Loan Purchase Agreement




 

LOAN
PURCHASE AGREEMENT

 

AMONG

 

HEALTHCARE
REALTY TRUST INCORPORATED

 

AND

 

HEALTH
CARE REIT, INC.

 

AND

 

EMERITUS
CORPORATION

 

MARCH
3, 2005

 

 







 

1093179.1 























 

TABLE
OF CONTENTS

 

ARTICLE
1: PURPOSE
AND DEFINITIONS 2

 

1.1 Purpose 2

 

1.2 Definitions 2

 

1.3 Incorporation
of Amendments 3

 

1.4 Exhibits 3

 

ARTICLE
2: SALE OF
THE LOAN AND ASSIGNMENT OF THE LOAN DOCUMENTS 3

 

2.1 Sale of
the Loan 3

 

2.2 Closing 4

 

2.3 Endorsement
of the Note and Delivery of Loan Documents 4

 

2.4 Assignments
of Mortgages 4

 

2.5 Assignment
of Additional Loan Documents 4

 

2.6 Other
Assurances 4

 

ARTICLE
3: CONDITIONS
PRECEDENT TO DISBURSEMENT 4

 

3.1 Conditions
Precedent to Purchase of the Loan 4

 

3.1.1 Amendment
of Loan 4

 

3.1.2 Completion
of Due Diligence Review 4

 

3.1.3 Intercreditor
Agreement 4

 

3.1.4 Estoppel
Certificates 5

 

3.1.5 Loan
Documents 5

 

3.1.6 Legal
Opinion 5

 

3.1.7 Organizational
Documents 5

 

3.1.8 No
Default 5

 

ARTICLE
4: REPRESENTATIONS AND WARRANTIES OF HCN 5

 

4.1 Organization
and Good Standing 5

 

4.2 Power and
Authority 5

 

4.3 No
Default 5

 

4.4 Note
Payments in Advance 6

 

4.5 Obligations
for Facility Improvements 6

 

4.6 Schedule
of Loan Documents 6

 

4.7 No Notice
of Remedial Action 6

 

4.8 Compliance 6

 

ARTICLE
5: REPRESENTATIONS AND WARRANTIES OF TENANT 6

 

5.1 Organization
and Good Standing 6

 

5.2 Power and
Authority 7

 

5.3 Claims
Against HCN 7

 

5.4 Schedule
of Loan Documents 7

 

5.5 No
Litigation 7

 

5.6 Reports,
Statements and Copies 7

 

5.7 No
Default 7

 

5.8 Note
Payments in Advance 7

 

5.9 Obligations
for Facility Improvements 7

 

5.10 No
Adverse Changes 8

 

5.11 Compliance 8

 

ARTICLE
6: AFFIRMATIVE COVENANTS 8

 

6.1 Impairment
of Lease 8

 

6.2 Notices
Under The Lease 8

 

6.3 Demolitions
of Facilities 8

 

6.4 Further
Assurances and Information 8

 

ARTICLE
7: MISCELLANEOUS 8

 

7.1 Notices 8

 

7.2 Entire
Agreement 9

 

7.3 Severability 9

 

7.4 Captions
and Headings 9

 

7.5 Governing
Law 9

 

7.6 Binding
Effect 9

 

7.7 Modification 9

 

7.8 Construction
of Agreement 9

 

7.9 Counterparts 9

 

7.10 No
Third-Party Beneficiary Rights 9

 

7.11 Remedies 10

 

7.12 Confidentiality 10

 

7.13 No
Brokers 10

 

7.14 Costs and
Expenses 10

 

7.15 Post
Closing Items 10

 

7.16 Waiver of
Jury 10

 










 

1093179.1 























 

LOAN
PURCHASE AGREEMENT

 

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

 

R
E C I T A L S:

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE
1: PURPOSE AND DEFINITIONS

 

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

 

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

 

“Affiliate”
means any person, corporation, partnership, limited liability company, trust, or
other legal entity that, directly or indirectly, controls, or is controlled by,
or is under common control with a referenced party. “Control” (and the
correlative meanings of the terms “controlled by” and “under common control
with”) means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such entity. 

 

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

 

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

 

“Effective
Date” means the effective date of Closing.

 

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

 

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

 

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

 

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

 

“Lease”
means the Master Lease.

 

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

 

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

 

“Loan
Amount” means $21,426,000.00

 

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

 

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

 

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

 

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

 

“State”
means the State of Ohio.

 

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

 

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

 

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

 

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

 

Exhibit
A -
Schedule of Loan Documents

 

Exhibit
B - Post
Closing Deliverables

 

ARTICLE
2: SALE OF THE LOAN AND ASSIGNMENT OF THE LOAN DOCUMENTS

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE
3: CONDITIONS PRECEDENT TO DISBURSEMENT

 

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

 

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

 

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

 

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

 

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

 

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

 

3.1.6 Legal
Opinion. Tenant
shall have delivered to HRT an opinion of its primary outside counsel, and, to
the extent reasonably required by HRT, opinions of local counsel, each in form
and substance satisfactory to HRT. Without limitation, the opinions of counsel
shall confirm the valid organization and existence of HCN, its good standing in
the states where the Facilities are located, due authorization, execution and
delivery of all Transaction Documents executed by HCN in connection with the
sale of the Loan, and the enforceability of such documents, as assigned. HRT
shall not be responsible for the cost of such opinions.

 

3.1.7 Organizational
Documents. HCN
shall have delivered to HRT a resolution authorizing the assignment of the Loan
Documents in form and substance satisfactory to HRT. HCN’s organizational
documents are available at its web site at www.hcreit.com.

 

3.1.8 No
Default. Except
as set forth in the Estoppel Certificates, no uncured Event of Default shall
have occurred under the Loan or the Lease, or any event which would, with the
giving of notice or the passage of time, or both, constitute such an Event of
Default. 

 

ARTICLE
4: REPRESENTATIONS AND WARRANTIES OF HCN

 

HCN
hereby makes to HRT the following representations and warranties, as of the date
of this Agreement and to be effective through and including the Effective Date,
and acknowledges that HRT is acquiring the Loan in reliance upon such
representations and warranties. HCN’s representations and warranties shall
survive the Closing.

 

4.1 Organization
and Good Standing. HCN is
a corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware.

 

4.2 Power
and Authority. HCN has
the power and authority to execute, deliver, and perform its obligations under
this Agreement and has taken all requisite action to authorize the execution,
delivery and performance of its obligations hereunder.

 

4.3 No
Default. As of
the Effective Date, except as set forth in the Estoppel Certificates, HCN has no
actual knowledge of an Event of Default by Tenant under the Loan Documents or
under the Lease, nor of any event that has occurred which, with the giving of
notice or the passage of time, or both, would constitute or result in such an
Event of Default under the Lease. This representation is solely for the benefit
of HRT and not for the benefit of Tenant and Tenant may not rely upon this
representation.

 

4.4 Note
Payments in Advance. Tenant
has made no payments due under the Loan Documents more than thirty (30) days in
advance. Accrued interest has been paid through March 2, 2005.

 

4.5 Obligations
for Facility Improvements. To the
actual knowledge of the undersigned without any further investigation, HCN has
not contracted with any third party to provide labor or materials at any
Facility and does not owe any third parties any amounts for labor or materials
furnished in connection with the improvement of any Facilities.

 

4.6 Schedule
of Loan Documents. The
schedule of all Loan Documents is attached hereto as Exhibit
A. True,
complete and correct copies of all Loan Documents have been furnished by Tenant
or HCN to HRT. None of such Loan Documents have been amended, modified or
terminated, except as reflected on Exhibit A.

 

4.7 No
Notice of Remedial Action. To the
actual knowledge of the undersigned without further investigation, HCN has not
received written notice from any governmental entity of any environmental
condition requiring remedial action at any Facility.

 

4.8 Compliance. To the
actual knowledge of the undersigned without further investigation, HCN has not
received written notice from any governmental entity of the non compliance of
any Facility with any requirements with respect to which non-compliance could
adversely impact the financial condition or the operation of the Facility,
provided however that this representation relates to zoning and environmental
requirements and similar matters relating to the real property, and does not
include any requirements arising from state licensure regulations.

 




 

ARTICLE
5: REPRESENTATIONS AND WARRANTIES OF TENANT

 

Tenant
hereby makes to HRT the following representations and warranties, as of the date
of this Agreement and to be effective through and including the Effective Date,
and acknowledges that HRT is acquiring the Loan in reliance upon such
representations and warranties. Tenant’s representations and warranties shall
survive the Closing and, except as specifically provided below, shall continue
in full force and effect until Tenant has repaid the Loan in full and performed
all other obligations under the Loan Documents.

 




 

5.1 Organization
and Good Standing. Tenant
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Washington.

 




 




 

5.2 Power
and Authority. Tenant
has the power and authority to execute, deliver, and perform its obligations
under this Agreement and has taken all requisite action to authorize the
execution, delivery and performance of its obligations hereunder. 

 

5.3 Claims
Against HCN. Tenant
has made no claims against HCN or any other rights of offset against the Note or
any defenses against payment obligations under the Note, and, Tenant has no
knowledge of any facts or circumstances which would give rise to or support any
such claims offset or defense.

 

5.4 Schedule
of Loan Documents. The
schedule of all Loan Documents is attached hereto as Exhibit A. True, complete
and correct copies of all Loan Documents have been furnished by Tenant to HRT.
None of such Loan Documents have been amended, modified or terminated, except as
reflected on Exhibit A.

 

5.5 No
Litigation. As of
the Effective Date, and except as set forth in the Estoppel Certificates [i] to
the best of Tenant’s knowledge there are no actions, suits, proceedings or
investigations by any governmental agency or regulatory body or any third party
pending against Tenant or any existing Facility which, if determined adversely
to Tenant, would materially and adversely affect an existing Facility or title
to a Facility (or any part thereof), the right to operate a Facility as
presently operated, or the financial condition of Tenant, except as otherwise
set forth in the Estoppel Certificates; [ii] Tenant has not received written
notice of any threatened actions, suits or proceeding or investigations against
Tenant or any existing Facility at law or in equity, or before any governmental
board, agency or authority which, if determined adversely to Tenant, would
materially and adversely affect an existing Facility or title to a Facility (or
any part thereof), the right to operate a Facility as presently operated, or the
financial condition of Tenant; [iii] there are no unsatisfied or outstanding
judgments against Tenant or any existing Facility; [iv] there is no labor
dispute materially and adversely affecting the operation or business conducted
by Tenant or any existing Facility; and [v] Tenant does not have knowledge of
any facts or circumstances which might reasonably form the basis for any such
action, suit, or proceeding.

 

5.6 Reports,
Statements and Copies. The
copies of all Loan Documents submitted by Tenant to HRT are true, correct and
complete copies and include all amendments and modifications of such
agreements.

 

5.7 No
Default. As of
the Effective Date, except as set forth in the Estoppel Certificates, Tenant has
no actual knowledge of an Event of Default by HCN under the Loan Documents or
under the Lease, and Tenant has no actual knowledge that any event has occurred
which, with the giving of notice or the passage of time, or both, would
constitute or result in such an Event of Default under the Lease.

 

5.8 Note
Payments in Advance. Tenant
has made no payments due under the Loan Documents more than thirty (30) days in
advance. Accrued interest has been paid through March 2, 2005.

 

5.9 Obligations
for Facility Improvements. Tenant
does not owe any third parties any amounts for labor or materials furnished in
connection with the improvement of any Facilities except for amounts due for
repairs made in the ordinary course of business which are not past due.


 

5.10 No
Adverse Changes. To the
best knowledge of Tenant, since September 30, 2003, there have been no adverse
changes in the environmental condition of any Facility, the title to any
Facility, matters which an ALTA/ACSM Land Title Survey of any Facility should
reflect, or any significant casualty loss or condemnation affecting any
Facility.

 

5.11 Compliance. Each
Facility is, to the best knowledge of Tenant, in compliance with all
requirements of law with respect to which non-compliance could adversely impact
the financial condition or the operation of the Facility.

 

For
purposes of this Article 5, the knowledge of Tenant shall mean the knowledge of
all officers of Tenant.

 

ARTICLE
6: AFFIRMATIVE COVENANTS

 

6.1 Impairment
of Lease. So long
as any obligations under the Loan Documents remain unsatisfied, HCN will not
amend the Lease to create a term shorter than the Maturity Date as defined in
the Note, as amended by that certain Second Amended and Restated Note, of even
date herewith, between Tenant and HRT, to materially alter the casualty and
condemnation provisions in the Lease, or to increase the rent payments without
an increase in investment by HCN.

 

6.2 Notices
Under The Lease. HCN
will promptly furnish HRT with copies of any notices of default provided to
Tenant under the Lease. HRT shall have the right to cure any defaults under the
Lease within the time provided to Tenant for notice and cure, or within such
greater time as may be provided under the Intercreditor Agreement among HRT, HCN
and Tenant. HCN will not exercise any remedies available to it for default under
the Lease until it has given HRT notice of the default and at least ten (10)
days to cure the default.

 

6.3 Demolitions
of Facilities. So long
as any obligations under the Loan Documents remain unsatisfied HCN will not make
or permit any material demolitions at any Facilities which would materially
reduce of appraised value of such Facility.

 

6.4 Further
Assurances and Information. HCN
shall, on request of HRT from time to time, execute, deliver, and furnish such
additional documents as may be reasonably necessary to fully consummate the
Transaction contemplated under this Agreement, in HCN reasonable discretion.


 

ARTICLE
7: MISCELLANEOUS

 

7.1 Notices. HCN,
Tenant and HRT hereby agree that all notices, demands, requests, and consents
(hereinafter “notices”) given pursuant to the terms of this Agreement shall be
in writing, shall be addressed to the addresses set forth in the introductory
paragraph of this Agreement and shall be served by [i] personal delivery; [ii]
certified mail, return receipt requested; [iii] nationally recognized overnight
courier; or [iv] by facsimile, provided that a copy thereof is mailed by
certified mail promptly thereafter. All notices shall be deemed to be given upon
the earlier of actual receipt (provided, that in the case of facsimiles, any
facsimile received after 5:00 p.m. local time shall be deemed received on the
next Business Day) or three days after deposit in the United States mail or one
Business Day after deposit with the overnight courier. Any notices meeting the
requirements of this Section shall be effective, regardless of whether or not
actually received. HRT and Tenant may change their notice address at any time by
giving the other party notice of such change.

 

7.2 Entire
Agreement. This
Agreement and the other Transaction Documents constitute the entire agreement
between HCN and HRT with respect to the subject matter hereof and supersede all
prior negotiations, discussions or writings with respect thereto. No
representations, warranties, and agreements have been made by HCN except as set
forth in this Agreement and the other Transaction Documents. If there is any
conflict between the terms and provisions of the Commitment and the terms of
this Agreement, this Agreement shall govern.

 

7.3 Severability. If any
term or provision of this Agreement is held or deemed by HRT to be invalid or
unenforceable, such holding shall not affect the remainder of this Agreement and
the same shall remain in full force and effect.

 

7.4 Captions
and Headings. The
captions and headings are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope of this Agreement or
the intent of any provision thereof.

 

7.5 Governing
Law. This
Agreement shall be governed by and construed under the laws of the
State.

 

7.6 Binding
Effect. This
Agreement will be binding upon and inure to the benefit of the successors and
assigns of HRT and HCN.

 

7.7 Modification. This
Agreement may only be modified by a writing signed by both HRT and HCN. All
references to this Agreement, whether in this Agreement or in any other document
or instrument, shall be deemed to incorporate all amendments, modifications, and
renewals of this Agreement made after the date hereof. 

 

7.8 Construction
of Agreement. This
Agreement has been prepared by HRT and its professional advisors and reviewed by
HCN, Tenant and their professional advisors. HRT, Tenant, HCN and their advisors
believe that this Agreement is the product of all their efforts, it expresses
their agreement, and that it shall not be interpreted in favor of either HRT,
Tenant or HCN or against either HRT, HCN or Tenant merely because of their
efforts in preparing it.

 

7.9 Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original hereof.

 

7.10 No
Third-Party Beneficiary Rights. No
person not a party to this Agreement shall have or enjoy any rights hereunder
and all third-party beneficiary rights are expressly negated.

 

7.11 Remedies. Each
party shall be entitled to all remedies available at law or in equity for any
breach of this Agreement or any other Transaction Documents. The prevailing
party in any action to enforce any Transaction Document shall be entitled to
recover, in addition to any other remedies available at law or in equity, its
reasonable attorneys’ fees and other costs associated with the enforcement of
its rights under any Transaction Document.

 

7.12 Confidentiality. HRT,
HCN and Tenant agree that the terms of the Transaction shall remain
confidential, and that no press or other publicity release or communication to
the general public in connection with the Transaction shall be made without the
other party’s prior written consent, except as required by law, with such
consent not to be unreasonably withheld.

 

7.13 No
Brokers. HCN,
HRT and Tenant each represents and warrants that it has not engaged, employed or
otherwise dealt with any broker, salesperson, consultant or finder in connection
with the Transaction. 

 

7.14 Costs
and Expenses. HRT
will pay its own legal fees incurred in connection with the Transaction and the
costs and expenses related to its examination of due diligence information
furnished by HCN or Tenant for its review. HRT shall not be responsible for any
costs incurred by HCN in connection with the Transaction. Tenant shall pay all
cost of HCN arising from this transaction.

 

7.15 Post
Closing Items. The
parties hereto agree that to the extent any item required to be provided under
the terms of this Agreement has not been produced at closing, each party shall
complete such requirements within ten (10) days after funding of the purchase of
the Note, or within such additional time as may be reasonably required, not to
exceed twenty (20) days after receipt of notice from HRT.

 

7.16 Waiver
of Jury. TO THE
FULLEST EXTENT PERMITTED BY LAW, HCN AND HRT, HEREBY KNOWINGLY AND VOLUNTARILY
WAIVE THE RIGHT TO A JURY TRIAL IN ANY ACTION, PROCEEDING, OR COUNTER CLAIMS
ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ANY TRANSACTION
DOCUMENT.

 

IN
WITNESS WHEREOF, HRT and Tenant have executed and delivered this Agreement
effective as of the Effective Date.

HEALTHCARE
REALTY TRUST INCORPORATED, a Maryland corporation







By:
/s/
John M. Bryant , Jr.

Print:
John M. Bryant, Jr.

Title:
Senior Vice President and General Counsel

Date:
March
3, 2005








	
       

      EMERITUS
      CORPORATION, a Washington corporation

       

      By:
      /s/
      William M. Shorten 

      Print: William
      M. Shorten

       

      Title: Director
      of Real Estate Finance

       

       

      Date:
      March
      3, 2005 
	
       

      HEALTH
      CARE REIT, INC., a Delaware corporation

       

      By:
      /s/
      Erin C. Ibele 

      Print: Erin
      C. Ibele

       

      Title: Vice
      President and Corporate Secretary

       

      Date:
      March
      3, 2005 




 








 

1093179.1 




















 

EXHIBIT
A

 

THE
LOAN DOCUMENTS

 

(Schedule
of Loan Documents)

 


	
      1.
	
      Amended
      and Restated Loan Agreement dated September 30, 2003 between Health Care
      REIT, Inc. and Emeritus Corporation




 


	
      2.
	
      Amended
      and Restated Note dated September 30, 2003 made by Emeritus Corporation in
      favor of Health Care REIT, Inc. in the original principal amount of
      $25,800,000




 


	
      3.
	
      Amended
      and Restated Leasehold Mortgage/Deed of Trust, Security Agreement,
      Assignment of Leases and Rents, Financing Statement and Fixture Filing
      dated effective on and as of September 30, 2003 made by Emeritus
      Corporation, as trustor, for the benefit of Health Care REIT, Inc., as
      beneficiary




 

 







 

1093179.1 























 

EXHIBIT
B

 




 

POST
CLOSING DELIVERABLES

 




 




 

Revised
3 Mar 2005

 

Post-Closing
Requirements (General)

 

	1.  	
      Updated
      Insurance Certificates for each location under the Master Lease
      (Fairfield, CA; Paso Robles, CA; Champaign, IL; Hattiesburg, MS;
      Flagstaff, AZ; Phoenix, AZ; Brandon, FL; Ft. Myers, FL; Lakeland, FL;
      Sarasota, FL; Chubbuck, ID; Coeur D’Alene, ID; Pocatello, ID; Hagerstown,
      MD; Tewksbury, MA; Lakewood, NY; Ontario, OR; Anderson, SC; Lubbock, TX;
      Staunton, VA; Bellingham, WA; Federal Way, WA; Moses Lake,
    WA)



 

 

	2.  	
      Copies
      of Licenses for each location under the Master Lease (Fairfield, CA; Paso
      Robles, CA; Champaign, IL; Hattiesburg, MS; Flagstaff, AZ; Phoenix, AZ;
      Brandon, FL; Ft. Myers, FL; Lakeland, FL; Sarasota, FL; Chubbuck, ID;
      Coeur D’Alene, ID; Pocatello, ID; Hagerstown, MD; Tewksbury, MA; Lakewood,
      NY; Ontario, OR; Anderson, SC; Lubbock, TX; Staunton, VA; Bellingham, WA;
      Federal Way, WA; Moses Lake, WA)



 

 

	3.  	
      Legal
      Opinion from counsel for Emeritus Corporation



 

 

	4.  	
      Legal
      Opinion from counsel for Health Care REIT, Inc.



 

 

	5.  	
      UCC-1
      Financing Statements from Emeritus Corporation and each subtenant under
      the Master Lease to be filed in each entity’s state of
      formation



 

 

	6.  	
      Assignments
      of Mortgage for each location under the Master Lease (Fairfield, CA; Paso
      Robles, CA; Champaign, IL; Hattiesburg, MS; Flagstaff, AZ; Phoenix, AZ;
      Brandon, FL; Ft. Myers, FL; Lakeland, FL; Sarasota, FL; Chubbuck, ID;
      Coeur D’Alene, ID; Pocatello, ID; Hagerstown, MD; Tewksbury, MA; Lakewood,
      NY; Ontario, OR; Anderson, SC; Lubbock, TX; Staunton, VA; Bellingham, WA;
      Federal Way, WA; Moses Lake, WA)



 

 

	7.  	
      Leasehold
      Mortgagee’s Title Insurance Policy for each location under the Master
      Lease (Fairfield, CA; Paso Robles, CA; Champaign, IL; Hattiesburg, MS;
      Flagstaff, AZ; Phoenix, AZ; Brandon, FL; Ft. Myers, FL; Lakeland, FL;
      Sarasota, FL; Chubbuck, ID; Coeur D’Alene, ID; Pocatello, ID; Hagerstown,
      MD; Tewksbury, MA; Lakewood, NY; Ontario, OR; Anderson, SC; Lubbock, TX;
      Staunton, VA; Bellingham, WA; Federal Way, WA; Moses Lake,
    WA)



 

 

	8.  	
      Schedule
      of Personal Property for each Master Leased
location.



 

 

	9.  	
      Payment
      of Invoice for $1,764.75 to Paranet for UCC-11
searches.



 

 

	10.  	
      Opinion
      of Waller Lansden Dortch and Davis that the Intercreditor Agreement is
      duly authorized, executed and delivered.



 

 










 

1093179.1 























 




 

 

Post-Closing
Requirements (Title Company Requirements)

 




 

	1.  	
      Owner’s
      Affidavit, in form satisfactory to Fidelity National Title Insurance
      Company



 

 

	2.  	
      Gap
      Indemnity, in form satisfactory to Fidelity National Title Insurance
      Company



 

 

	3.  	
      Corporate
      Resolution of Emeritus Corporation



 

 

	4.  	
      Corporate
      Resolution of Health Care REIT, Inc.



 

 

	5.  	
      Washington
      Certificate of Good Standing for Emeritus Corporation (2
      originals)



 

 

	6.  	
      Certified
      copy of the Articles of Incorporation of Emeritus Corporation from the
      Washington Secretary of State



 

 

	7.  	
      Copy
      of the By-Laws of Emeritus Corporation, certified by the corporate
      secretary



 

 

	8.  	
      Certificates
      of Authority for Emeritus Corporation for the following states: Florida,
      Maryland, Virginia, New York



 

 

	9.  	
      Delaware
      Certificate of Good Standing for Health Care REIT,
Inc.



 

 

	10.  	
      Massachusetts
      Certificate of Registration (equivalent of good standing certificate) for
      Health Care REIT, Inc.



 

 

	11.  	
      Estoppel
      of Health Care REIT, Inc. and Emeritus Corporation as to no defaults in
      the Master Lease and in the Note



 

 

	12.  	
      Surveys
      for the following locations: Flagstaff, AZ; Phoenix, AZ; Brandon, FL; Ft.
      Myers, FL; Lakeland, FL; Sarasota, FL; Hagerstown, MD; Tewksbury, MA;
      Lakewood, NY; Lubbock, TX; Bellingham, WA; Federal Way, WA; Moses Lake,
      WA



 

 

	13.  	
      No-Change
      Affidavits for each of the following locations: Fairfield, CA; Paso
      Robles, CA; Champaign, IL; Hattiesburg, MS; Flagstaff, AZ; Phoenix, AZ;
      Brandon, FL; Ft. Myers, FL; Lakeland, FL; Sarasota, FL; Chubbuck, ID;
      Coeur D’Alene, ID; Pocatello, ID; Hagerstown, MD; Tewksbury, MA; Lakewood,
      NY; Ontario, OR; Anderson, SC; Lubbock, TX; Staunton, VA; Bellingham, WA;
      Federal Way, WA; Moses Lake, WA



 

 

	14.  	
      Copies
      of Phase I Environmental Assessment for each of the following locations:
      Fairfield, CA; Paso Robles, CA; Champaign, IL; Hattiesburg,
    MS