ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT
(WITH CONSENT)
(KINGSLEY PLACE AT STONEBRIDGE)
Dated as of December 31, 2003
HB-ESC V, L.P., a Washington limited
partnership ("Assignor"), ESC IV, L.P., a
Washington limited partnership, doing business in Texas as
Texas-ESC IV, L.P.
("Assignee"), EMERITUS CORPORATION, a Washington corporation ("Emeritus"),
DANIEL R. BATY, an individual resident of the State
of Washington ("Existing
Guarantor"), and HR ACQUISITION OF SAN ANTONIO, LTD., an Alabama limited
partnership, formerly known as Capstone Capital of San Antonio, Ltd.,
d/b/a
Cahaba of San Antonio, Ltd. ("Lessor"), agree as follows:
1. PRELIMINARY
STATEMENTS.
Lessor and Integrated Living Communities of
McKinney, L.P, a Delaware limited
partnership ("Original Lessee") (successor by
conversion to Integrated Living Communities of McKinney, Inc., a Delaware
corporation) entered into that certain Lease
Agreement dated as of December 31,
1996, which was amended by
that certain First Amendment to Lease Agreement dated
as of December 1, 1997, and which was further
amended by that certain Second
Amendment to Lease Agreement dated as of May
9, 2002 (as amended, the "Lease"),
whereby Lessor agreed to
lease to Original Lessee, and Original Lessee agreed to
lease from Lessor, that certain assisted living facility located
at 1650 S.
Stonebridge Drive, McKinney, Texas 75070, as more particularly
described and
defined in the Lease (the "Leased Property").
A copy of the Lease is
attached
hereto as Exhibit "A". The Lease was assigned to Assignor
by Original Lessee
pursuant to that certain Assignment and Assumption of Lease Agreement
(With
Consent) dated as of May 9, 2002. Existing Guarantor executed a
Guaranty of
Payment and Performance dated May 9, 2002 ("Existing Guaranty"),
in favor of
Lessor, guaranteeing Assignor's obligations under the Lease. Assignor now
desires to assign to
Assignee, and Assignee desires to accept the assignment
of,
any right, title or interest Assignor has in and to the Leased Property
as
lessee under the Lease, and Assignor and
Assignee desire Lessor to, among other
things, consent to such assignment and to make certain other
agreements and
statements, all pursuant to the terms and conditions of this
Assignment and
Assumption of Lease Agreement (this "Agreement"). Emeritus is the sole
shareholder of ESC G.P. II,
INC., a Washington corporation, which is the general
partner of Assignee. Emeritus is required to make certain
representations,
warranties and agreements in this Agreement as a condition precedent
to the
execution of this Agreement by Lessor.
2. EFFECTIVENESS;
DEFINED TERMS. Unless otherwise indicated to the
contrary, all terms and conditions of this Agreement
shall be effective as of
the date first written above (the "Effective Date"). Unless defined or
otherwise indicated herein, capitalized terms used herein without
definition
shall have the definitions provided therefor in the Lease.
3. ASSIGNMENT.
Assignor assigns and
conveys unto Assignee all of Assignor's
right, title and interest in and to the Leased Property as
lessee under the
Lease, effective as of the Effective Date.
Commencing on the
Effective Date,
Assignee shall be primarily liable, as
principal rather than as surety, for the
payment and performance of all of Assignor's obligations as
lessee under the
Lease arising on or after the Effective Date.
4. ASSUMPTION.
Assignee accepts said
assignment from Assignor and expressly
assumes and agrees to keep
and perform all of the terms of the Lease on the part
of lessee under the Lease arising on
or after the Effective Date. Assignee and
Emeritus shall be and become jointly and severally
liable for the payment and
performance of each
obligation of the lessee under the Lease arising on or
after
the Effective Date.
5. RELEASE OF
ASSIGNOR/EXISTING GUARANTOR NOT RELEASED. As of the Effective
Date, Lessor for itself and for its affiliates,
subsidiaries, successors and
assigns, hereby releases
Assignor, and its affiliates, subsidiaries, successors,
assigns, agents and attorneys, representatives and employees, from their
respective obligations and liabilities of any kind or nature
whatsoever under
the Lease (including the payment of
rent and other charges) arising or accruing
on or after the Effective
Date, although Assignor shall not be released from any
obligations or liabilities of any kind or nature arising or
accruing prior to
the Effective Date. Existing Guarantor shall not be released from any
obligations or liability under the Existing Guaranty and shall
guaranty the
obligations of Assignee under the Lease.
6. ASSIGNOR'S
REPRESENTATIONS.
Assignor represents to Assignee, Emeritus
and Lessor that, as of the date of this Agreement, (i) to
Assignor's actual
knowledge, there is no
default on the part of Lessor under the Lease; (ii)
there
is no default on the part of Assignor
under the Lease or event, which, with the
giving of notice or passage of time or both, would constitute an Event
of
Default under the Lease; (iii) the Lease is
valid and in full force and effect
and has not been modified, supplemented, or amended, nor to its actual
knowledge, has Lessor assigned its interest in the Lease; (iv) to
Assignor's
actual knowledge, there are no existing or impending
condemnation proceedings
which could affect the Leased Property; (v)
all Impositions (as defined in the
Lease) are current and fully paid; and (vi) the
amount of the current Minimum
Rent (per month) and the date
through which rent has been paid for the Lease and
for the Related Leases is set forth in Exhibit "B" to this Agreement.
7. ASSIGNEE'S
AND EMERITUS' REPRESENTATIONS.
Assignee and Emeritus
hereby
(i) acknowledge and agree that there are no
offsets or defenses to payment and
performance of the
obligations of Assignor and Assignee or any other party
under
the Lease; and (ii) waive any defense, claim
or counterclaim arising out of or
in connection with the obligations of Assignor or
Assignee or any other party
under the Lease that exists
as of the Effective Date (but not any defense, claim
or counterclaim that may arise in the future).
8. CONDITIONS
PRECEDENT TO LESSOR'S CONSENT. The following items are
conditions precedent to Lessor's consent to the assignment of Assignor's
interest under the Lease to Assignee and must be
completely satisfied prior to
the effectiveness of such assignment (Lessor's execution and
unconditional
delivery to Assignor and Assignee of this Agreement
shall constitute Lessor's
agreement that the Effective Date is the date first hereinabove
written):
8.1 Assignor
and its affiliates shall execute and deliver the
following
agreements to Lessor, and shall complete and
satisfy all of Lessor's conditions
precedent set forth therein:
i. the Assignment and Assumption of Lease Agreement,
dated as of even date
herewith, among Assignor, Assignee and Lessor, with respect to the Lease
Agreement dated December 31,
1996, between Lessor, Integrated Living Communities
of Oakwell, L.P., a Delaware limited partnership ("ILCO"), successor by
conversion to Integrated Living Communities of Oakwell, Inc., a Delaware
corporation, as lessee, for
the assisted living facility located at 3360 Oakwell
Court, San Antonio, Texas 78218, which was amended by that certain First
Amendment to Lease Agreement dated as of December 1, 1997 and that
Second
Amendment to Lease Agreement dated as of May 9,
2002, and which was previously
assigned to Assignor by that certain Assignment and Assumption of Lease
Agreement (With Consent) dated as of May 9, 2002
(as amended and assigned, the
"Oakwell Lease");
ii. the Assignment and Assumption of Lease
Agreement, dated as of even date
herewith, among Assignor, Assignee and Lessor, with respect to the Lease
Agreement dated December 31,
1996, between Lessor, Integrated Living Communities
of San Antonio, L.P., a Delaware limited partnership
("ILCSA"), successor by
conversion to Integrated Living Communities of San Antonio, Inc.,
a Delaware
corporation, as lessee, for the assisted living
facility located at 9000 Floyd
Curl Drive, San Antonio, Texas 78240, which was amended by that
certain First
Amendment to Lease Agreement dated as of December 1, 1997 and that
Second
Amendment to Lease Agreement dated as of May 9,
2002, and which was previously
assi
