LEASE ASSIGNMENT AND OPERATIONS TRANSFER AGREEMENT
THIS AGREEMENT is made and entered into effective as of the 30th day of
September, 2001 (the "Execution Date") by and between Emeritus Corporation, a
Washington corporation ("Tenant") and Sierra Hills Assisted Living Community,
LLC, an Oregon limited liability company ("Assignee") and Jon M. and Kristin P.
Harder, husband and wife, Darryl E. and Carol L. Fisher, husband and wife, Eric
W. and Marti M. Jacobson, husband and wife and Sunwest Management, Inc., an
Oregon corporation (collectively, "Guarantor").
RECITALS
A. Pursuant to a Lease Agreement dated as of September _____ [undated],
2000, a true and correct copy of which is attached hereto as Exhibit A (the
"Lease"), Tenant leases from HR Acquisition I Corporation, a Maryland
corporation ("Landlord") the assisted living facility located in Cheyenne,
Wyoming and commonly known as Sierra Hills, 4606 North College Drive, Cheyenne,
Wyoming 82009 (the "Facility").
B. Tenant and Assignee are interested in (i) Tenant assigning the Lease
to Assignee and Assignee assuming the Lease from Tenant and (ii) confirming the
guarantee by Guarantor of the obligations of Assignee under the Lease.
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. Lease Assignment and Assumption.
(a) Provided all of the conditions set forth in clauses (ii), (iii),
(iv), (v), (vi), (x) and (xi) (but only with respect to the payment due on
November 1, 2001) of the Landlord Consent attached hereto as Exhibit A (the
"Landlord Consent") have been satisfied by Tenant or Assignee, as applicable, as
of November 1, 2001 or such later date on which Assignee may be duly licensed
to operate the Facility by the State of Wyoming(the "Transfer Date") Tenant does
hereby sell, transfer, convey and assign to Assignee and Assignee does hereby
take, accept and assume from Tenant (i) all of Tenant's right, title and
interest in and to and obligations under the Lease and (ii) all of Tenant's
right, title and interest, if any, in and to the trade name "Sierra Hills," it
being understood and agreed, however, that Tenant is not making any
representations or warranties with respect to the nature or extent of its legal
rights, if any, in and to the name "Sierra Hills." Assignee agrees to proceed
with all due diligence to secure a license to operate the Facility by November
1, 2001 and Tenant agrees, upon request and at no cost to Tenant, to cooperate
in Assignee's licensure application process, including, but not limited to,
providing Assignee with such documentation or information as may be in Tenant's
possession and may be required to be submitted as part of Assignee's license
application. In the event Assignee has been unable to secure a license to
operate the Facility by December 1, 2001, Tenant shall have the right, but not
the obligation, to declare this Agreement null and void and of no further force
and effect.
(b) In furtherance and not in limitation of the foregoing, Assignee
acknowledges that as of the date hereof Tenant has not posted with Landlord the
Rent Reserve Deposit required by the terms of Section 2.5 of the Lease and that,
unless Landlord agrees to waive the requirement therefor, the posting and
maintenance of the Rent Reserve Deposit shall be and remain the responsibility
of Assignee. Assignee further acknowledges and agrees that Landlord has agreed
that the requirements with respect to the Rent Reserve Deposit shall be deemed
satisfied if Assignee does the following: (i) on November 1, 2001 and on the
first day of each month thereafter through April 1, 2002, Assignee shall deliver
to Landlord concurrently with the payment of its monthly Minimum Rent payment
the sum of $5,000, (ii) on May 1, 2002 and on the first day of each month
thereafter through October 1, 2002, Assignee shall deliver to Landlord
concurrently with the payment of its monthly Minimum Rent payment the sum of
$10,000 and (iii) on November 1, 2002 and on the first day of each month
thereafter through April 1, 2003, Assignee shall deliver to Landlord
concurrently with the payment of its monthly Minimum Rent payment the sum of
$13,274; provided, however, Assignee shall be relieved of its obligations
hereunder with respect to any payments which would otherwise be due to Landlord
pursuant to this Section 1(b) from and after the date the Facility is purchased
by Assignee pursuant to the option to purchase set forth in Section 29.2 of the
Lease (as amended by the terms of the Landlord Consent executed concurrently
herewith).
(c) Notwithstanding the foregoing, in the event of a default by
Assignee in its obligations under the Lease which is not cured within any cure
period provided for therein (an "Assignee Default"), Tenant shall have the right
(i) to take such action on behalf and at the cost of Assignee as may be
necessary to cure such Assignee Default, in which case any amounts so expended
by Tenant shall be due from Assignee on demand along with interest thereon at
the Overdue Rate (as defined in the Lease), (ii) to declare this Assignment null
and void and of no further force and effect as of a date specified by Tenant in
written notice to Assignee (the "Termination Date") and/or (iii) to re-enter the
Facility and resume operational and financial responsibility therefor, in which
case upon request Assignee agrees to enter into an interim management agreement
with Tenant pursuant to which Tenant shall be entitled to assume operational and
financial responsibility for the Facility and to operate the same under
Assignee's license from and after the Termination Date and until the issuance to
Tenant of a license to operate the Facility.
(d) In the event Tenant exercises its rights under this Section 1 after an
Assignee Default to declare this Assignment null and void and to retake
operational and financial responsibility for the Facility, such operational and
financial responsibility shall be transferred by Assignee to Tenant in
accordance with the provisions of this Agreement governing the transfer of
operational and financial responsibility for the Facility from Tenant to
Assignee.
(e) Assignee acknowledges and agrees that for so long as this
Assignment remains in effect, Tenant shall have all of the rights granted to the
Landlord under the Lease, including, but not limited to, the inspection rights
set forth in Article 25 of the Lease, the right to receive copies of the
officer's certificates, financial statements and other information required to
be delivered by Assignee to Landlord under Article 24 of the Lease and the right
to exercise any rights and remedies on default granted to the Landlord under
Article15 of the Lease.
(f) For so long as this Assignment remains in effect, Assignee shall
provide to Tenant copies of any and all notices of default which it receives
from Landlord within two (2) business days after its receipt thereof.
2. Employees.
(a) On the Transfer Date, Tenant shall terminate all of the employees
of each of the Facility and shall pay to them any wages and benefits which are
due as of the Transfer Date under applicable State law. Assignee agrees to
interview each of the employees of the Facility and, as appropriate in its
reasonable discretion, to extend an offer of employment to those employees that
it feels can meet its performance standards, which offer shall be on reasonable
comparable terms and conditions to the current terms of their employment as
disclosed to Assignee by Tenant. All of the Facility employees hired by Assignee
shall hereinafter be referred to as the "Retained Employees."
(b) Tenant shall offer and provide, as appropriate, group health plan
continuation coverage pursuant to the requirements of Section 601, et seq. of
ERISA and Section 4980B of the Internal Revenue Code ("COBRA") to all of the
employees of the Facility to whom it is required to offer the same under
applicable law. Tenant acknowledges and agrees that Assignee is not assuming
any of Tenant's obligations to its employees under COBRA or otherwise. Assignee
agrees to cooperate with Tenant in providing information concerning the Retained
Employees, and the nature of the benefits offered to each Retained Employee. As
of the Transfer Date, all Retained Employees shall be eligible for participation
in a group health plan (as defined for purposes of Internal Revenue Code Section
4980B) established and maintained by Assignee for the general benefit of its
employees and their dependents; provided, however, if and to the extent Assignee
imposes a waiting period on the Retained Employees with respect to such coverage
Assignee shall reimburse the employees for any costs incurred by them in
exercising their rights under COBRA to continue coverage during such waiting
period under Tenant's health insurance plan.
3. Resident Deposits.
Tenant represents and warrants to Assignee that it is not currently
holding any security deposits with respect to the residents of the Facility.
4. Accounts Receivable.
(a) Within ten (10) business days prior to the Transfer Date, Tenant
shall provide Assignee with a detailed listing of Tenant's accounts receivable
which are anticipated to be outstanding on the Transfer Date.
(b) From and after the Transfer Date, Assignee shall assume
responsibility for the billing for and collection of payments on account of
services rendered or goods sold by it on and after the Transfer Date and Tenant
shall retain all right, title and interest in and to and all responsibility for
the collection of its accounts receivable for services rendered or goods sold
prior to the Transfer Date.
(c) Payments received by Assignee from and after the Transfer Date
from private pay residents and third party payors shall be handled as follows:
(i) If such payments either specifically indicate on the check or on an
accompanying remittance advice, or if the parties agree, that they relate to the
period prior to the Transfer Date, they shall be forwarded to Tenant by
Assignee, along with the applicable remittance advice (if separate from the form
of payment), within five (5) business days after receipt thereof.
(ii) If such payments indicate on the check or on an accompanying remittance
advice, or if the parties agree, that they relate to the period on or after the
Transfer Date they shall be retained by Assignee.
(iii) If such payments indicate on the check or on the accompanying
remittance advice, or if the parties agree, that they relate to periods for
which both parties are entitled to payment/reimbursement under the terms hereof,
the portion thereof which relates to the period on and after the date on which
the Transfer Date shall be retained by Assignee and the balance shall be
remitted to Tenant within five (5) business days after receipt thereof.
(iv) If such payments do not indicate on the check or on the accompanying
remittance advice and if the parties cannot otherwise agree as to the period to
which they relate, then any such payments received by Assignee during the first
forty five (45) days after the Transfer Date from or on behalf of residents with
outstanding balances as of the Transfer Date, will first be applied by Assignee
to reduce the resident's pre-Transfer Date balances, with any excess retained by
Assignee to reduce the resident's post Transfer Date balances.
(d) Tenant shall have the right during normal business hours and on
reasonable notice to Assignee to inspect Assignee's books and records with
respect to the accounts receivable received by it after the Transfer Date from
residents with balances due as of the Transfer Date.
(e) Nothing herein shall be deemed to limit in any way Tenant's or
Assignee's rights and remedies to recover accounts receivable due and owing
Tenant or Assignee under the terms of this Agreement.
(f) In the event the parties mutually determine that any payment
hereunder was misapplied by the parties, the party which erroneously received
said payment shall remit the same to the other within ten (10) business days
after said determination is made.
5. Operating Contracts.
(a) Tenant shall provide to Assignee within five (5) business days
after the Execution Date, true and correct copies of all contracts to which
Tenant or the Facility is a party in connection with the operation of the
Facility, including, but not limited to, service contracts and equipment leases
(the "Operating Contracts"). All of the Operating Contracts shall be assigned by
Tenant to Assignee on the Transfer Date unless Assignee advises Tenant in
writing within five (5) business days after its receipt of the Operating
Contracts that it does not want to assume any or all of the Operating Contracts,
which notice shall specify in reasonable detail those Operating Contracts which
Assignee does not want to assume (the "Designated Operating Contracts"), in
which case the Designated Operating Contracts shall be terminated by Tenant as
of the Transfer Date.
(b) Notwithstanding the foregoing, in the event after the Transfer Date
Tenant identifies one or more contracts that should have been provided to
Assignee prior to the Transfer Date pursuant to this Section 2(i) (the
"Additional Operating Contracts"), Tenant shall promptly provide a copy thereof
to Assignee and Assignee shall have a period of five (5) business days after its
receipt of the Additional Operating Contracts to review the same and to advise
Tenant whether it is prepared to assume the same or whether it wants Tenant to
terminate such Additional Operating Contract, it being understood and agreed,
that in the case of any equipment leases included in the Additional Operating
Contracts, the termination thereof will involve the removal of the equipment to
which it relates from the Facility.
6. Prorations.
(a) As between Assignee and Tenant, revenues and expenses, utility
charges for the billing period in which the Transfer Date occurs, real and
personal property taxes, certain prepaid expenses and other related items of
revenue or expense attributable to the Facility shall be prorated between Tenant
and Assignee as of the Transfer Date. In general, such prorations shall be made
so that as between Assignee and Tenant, Tenant shall be reimbursed for prepaid
expense items to the extent that the same are attributable to periods after the
Transfer Date and Tenant shall remain responsible for the payment as and when
due of unpaid expenses to the extent that the same are attributable to periods
prior to the Transfer Date. The intent of this provision shall be implemented by
Assignee remitting to Tenant any invoices which describe goods or services
provided to the Facility before the Transfer Date and by Assignee assuming
responsibility for the payment of any invoices which describe goods or services
provided to the Facility on and after the Transfer Date.
(b) All such prorations shall be made on the basis of actual days
elapsed in the relevant accounting or revenue period and shall be based on the
most recent information available to Tenant. Utility charges which are not
metered and read on the Transfer Date shall be estimated based on prior charges,
and shall be re-prorated upon receipt of statements therefor as of the Transfer
Date.
(c) All amounts which are subject to proration under the terms of this
Agreement and which require adjustment after the Transfer Date shall be settled
within thirty (30) days after the Transfer Date or, in the event the information
necessary for such adjustment is not available within said thirty (30) day
period, then within ten (10) business days of receipt of information by either
party necessary to settle the amounts subject to proration.
(d) Within five (5) business days after the Transfer Date, Assignee
shall remit to Tenant a cashiers check in an amount equal to any petty cash (as
compared to resident funds) maintained at the Facility by Tenant as of the
Transfer Date.
7. Access to Records.
(a) On the Transfer Date, Tenant shall deliver to Assignee all of the
records of the Facility which are necessary for the continued operation of the
Facility by Assignee but specifically excluding any confidential or proprietary
materials developed by or for Tenant, including, but not limited to, Tenant's
policy and procedure manuals, employee handbooks and financial records which
relate to its operations at the Facility. All of the records delivered by
Tenant to Assignee pursuant to this Section 7(a) shall be intact and current.
(b) From and after the Transfer Date and for a period of five (5) years
thereafter, Assignee shall retain and maintain in a safe and accessible place
the books and records and supporting material of the Facility relating to the
period prior to and including the Transfer Date and shall allow Tenant and its
agents and representatives to have reasonable access to (upon reasonable prior
written notice and during normal business hours), and to make copies of such
books, records and materials to the extent reasonably necessary to enable Tenant
to, among other things, investigate and defend malpractice, employee or other
claims, to file or defend third party billings and tax returns and to verify
accounts receivable collections due Tenant.
(c) Tenant shall be entitled to remove the originals of any records
delivered to Assignee, for purposes of litigation involving a resident or
employee to whom such record relates, if an officer of or counsel for Tenant
certifies that such original must be produced in order to comply with applicable
law or the order of a court of competent jurisdiction in connection with such
litigation. Any record so removed shall promptly be returned to Assignee
following its use, and nothing herein shall be interpreted to prohibit Assignee
from retaining copies of any such documents. In addition, Assignee shall have
the right to make a copy of such records before allowing Tenant to remove the
originals from the Facility.
(d) Assignee agrees to maintain such books, records and other material
comprising records of the Facility's operations prior to the Transfer Date that
have been received by Assignee from Tenant or otherwise, including, but not
limited to, resident records and records of resident funds, to the extent
required by law, but in no event less than three (3) years, and shall, at
Tenant's request, allow Tenant a reasonable opportunity to remove such
documents, at Tenant's expense, at such time after such record retention period
as may be required by law as Assignee shall decide to dispose of such documents.
8. Vehicle.
Tenant and Assignee acknowledge and agree that the vehicle listed on
Exhibit B is located at the Facility and shall be handled on the Transfer Date
in the manner described in Exhibit B.
9. Computer Systems and Telecommunications Equipment.
(a) Assignee shall have the right, but not the obligation, to purchase
from Tenant any or all of the computer hardware and transferable software
located at and used in connection with the operation of the Facility by
providing Tenant with written notice of its intent to do so within thirty (30)
days after the Transfer Date setting forth in reasonable detail the computer
hardware and software which Assignee has elected to purchase (the "Purchase
Notice"). In the event Assignee does not provide Tenant with the Purchase Notice
within such thirty (30) day period then Tenant shall have the right to remove
all such computer hardware and software from the Facility. In the event
Assignee does provide the Purchase Notice within such thirty (30) day period,
then within five (5) business days after Tenant's receipt of the Purchase
Notice, Tenant shall provide Assignee in writing with written notice setting
forth the purchase price for the hardware and software described in the Purchase
Notice (the "Purchase Price Notice"). Assignee shall have the right to rescind
the Purchase Notice within five (5) business days after its receipt of the
Purchase Price Notice. In the event Assignee does not rescind the Purchase
Notice within such five (5) business day period, then Assignee shall have a
period of five (5) business days thereafter in which to deliver to Tenant its
check in the amount set forth in the Purchase Price Notice and upon receipt
thereof Tenant shall remit to Assignee a bill of sale in form and substance
acceptable to parties conveying to Assignee all of Tenant's right, title and
interest in and to the computer hardware and software so purchased by Assignee.
(b) Assignee acknowledges and agrees that as of the Transfer Date
Tenant will terminate all rights of access to Tenant's corporate email system
and website from the computers at the Facility and, as such, the Facility will
no longer have access to any policies or procedures which may be used in
connection with the operation of the Facility and maintained on such corporate
email system or website.
(c) Assignee acknowledges and agrees that it will have no right under
Section 9(a) to acquire from Tenant any software used in connection with the
operation of the Facility which is licensed under a non-transferable license
agreement. However, upon written request provided concurrently with the
Purchase Notice. Tenant will allow Assignee to continue to use such software for
a period of thirty (30) days after the Transfer Date.
(d) Within ten (10) business days prior to the Transfer Date, Tenant
shall provide Assignee with a detailed listing of all of the computer hardware
and software which may be purchased by Assignee pursuant to Section 9(a) and
with all non-transferable software which is subject to Section 9(c).
(e) Tenant represents and warrants that it owns the phone system
currently located at the Facility and that title thereto will be transferred to
Assignee on the Transfer Date. Tenant agrees to execute a Bill of Sale on the
Transfer Date confirming the conveyance to Assignee of all of its right, title
and interest in and to the phone system located at the Facility.
10. Indemnity.
(a) Assignee agrees to indemnify, defend and hold harmless Tenant from
and against any and all costs, liabilities and expenses, including reasonable
attorneys fees, which it may incur as a result of (i) a breach by Assignee of
its obligations under this Agreement, (ii) the acts or omissions of the Assignee
under the Operating Contracts (other than the Designated Operating Contracts)
from and after the Transfer Date and under the Additional Operating Contracts
from and after their assumption by Assignee, if applicable and/or (iii) the
operation of the Facility from and after the Transfer Date; provided, however,
that nothing herein shall be construed as imposing any liability on Assignee to
indemnify, defend or hold harmless Tenant with respect to Tenant's own acts or
omissions from and after the Transfer Date. On the Transfer Date Assignee shall
provide Tenant with a certificate which evidences the existence of insurance
with respect to the negligent acts or omissions of Assignee from and after the
Transfer Date in connection with its operation of the Facility meeting the
requirements set forth in the Lease and which names Tenant as an additional
insured/loss payee thereunder. Assignee shall cause such coverage in favor of
Tenant to remain in effect until the first anniversary of the Transfer Date.
(b) Tenant agrees to indemnify, defend and hold harmless Assignee from
and against any and all costs, liabilities and expenses, including reasonable
attorneys fees, which it may incur as a result of (i) a breach by Tenant of its
obligations under this Agreement, (ii) the acts or omissions of the Tenant under
the Operating Contracts prior to the Transfer Date and under the Designated
Operating Contracts and any Additional Operating Contracts which Assignee does
not elect to assume both prior to and after the Transfer Date and/or (iii) the
operation of the Facility prior to the Transfer Date; provided, however, that
nothing herein shall be construed as imposing any liability on Tenant to
indemnify, defend or hold harmless Assignee with respect to Assignee's own acts
or omissions whether prior to or from and after the Transfer Date. On the
Transfer Date Tenant shall provide Assignee with a certificate which evidences
the existence of insurance with respect to the negligent acts or omissions of
Tenant prior to the Transfer Date in connection with its operation of the
Facility. Tenant shall cause such coverage to remain in effect until the first
anniversary of the Transfer Date.
11. Inventory.
Tenant shall transfer and convey to Assignee on the Transfer Date, all
consumable inventories of every kind and nature whatsoever (specifically
including, but not limited to, all pharmacy supplies, medical supplies, office
supplies, other supplies and foodstuffs) owned by Tenant as of the Transfer Date
and located at the Facility (the "Inventory"). Tenant shall have no obligation
to deliver the Inventory to any location other than the Facility, it being
understood and agreed that the presence of the Inventory at the Facility on the
Transfer Date shall constitute delivery thereof. Assignee shall pay any sales or
use tax which may be payable with respect to the transfer and conveyance of the
Inventory to Assignee. Tenant shall execute a Bill of Sale in form and substance
acceptable to Tenant and Assignee which confirms the conveyance of the
Inventory.
12. Further Assurances.
Notwithstanding anything to the contrary contained herein, Landlord, Tenant
and Assignee agree to execute and/or file any and all other documents,
agreements or other instruments as may be necessary or appropriate to confirm
the agreements reached by, and the obligations imposed on, Landlord, Tenant and
Assignee hereunder.
13. Counterparts.
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.
14. Entirety.
This Agreement represents the entire and final agreement of the parties
hereto with respect to the subject matter hereof and supersedes all prior
discussions, negotiations and writings with respect thereto. This Agreement may
only be amended by written instrument signed by the parties hereto.
15. Construction.
Each of the parties has participated in the drafting and negotiation of
this Agreement. Accordingly, in the event of a dispute among the parties 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. In calculating
time periods under this Agreement, whether or not specified, any period
involving less than thirty days shall be calculated using business days and any
period involving thirty days or more shall be calculated using calendar days.
16. Attorneys Fees.
In the event of a dispute among the parties hereto with respect to the
interpretation or enforcement of the terms hereof, the prevailing party shall be
entitled to collect from the other its reasonable attorneys fees and costs,
including its costs and fees on appeal.
17. Captions.
The captions are included in this Agreement for convenience of reference
only and shall not be construed so as to define, limit or modify in any manner
any of the terms hereof.
18. Governing Law.
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Wyoming.
19. Notices.
All notices to be given by either party to this Agreement to the other
party hereto shall be in writing, and shall be (a) given in person, (b)
deposited in the United States mail, certified or registered, postage prepaid,
return receipt requested, or (c) sent by national overnight courier service or
by facsimile transmission with confirmed receipt, each addressed as follows:
To Tenant: Emeritus Corporation
3131 Elliott Avenue
Suite 500
Seattle, WA 98101
Attn: William Shorten
Phone: 206-298-2909
Fax: 206-301-4500
with copy to: The Nathanson Group PLLC
1411 Fourth Avenue
Suite 905
Seattle, WA 98121
Attn: Randi S. Nathanson
Phone: 206-623-6239
Fax: 206-623-1738
To Assignee: Sierra Hills Assisted Living Community, LLC
c/o Sunwest Management, Inc.
2735 12th Street SE
Salem, Oregon 97302
Attn: Jon M. Harder
Phone: 503-375-0916
Fax: 503-375-0589
with copy to: Sierra Hills Assisted Living Community, LLC
c/o Sunwest Management, Inc.
2735 12th Street SE
Salem, Oregon 97302
Attn: J. Wallace Gutzler
Phone: 503-375-0916
Fax: 503-585-7684
Any such notice shall be deemed delivered when actually received or when
delivery is first refused regardless of the method of delivery used. Any party
to whom notices are to be sent pursuant to this Agreement may from time to time
change its address for further communications thereunder by giving notice in the
manner prescribed herein to all other parties hereto. Although either party
shall have the right to change its address for notice purposes from time to
time, any notice delivered pursuant to this Section 19 to the address set forth
in this Section 19 or to such other address as may be hereafter specified in
writing in accordance with this Section 19 shall be effective even if actual
delivery cannot be made as a result of a change in the address of the recipient
of such notice and the party delivering the notice has not received actual
written notice in accordance with the provisions of this Section 19 of the
current address to which notices are to be sent.
20. Payment of Expenses.
Each party hereto shall bear its own legal, accounting and other expenses
incurred in connection with the preparation and negotiation of this Agreement
and the consummation of the transaction contemplated hereby, whether or not the
transaction is consummated. In the event of a dispute between the parties
hereto 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.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties hereby execute this Agreement as of the day
and year first set forth above.
EMERITUS CORPORATION
By: /s/ Raymond R. Brandstrom
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Its: Vice President of Finance
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SIERRA HILLS ASSISTED LIVING COMMUNITY, LLC
By: /s/ Jon M. Harder
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Its: Manager
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UNCONDITIONAL GUARANTY
By their signatures set forth below, each of Jon M. and Kristin P. Harder,
husband and wife, Darryl E. and Carol L. Fisher, husband and wife, Eric W. and
Marti M. Jacobson, husband and wife, and Sunwest Management, Inc., an Oregon
corporation (collectively, "Guarantor") does hereby unconditionally guarantee on
a joint and several basis the payment and performance by Sierra Hills Assisted
Living Community, LLC ("Assignee") of its obligations under the Lease Assignment
and Operations Transfer Agreement dated as of September 30, 2001, as the same
may be amended from time to time (the "Agreement") between Emeritus Corporation
("Emeritus") and Assignee with respect to the assisted living facility commonly
known as Sierra Hills, 4606 North College Drive, Cheyenne, Wyoming 82009 (the
"Facility").
Guarantor does hereby acknowledge and agree that this is a guarantee of
payment and performance and not merely of performance and that Emeritus shall
have the right to seek recourse against any or all of the persons or the entity
comprising Guarantor whether or not it has first sought to enforce the
obligations of Assignee under the Agreement or has exhausted any security that
Emeritus holds from Assignee.
Guarantor does hereby knowingly and voluntarily waive any and all defenses
which may be available to the enforcement of this Guaranty, including any
defense based on changes in the condition of Assignee, the statute of
limitations or any future amendments or modifications to the Agreement, it being
understood and agreed that Emeritus and Assignee shall be entitled to modify or
amend the Agreement without securing the prior written consent of Guarantor and
that the persons and entity comprising Guarantor shall be required to keep
themselves/itself informed with respect to the financial condition of Assignee.
Guarantor further waives all notices, presentments, demands for
performance, notices of nonperformance, notices of nonpayment, protests, notices
of protest, notices of dishonor, and notices of acceptance of this Guaranty, and
waive all notices of the existence, creation, or, incurring of new or additional
obligations.
Any indebtedness of Assignee now or hereafter held by any person or entity
comprising Guarantor is hereby waived and subordinated to all indebtedness of
Assignee to Emeritus; and such indebtedness of Assignee to Guarantor if Emeritus
so requests shall be collected, enforced and received by Guarantor as trustee
for Emeritus and shall be paid over to Emeritus on account of the indebtedness
of Assignee to Emeritus but without reducing or affecting in any manner the
liability of Guarantor under the provisions of this Guaranty.
Each person or entity comprising Guarantor does hereby represent and
warrant that this Guaranty, when executed and delivered by such person or
entity, will constitute the legal, valid and binding obligation of such person
or entity , enforceable against such person or entity in accordance with its
terms and that no consent of any party is required for the valid execution and
delivery of this Guaranty. Guarantor does further represent and warrant that
each of the persons comprising Guarantor is a resident of the State of Oregon
and that Sunwest Management, Inc. is an Oregon corporation duly organized and
validly existing and in good standing under the laws of the State of Oregon.
Each person or entity comprising Guarantor does further represent and warrant
that it has no liabilities, whether contingent or otherwise, other than as
reflected in the financial statements and written contingent liability
disclosure statement, if applicable, provided to Emeritus prior to the execution
of this Guaranty.
For so long as this Guaranty remains in effect, each person or entity
comprising upon request Guarantor shall deliver to Emeritus updated annual
financial statements.
This Guaranty constitutes the entire agreement between Guarantor and
Emeritus with respect to the subject matter hereof. No provision of this
Guaranty or right of Emeritus hereunder may be either modified or waived in
whole or in part, nor can Guarantor be released from Guarantor's obligations
hereunder, except by a writing duly executed by Emeritus and Guarantor.
Dated: September 30, 2001
GUARANTOR: SUNWEST MANAGEMENT, INC.
By: /s/ Jon M. Harder
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Its: President
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/s/ Jon M. Harder
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JON M. HARDER
/s/ Kristin P. Harder
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KRISTIN P. HARDER
/s/ Darryl E. Fisher
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DARRYL E. FISHER
/s/ Carol L. Fisher
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CAROL L. FISHER
/s/ Eric W. Jacobson
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ERIC W. JACOBSON
/s/ Marti M. Jacobson
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MARTI M. JACOBSON
LANDLORD CONSENT
(ATTACHED)
EXHIBIT A
THE LEASE
(ATTACHED)
EXHIBIT B
THE VEHICLE
Assignee shall have the option to purchase the vehicle from Tenant for a
purchase price equal to $15,000. The purchase price for the vehicle shall be
paid (i) in cash and (ii) by either the assumption of the existing vehicle
financing or, if the same is not assumable, by Assignee taking title subject to
the existing vehicle financing and delivering to Emeritus its promissory note in
the face amount equal to the then outstanding principal balance of the existing
vehicle financing and otherwise on the same terms and conditions as the existing
vehicle financing. Assignee shall exercise such purchase option by delivering
written notice thereof to Tenant within thirty (30) days after the Transfer
Date. If Assignee fails to deliver such notice within such thirty (30) day
period, then Assignee shall be deemed to have waived its right to purchase the
vehicle and Tenant shall have the right to remove the same from the Facility
within a reasonable time thereafter. If Assignee delivers such notice within
such thirty (30) day period, then Tenant shall convey title to the vehicle to
Assignee by execution and delivery of a Bill of Sale in form and substance
reasonably acceptable to Emeritus and Assignee concurrently with the delivery to
Tenant of the purchase price for the vehicle.