Document:

EX-10.3

 

EXHIBIT 10.3

CREDIT AGREEMENT

     This Credit Agreement (the “Agreement”) is entered into as of the 31st day of May 2007, by and
between HEALTH CARE REIT, INC., a Delaware corporation (“HCN”), and each of the entities listed on
Schedule I attached hereto (HCN and such other entities may hereinafter be referred to collectively
as “Borrowers”), and FIFTH THIRD BANK, an Ohio banking corporation (“Bank”).

Section 1. Definitions.

     All financial terms used in the Agreement but not defined in the Loan Documents (as defined
below) have the meanings given to them by generally accepted accounting principles (“GAAP”). All
other undefined terms have the meanings given to them in the Ohio Uniform Commercial Code.

Section 2. Loan(s).

     2.01 Revolving Credit Loan.

              (a) Subject to the terms and conditions hereof, Bank hereby extends to Borrowers a line of
credit facility (the “Facility” or the “Loan”) under which Bank may make loans (the “Revolving
Loans”) to Borrowers at Borrowers’ requests from time to time during the term of this Agreement.
Bank will have discretion at all times as to whether or not to make any Revolving Loan if there is
any Event of Default (as defined below). Borrower may borrow, prepay, and reborrow under the
Facility, provided that the principal amount of all Revolving Loans outstanding at any one time
under the Facility will not exceed the foregoing limits or those limits specified in the Revolving
Note. If the amount of the Revolving Loans outstanding at any time under the Facility exceeds the
limits set forth above or in the Revolving Note, Borrower will immediately pay the amount of such
excess to Bank in certified funds. Bank has agreed to make this Loan upon the terms and subject to
the conditions of this Agreement and all documents executed pursuant to or in connection with this
Agreement (all such documents and this Agreement will be called “Loan Documents”).

              (b) Borrowers may request a Revolving Loan by written or telephone notice to Bank. Bank will
make a Revolving Loan by crediting the amount thereof to Borrowers’ account at Bank. Loan proceeds
will be used for working capital and general corporate purposes, including acquisitions and the
repayment/refinancing of other indebtedness.

              (c) On the date hereof, Borrowers will duly issue and deliver to Bank a revolving note (the
“Revolving Note” or “Note”) in the principal amount of Forty Million and 00/100 Dollars
($40,000,000.00) bearing interest as specified in Section 2.02.

              (d) The term of the Facility will expire on May 30, 2008 and the Revolving Note will become
payable in full on that date.

     2.02 Interest on Revolving Loans. The principal amounts outstanding hereunder shall
bear interest commencing on the date of the first advance hereunder at the rate or rates per annum
set forth below which shall be designated by Borrowers as more fully set forth herein. At any
time, from time to time, during the term of the Note, so long as no Event of Default exists and so
long as such Borrowings (as defined in the Note) are not then subject to an Interest Rate Election
(as defined below), Borrowers may notify Bank that they wish to exercise their right to adjust the
rate of interest accruing on some or all amounts of principal outstanding under the Note (in a
minimum amount of $500,000) to one of the rates set forth below, however, once the rate of interest
accruing against any amounts outstanding hereunder is

1

 

adjusted to one of the following interest rates during an interest period, Borrowers may not elect
to adjust such interest rate to a different interest rate until the expiration of such interest
period:

              (a) LIBOR Rate. Upon telephonic notice by a Borrower to Bank, Borrower may elect to
have all or any portion of the Borrowings in a minimum amount of $500,000 per election bear
interest at the per annum rate equal to eighty (80) basis points in excess of the LIBOR Rate (as
defined below) (a “LIBOR Rate Election”). Such notice shall inform Bank of the amount of
Borrowings to be subject to the LIBOR Rate Election, the LIBOR Interest Period (as defined below)
and the Effective Date (as defined below) of the LIBOR Interest Period.

                            Borrowers’ right to make a LIBOR Rate Election shall be terminated automatically if Bank, by
telephonic notice, shall notify Borrowers that LIBOR deposits with a maturity corresponding to the
maturity of the LIBOR Interest Period, in an amount equal to the Borrowings to be subject to the
LIBOR Rate Election are not readily available in the London Inter-Bank Offered Rate Market, or
that, by reason of circumstances affecting such market, adequate and reasonable methods do not
exist for ascertaining the interest rate applicable to such deposits for the proposed LIBOR
Interest Period.

                            In addition, notwithstanding anything herein contained to the contrary, if, prior to or during
any period with respect to which a LIBOR Rate is in effect, any change in any law, regulation or
official directive, or in the interpretation thereof, by any governmental body charged with the
administration thereof, shall make it unlawful for the Bank to fund or maintain its funding in
Eurodollars of any portion of the Borrowings subject to the LIBOR Rate or otherwise to give effect
to Bank’s obligations as contemplated hereby, (i) Bank may by written notice to Borrowers, declare
Bank’s obligations in respect of the LIBOR Rate to be terminated forthwith, and (ii) the LIBOR Rate
with respect to Bank shall forthwith cease to be in effect, and interest shall from and after such
date be calculated at the Prime Rate, unless Borrowers shall thereafter make one or more other
Interest Rate Elections.

              (b) Prime Rate. Upon telephonic notice by a Borrower to Bank prior to or on the
Effective Date, Borrowers may elect to have all or part of the Borrowings (provided such Borrowings
are not then subject to an Interest Rate Election) bear interest at the per annum rate equal to the
Prime Rate (as defined below) (a “Prime Rate Election”). Such telephonic notice shall inform Bank
of the amount of the Borrowings to be subject to the Prime Rate Election, the Prime Rate Interest
Period (as defined below) and the Effective Date for the Prime Rate Interest Period.

                            If at any time during the term hereof, (i) the outstanding principal hereunder is less than
$500,000, or (ii) Borrowers fail to designate one of the interest rates set forth above or at any
time after Borrowers have elected to adjust the interest rate accruing on any principal outstanding
hereunder to a rate other than the fixed rate set forth above, at the expiration of any interest
period, if Borrowers have not made another Interest Rate Election hereunder, then in either such
event, such outstanding amounts of principal will accrue interest at a rate of interest equal to
the Prime Rate.

              (c) Minimum Borrowing Amounts and Prepayment. Each Borrowing subject to an Interest
Rate Election that is advanced, continued or converted shall be in an amount equal to $500,000 or
such greater amount which is an integral multiple of $100,000. The Borrowers may prepay without
premium or penalty and in whole or in part any Borrowing subject to a LIBOR Rate Election at any
time upon three (3) business days prior notice by the Borrowers to the Bank or, in the case of a
Borrowing subject to a Prime Rate Election, notice delivered by the Borrowers to the Bank no later
than 2:00 p.m. (Toledo time) on the date of prepayment, such prepayment to be made by the payment
of the principal amount to be prepaid and, in the case of any Borrowing subject to a LIBOR Rate
Election, accrued interest thereon to the date fixed for prepayment; provided, however, the
Borrowers may not partially

2

 

repay a Borrowing (i) if such Borrowing is subject to a Prime Rate Election, in a principal amount
less than $500,000, (ii) if such Borrowing is subject to a LIBOR Rate Election, in a principal
amount not less than $500,000 or any amount in excess thereof that is not an integral multiple of
$100,000, and (iii) in each case, unless it is in an amount such that the minimum amount required
for a Borrowing pursuant to Section 2.02 remains outstanding. Any amount of Loans paid or prepaid
before May 31, 2008 may, subject to the terms and conditions of this Agreement, be borrowed, repaid
and borrowed again.

              (d) Defined Terms. As used herein, the following terms will have the meanings set
forth below:

                            (i) “Effective Date” means the date on which a LIBOR Rate Election or Prime Rate Election will
begin.

                            (ii) “Interest Rate Election” means a LIBOR Rate Election, or a Prime Rate Election, or any
one or more of the foregoing.

                            (iii) “LIBOR Interest Period” means, with respect to a Borrowing elected to accrue interest at
the LIBOR Rate, a period of 30, 60 or 90 days commencing on a business day selected by the
Borrowers pursuant to this Agreement. Such LIBOR Interest Period shall end on the day in the
succeeding calendar month which corresponds numerically to the beginning day of such LIBOR Interest
Period, provided, however, that if there is no such numerically corresponding day in such
succeeding month, such LIBOR Interest Period shall end on the last business day of such succeeding
month. If a LIBOR Interest Period would otherwise end on a day which is not a business day, such
LIBOR Interest period shall end on the next succeeding business day, provided, however, that if
said next succeeding business day falls in a new month, such LIBOR Interest Period shall end on the
immediately preceding business day.

                            (iv) “LIBOR Rate” means the rate (adjusted for reserves if Bank is required to maintain
reserves with respect to relevant advances) being asked on an amount of Eurodollar deposits equal
to the amount of Borrowings subject to a LIBOR Rate on the first day of a LIBOR Interest Period and
which has a maturity corresponding to the maturity of the LIBOR Interest Period, as reported by the
TELERATE rate reporting system (or any successor) as determined by the Bank by noon on the
Effective Date of the LIBOR Interest Period. Each determination by Bank of the LIBOR Rate shall be
conclusive in the absence of manifest error.

                            (v) “Prime Rate” means the rate established by Bank from time to time as its Prime Rate based
upon its considerations of various factors and is not necessarily Bank’s most favored interest
rate.

                            (vi) “Prime Rate Interest Period” means any period with respect to which the Borrowers make a
Prime Rate Election or the Borrowers have made an Interest Rate Election which has expired and the
Borrowers have failed to make an alternate Interest Rate Election. If a Prime Rate Interest Period
would otherwise end on a day which is not a business day, such Prime Rate Interest Period shall end
on the next succeeding business day.

     2.03 Statements. After the end of each quarter, Bank will render to Borrowers a
statement on each of Borrowers’ loan accounts with Bank hereunder, which statement will be
considered correct and will be conclusively binding upon Borrowers unless Borrowers notify Bank in
writing of any discrepancy within thirty (30) days from the date of such statement.

3

 

Section 3. Representations And Warranties.

     3.01 Incorporation by Reference. The provisions of the following sections (including
the contents of the related schedules and exhibits) of the Existing or Replacement Agreement (as
defined below) are incorporated herein by reference in their entirety as in effect on the date
hereof, or as any replacement agreement may be in effect after the date hereof, after giving effect
to any terminations, further amendments and/or waivers after the date hereof, or the payment in
full of the amounts subject thereto, with (a) the defined terms used therein and the definitions of
such terms being construed in accordance with this Agreement, and (b) section references therein
being deemed to be references to sections of the Existing or Replacement Agreement as incorporated
by reference herein: Section 3.1 through and including Section 3.17. The Borrowers hereby
represent and warrant to the Bank the sections of the Existing or Replacement Agreement
incorporated herein by this Section 3.01 for the benefit of the Bank as if such sections were set
forth directly in this Agreement. With regard to Section 3.12 incorporated herein, the reference
to “Section 2.8 hereof” shall be deemed to be a reference to Section 2.01(b) of this Agreement.

     3.02 Existing or Replacement Agreement. “Existing or Replacement Agreement” means
that certain Third Amended and Restated Loan Agreement by and among HCN, its subsidiaries party
thereto, the banks signatory thereto, KeyBank National Association, as Administrative Agent,
Deutsche Bank Securities Inc., as Syndication Agent, and UBS Securities LLC, Bank of America, N.A.
and JPMorgan Chase Bank, N.A. as Documentation Agents, dated July 26, 2006, as amended by Amendment
No. 1 to Third Amended and Restated Loan Agreement, dated September 20, 2006, as such agreement is
in effect on the date hereof or may be amended or supplemented hereafter, or as any replacement
agreement may be in effect after the date hereof, after giving effect to any terminations, further
amendments or supplements and/or waivers after the date hereof or the payment in full of the
amounts subject thereto. HCN agrees to promptly provide to Bank a copy of any and all such
amendments, supplements and replacement agreements.

Section 4. Covenants.

     4.01 Incorporation by Reference. The provisions of the following articles and
sections (including the contents of the related schedules and exhibits) of the Existing or
Replacement Agreement are incorporated herein by reference in their entirety as in effect on the
date hereof, after giving effect to any terminations, amendments, replacements or waivers thereof
after the date hereof, or the payment in full of the amounts subject thereto, with (a) the defined
terms used therein and the definitions of such terms being construed in accordance with this
Agreement, and (b) section references therein being deemed to be references to sections of the
Existing or Replacement Agreement as incorporated by reference herein: Article 5 (including
Section 5.1 through and including Section 5.13), Article 6 (including Section 6.1 through and
including Section 6.13) and Article 7 (including Section 7.1 through and including Section 7.16).
The Borrowers hereby covenant and agree to observe, perform and comply with the articles and
sections of the Existing or Replacement Agreement incorporated herein by this Section 4.01 for the
benefit of the Bank as if such articles and sections were set forth directly in this Agreement.

Section 5. Events of Default and Remedies.

     5.01 Events of Default. Any one or more of the events set forth in Article 8 of the
Existing or Replacement Agreement shall constitute an “Event of Default” hereunder.

     5.02 Remedies. Except as otherwise provided in Article 8 of the Existing or
Replacement Agreement, if any Event of Default will occur, Bank may by written notice to the
Borrowers cease advancing money hereunder, and/or declare all obligations to be due and payable
forthwith, whereupon they will forthwith become due and payable without further presentment,
demand, protest, or notice of any kind, all of which are hereby expressly waived by Borrower;
provided, however, that no such written notice to the

4

 

Borrowers shall be required when any Event of Default described in Section 8.6 of the Existing or
Replacement Agreement has occurred and is continuing.

              5.03 Setoff. If any Event of Default will occur, Bank is authorized, without advance
notice but otherwise with notice to Borrowers, to offset and apply to all or any part of the Note
all moneys, credits and other property of any nature whatsoever of Borrowers now or at any time
hereafter in the possession of, in transit to or from, under the control or custody of, or on
deposit with Bank, including but not limited to certificates of deposit.

              5.04 Default Rate. While any Event of Default exists, the Borrowers shall pay
interest (after as well as before entry of judgment thereon to the extent permitted by law) on the
principal amount of all Loans owing by it at a rate per annum equal to:

                            (i) for any Borrowing subject to a Prime Rate Election, the sum of 2.0% per annum
plus the Prime Rate; and

                            (ii) for any Borrowing subject to a LIBOR Rate Election, the sum of 4.0% per
annum plus the LIBOR Rate in effect thereon at the time of such default until the end
of the interest period applicable thereto and, thereafter, at a rate per annum equal
to the sum of 2.0% plus the Prime Rate;

provided, however, that in the absence of acceleration, any adjustments pursuant to this section
shall be made at the election of the Bank, with written notice to the Borrowers. While any Event
of Default exists or after acceleration, interest shall be paid on demand of the Bank. This
provision does not constitute a waiver of any Event of Default or an agreement by Bank to permit
any late payments whatsoever.

     5.05 No Remedy Exclusive. No remedy set forth herein is exclusive of any other
available remedy or remedies, but each is cumulative and in addition to every other remedy
available under this Agreement, the Loan Documents or as may be now or hereafter existing at law,
in equity or by statute.

     5.06 Effect of Termination. The termination of this Agreement will not affect any
rights of either party or any obligation of either party to the other, arising prior to the
effective date of such termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into, rights created or obligations incurred prior to such
termination have been fully disposed of, concluded or liquidated.

Section 6. Conditions Precedent.

     6.01 Conditions to Loan. Bank will have no obligation to make or advance any Loan
until Borrowers have delivered to Bank at or before the closing date, in form and substance
satisfactory to Bank:

              (a) An executed Revolving Note of even date herewith.

              (b) A corporate resolution of HCN.

              (c) Certification of signing authority for Borrowers.

5

 

              (d) An executed copy of this Agreement.

              (e) Such additional information and materials as Bank may reasonably request.

     6.02 Conditions to Each Loan. On the date of any Loan under the Revolving Note, the
following statements will be true:

              (a) All of the representations and warranties contained herein and in the Loan Documents will
be correct in all material respects as though made on such date.

              (b) No event will have occurred and be continuing, or would result from such Loan, which
constitutes an Event of Default, or would constitute an Event of Default but for the requirement
that notice be given or lapse of time or both.

              (c) The aggregate unpaid principal amount of the Revolving Loans after giving effect to such
Revolving Loans will not violate the lending limits set forth in Section 2.01 of this Agreement.

              The acceptance by Borrowers of the proceeds of each Loan will be deemed to constitute a
representation and warranty by Borrowers that the conditions in Section 6.02 of this Agreement,
other than those that have been waived in writing by Bank, have been satisfied.

Section 7. Miscellaneous Provisions.

     7.01 Miscellaneous. This Agreement, the exhibits and the other Loan Documents are the
complete agreement of the parties hereto and supersede all previous understandings relating to the
subject matter hereof. This Agreement may be amended only in writing signed by the party against
whom enforcement of this amendment is sought. This Agreement may be executed in counterparts. If
any part of this Agreement is held invalid, the remainder of this Agreement will not be affected
thereby. This Agreement is and is intended to be a continuing agreement and will remain in full
force and effect until the Loans are finally and irrevocably paid in full.

     7.02 Waiver by Borrowers. Borrowers waive notice of non-payment, demand, presentment,
protest or notice of protest, and all other notices (except those notices specifically provided for
in this Agreement or other Loan Documents); consents to any renewals or extensions of time of
payment thereof; and generally waives any and all suretyship defenses and defenses in the nature
thereof.

     7.03 Binding Effect. This Agreement will be binding upon and inure to the benefit of
the respective legal representatives, successors and assigns of the parties hereto; however,
Borrowers may not assign any of its rights or delegate any of its obligations hereunder. Bank (and
any subsequent assignee) may transfer and assign this Agreement or may assign partial interests or
participation in the Loans to other persons. Bank may disclose to all prospective and actual
assignees and participants all financial, business and other information about Borrowers which Bank
may possess at any time.

     7.04 Survival. All representations, warranties, covenants and agreements made by
Borrowers herein and in the Loan Documents will survive the execution and delivery of this
Agreement, the Loan Documents and the issuance of the Note.

     7.05 Delay or Omission. No delay or omission on the part of Bank in exercising any
right, remedy or power arising from any Event of Default will impair any such right, remedy or
power or be considered a waiver of any right, remedy or power or any Event of Default; and the
action or omission to act

6

 

by Bank upon the occurrence of any Event of Default will not impair any right, remedy or power
arising as a result thereof or affect any subsequent Event of Default of the same or different
nature.

     7.06 Notices. Any notices under or pursuant to this Agreement will be deemed duly
sent when delivered in hand or when mailed by registered or certified mail, return receipt
requested, addressed as follows:

	 	 	 
	To Borrowers:

	 	Health Care REIT, Inc.

One SeaGate, Suite 1500

Toledo, Ohio 43604

Attention: Michael A. Crabtree, Vice President and Treasurer
	 
	 	 
	With a copy to:

	 	Mary Ellen Pisanelli

Shumaker, Loop & Kendrick, LLP

1000 Jackson Street

Toledo, Ohio 43624
	 
	 	 
	To Bank:

	 	Fifth Third Bank

606 Madison Avenue

Toledo, Ohio 43604

Attention: Jeffrey A. Thieman, Vice President

     Either party may change such address by sending notice of the change to the other party.

     7.07 No Partnership. Nothing contained herein or in any of the Loan Documents is
intended to create or will be construed to create any relationship between Bank and the Borrowers
other than as expressly set forth herein or therein and will not create any joint venture,
partnership or other relationship.

     7.08 Indemnification. If after receipt of any payment of all or part of the Note,
Bank is for any reason compelled to surrender such payment to any person or entity, because such
payment is determined to be void or voidable as a preference, impermissible setoff, or diversion of
trust funds, or for any other reason, this Agreement will continue in full force and effect and
Borrowers will be liable to, and will indemnify, save and hold Bank, its officers, directors,
attorneys, and employees harmless of and from the amount of such payment surrendered. The
provisions of this section will be and remain effective notwithstanding any contrary action which
may have been taken by Bank in reliance on such payment, and any such contrary action so taken will
be without prejudice to Bank’s rights under this Agreement and will be deemed to have been
conditioned upon such payment becoming final, indefeasible and irrevocable. In addition, Borrowers
will indemnify, defend, save and hold Bank, its officers, directors, attorneys, and employees
harmless of, from and against all claims, demands, liabilities, judgments, losses, damages, costs
and expenses, joint or several (including all accounting fees and attorneys’ fees reasonably
incurred), that Bank or any such indemnified party may incur arising out of this Agreement, any of
the Loan Documents or any act taken by Bank hereunder except for the willful misconduct or gross
negligence of such indemnified party. The provisions of this section will survive the termination
of this Agreement.

     7.09 Governing Law; Jurisdiction. This Agreement, the Note and the other Loan
Documents will be governed by the domestic laws of the State of Ohio. Borrowers agree that the
state and federal courts in Lucas County, Ohio, or any other court in a jurisdiction in which the
Borrowers do business and in which Bank initiates proceedings have exclusive jurisdiction over all
matters arising out of this Agreement, and that service of process in any such proceeding will be
effective if mailed to Borrowers at its address described in Section 7.06 of this Agreement. BANK
AND BORROWERS HEREBY WAIVE THE RIGHT TO TRIAL

7

 

BY JURY OF ANY MATTERS ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED THEREBY.

IN WITNESS WHEREOF, Borrowers and Bank have executed this Agreement by their duly authorized
officers as of the date first above written.

HEALTH CARE REIT, INC.

HCRI PENNSYLVANIA PROPERTIES, INC.

HCRI TEXAS PROPERTIES, INC.

HCRI TEXAS PROPERTIES, LTD.
     By
Health Care REIT, Inc.,
     Its
General Partner

HCRI NEVADA PROPERTIES, INC.

HCRI LOUISIANA PROPERTIES, L.P.
     By
HCRI Southern Investments I, Inc.,
     Its
General Partner

HEALTH CARE REIT INTERNATIONAL, INC.

HCN ATLANTIC GP, INC.

HCN ATLANTIC LP, INC.

HCN BCC HOLDINGS, INC.

HCRI INDIANA PROPERTIES, INC.

HCRI INDIANA PROPERTIES, LLC
     By
Health Care REIT, Inc.,
     Its
Member

HCRI LIMITED HOLDINGS, INC.

HCRI MASSACHUSETTS PROPERTIES, INC.

HCRI MASSACHUSETTS PROPERTIES TRUST
     By
HCRI Massachusetts Properties, Inc.
     Its
Trustee

HCRI HOLDINGS TRUST
     By
HCRI Massachusetts Properties, Inc.
     Its
Trustee

HCRI NORTH CAROLINA PROPERTIES, LLC
     By
HCRI North Carolina Properties I, Inc.
     Its
Member

HCRI SOUTHERN INVESTMENTS I, INC.

HCRI TENNESSEE PROPERTIES, INC.

PENNSYLVANIA BCC PROPERTIES, INC.

HCRI KENTUCKY PROPERTIES, LLC
     By
Health Care REIT, Inc.
     Its
Member

HCRI MASSACHUSETTS PROPERTIES TRUST II
     By
HCRI Massachusetts Properties, Inc.
     Its
Trustee

HCRI MARYLAND PROPERTIES, LLC
     By
Health Care REIT, Inc.
     Its
Member

HCRI NORTH CAROLINA PROPERTIES I, INC.

     [Borrowers continued on
following page]

8

 

HCRI NORTH CAROLINA PROPERTIES III, LIMITED PARTNERSHIP

     By HCRI North Carolina Properties II, Inc.
     Its
General Partner

HCRI NORTH CAROLINA PROPERTIES II, INC.

HCRI WISCONSIN PROPERTIES, LLC
     By
Health Care REIT, Inc.
     Its
Member

HCRI MISSISSIPPI PROPERTIES, INC.

HCRI ILLINOIS PROPERTIES, LLC
     By
Health Care REIT, Inc.
     Its
Member

HCRI MISSOURI PROPERTIES, LLC
     By
Health Care REIT, Inc.
     Its
Member

HCRI SURGICAL PROPERTIES, LLC
     By
Health Care REIT, Inc.
     Its
Member

HCRI TUCSON PROPERTIES, INC.

HCRI INVESTMENTS, INC.

HCRI CHICAGO PROPERTIES, INC.

HCRI GENERAL PROPERTIES, INC.

HCRI KANSAS PROPERTIES, LLC
     By
Health Care REIT, Inc.
     Its
Member

HCRI TENNESSEE PROPERTIES, LLC
     By
HCRI Tennessee Properties, Inc.
     Its
Member

HH FLORIDA, LLC
     By
Limited Holdings, Inc.
     Its
Member

HCRI NEW HAMPSHIRE PROPERTIES, LLC
     By
Health Care REIT, Inc.
     Its
Member

HCRI PROVIDER PROPERTIES, LLC
     By
Health Care REIT, Inc.
     Its
Member

1920 CLEVELAND ROAD WEST, LLC
     By
Health Care REIT, Inc., as the Member of
     HCRI
Provider Properties, LLC
     Its
Member

721 HICKORY STREET, LLC
     By
Health Care REIT, Inc., as the Member of
     HCRI
Provider Properties, LLC
     Its
Member

111 LAZELLE ROAD EAST, LLC
     By
Health Care REIT, Inc., as the Member of
     HCRI
Provider Properties, LLC
     Its
Member

5166 SPANSON DRIVE SE, LLC
     By
Health Care REIT, Inc., as the Member of
     HCRI
Provider Properties, LLC
     Its
Member

     [Borrowers continued on following page]

9

 

1425 YORKLAND ROAD, LLC
     By
Health Care REIT, Inc., as the Member of
     HCRI
Provider Properties, LLC
     Its
Member

222 EAST BEECH STREET — JEFFERSON, L.L.C.
     By
Health Care REIT, Inc., as the Member of
     HCRI
Provider Properties, LLC
     Its
Member

HCRI SENIOR HOUSING PROPERTIES, INC.

209 MERRIMAN ROAD, L.L.C.
     By
Health Care REIT, Inc., as the Member of
     HCRI
Provider Properties, LLC
     Its
Member

HCRI FINANCING, INC.

	 	 	 	 	 
	 

	 	 	 	     

	 

	 	By
	 	/s/ Michael A. Crabtree
	 

	 	 	 	 
	 

	 	 	 	Name: Michael A. Crabtree
	 

	 	 	 	Title: Vice President and Treasurer

	 	 	Michael A. Crabtree, as Vice President and Treasurer of all of the aforementioned entities,
has executed this Agreement and intending that all entities above named are bound and are to be
bound by the one signature as if he had executed this Agreement separately for each of the above
named entities.

	 	 	 	 	 
	 	 	FIFTH THIRD BANK,
	 	 	an Ohio banking corporation

	 

	 	By
	 	/s/ Jeffrey A. Thieman
	 

	 	 	 	 
	 

	 	 	 	Name: Jeffrey A. Thieman
	 

	 	 	 	Title: Vice President

10

 

Schedule I

List Of Borrowers

	 	 	 
	Name of Borrower

	 	State of Organization
	 
	 	 
	Health Care REIT, Inc.

	 	Delaware
	HCRI Pennsylvania Properties, Inc.

	 	Pennsylvania
	HCRI Texas Properties, Inc.

	 	Delaware
	HCRI Texas Properties, Ltd.

	 	Texas
	HCRI Nevada Properties, Inc.

	 	Nevada
	HCRI Louisiana Properties, L.P.

	 	Delaware
	Health Care REIT International, Inc.

	 	Delaware
	HCN Atlantic GP, Inc.

	 	Delaware
	HCN Atlantic LP, Inc.

	 	Delaware
	HCN BCC Holdings, Inc.

	 	Delaware
	HCRI Indiana Properties, Inc.

	 	Delaware
	HCRI Indiana Properties, LLC

	 	Indiana
	HCRI Limited Holdings, Inc.

	 	Delaware
	HCRI Massachusetts Properties Trust

	 	Massachusetts
	HCRI Massachusetts Properties, Inc.

	 	Delaware
	HCRI Holdings Trust

	 	Massachusetts
	HCRI North Carolina Properties, LLC

	 	Delaware
	HCRI Southern Investments I, Inc.

	 	Delaware
	HCRI Tennessee Properties, Inc.

	 	Delaware
	Pennsylvania BCC Properties, Inc.

	 	Pennsylvania
	HCRI Kentucky Properties, LLC

	 	Kentucky
	HCRI Massachusetts Properties Trust II

	 	Massachusetts
	HCRI Maryland Properties, LLC

	 	Maryland
	HCRI North Carolina Properties I, Inc.

	 	North Carolina
	HCRI North Carolina Properties III, Limited Partnership

	 	 North Carolina
	HCRI North Carolina Properties II, Inc.

	 	North Carolina
	HCRI Wisconsin Properties, LLC

	 	Wisconsin
	HCRI Mississippi Properties, Inc.

	 	Mississippi
	HCRI Illinois Properties, LLC

	 	Delaware
	HCRI Missouri Properties, LLC

	 	Delaware
	HCRI Surgical Properties, LLC

	 	Ohio
	HCRI Tucson Properties, Inc.

	 	Delaware
	HCRI Investments, Inc.

	 	Delaware
	HCRI Chicago Properties, Inc.

	 	Delaware
	HCRI General Properties, Inc.

	 	Delaware
	HCRI Kansas Properties, LLC

	 	Delaware
	HCRI Tennessee Properties, LLC

	 	Delaware
	HH Florida, LLC

	 	Delaware
	HCRI New Hampshire Properties, LLC

	 	Delaware
	HCRI Provider Properties, LLC

	 	Delaware
	1920 Cleveland Road West, LLC

	 	Delaware
	721 Hickory Street, LLC

	 	Delaware
	111 Lazelle Road East, LLC

	 	Delaware
	5166 Spanson Drive SE, LLC

	 	Delaware
	1425 Yorkland Road, LLC

	 	Delaware
	222 East Beech Street — Jefferson, L.L.C.

	 	Delaware
	HCRI Senior Housing Properties, Inc.

	 	Delaware
	209 Merriman Road, L.L.C.

	 	Delaware
	HCRI Financing, Inc.

	 	Delaware

11exv10w4

 

EXHIBIT 10.4

HEALTH CARE REIT, INC.

Stock Option Agreement

     THIS AGREEMENT, dated December 20, 2006, between Health Care REIT, Inc., a Delaware
corporation (the “Company”), and Daniel R. Loftus (the “Participant”), is made pursuant and subject
to the provisions of the 2002 Stock Incentive Plan (the “Plan”) of Windrose Medical Properties
Trust, a Maryland real estate investment trust (the “Trust”), a copy of which has been made
available to the Participant. All capitalized terms used herein but not otherwise defined herein
shall have the meanings ascribed to them in the Plan, except that references in the Plan to the
“Company” shall mean “Health Care REIT, Inc., a Delaware corporation” and references to the “Common
Stock” shall mean “the common stock, $1.00 par value per share, of Health Care REIT, Inc.”

     WHEREAS, the Trust and Windrose Medical Properties, L.P., a Virginia limited partnership (the
“Operating Partnership”), entered into an Agreement and Plan of Merger, dated September 12, 2006,
with the Company, Heat Merger Sub, LLC, a Delaware limited liability company (“Merger Sub”), and
Heat OP Merger Sub, L.P., a Virginia limited partnership (“OP Merger Sub”), as amended by Amendment
No. 1 to Agreement and Plan of Merger, dated October 12, 2006 (the “Merger Agreement”), which
provides for: (a) the Trust to merge with and into Merger Sub, with Merger Sub continuing as the
surviving entity, and (b) OP Merger Sub to merge with and into the Operating Partnership, with the
Operating Partnership continuing as the surviving entity.

     WHEREAS, pursuant to Section 6.2 of the Merger Agreement, each option to acquire common shares
of beneficial interest in the Trust, $0.01 par value per share, held by Participant prior to the
Merger Effective Time (as defined in the Merger Agreement), became fully vested in accordance with
the Plan and is identified on Exhibit A (a “Pre-Conversion Option”).

     WHEREAS, pursuant to Section 6.2 of the Merger Agreement, at the Merger Effective Time, each
Pre-Conversion Option was converted into an option to acquire the number of shares of common stock,
$1.00 par value per share, of the Company, as reflected on Exhibit A (“Common Stock”).

1. Converted Options. Pursuant to the Plan, the Trust granted to the Participant the Pre-Conversion
Options, subject to the terms and conditions of the Plan and the applicable stock option agreement
between the Trust and Participant. At the Merger Effective Time, such Pre-Conversion Options were
fully vested and converted into an option to acquire the number of shares of Common Stock
identified on Exhibit A (the “Converted Options”). Accordingly, effective as of the date
hereof and subject to the terms and conditions of the Plan and the terms and conditions herein set
forth, Participant shall have the right and option to exercise such Converted Options and purchase
from the Company all or any part of the Common Stock at the option price set forth on Exhibit
A. The Converted Options are intended to be “incentive stock options” under Section 422 of the
Code. Such Converted Options will be exercisable as hereinafter provided.

2. Expiration Date. The Converted Options shall expire at 11:59 p.m. on the applicable
Expiration Date set forth on Exhibit A.

 

 

3. Exercisability. The Converted Options shall continue to be exercisable until the earlier of
the termination of the right to exercise the Converted Options pursuant to paragraph 6, 7 or 8 or
until the Expiration Date. The Participant may exercise the Converted Options for all or part of
the number of shares of Common Stock. A partial exercise of the Converted Options shall not affect
the Participant’s right to exercise the Converted Options with respect to the remaining shares of
Common Stock, subject to the conditions of the Plan and this Agreement.

4. Method of Exercise and Payment for Shares. The Converted Options shall be exercised by written
notice delivered to the attention of the Company’s Secretary at the Company’s principal executive
office. The exercise date shall be (i) in the case of notice by mail, the date of postmark or (ii)
if delivered in person, the date of delivery. Such notice shall be accompanied by payment of the
option price in full, in cash or cash equivalent acceptable to the Compensation Committee of the
Company, or by the surrender of shares of Common Stock with an aggregate Fair Market Value
(determined as of the preceding business day) which, together with any cash or cash equivalent paid
by the Participant, is not less than the option price for the number of shares of Common Stock for
which the Converted Option is being exercised.

5. Nontransferable. The Participant’s rights under the Converted Options are nontransferable except
by will or the laws of descent and distribution. During the Participant’s lifetime, the Converted
Options may be exercised only by the Participant.

6. Exercise in the Event of Death. The Converted Options may be exercised by the Participant’s
estate, or the person or persons to whom his rights under the Converted Options shall pass by will
or the laws of descent and distribution, if the Participant dies before the Expiration Date and
before the termination of his or her rights under paragraph 7 or 8. The Participant’s estate or
such persons may exercise the Converted Options during the 90 day period following the
Participant’s death or, if shorter, during the remainder of the period preceding the Expiration
Date. The Participant’s estate or such persons may exercise the Converted Options for all or part
of the number of shares of Common Stock that the Participant was entitled to purchase on the date
of his or her death.

7. Exercise by Participant After Termination. The Converted Options may be exercised by the
Participant if his or her employment with the Company or its Affiliates terminates or is terminated
before the Expiration Date and before the termination of his or her rights under paragraph 8. In
that event, the Participant may exercise the Converted Options during the 90 day period following
the last day that he or she is employed by the Company or an Affiliate or, if shorter, the
remainder of the period preceding the Expiration Date. The Participant may exercise the Converted
Options for all or part of the number of shares of Common Stock that the Participant was entitled
to purchase on the last day that he or she was employed by the Company or an Affiliate.

8. Breach of Covenant. The Converted Options may not be exercised on or after the date that the
Participant breaches a covenant against competition, disclosure of confidential information or
solicitation of employees contained in a written agreement between the Company and the Participant
or an Affiliate and the Participant. In addition, in the event of any such breach, the Participant
or the transferee of the Converted Options must return to the Company any shares of Common Stock
acquired upon the exercise of the Converted Options within the six

-2-

 

month period before such breach or on or after such breach. Upon delivery of the shares of Common
Stock pursuant to the preceding sentence, the Company shall pay the Participant or transferee the
option price paid to acquire such shares of Common Stock under the Converted Options.

9. Fractional Shares. Fractional shares shall not be issuable hereunder, and when any provision
hereof may entitle the Participant to a fractional share such fraction shall be disregarded.

10. Change in Capital Structure. The terms of the Converted Options shall be adjusted as the Board
of Directors of the Company determines is equitably required in the event the Company effects one
or more stock dividends, stock split-ups, subdivisions or consolidations of shares or other similar
changes in capitalization.

11. Governing Law. This Agreement shall be governed by the laws of the State of Maryland; provided,
however, that the issuance of shares of Common Stock shall be governed by the laws of the State of
Delaware.

12. Conflicts. In the event of any conflict between the provisions of the Plan as in effect on the
date hereof and the provisions of this Agreement, the provisions of the Plan shall govern. All
references herein to the Plan shall mean the Plan as in effect on the date hereof.

13. Participant Bound by Plan. The Participant hereby acknowledges that a copy of the Plan has been
made available to the Participant and agrees to be bound by all the terms and provisions thereof.

14. No Right to Continued Employment. The Converted Options do not confer upon the Participant any
right with respect to continuance of employment with the Company or an Affiliate and does not
interfere with the right of the Company or an Affiliate to terminate the Participant’s employment.

15. Binding Effect. Subject to the limitations stated above and in the Plan, this Agreement shall
be binding upon and inure to the benefit of the legatees, distributees, and personal
representatives of the Participant and the successors of the Company.

16. Superceding Agreement. This Agreement supercedes all other agreements that evidence
Pre-Conversion Options.

[SIGNATURE PAGE FOLLOWS]

-3-

 

     IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by a duly authorized
officer, and the Participant has affixed his or her signature hereto as of the date first written
above.

	 	 	 	 	 
	Health Care REIT, Inc.	 	Daniel R. Loftus
	 
	 	 	 	 
	 
	 	 	 	 
	By:

	 	/s/ Erin C. Ibele
	 	/s/ Daniel R. Loftus
	 

	 	 
	 	 
	Name:

	 	Erin C. Ibele	 	 
	Its:

	 	Senior Vice President—Administration	 	 
	 

	 	and Corporate Secretary	 	 

-4-

 

DAN LOFTUS

EXHIBIT A

INCENTIVE STOCK OPTIONS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Vested Before	 	 	Vested After	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Merger of 12/19/2006	 	 	Merger of 12/19/2006	 	 	Total	 	 	 	 	 	 	Exercise Price	 	 	Exercise Price	 	 	 	 
	Grant Date Of	 	Number of	 	 	Number of	 	 	Number of Pre-	 	 	Number of	 	 	Per Share for	 	 	Per Share for	 	 	 	 
	Pre-Conversion	 	Pre-Conversion	 	 	Pre-Conversion	 	 	Conversion	 	 	Converted	 	 	Pre-Conversion	 	 	Converted	 	 	Expiration	 
	Options	 	Options	 	 	Options	 	 	Options	 	 	Options	 	 	Options	 	 	Options	 	 	Date	 
	8/16/2002
	 	 	6,000	 	 	 	—	 	 	 	6,000	 	 	 	2,705	 	 	$	12.00	 	 	$	26.61	 	 	 	8/15/2012	 
	8/5/2003
	 	 	6,000	 	 	 	1,500	 	 	 	7,500	 	 	 	3,381	 	 	$	12.00	 	 	$	26.61	 	 	 	8/4/2013	 
	7/27/2004
	 	 	4,280	 	 	 	2,853	 	 	 	7,133	 	 	 	3,216	 	 	$	12.00	 	 	$	26.61	 	 	 	7/26/2014	 
	7/26/2005
	 	 	1,000	 	 	 	1,500	 	 	 	2,500	 	 	 	1,127	 	 	$	15.11	 	 	$	33.51	 	 	 	7/25/2015	 

NON-QUALIFYING STOCK OPTIONS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Vested Before	 	 	Vested After	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Merger of 12/19/2006	 	 	Merger of 12/19/2006	 	 	Total	 	 	 	 	 	 	Exercise Price	 	 	Exercise Price	 	 	 	 
	Grant Date Of	 	Number of	 	 	Number of	 	 	Number of Pre-	 	 	Number of	 	 	Per Share for	 	 	Per Share for	 	 	 	 
	Pre-Conversion	 	Pre-Conversion	 	 	Pre-Conversion	 	 	Conversion	 	 	Converted	 	 	Pre-Conversion	 	 	Converted	 	 	Expiration	 
	Options	 	Options	 	 	Options	 	 	Options	 	 	Options	 	 	Options	 	 	Options	 	 	Date	 
	7/27/2004
	 	 	220	 	 	 	147	 	 	 	367	 	 	 	165	 	 	$	12.00	 	 	$	26.61	 	 	 	7/25/2014	 
	12/20/2005
	 	 	7,200	 	 	 	28,800	 	 	 	36,000	 	 	 	16,232	 	 	$	14.79	 	 	$	32.80	 	 	 	12/19/2015	 
	7/26/2005
	 	 	4,000	 	 	 	6,000	 	 	 	10,000	 	 	 	4,509	 	 	$	15.11	 	 	$	33.51	 	 	 	7/25/2015	 
	8/1/2006
	 	 	3,600	 	 	 	14,400	 	 	 	18,000	 	 	 	8,116	 	 	$	14.70	 	 	$	32.60	 	 	 	7/31/2016	 

-5-

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