LEASE ASSIGNMENT AND OPERATIONS TRANSFER AGREEMENT
THIS AGREEMENT is made and entered into effective as of the 18th day of
September, 2002 (the "Execution Date") by and between Regent Assisted Living,
Inc., an Oregon corporation ("Tenant") and ESC III, L.P., a Washington limited
partnership doing business in Texas as Texas-ESC III, L.P. ("Assignee").
RECITALS
A. Pursuant to a Lease Agreement dated as of December 5, 1996, between
Texas HCP Holding, L.P., as Landlord ("Landlord"), and Regent, as Tenant, as
amended by First Amendment to Lease dated as of March 4, 1997, by Second
Amendment to Lease dated as of September 20, 1009, by Third Amendment to Lease
dated as of December 26, 2000, by Fourth Amendment to Lease dated as of March,
2001 and by Fifth Amendment to Lease, dated as of November 1, 2002 (the
"Lease"), a true and correct copy of which is attached hereto as Exhibit A,
Tenant leases from Landlord the assisted living facility located in San Antonio,
Texas and commonly known as Hamilton House, 5331 Hamilton-Wolfe Road, San
Antonio, Texas 78229 (the "Facility").
B. Tenant and Assignee are interested in Tenant assigning the Lease to
Assignee and Assignee assuming the Lease from Tenant.
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 that all of the Conditions (as defined in Section 12) have
been satisfied by Tenant or Assignee, as applicable, as of the Transfer Date (as
defined below), 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
"Hamilton House," 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 "Hamilton House."
(b) Assignee agrees to proceed with all due diligence to satisfy the
Conditions by August 31, 2002 and, in connection therewith, Tenant agrees, upon
request and at no cost to Tenant, to cooperate therein, including 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.
(c) For purposes hereof, the Transfer Date shall be defined as the
date on which operational and financial responsibility for the Facility are
transferred to Assignee and the Lease is assigned to and assumed by Assignee;
provided, however, in the event any of the Conditions have not been satisfied or
waived by September 30, 2002, then either Tenant or Assignee shall have the
right, but not the obligation, to declare this Agreement null and void and of no
further force and effect.
2. EMPLOYEES.
(a) On the Transfer Date, Tenant shall terminate all of the employees
of the Facility and shall pay to them all wages, vacation, and paid time off
which are earned and/or accrued as of the Transfer Date. 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 holding the security
deposits with respect to the residents of the Facility described in Exhibit C
and that it shall transfer the same to Assignee on the Transfer Date, along with
a statement signed by each resident confirming the accuracy of the amount being
transferred by Tenant to Assignee on the Transfer Date, unless Assignee waives
the requirement for such a statement based on the results of its own audit of
the resident security deposits.
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 Tenant and Assignee 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 Tenant and Assignee 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 Tenant and Assignee 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 Tenant and Assignee cannot otherwise agree as to the
period to which they relate, then any such payments received by Assignee will
first be applied by Assignee to reduce the resident's post-Transfer Date
balances, with any excess remitted by Assignee to Tenant to reduce the
resident's pre- 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.
( c) Notwithstanding the foregoing, Assignee acknowledges and agrees
that the Operating Contracts will include a lease for a postage meter and a
copier and that Assignee shall be required to assume such leases as of the
Transfer Date (the "Assumed Equipment Leases").
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) On the Transfer Date, Tenant shall have the right to remove any
petty cash (as compared to resident funds) then being maintained by Tenant at
the Facility.
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 vehicles listed on
Exhibit B are 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) Tenant shall transfer and convey to Assignee on the Transfer Date
for no additional consideration all of the computer hardware and transferable
software owned by Tenant and located at and used in connection with the
operation of the Facility. 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 conveyed to
Assignee. Assignee and Tenant acknowledge and agree that the transferable
software shall not include the AMSI software which shall be and remain the
property of Tenant but which Tenant shall permit Assignee to use in connection
with its operation of the Facility at no additional cost to Assignee for a
period of sixty (60) days after the Transfer Date.
(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) 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 is to be conveyed to Assignee pursuant to Section 9(a).
(d) 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 which are assumed by Assignee pursuant to the
terms of this Agreement, if any, including the Assumed Equipment Leases and the
Assumed Vehicle Lease (as defined in Exhibit B), 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.
(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, (iii) the
operation of the Facility prior to the Transfer Date and/or (iv) a breach by
Tenant of its obligations under the Lease 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.
Between the Execution Date and the Transfer Date, Tenant shall maintain 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") at the levels customarily
maintained by Tenant in connection with its operation of the Facility and on the
Transfer Date Tenant shall transfer and convey the Inventory to Assignee. 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. CONDITIONS
The obligation of the parties to consummate the transaction provided for
herein is subject to the satisfaction or waiver of the following conditions,
with the conditions set forth in clauses (a) through (d) being deemed to be the
"Initial Conditions" and the conditions set forth in clauses (e) though (h)
being deemed to be the "Additional Conditions" and with the Initial Conditions
and the Additional Conditions being collectively referred to as the
"Conditions:"
(a) The issuance to Assignee of a license to operate the Facility as of
the Transfer Date or the receipt by Licensee of such assurances as may be
reasonably acceptable to it that within a reasonable period of time after the
Transfer Date it will be licensed to operate the Facility effective as of the
Transfer Date.
(b) The receipt of the Landlord Consent duly executed by Landlord and the
satisfaction of any conditions to the effectiveness thereof, which Landlord
Consent shall provide, at a minimum, for the elimination of the termination
rights granted to the Landlord under the Fifth Amendment thereto and the
amendment of the Lease, if and to the extent necessary to ensure that it is
treated for accounting purposes as an operating, rather than a capital lease,
and that Assignee and the Facility are in compliance with any financial
covenants contained therein.
(c) The satisfaction by Assignee with the results of its due diligence
investigation with respect to the Facility, including, but not limited to, its
review and approval of the structural and environmental condition of, and the
operating systems, including electrical, plumbing and HVAC systems, within, the
Facility, the title to the Facility, the zoning of the Facility, an ALTA survey
of the Facility and the real property on which it is located, a pest inspection
report with respect to the Facility.
(d) The receipt of Assignee of the approval of its Board of Directors.
On or before September 13, 2002 (or earlier if possible) Assignee shall
advise Tenant in writing as to which, if any, of the foregoing, conditions has
not been satisfied and setting forth in reasonable detail the reasons therefor
(the "Assignee Objection Notice"). Tenant shall have a period of five (5) days
after receipt of the Assignee Objection Notice in which to respond and advise
Assignee in writing whether or not it will correct the items to which Assignee
has objected in the Objection Notice or, if applicable, give Assignee additional
time to resolve the matters to which Assignee has objected in the Assignee
Objection Notice (the "Tenant Response Notice"). Assignee shall have five (5)
days after receipt of the Tenant Response Notice to advise Tenant in writing
whether or not it is prepared to proceed with the transaction or to terminate
the transaction (the "Assignee Response Notice"). If Assignee elects to
terminate the transaction, then Assignee shall be entitled to the immediate
return of the $100,000 Earnest Money deposit previously paid by Assignee to
Tenant under the terms of that Letter of Intent dated July 25, 2002 between
Assignee and Tenant (the "LOI"). If Assignee elects to proceed with the
transaction, then the assignment and assumption provided for herein shall occur
five (5) business days after the delivery of the Assignee's Response Notice,
subject to the satisfaction of the following Additional Conditions:
(e) It shall be a condition to the obligation of each of Tenant and Assignee
to consummate the transaction provided for herein that, on the Transfer
Date, the representations and warranties of Tenant and Assignee set forth in
Section 13 hereof shall be true and correct in all material respects.
(f) It shall be a condition to the obligation of Tenant to consummate
the transaction provided for herein that, on the Transfer Date, Assignee shall
deliver to Landlord its letter of credit or other security in form and substance
acceptable to Landlord in the amount of $741,751.65 (the "LC Amount") and
Landlord shall return to Tenant Tenant's cash deposit in the LC Amount.
(g) It shall be a condition to the obligation of Tenant to consummate
the transaction provided for herein that, on the Transfer Date, Assignee shall
pay to Tenant the sum of Three Hundred Eight Thousand and no/100 Dollars
($308,000) as consideration for the assignment of the Lease to Assignee and the
transfer to Assignee of the other assets described herein (the "Transfer
Consideration").
(h) The execution and delivery of a letter duly executed by Tenant and
Assignee confirming (i) that, as of the Transfer Date, the Facility shall cease
to be subject to the terms of the Management Agreement dated as of December 31,
2001 between Tenant and Assignee and (ii) the waiver by Assignee of any
termination fees which would otherwise be due thereunder as a result of such
termination.
13. REPRESENTATIONS AND WARRANTIES.
(a) Tenant makes the representations set forth in this Section 13, each
of which is material to and relied upon by Assignee.
(b) (a) Tenant is a duly organized and validly existing Oregon
corporation and is duly qualified to do business in, and in good standing under
the laws of, the State of Texas.
(c) (b) Subject to securing the Landlord Consent, Tenant has the
necessary corporate power and authority to execute, deliver and perform its
obligations and to consummate the transactions contemplated by this Agreement.
(d) (c) Tenant has duly executed and delivered this Agreement and
this Agreement is a valid and legally binding obligation of Tenant enforceable
against Tenant in accordance with its terms, except as the enforceability may be
limited by applicable bankruptcy laws, laws affecting the rights of creditors
and general principles of equity.
(e) (d) There is no pending, or to the best knowledge of Tenant,
threatened litigation, arbitration proceedings or governmental proceedings
involving Tenant that would prevent or delay the consummation of the
transactions contemplated by this Agreement.
(f) (e) Subject to satisfaction of the conditions set forth in
Section 12(b), the execution and delivery by Tenant of this Agreement and the
consummation by Tenant of the transactions contemplated by this Agreement do not
and will not violate the terms of Tenant's Articles of Incorporation or Bylaws
or any instrument, document or agreement to which Tenant is a party or by which
Tenant is bound or result in a breach of any agreement, document or instrument
to which Tenant is a party or by which Tenant is bound.
(g) (f) No brokerage fees or other commissions will be payable in
connection with the transactions contemplated by this Agreement by reason of any
act or agreement of Tenant.
(h) (g) Tenant is the holder of leasehold title to the Facility and
is the owner of the Inventory, the Lease and the Inventory are free and clear of
all liens, claims and encumbrances, other than any liens granted to Landlord
under the terms of the Lease. Rent due under the Lease has been paid through
August 31, 2002. Tenant has not established any tax or other escrows with
Landlord under the terms of the Lease.
(i) (h) Tenant has not received written or verbal notice of (i) any
violation of any local, state or federal law, including any health care,
building, zoning, licensure or environmental law, with respect to the Facility
or the operation thereof by Tenant, which has not been corrected as of the date
hereof, (ii) a default or Event of Default under the Lease, which has not been
cured as of the date hereof or (iii) any pending or threatened condemnation
action or proceeding.
Assignee makes the representations set forth in this Section 13, each of
which is material to and relied upon by Tenant.
(a) (a) Assignee is duly organized and existing under the laws of the
state of Washington and is duly qualified to do business in the State of Texas
and is in good standing under the laws thereof.
(b) (b) Subject to satisfaction of the Conditions, Assignee has the
power to execute and deliver and perform its obligations under this Agreement
and to consummate the transactions contemplated by this Agreement.
(j) (c) Assignee has duly executed and delivered this Agreement.
This Agreement constitutes the valid and legally binding obligation of Assignee,
enforceable against it in accordance with its terms, except as the
enforceability may be limited by applicable bankruptcy laws, laws affecting the
rights of creditors, and general principles of equity.
(k) (d) There is no pending, or to the best knowledge of Assignee,
threatened litigation, arbitration proceedings or governmental proceedings
involving Assignee that will prevent or delay the consummation of the
transactions contemplated by this Agreement.
(l) (e) No brokerage fees or other commissions will be payable in
connection with the transactions contemplated by this Agreement by reason of any
act or agreement of Assignee.
(m) (f) Subject to satisfaction of the Conditions set forth in
Sections 12(b) and (d), the execution and delivery by Assignee of this Agreement
and the consummation by Assignee of the transactions contemplated by this
Agreement do not and will not violate the terms of Tenant's Certificate of
Partnership or Partnership Agreement or any instrument, document or agreement to
which Assignee is a party or by which Assignee is bound or result in a breach of
any agreement, document or instrument to which Assignee is a party or by which
Assignee is bound.
14. 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.
15. 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.
16. 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 including, but not
limited to, the LOI except those provisions of the LOI captioned Earnest Money,
Non-Solicitation and Relationship to Management Agreement, all of which shall
survive until the consummation of the transaction provided for herein and shall
govern the rights and obligations of the parties hereto and identified therein
in the event the transaction provided for herein fails to occur for any reason
whatsoever. This Agreement may only be amended by written instrument signed by
the parties hereto.
17. 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.
18. 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.
19. 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.
20. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Texas.
21. 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 Assignee: 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
1520 Fourth Avenue
Sixth Floor
Seattle, WA 98101
Attn: Randi S. Nathanson
Phone: 206-623-6239
Fax: 206-623-1738
To Tenant: Regent Assisted Living, Inc.
Bank of America Financial Center
121 SW Morrison
Suite 950
Portland, OR 97201
Phone: 503-227-4000
Facsimile: 503-274-4685
Attn: Walter C. Bowen, President
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 21 to the address set forth
in this Section 21 or to such other address as may be hereafter specified in
writing in accordance with this Section 21 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 21 of the
current address to which notices are to be sent.
22. 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.
ESC III, L.P. doing business in Texas as Texas-ESC III, L.P.
By: ESC GP II, Inc.
Its: General Partner
By: /s/ Raymond R. Brandstrom
----------------------------
Name: Raymond R. Brandstrom
Its: CFO
REGENT ASSISTED LIVING, INC.
By: /s/ Steven L. Gish
---------------------
Name: Steven L. Gish
Its: Treasurer
LANDLORD CONSENT
(ATTACHED)
EXHIBIT A
THE LEASE
(ATTACHED)
EXHIBIT B
THE VEHICLES
The following vehicles are located at the Facility:
Description of Van: 1997 Ford Supreme Senator, VIN 1FDLE4050VHB22935
Description of Saturn:
Title to the Van shall be conveyed by Tenant to Assignee on the Transfer Date
for no additional consideration.
The Saturn is leased under that Lease Agreement dated ___________ between Tenant
and ________________ (the "Vehicle Lease"). On the Transfer Date, subject to
securing any necessary consents or approvals, Assignee shall assume the Vehicle
Lease.
EXHIBIT C
RESIDENT SECURITY DEPOSITS