, a Delaware limited
liability company.

4.     Opco Sublease:  Schedule 4 to the Master Lease is hereby amended to add
the following operating sublease thereto: 

ManorCare Health Services, LLC d/b/a Heartland Health Care Center – Sterling
Heights

5.     Sterling Heights Addition:  Lessor hereby consents to the development and
construction of that certain addition to the Additional Facility, which will
include adding up to 40 skilled nursing facility beds to the Additional
Facility, at a cost that is expected to exceed One Million Five Hundred Thousand
Dollars ($1,500,000), subject to Lessee complying with the conditions set forth
in the Master Lease, including without limitation Section 10.2.2. thereof.

6.     Effect of Addendum. All references in the Master Lease to “this Lease”
shall be deemed to be references to the Master Lease as amended hereby.

7.     Full Force and Effect; Acknowledgement. The Master Lease, as hereby
amended, shall remain and continue in full force and effect.

8.     Counterparts; Facsimile or Electronically Transmitted Signatures. This
Addendum may be executed in any number of counterparts, all of which shall
constitute one and the same instrument. Signatures transmitted by facsimile or
other electronic means may be used in place of original signatures on this
Addendum, and Lessor and Lessee both intend to be bound by the signatures on the
document transmitted by facsimile or such other electronic means.

[NO FURTHER TEXT ON THIS PAGE]

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be executed
as of the day and year first written above.

 

 

 

“Lessor”

HCP PROPERTIES, LP, a Delaware limited partnership

By:    HCP I-B Properties, LLC, a Delaware limited liability company, its
General Partner

HCP WEST VIRGINIA PROPERTIES, LLC, a Delaware limited liability company

HCP PROPERTIES OF ALEXANDRIA VA, LLC, a Delaware limited liability company

HCP PROPERTIES OF ARLINGTON VA, LLC, a Delaware limited liability company

HCP PROPERTIES OF MIDWEST CITY OK, LLC, a Delaware limited liability company

HCP PROPERTIES OF OKLAHOMA CITY (NORTHWEST), LLC, a Delaware limited liability
company

HCP PROPERTIES OF OKLAHOMA CITY (SOUTHWEST), LLC, a Delaware limited liability
company

HCP PROPERTIES OF TULSA OK, LLC, a Delaware limited liability company

HCP PROPERTIES-ARDEN COURTS OF ANNANDALE VA, LLC, a Delaware limited liability
company

HCP PROPERTIES-CHARLESTON OF HANAHAN SC, LLC, a Delaware limited liability
company

HCP PROPERTIES-COLUMBIA SC, LLC, a Delaware limited liability company

 

 

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HCP PROPERTIES-FAIR OAKS OF FAIRFAX VA, LLC, a Delaware limited liability
company

HCP PROPERTIES-IMPERIAL OF RICHMOND VA, LLC, a Delaware limited liability
company

HCP PROPERTIES-LEXINGTON SC, LLC, a Delaware limited liability company

HCP PROPERTIES-MEDICAL CARE CENTER-LYNCHBURG VA, LLC, a Delaware limited
liability company

HCP PROPERTIES-OAKMONT EAST-GREENVILLE SC, LLC, a Delaware limited liability
company

HCP PROPERTIES-OAKMONT OF UNION SC, LLC, a Delaware limited liability company

HCP PROPERTIES-OAKMONT WEST-GREENVILLE SC, LLC, a Delaware limited liability
company

HCP PROPERTIES-STRATFORD HALL OF RICHMOND VA, LLC, a Delaware limited liability
company

HCP PROPERTIES-WEST ASHLEY-CHARLESTON SC, LLC, a Delaware limited liability
company

HCP MARYLAND PROPERTIES, LLC, a Delaware limited liability company

HCP PROPERTIES-SALMON CREEK WA,  LLC, a Delaware limited liability company

HCP PROPERTIES-WINGFIELD HILLS NV, LLC, a Delaware limited liability company

 

 

 

 

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HCP PROPERTIES-UTICA RIDGE  IA, LLC, a Delaware limited liability company

HCR TWINSBURG OH PROPERTY, LLC, a Delaware limited liability company

 

 

By:

/s/ Darren Kowalske

Name:

Darren Kowalske

Title:

Executive Vice President

 

 

 

 

HCR STERLING HEIGHTS MI PROPERTY, LLC, a Delaware limited liability company

By:HCR Schoenherr Road Property, LLC, a Delaware limited liability company, its
sole member

By:HCP Properties, LP, a Delaware limited partnership, its sole member

By:HCP I-B Properties, LLC, a Delaware limited liability company, its General
Partner

 

By:

/s/ Darren Kowalske

Name:

Darren Kowalske

Title:

Executive Vice President

 

 

 

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be executed
as of the day and year first written above.

 

 

 

“Lessee”

HCR III HEALTHCARE, LLC, a Delaware limited liability company

aniel

 

By:

/s/ Daniel H. Kight

Name:

Daniel H. Kight

Title:

Treasurer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Addendum #4

CONSENT, REAFFIRMATION AND AGREEMENT OF GUARANTOR

Guarantor hereby (i) reaffirms all of its obligations under the Guaranty, (ii)
consents to the foregoing Addendum and (iii) agrees that its obligations under
the Guaranty shall extend to Lessee’s duties, covenants and obligations pursuant
to the Master Lease, as amended or modified pursuant to the foregoing Addendum.

 

 

HCR MANORCARE, INC., a Delaware corporation

 

 

By:

/s/ Daniel H. Kight

Name:

Daniel H. Kight

Title:

Treasurer

 

 

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EXHIBIT A

Legal Description of Additional Property

A part of the Northwest 1/4 of Section 24, Town 2 North, Range 12 East, City of
Sterling Heights, Macomb County, Michigan, more particularly described as:
Commencing at the West 1/4 corner of said Section 24; thence North 89 degrees 30
minutes 22 seconds East, 623.10 feet along the East-West 1/4 line of Section 24,
(Plumbrook Road); thence North 33 degrees 19 minutes 38 seconds West, 63.21 feet
to the point of beginning; thence continuing North 33 degrees 19 minutes 38
seconds West, 334.27 feet to a point on the Easterly line of Schoenherr Road
(204 feet wide); thence North 08 degrees 48 minutes 48 seconds East, 573.95 feet
along said line to a point on the Southerly line of Utica Road (60 feet wide
Southerly right-of-way); thence South 56 degrees 53 minutes 40 seconds East,
706.01 feet along said line; thence South 01 degrees 44 minutes 52 seconds West,
248.88 feet; thence South 89 degrees 30 minutes 22 seconds West, 453.07 feet;
thence South 09 degrees 35 minutes 21 seconds West, 210.13 feet to the point of
beginning.

Surveyed as:

Land situated in the City of Sterling Heights, Macomb County, Michigan,
described as: a part of the Northwest 1/4 of Section 24, Town 2 North, Range 12
East, City of Sterling Heights, Macomb County, Michigan, more particularly
described as: Commencing at the West 1/4 corner of said Section 24; thence along
the centerline of Plumbrook Road (86 feet wide) North 89 degrees 27 minutes 00
seconds East, 623.10 feet; thence North 33 degrees 23 minutes 00 seconds West,
63.21 feet to the Point of Beginning; thence North 33 degrees 23 minutes 00
seconds West, 334.27 feet to a point on the Easterly Right of Way of Schoenherr
Road (204 feet wide); thence along the Easterly Right of Way line of said
Schoenherr Road North 08 degrees 45 minutes 26 seconds East, 573.95 feet to
point of intersection of the Easterly Right of Way line of said Schoenherr Road
and the Southerly Right of Way line of Utica Road (120 feet wide); thence along
the Southerly Right of Way line of said Utica Road South 56 degrees 57 minutes
02 seconds East, 706.01 feet; thence South 01 degrees 41 minutes 30 seconds
West, 249.88 feet to a point on the North line of "Plumbrook Professional
Centre" Condominium (M.C.C.P. No. 1014); thence along the North line of
"Plumbrook Professional Centre" Condominium South 89 degrees 27 minutes 00
seconds West, 453.08 feet; thence South 09 degrees 31 minutes 59 seconds West,
210.13 feet to the Point of Beginning.

 

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