GLOBAL AMENDMENT TO MANAGEMENT AGREEMENTS
THIS GLOBAL AMENDMENT TO AGREEMENTS TO PROVIDE MANAGEMENT SERVICES TO
ASSISTED LIVING FACILITIES (the "Amendment") is made and entered into effective
as of the 30th day of June, 2003 by and between EMERITUS CORPORATION
("Manager"), ESC IV, LP., a Washington limited partnership ("Assignee") and
HB-ESC I, LLC, a Washington limited liability company ("HB-ESC I"), HB-ESC II,
LLC, a Washington limited liability company ("HB-ESC II") and HB-ESC V, LP, a
Washington limited partnership ("HB-ESC V" and together with HB-ESC I and HB-ESC
II, the "HB Licensees").
RECITALS
A. WHEREAS, the HB Licensees and Manager are parties to those certain
Agreements to Provide Management Services to Assisted Living Facility as
specifically set forth on Exhibit A, attached hereto and made a part hereof,
(the "Management Agreements") with respect to the management by Manager or by
Assignee pursuant to that certain Assignment of Management dated May 1,2002 (the
"Assignment") for the assisted living facilities as further set forth on Exhibit
A (the "Facilities").
B. WHEREAS, concurrent with the execution of this Amendment, Manager and the
HB Licensees intend to enter into (1) a Termination of Amended and Restated
Funding Agreement to terminate Manager's funding of certain Operating Losses
related to the Facilities; and (2)a binding Purchase Agreement (the "Purchase
Agreement") to document the terms of a transaction whereby Manager will acquire
and/or assume and the HB Licensees will sell and/or assign all of the HB
Licensees' right, title and interest in each of the leasehold estates for the
Facilities on the terms and conditions of the Purchase Agreement and upon the
same such assignment and assumption the Management Agreements and each of them
shall terminate.
C. WHEREAS, Manager, Assignee and each of the HB Licensees are
interested in amending the terms of the Management Agreements for the period in
which
the Purchase Agreement is in effect.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants of the parties set forth herein, IT IS HEREBY AGREED AS FOLLOWS:
1. Article IV of each of the Management Agreements is amended to add the
following language at the end of the paragraph:
Notwithstanding the foregoing, in the event that the Manager and Licensee enter
into a Purchase Agreement whereby the leasehold interest in the Facility is to
be transferred to the Manager, during the term of such Purchase Agreement,
neither party shall have any right of termination of the Agreement except for
cause in the case of a breach of either the Agreement or the Purchase Agreement.
Further, in no event shall the
Manager's failure to close the transaction contemplated by the Purchase
Agreement for a failure to meet a condition to closing result in a termination
of the Agreement.
2. Article VIII of each of the Management Agreements is hereby deleted in
its entirety and replaced with the following language:
Management Fee:In consideration for the provision of the services contemplated
----------------
in this Agreement, Manager shall receive a management fee ("Management Fee") of
up to a maximum of seven percent (7%) of the gross revenue generated for the
prior month by the Facility, contingent upon and payable out of available cash
flow of the Facility. The Management Fee shall be payable on or before the 10th
day of each month out of available cash flow in an amount up to 7% of the gross
revenues. For purposes of this Agreement, "gross revenues" mean all revenues
generated by the operation of the Facility, but shall not include proceeds from
the sale of Facility equipment or the Facility, any insurance or condemnation
proceeds or any other proceeds from a capital event. For purposes of this
Agreement, "cash flow" shall be defined as gross revenues less Facility expenses
and lease, rental and/or debt service
payments, however cash flow shall be calculated prior to the payment of the
Management Fee and any depreciation or amortization charges. If the services of
Manager commence or terminate, other than on the first day of the month, the
revenues upon which the fee is calculated shall be prorated in proportion to the
number of days for which services are actually rendered. The Management Fee
provided for herein shall be disbursed by Manager to itself out of the Facility
Checking Account as provided in this Agreement.
3. Except as specifically set forth herein, the Management Agreements and
each of them shall remain in full force and effect as originally executed by the
parties thereto.
4. The execution and performance of this Amendment by the HB Licensees,
Manager and Assignee has been duly authorized by all necessary laws, resolutions
or corporate action, and this Amendment constitutes the valid and enforceable
obligations of the HB Licensees, Manager and Assignee in accordance with its
terms.
5. This Amendment represents the entire and final agreement of the parties
hereto with respect to the subject matter hereof and supersedes all prior
negotiations, discussions or writings with respect thereto. This Amendment may
not be amended or modified except by written instrument signed by the parties
hereto. In the event of a conflict between this Amendment and any or all of the
Management Agreements or the Assignment, this Amendment shall control.
6. This Amendment may be executed in counterparts, each of which shall be
deemed to be an original, but all of which taken together shall constitute but
one and the same instrument.
7. Each of the parties acknowledges and agrees that it has participated in
the drafting and negotiation of this Amendment. Accordingly, in the event of a
dispute with respect to the interpretation or enforcement of the terms hereof,
no provision shall be construed so as to favor or disfavor any party hereto.
8. In the event of dispute with respect to the interpretation or enforcement
of the terms thereof, the prevailing party shall be entitled to collect from the
other its reasonable costs and attorneys fees, including its costs and fees on
appeal.
9. Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Management Agreements.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereby execute this Amendment effective as
of the day and year first set forth above.
EMERITUS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Its: Director of Real Estate Finance
By: ESC XX XX, Inc.
Its: General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Its: Director of Real Estate Finance
HB-ESC I, LLC
By: /s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
Manager
HB-ESC II, LLC
By: /s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
Manager
HB-ESC V, LLC
By: HB-ESC III, LLC
Its: General Partner
By: /s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
Manager
EXHIBIT A
MANAGEMENT AGREEMENTS
1. That Agreement to Provide Management Services to Assisted Facility dated as
of May 9,2002 by and between HB-ESC V, L.P, as Licensee ("Licensee") and
Emeritus Corporation, as Manager ("Manager") as amended by that Amended and
Restated Funding Agreement dated as of May 1,2002 among Licensee, Manager and
certain affiliates of Manager (the "Funding Agreement") and as assigned by that
certain Assignment of Management Agreements dated May 1, 2002("Assignment") by
and amongst Licensee, Manager and ESC IV, LP, a Washington limited partnership
("Assignee"), with respect to the following assisted living facility:
Xxxxxxxx Place at The Medical Center
0000 Xxxxx Xxxx Xxxxx
Xxx Xxxxxxx, Xxxxx 00000
2. That Agreement to Provide Management Services to Assisted Facility dated as
of May 9,2002 by and between HB-ESC V, L.P, as Licensee ("Licensee") and
Emeritus Corporation, as Manager ("Manager") as amended by that Amended and
Restated Funding Agreement dated as of May 1, 2002 among Licensee, Manager and
certain affiliates of Manager (the "Funding Agreement") and as assigned by that
certain Assignment of Management Agreements dated May 1, 2002("Assignment") by
and amongst Licensee, Manager and ESC IV, LP, a Washington limited partnership
("Assignee"), with respect to the following assisted living facility:
Xxxxxxxx Place at Oakwell Farms
0000 Xxxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxx 00000
3. That Agreement to Provide Management Services to Assisted Facility dated as
of May 9,2002 by and between HB-ESC V, L.P, as Licensee ("Licensee") and
Emeritus Corporation, as Manager ("Manager") as amended by that Amended and
Restated Funding Agreement dated as of May 1, 2002 among Licensee, Manager and
certain affiliates of Manager (the "Funding Agreement") and as assigned by that
certain Assignment of Management Agreements dated May 1, 2002("Assignment") by
and amongst Licensee, Manager and ESC IV, LP, a Washington limited partnership
("Assignee"), with respect to the following assisted living facility:
Xxxxxxxx Place at Stonebridge
0000 X. Xxxxxxxxxxx Xxxxx
XxXxxxxx, Xxxxx 00000
4. That Agreement to Provide Management Services to Assisted Facility dated as
of May 9,2002 by and between HB-ESC V, L.P, as Licensee ("Licensee") and
Emeritus Corporation, as Manager ("Manager") as amended by that Amended and
Restated Funding Agreement dated as of May 1,2002 among Licensee, Manager and
certain
affiliates of Manager (the "Funding Agreement") and as assigned by that certain
Assignment of Management Agreements dated May 1, 2002("Assignment") by and
amongst Licensee, Manager and ESC IV, LP, a Washington limited partnership
("Assignee"), with respect to the following assisted living facility:
Xxxxxxxx Place of Henderson
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx 00000
5. That Agreement to Provide Management Services to Assisted Facility dated as
of May 1,2002 by and between HB-ESC II, LLC., as Licensee ("Licensee") and
Emeritus Corporation, as Manager ("Manager") as amended by that Amended and
Restated Funding Agreement dated as of May 1, 2002 among Licensee, Manager and
certain affiliates of Manager (the "Funding Agreement"), with respect to the
following assisted living facility:
Xxxxxxxx Place at Alexandria
000 Xxxxxxxxxx Xxxx
Alexandria, Louisiana
6. That Agreement to Provide Management Services to Assisted Facility dated as
of May 1,2002 by and between HB-ESC II, LLc., as Licensee ("Licensee") and
Emeritus Corporation, as Manager ("Manager") as amended by that Amended and
Restated Funding Agreement dated as of May 1,2002 among Licensee, Manager and
certain affiliates of Manager (the "Funding Agreement"), with respect to the
following assisted living facility:
Xxxxxxxx Place at Lake Xxxxxxx
0000 Xxxxxxx Xxxx Xxxx
Xxxx Xxxxxxx, Xxxxxxxxx
7. That Agreement to Provide Management Services to Assisted Facility dated as
of May 1,2002 by and between HB-ESC II, LLC., as Licensee ("Licensee") and
Emeritus Corporation, as Manager ("Manager") as amended by that Amended and
Restated Funding Agreement dated as of May 1,2002 among Licensee, Manager and
certain affiliates of Manager (the "Funding Agreement"), with respect to the
following assisted living facility:
Xxxxxxxx Place at Lafayette
000 Xxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx
8. That Agreement to Provide Management Services to Assisted Facility dated as
of May 1,2002 by and between HB-ESC I, LLc., as Licensee ("Licensee") and
Emeritus Corporation, as Manager ("Manager") as amended by that Amended and
Restated Funding Agreement dated as of May 1, 2002 among Licensee, Manager and
certain
affiliates of Manager (the "Funding Agreement"), with respect to the following
assisted living facility:
Xxxxxxxx Place of Shreveport
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxx
