EXHIBIT 7
Merit Partners, LLC
c/o NorthStar Capital Investment Corp.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
July 30, 2003
VIA FACSIMILE
Emeritus Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx
Facsimile No.: (000) 000-0000
RE: 9% Cumulative Convertible Exchangeable
Redeemable Preferred Stock
Dear Ray:
Reference is made to the Repurchase Agreement, dated as of May 14,
2003, as amended as of June 25, 2003 (the "Agreement"), by and between
Emeritus Corporation, a Washington corporation (the "Purchaser"), as
purchaser, and Merit Partners, LLC, a New York limited liability company (the
"Seller"), as seller. Capitalized terms used and not otherwise defined in this
letter agreement shall have the respective meanings ascribed to such terms in
the Agreement.
The Purchaser and the Seller hereby agree to modify the Agreement
such that the Seller shall sell to the Purchaser at an initial closing to
occur on or prior to July 31, 2003 (the "First Closing") 12,500 of the
Preferred Shares, together with all Accrued Dividends thereon, for a cash
purchase price of $10,000,000 and the Seller shall sell to the Purchaser at a
second closing to occur on or prior to August 30, 2003 (the "Second Closing")
the remaining 12,500 Preferred Shares, together with all Accrued Dividends
thereon, for a cash purchase price of $10,000,000, with the Deposit (as such
term is defined below) being applied at the Second Closing in the manner set
forth in Section 2.2 of the Agreement. The Seller and the Purchaser agree that
the foregoing modification is subject to the following terms and conditions:
(i) if the First Closing fails to occur on or prior to July 31, 2003, the
Termination Date shall be deemed to have occurred on July 31, 2003 and the
Deposit shall be handled in the manner set forth in Section 2.2 of the
Agreement; (ii) if the First Closing occurs on or prior to July 31, 2003 but
the Second Closing fails to occur on or prior to August 30, 2003, the
Termination Date shall be deemed to have occurred on August 30, 2003 and the
Deposit shall be handled in the manner set forth in Section 2.2 of the
Agreement; (iii) all representations and warranties under Articles III and IV
shall be deemed to be brought down through the First Closing should it occur
and the legal opinions and officers' certificates required to be delivered
pursuant to Section 2.4 of the Agreement shall be delivered at the First
Closing and shall be deemed to relate solely to the First Closing; (iv) all
representations and warranties under Articles III and IV shall be deemed to be
brought down through the Second Closing should it occur and additional legal
opinions and officers' certificates, or reasonably acceptable bring-down
letters as those opinions and certificates delivered at the First Closing, in
each case dated the date of the Second Closing, shall be required to be
delivered at the Second Closing pursuant to Section 2.4 of the Agreement; and
(v) the resignation of Xxxxx Xxxxxxxx from the Board of Directors of the
Purchaser shall be a condition to the Second Closing only. References in the
Agreement to the "Deposit" shall be deemed to be references collectively to
the initial deposit of $500,000 as described in Section 2.2 of the Agreement
(the "Initial Deposit") and the $300,000 extension deposit paid in connection
with the June 25, 2003 amendment to the Agreement (the "First Extension
Deposit").
Except as otherwise provided in this letter agreement, the Agreement
shall remain unchanged and in full force and effect. From and after the
execution of this letter agreement by each of the Purchaser and the Seller,
any reference to the Agreement shall be deemed to be a reference to the
Agreement as modified by this letter agreement.
This letter agreement may be executed in one or more counterparts,
and by different parties hereto in separate counterparts, each of which when
so executed shall be deemed an original, but all of which together shall
constitute one and the same instrument.
This letter agreement shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York without giving
effect to the principles of conflicts of law thereof.
If the Purchaser is in agreement with the foregoing, please indicate
such agreement by executing this letter agreement where indicated below.
Very truly yours,
MERIT PARTNERS, LLC
By: NorthStar Partnership, L.P.
Its: Sole Member
By: NorthStar Capital Investment Corp.
Its: General Partner
By: /s/ Xxxxxxx X. XxXxxxxx
-----------------------
Name: Xxxxxxx X. XxXxxxxx
Title: Vice President
AGREED AS OF THE DATE WRITTEN ABOVE:
EMERITUS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Vice President of Finance
