TERMINATION OF
AMENDED AND RESTATED FUNDING AGREEMENT
THIS TERMINATION OF AMENDED AND RESTATED FUNDING AGREEMENT (the
"Agreement") is made and entered into as of the 30th day of June, 2003 by and
between EMERITUS CORPORATION ("Emeritus") and HB-ESC I, LLC ("HB-ESC I"), HB-ESC
II, LLC ("HB-ESC II") and HB-ESC V, LP ("HB-ESC V" and together with HB-ESC I
and HB-ESC II, the "HB Entities").
RECITALS
A. WHEREAS, Emeritus and the HB Entities are parties to that certain
Amended and Restated Funding Agreement dated as of May 1, 2002 ("Amended Funding
Agreement") whereby Emeritus agreed to be responsible for certain Operating
Losses of those certain assisted living facilities that are listed on Exhibit A
(the "Facilities"), attached hereto and made a part hereof, pursuant to the
terms of the Amended Funding Agreement and in consideration of certain covenants
and agreements of the HB Entities as set forth therein.
B. WHEREAS, Emeritus and the HB Entities have also entered into Management
Agreements of even date with the Amended Funding Agreement, whereby Emeritus has
agreed to and has been engaged by the HB Entities to operate the Facilities.
C. WHEREAS, concurrent with the execution of this Agreement, Emeritus and
the HB Entities intend to enter into an amendment to the Management Agreements
("Amendment to Management Agreements") and a binding Purchase Agreement (the
"Purchase Agreement") to document the terms of a transaction whereby Emeritus
will acquire and/or assume and the HB Entities will sell and/or assign all of
the HB Entities' right, title and interest in each of the leasehold estates for
the Facilities on the terms and conditions of the Purchase Agreement.
D. WHEREAS, in consideration for each of the other's entry into the
Amendment to Management Agreements and the Purchase Agreement Emeritus and the
HB Entities desire to fully and finally terminate the Amended Funding Agreement
and release each other from any further duties or obligations thereunder and
each of Emeritus and the HB Entities are interested in documenting the terms and
conditions of such termination and release.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants of the parties set forth herein, IT IS HEREBY AGREED THAT THE AMENDED
AND RESTATED FUNDING AGREEMENT SHALL BE AND HEREBY IS TERMINATED ACCORDING TO
THE FOLLOWING TERMS:
1. Emeritus and each of the HB Entities acknowledge, agree and covenant
that in consideration of each of the other entering into the Purchase Agreement
and the Amendment to Management Agreement that the Amended Funding Agreement is
and
Termination of Amended and Restated Funding Agreement.doc
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shall be terminated effective as of June 30, 2003 (the "Effective Date") and
that neither Emeritus nor any of the HB Entities shall have any further rights
or obligations thereunder from and after the Effective Date.
2. In consideration for the termination of the Amended Funding
Agreement, each of Emeritus and Regent shall forever release and discharge each
the other, and each of their current and former officers, directors, partners,
shareholders, members, managers, attorneys, agents, parents, affiliates,
employees, successors and assigns, as applicable, from any and all actions,
claims, debts, demands, duties, expenses, judgments, liabilities and obligations
whatever, whether known or unknown, contingent or fixed, whether from contract
or tort, from the beginning of time to the Effective Date, arising out of or
connected with, directly or indirectly, the Amended Funding Agreement.
3. This Agreement represents the entire and final agreement of the
parties thereto with respect to the subject matter hereof and supersedes all
prior negotiations, discussions or writings with respect thereto. This Agreement
may not be amended or modified except by written instrument signed by the
parties hereto. In the event of a conflict between this Agreement and the
Amended Funding Agreement, the Management Agreements or any other agreement
between the parties related to the Facilities, this Agreement shall control.
4. This Agreement 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.
5. Each of the parties acknowledges and agrees that it has participated
in the drafting and negotiation of this Agreement. 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.
6. In the event of dispute with respect to the interpretation or
enforcement of the terms hereof, the prevailing party shall be entitled to
collect from the other its reasonable costs and attorneys fees, including its
costs and fees on appeal.
7. Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Amended Funding Agreement.
IN WITNESS WHEREOF, the parties hereby execute this Agreement as of the day
and year first set forth above.
EMERITUS CORPORATION
By:/s/ Xxxxxxx X. Xxxxxxx
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, L.P.
By: HB-ESC III, LLC
Its: General Partner
By: /s/ Xxxxxx X. Xxxx
Its: Manager
EXHIBIT A
THE FACILITIES
Xxxxxxxx Place at Alexandria
000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx
Xxxxxxxx Place at Lake Xxxxxxx
0000 Xxxxxxx Xxxx Xxxx
Xxxx Xxxxxxx, Xxxxxxxxx
Xxxxxxxx Place at Lafayette
000 Xxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx
Xxxxxxxx Place of Xxxxxxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx
Xxxxxxxx Place at Oakwell Farms
0000 Xxxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxx
Xxxxxxxx Place at The Medical Center
0000 Xxxxx Xxxx Xxxxx
Xxx Xxxxxxx, Xxxxx
Xxxxxxxx Place at Stonebridge
0000 X. Xxxxxxxxxxx Xxxxx
XxXxxxxx, Xxxxx
Xxxxxxxx Place of Shreveport
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxx
