FIRST AMENDMENT TO MANAGEMENT AGREEMENT
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WITH OPTION TO PURCHASE
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(AL I - Emeritrust 25 Facilities)
This First Amendment to Management Agreement with Option to Purchase (this
"Amendment") is made this 22 day of March, 2001 by and among Emeritus Management
LLC, a Washington limited liability company ("Emeritus Management"), Emeritus
Management I LP, a Washington limited partnership ("Texas Manager;" together
with Emeritus Management referred to herein as "Manager"), Emeritus Corporation,
a Washington Corporation ("Emeritus), AL Investors LLC, a Delaware limited
liability company ("AL Investors"), for itself and as sole managing member or
sole managing member of the general partner of each of the Facility Entities set
forth on Exhibit A to the Management Agreement (as hereinafter defined).
Recitals
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A. Emeritus Management, Texas Manager, Emeritus, AL Investors, ESC I,
L.P., a Washington limited partnership ("ESC"), and Emeritus Properties I, Inc.,
a Washington corporation ("EPI") entered into that certain Management Agreement
with Option to Purchase (Emeritrust 25) dated December 30, 1998, pursuant to
which, among other things, AL Investors and the Facility Entities engaged
Manager to manage certain Facilities described therein (the "Management
Agreement"). Pursuant to the terms of the Management Agreement, ESC and EPI
have ceased to be Managers under the Management Agreement.
B. The parties have agreed that it would be beneficial to restructure
the Senior Loan (as defined in the Management Agreement) by, among other things,
dividing the Senior Loan into three tranches, collateralizing a portion of the
tranche known as "Tranche B" with certain property owned by AL Investors II LLC
(the "AL II Additional Collateral Properties), amending the interest rate, and
obtaining two 9-month conditional options to extend the term of the Senior Loan,
all as more particularly set forth in the amendments to the Senior Loan
(collectively, "the Senior Loan Restructure").
C. As part of the Senior Loan Restructure and pursuant to Section 5 of
the Promissory Note (Tranche C) executed in connection with the Senior Loan
Restructure on or about the date hereof (the "Tranche C Note"), AL Investors has
agreed to make certain principal payments to reduce the principal balance of
Tranche C of the Senior Loan (the "Additional Principal Payments"). Pursuant to
an amendment to the operating agreement of AL Investors, Daniel R. Baty has
agreed to contribute the Additional Principal Payments to AL Investors in
accordance with the terms and conditions contained therein.
D. In connection with the Senior Loan Restructure and to take into
account the Additional Principal Payments, the parties now desire to amend the
Management Agreement on the terms and conditions contained herein.
NOW, THEREFORE, in consideration of Ten and No/100 Dollars, the agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
Defined Terms. All terms capitalized herein but not defined shall have the
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meanings given them in the Management Agreement.
Accrued Management Fees. From the date hereof until January 1, 2002 (at
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which time paragraph 5 of this Agreement becomes effective), the last sentence
of Section 7.2 is hereby deleted and replaced in its entirety with the
following:
Notwithstanding anything to the contrary contained herein, any obligation of
Owners to pay any Accrued Management Fee shall terminate automatically at the
expiration of the Initial Term, and all Accrued Management Fees accrued as of
that date shall be terminated and written off. In any event, any Accrued
Management Fee shall be paid solely out of Operating Profit and neither the
Facility Entities nor AL Investors shall have any liability to pay the Accrued
Management Fee during the Initial Term or upon expiration or sooner termination
of this Agreement from any other funds or by any Owner Deficit Contribution
pursuant to Section 8.3.
Definitions. Exhibit A is hereby amended as follows:
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3.1 Senior Loan. The definition of "Senior Loan" is hereby
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deleted and replaced in its entirety with the following:
SENIOR LOAN: any indebtedness incurred by Owners which is secured by any
mortgage, deed of trust and related security instruments against a Facility.
Initially the Senior Loan is evidenced by that certain Loan Agreement between AL
Investors (and the Facility Entities) and GMAC Commercial Mortgage Corporation
dated on or about December 30, 1998, as amended by the First Amendment to Loan
Agreement dated on or about the date of this First Amendment to the Management
Agreement (the "Senior Loan Amendment"), including, without limitation, all
interest increases and modifications contained therein (the "Initial Senior
Loan"). It is expressly agreed that the Senior Loan includes the entirety of
Tranches A, B & C as set forth in the Senior Loan Amendment.
3.2 Deemed Senior Loan. A new definition shall be added as
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follows:
DEEMED SENIOR LOAN: The amount of the Senior Loan (i) without regard to the
Additional Principal Payments and (ii) without regard to any proceeds from the
sale of the AL II Additional Collateral Properties which are applied to reduce
the Tranche B debt in accordance with the terms of the Senior Loan Amendment.
3.3 Fixed Operating Expenses. Effective as of January 1, 2002,
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subsection (a) of the definition of Fixed Operating Expenses is and shall be
deleted in its entirety. Effective as of the date hereof, subsection (c) of the
definition of Fixed Operating Expenses is amended to read in its entirety "the
debt service on account of the Deemed Senior Loan". The parties hereby agree
that the foregoing amendment is in part intended to and does modify the
Management Agreement such that as to Tranche A of the Senior Loan (as defined in
the Senior Loan Amendment), Manager will pay as part of Fixed Operating Expenses
only the pay rate as set forth in Section 4 of the Amendment to Promissory Note
(Tranches A & B) executed in connection with the Senior Loan Amendment and dated
on or about the date of this First Amendment, until such time as the difference
between the pay rate and the accrual rate (the "Deferred Interest") comes due
and payable, at which time Manager will pay such Deferred Interest as part of
Fixed Operating Expenses whether or not the First Extension Period is exercised.
Notwithstanding the foregoing, Manager shall have the right to credit the amount
of Deferred Interest it is required to pay hereunder by the amount (including
any earned interest) then-contained in that certain escrow account established
pursuant to the Escrow and Security Agreement by and between AL Investors and
GMAC, dated on or about the date hereof, and AL Investors agrees that it will
use the amount contained therein to pay all or a portion of the balance of the
Deferred Interest due.
For purposes of clarification, the parties agree that the net effect of
this paragraph 3.3 will be to calculate Operating Profit and Operating Deficit
utilizing the definition of the Deemed Senior Loan, such that the calculation is
based on interest expense accruing on the Deemed Senior Loan rather than the
actual Senior Loan loan balance.
Extension of Management Agreement and Option Term
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4.1 Extension of Management Agreement. Section 2.3 is hereby added
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to the Management Agreement as follows:
2.3 ADDITIONAL EXTENSION TERM. Under the Senior Loan Amendment,
AL Investors is eligible for (i) a 9 month loan extension in accordance with the
terms and conditions contained in Section 2.4 thereof (the "First Extension
Period"), to be exercised no later than December 15, 2001 and (ii) at the end of
the First Extension Period, one additional 9 month loan extension also in
accordance with the terms and conditions contained in Section 2.5 thereof (the
"Second Extension Period"), to be exercised no later than September 15, 2002.
If AL Investors is entitled to exercise its extension rights under the terms of
the Senior Loan Amendment , it hereby agrees that it will do so provided that
Manager has elected to extend the term of the Management Agreement and has
elected not to exercise the Purchase Option.
If AL Investors is entitled to exercise its extension rights for the First
Extension Period, Manager shall have the option to extend the term of the
Management Agreement to make it co-terminous with the First Extension Period by
giving written notice thereof to AL Investors on or before December 1, 2001,
whereupon all of the terms and provisions of the Management Agreement (as
modified by this Amendment) shall continue to be applicable throughout the
extended term, including, without limitation, the obligation to fund Operating
Deficits and the right to exercise the Purchase Option. If the Management
Agreement is extended through the First Extension Period and AL Investors is
entitled to exercise its extension rights for the Second Extension Period,
Manager shall have the option to extend the Management Agreement to make it
co-terminous with the Second Extension Period by giving written notice thereof
to AL Investors on or before September 1, 2002, whereupon all of the terms and
provisions of the Management Agreement (as modified by this Amendment) shall
continue to be applicable throughout the extended term, including, without
limitation, the obligation to fund Operating Deficits and the right to exercise
the Purchase Option. If Manager elects to extend the Management Agreement in
accordance with the provisions set forth above, and during any extension term
the Management Agreement is terminated for any reason (other than the failure to
qualify for extension rights under the Senior Loan Amendment), at Owner's
election in its sole discretion Manager may be required to continue to provide
management services for the Facilities for up to 90 days (until terminated by
Owner upon not less than 30 days prior written notice) and the management fee
payable during such period shall be 3% of Total Revenues from each Facility then
managed.
If (i) AL Investors is not eligible to exercise either of its extension
rights under the Senior Loan Amendment (whether determined before or after the
end of the then current term), or (ii) Manager does not elect to extend the
Management Agreement pursuant to the terms of this section 2.3, then the
Management Agreement shall automatically terminate upon the maturity date of the
Senior Loan, but Owner shall be deemed to have notified Manager of its intent to
extend beyond such maturity date pursuant and subject to the terms of to section
2.2 of the Management Agreement as modified herein. During the first 90 days
of such extension Owner shall notify Manager of the duration of the extension
and the Facilities to which such extension is applicable, which extension may be
up to 12 months from the date of termination, subject to any earlier termination
rights contained in the Management Agreement or this Amendment. The extension
exercised pursuant to section 2.2 of the Management Agreement in accordance with
this paragraph shall not be subject to the 90 day prior notice requirement
contained in section 2.2 of the Management Agreement but shall be for a
Management Fee of 5% of gross revenues as set forth in Section 2.2 and Manager
shall not be obligated to fund Operating Deficits during such period.
4.2 Extension of Purchase Option. The first sentence of Section
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13.2 of the Management Agreement is hereby deleted and replaced in its entirety
with the following:
The Purchase Option shall permit Emeritus to purchase the Meditrust Facilities
(a) at any time during the Initial Term but not later than the last day of the
Initial Term (which shall be December 31, 2001 unless the Management Agreement
is sooner terminated by Owner), (b) if the Management Agreement is extended
pursuant to the First Extension Period, at any time prior to the end of the
First Extension Period, and (c) if the Management Agreement is extended pursuant
to the Second Extension Period, at any time prior to the end of the Second
Extension Period (as applicable, the "Purchase Option Expiration Date") provided
the written notice of the exercise of the option is given by Emeritus to the
Owners (a "Purchase Option Notice") (i) with respect to an exercise under
subsection (a) above, on or before December 12, 2001, (ii) with respect to an
exercise under subsection (b) above, on or before September 12, 2002, or (iii)
with respect to an exercise under subsection (c) above, on or before May 1,
2003.
4.3 Place and Time of Closing. Section 13.6 is hereby deleted and
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replaced in its entirety with the following:
13.6. Place and Time of Closing. If the Purchase Option is
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exercised, the closing shall occur and the Deed for each Meditrust Facility
shall be delivered to Title Company (the "Closing") pursuant to escrow closing
arrangements reasonably satisfactory to Owners and Manager at 12:00 o'clock noon
(P.S.T.) no later than the applicable Purchase Option Expiration Date (the "Time
of Closing"). It is agreed that time is of the essence of this Purchase Option.
Notwithstanding the foregoing, Owner shall not unreasonably withhold its consent
to Manager's request for a 30-day extension of such Closing Date provided that
Manager deposits the equity funds required to close the Purchase Option into
escrow and provides Owner with reasonable evidence of financing prior to the
applicable Purchase Option Expiration Date, and reimburses Owner for any
additional costs incurred by such extension.
Management Fee. Effective as of January 1, 2002, Section 7 of the
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Management Agreement shall be deleted and replaced in its entirety with the
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following:
7.1 BASE MANAGEMENT FEE. Manager shall be entitled to pay itself
from the Agency Account on the 4th day of each month (i) a management fee of 3%
of the Total Revenues from all Facilities in the aggregate subject to this
Agreement ("Base Management Fee"), together with (ii) any Accrued Base
Management Fee (as hereinafter defined), which amount shall be paid on a monthly
basis from Operating Profit earned by the Facilities during the previous month.
If there is insufficient Operating Profit during any month to pay the Base
Management Fee, the unpaid portion shall accrue (the "Accrued Base Management
Fee"), shall be added to any accrued amounts for prior months commencing January
1, 2002, and shall be payable as set forth above.
7.2 ADDITIONAL MANAGEMENT FEE. Any Operating Profit in excess of
the Base Management Fee and any Accrued Base Management Fee at the end of each
month shall be paid 50% to Manager and 50% to Owners until Manager has received
(i) an additional management fee of 4% of Total Revenues from all Facilities in
the aggregate subject to this Agreement (the "Additional Management Fee") plus
(ii) any Accrued Additional Management Fee (as hereinafter defined). If there
is insufficient Operating Profit after payment of the Base Management Fee and
Accrued Base Management Fee during any month to pay the Additional Management
Fee, the unpaid portion shall accrue and be added to any accrued amounts for
prior months commencing January 1, 2002 (the "Accrued Additional Management
Fee"). The Base Management Fee, any Accrued Base Management Fee, the Additional
Management Fee and any Accrued Additional Management Fee are sometimes referred
to herein as the "Management Fee".
7.3 TERMINATION. Any Accrued Base Management Fee and Accrued
Additional Management Fee shall be paid solely out of Operating Profit and not
from any other funds or by any Owner's Deficit Contribution pursuant to Section
8.3. Upon (i) the expiration of the Second Additional Extension Period; or (ii)
the expiration of the First Additional Extension Period if the Second Additional
Extension Period is not available for exercise; or (iii) the sooner expiration
or termination of the Management Agreement for any reason whatsoever, all
Accrued Additional Management Fees not then paid shall be written off in their
entirety and Manager shall not be entitled to receive any such written-off
amounts from future revenues of the Facilities or any other source whatsoever.
Notwithstanding the foregoing, Owner shall continue to be liable for all Accrued
Base Management Fees remaining unpaid after the date of such expiration or
termination.
Payment of Expenses and Management Fee. From and after January 1, 2002, in
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part to reflect the revised Management Fee agreement as set forth in
paragraph 5 above, Section 8.2 of the Management Agreement shall be deleted and
replaced in its entirety with the following:
8.2 EXPENDITURES. In accordance with the Annual Plan, except as
otherwise approved by owners, Managers as agent for the Facility Entities are
hereby authorized and directed to pay from the Agency Account for each Facility
in the following order of priority such amounts and at such times as are
required to pay the following expenditures:
(a) The Operating Expenses;
(b) The Fixed Operating Expenses (as amended by the First
Amendment to Management Agreement), except for such items as Owner has elected
to pay directly; provided, however, that actual debt service on account of the
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Senior Loan shall be paid to the holder of the Senior Loan, and interest on the
Additional Principal Payments and any AL II Additional Collateral Properties
paydown (i.e. the difference between the Senior Loan and the Deemed Senior Loan)
shall be paid monthly to AL Investors at the rate set forth in the Tranche C
Note (i.e. Libor plus 4.50%).
(c) The cost of Capital Improvements approved by Owner;
(d) The Base Management Fee and any Accrued Base Management
Fee to the extent not written off in accordance with Section 7.3 above;
(e) Any remaining Operating Profit shall be paid 50% to
Manager and 50% to Owners until Manager has received the Additional Management
Fee plus any Accrued Additional Management Fee for prior months to the extent
not written off in accordance with Section 7.3 above.
(f) Any remaining Cash Available for Distribution shall be
paid to Owner.
Any amounts due Owner shall be paid over to Owners as directed by Owners
within twenty (20) days after the end of each calendar month during the term of
this Agreement. Funds in the Agency Account shall not be utilized for any other
purpose.
Termination Rights. Effective from and after January 1, 2001, new Sections
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9.8, 9.9 and 9.10 will be and are hereby added to the Management Agreement
as follows:
9.8 TERMINATION FOR FAILURE TO ACHIEVE FINANCIAL PERFORMANCE. Subject
to Section 9.9 below, Owner may terminate this Agreement in its entirety at any
time by written notice to Manager in the event that:
(a) For the period from January 1, 2002 to June 30, 2002, Cash
Available for Distribution actually distributed to Owner, together with interest
payments on the Additional Principal Payments in accordance with Section 8.2(b),
does not average at least $60,000 per month; or
(b) For the period from July 1, 2002 to December 31, 2002, Cash
Available for Distribution actually distributed to Owner, together with interest
payments on the Additional Principal Payments in accordance with Section 8.2(b),
does not average at least $90,000 per month; or
(c) for any six month period ending after December 31, 2002, Cash
Available for Distribution actually distributed to Owner, together with interest
payments on the Additional Principal Payments in accordance with Section 8.2(b),
does not average at least $90,000 per month.
9.9 RIGHT TO CURE FAILURE TO ACHIEVE FINANCIALPERFORMANCE.
Notwithstanding the provisions of Section 9.8 above, Manager shall have the
right to voluntarily reduce the Base Management Fee and the Additional
Management Fee, or defer payment of any Accrued Base Management Fee and the
Accrued Additional Management Fee, in order to cause compliance with the
distribution requirements set forth in Section 9.8 above. Any such reduction of
a Base Management Fee or Additional Management Fee shall be added to the Accrued
Additional Management Fee, as applicable, and shall be paid only in accordance
with Section 7.2 and Section 8.2(e) above.
9.10 TERMINATION FOR FAILURE TO MAKE CONTRIBUTION. Owner may terminate
this Agreement in its entirety by written notice to Manager in the event that a
cure amount is required to be paid under Section 4.12(b) of the Senior Loan
Agreement, as amended by the Senior Loan Amendment (the "4.12(b) Cure Amount"),
and Manager does not elect to pay (and thereafter pays) such 4.12(b) Cure Amount
within the time frame required under the Senior Loan. It is understood that
Manager is not required to pay the 4.12(b) Cure Amount, but in the event Manager
elects to do so, the 4.12(b) Cure Amount paid by Manager shall be credited or
applied as required under the Senior Loan Amendment and Manager shall have no
right to reimbursement from Owners.
Option Price. Exhibit B is hereby amended to reflect that for purposes of
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Exhibit B only, the definition of "Senior Loan" shall be the Deemed Senior Loan
(i.e. the Senior Loan disregarding the Additional Principal Payments and
disregarding any proceeds from the sale of the AL II Additional Collateral
Properties which are applied to the Tranche B debt in accordance with the terms
of the Senior Loan Amendment) and any interest payments distributed to AL
Investors pursuant to Section 8.2(b) with respect to the Additional Principal
Payments and any AL II Additional Collateral Properties paydown shall not be
credited against the amount due to the holder of the Junior Loan under section
(c) of Exhibit B, or against the amount due to AL Investors under section (d) of
Exhibit B. In addition, the Purchase Price shall be increased by the
reimbursement amount due as more particularly set forth in section 9 below.
Payment of Loan Restructure Fees. The parties acknowledge that the Senior
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Loan Restructure will result in substantial benefit to all parties, but will
also result in significant costs and fees, including, without limitation,
extension fees and the Senior Lender's costs and expenses as set forth in
paragraph 3 and paragraph 4 of the First Amendment to Loan Agreement to exercise
the first and second extension options under the Loan Agreement, the
extension option fee of $342,500 as set forth in section 2.7 of the First
Amendment to Loan Agreement, title insurance fees, UCC search costs, the cost of
obtaining the interest rate agreement pursuant to Section 4.24 of the Loan
Agreement, attorneys fees and costs to AL Investors, Manager, and Senior Housing
Partners I, L.P., and other reasonable out of pocket costs and expenses (the
"Pooled Expenses"). Daniel R. Baty ("Baty") has agreed to initially fund such
Pooled Expenses, subject to reimbursement as follows:
(a) Upon Manager's exercise of the Purchase Option under the
Management Agreement, the Purchase Price as set forth in Exhibit B shall be
increased by 25% of the aggregate Pooled Expenses and Owner upon receipt of such
amount shall promptly reimburse Baty for the Pooled Expenses to the extent of
such amount.
(b) Upon Manager's exercise of the Purchase Options under (i) that
certain AL II Management Agreement with Option to Purchase (AL II- 14 Operating
Facilities), dated March 26, 1999, as amended and segregated by Amendment to
Management Agreement dated March 27, 2000, (ii) that certain Management
Agreement with Option to Purchase (Teachers), dated March 27, 2000, and (iii)
Management Agreement with Option to Purchase (AL II - 5 Development Facilities,
dated March 25, 1999 (collectively the "AL II Management Agreements"), pursuant
to the terms of which the Purchase Options under all three of the AL II
Management Agreements must be exercised simultaneously, the aggregate Purchase
Price under the Management Agreements thereunder shall be increased by 25% of
the aggregate Pooled Expenses and the Owners thereunder upon receipt of such
amount shall promptly reimburse Baty for the Pooled Expenses to the extent of
such amount; provided, however, that if the Purchase Option as defined in the AL
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II Management Agreements has been exercised and the purchase and sale
transaction contemplated thereby has closed prior to incurring all or a portion
of the Pooled Expenses in connection with the First Extension Period or the
Second Extension Period (or both) which would otherwise be payable pursuant to
this subsection 9(b), then 25% of the additional Pooled Expenses not then
incurred but which would have been payable pursuant to this subsection 9(b)
shall be payable by Manager out of 50% of his Management Fees as and when paid
to Manager under this Management Agreement in addition to the portion paid by
Manager pursuant to subsection 9(c) below.
(c) Manager shall pay Baty 25% of the aggregate Pooled Expenses
out of its Management Fees; provided, however, that such reimbursement shall be
limited to 50% of Management Fees as and when paid to Manager under this
Management Agreement.
Conforming Definitions. Exhibit A is hereby amended as follows:
10.1 Junior Loan. The definition of Junior Loan is hereby deleted and
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replaced in its entirety with the following: any indebtedness incurred by
Owners which is secured by a mortgage, pledge, and related security instruments
against, among other things, the membership interests of AL Investors in the
Facility Entities. Initially, the Junior Loan is evidenced by that certain Loan
Agreement among AL Investors (and the Facility Entities) and Senior Housing
Partners I, L.P. dated on or about the same date hereof, as subsequently amended
("Initial Junior Loan").
10.2 Operating Period. The definition of Operating Period is hereby
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deleted and replaced in its entirety with the following: the period beginning
with the Commencement Date and ending upon the expiration of the Initial Term
and any extension term.
10.3 Put and Purchase Agreement The definition of Put and Purchase
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Agreement is hereby deleted and replaced in its entirety with the following:
that certain Put and Purchase Agreement dated December 30, 1998, as amended by
First Amendment to Put and Purchase Agreement dated March 26, 1999, by Second
Amendment to Put and Purchase Agreement dated on or about the date hereof and as
may be subsequently amended.
Notices. All notices to be given by either party to this Agreement to the
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other party hereto shall be in writing, and shall be sent to the parties at the
addresses and in the manner set forth in the Management Agreement.
Ratification. The Management Agreement, as amended by this Agreement, is
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hereby ratified and confirmed.
Understandings and Agreements. This Amendment, together with the
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Management Agreement, constitutes all of the understandings and agreements
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between the parties with respect to the management of the Facilities.
Headings. The headings contained herein are for convenience of reference
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only and are not intended to define, limit or describe the scope or intent of
any provision of this Agreement.
Applicable Law. This Agreement shall be construed and interpreted and be
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governed by the laws of the State of Washington.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date and year first above written.
EMERITUS MANAGEMENT
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EMERITUS MANAGEMENT LLC,
a Washington limited liability company
By: Emeritus Corporation,
a Washington corporation
By: /s/ Raymond R. Brandstrom
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Name Raymond R. Brandstrom
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Title Vice President of Finance
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EMERITUS MANAGEMENT I LP
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EMERITUS MANAGEMENT I LP,
a Washington limited partnership
By: EM I, LLC, a Washington limited liability company
By: Emeritus Corporation, a
Washington corporation
By: /s/ Raymond R. Brandstrom
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Name Raymond R. Brandstrom
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Title Vice President of Finance
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EMERITUS
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EMERITUS CORPORATION, a Washington
corporation
By: /s/ Raymond R. Brandstrom
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Name Raymond R. Brandstrom
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Title Vice President of Finance
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AL INVESTORS
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AL INVESTORS LLC, a Delaware limited liability company, for itself and as sole
managing member on behalf of each of the Owners, or in the case where the Owner
is a limited partnership, as sole managing member on behalf of the general
partner thereof
By: /s/ Norman L. Brendan
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Name Norman L. Brendan
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Title Manager
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The undersigned lenders in connection with the Senior Loan and the Junior Loan
have executed this Agreement for the sole purpose of consenting to the foregoing
Amendment.
GMAC Commercial Mortgage Corporation, a California corporation
By: /s/ Lisa M. Lautner
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Name Lisa M. Lautner
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Title Senior Vice President
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Senior Housing Partners I, L.P.,
a Delaware limited partnership
By: /s/ Noah R. Levy
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Name Noah R. Levy
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Title Vice President
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The undersigned has executed this Agreement for the sole purpose of
acknowledging and consenting to the foregoing Amendment, ratifying the Emeritus
Guaranty, and confirming and agreeing that foregoing Amendment does not alter,
modify, amend or waive any terms contained in the Emeritus Guaranty.
Emeritus Corporation,
a Washington corporation
By:/s/ Raymond R. Brandstrom
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Name Raymond R. Brandstrom
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Title Vice President of Finance
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