EX-10.84.1
 
EMERITUS CORPORATION
 
SHARED OPPORTUNITIES AGREEMENT
 
THIS SHARED OPPORTUNITIES AGREEMENT (“Agreement”) is entered into as of this
19th day of January, 2011 between EMERITUS CORPORATION, a Washington corporation
(the “Company”) and DANIEL R. BATY (“Executive”).
 
RECITALS
 
A. The Company is engaged in the business of owning, leasing, operating and
managing senior living communities (including independent living, assisted
living and skilled nursing) as well as ancillary businesses, including therapy,
home health, durable medical equipment, and hospice (“Senior Living”) in the
United States and Canada.  The Company is not currently engaged in Senior Living
outside the United States or Canada, but may choose to pursue such activities in
the future.
 
B. Executive is the Co-Chief Executive Officer, Chairman of the Board of
Directors and a principal shareholder of the Company.
 
C. Executive wishes to relinquish his position as Co-Chief Executive Officer,
remain as an employee, and serve as executive Chairman of the Board of Directors
and as a Director.
 
D. Executive is a managing partner in Columbia Pacific Management (“CPM”).  CPM
has invested in, developed and operated through third parties, and intends to
continue to invest in, develop and operate, facilities in the senior
housing/assisted living space and related healthcare facilities.
 
E. The Company and Executive wish to terminate that certain Noncompetition
Agreement dated September 29, 1995 between the Company and Executive in order to
streamline the procedures under which Executive may pursue opportunities in
Senior Living outside the Company.  Nothing in this agreement is to be construed
as relieving or diminishing Executive’s duties to the Company as an officer and
director under applicable law.
 
F. The parties hereto intend to be legally bound hereby.
 
NOW, THEREFORE, in consideration of the mutual promises, agreements,
representations, warranties and covenants herein contained, the sufficiency and
adequacy of which is acknowledged, the parties agree as follows:
 
1. Transactions in the United States and Canada
 
Executive and CPM each acknowledge that each has an affirmative obligation to
immediately present to the Company all equity investment opportunities in Senior
Living in the United States and Canada.  These opportunities include
acquisitions, leases, management, joint venture opportunities, and development
of independent living, assisted living, memory care and skilled nursing
communities.  Upon notification to the Company, Executive may undertake actions
necessary to complete such transactions.  With respect to such transaction, the
Company will have the right to:
 

 
 

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(i) pursue such transaction on its own or elect to co-invest with Executive in
the transaction.  The Company may exercise its option to pursue the transaction
or co-invest anytime during the first one hundred twenty (120) days following
the date that Executive has notified the Company and provided access to due
diligence materials.  In the event that the Company elects to pursue the
transaction, Executive will no longer pursue such transaction, and the Company
will do so on the same terms as Executive and will reimburse Executive for
Executive’s third party out of pocket expenses and cost of funds at an annual
interest rate of 8%; and/or
 
(ii) manage the assets and/or business that is the subject of the transaction
pursuant to a management agreement, cancellable by the owner only for cause,
with a minimum management fee of 5% of gross revenues and a reasonable
mobilization fee for marshalling the resources to manage the assets and/or
business and, if applicable, a construction management fee at prevailing market
rate.  If the Company enters into a management agreement, it shall also be
entitled to:
 
(iii) a first right of refusal to purchase the assets and/or business at a
subsequent sale using the same methodology approved by the Company’s Independent
Directors Committee for the Las Vegas community Emeritus at Spring Valley
(“Spring Valley”); and
 
(iv) a participation “promote” (in addition to any return to which the Company
may be entitled as an equity participant) upon the sale of the assets and/or
business calculated in the same manner as was approved by the Company’s
Independent Directors Committee for Spring Valley.
 
2. Transactions in China
 
In the event that Executive identifies an opportunity in Senior Living in China
(“China Opportunity”), Executive shall promptly notify the Company and may
undertake actions necessary to pursue and consummate the transaction(s).  The
Company will have the right to:
 
(i) Notify Executive, within sixty (60) days of receiving notice, of the
Company’s intention to co-invest in the China Opportunity up to 50% of the
equity value; and
 
(ii) Manage, consult or otherwise provide resources upon mutually agreeable
terms.
 
3. Soliciting Customers or Employees
 
Executive shall not directly or indirectly solicit or take away, or attempt to
solicit or take away, any person then employed by the Company for purposes of
employment by or any consulting relationship with Executive or any other person,
firm, corporation, partnership, limited liability company or other entity during
the term of this Agreement.
 

 
 

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4. Remedies
 
The parties agree that legal remedies may well be inadequate to compensate for
the unique losses to be suffered in the event of a breach hereof, and that the
damaged party shall be entitled to seek and obtain specific performance of the
terms of this Agreement, as well as all remedies permitted by law.
 
5. Effectiveness and Term
 
This Agreement shall become effective upon the date first stated above and shall
remain in effect as long as Executive is an officer or director of the Company,
except as may be otherwise agreed in writing by the Company.  The Company
reserves the right to terminate part or all of this agreement upon six (6)
months’ written notice to Executive.
 
6. Cumulative Rights; Survival
 
Each and all of the various rights, powers and remedies of the parties hereto
shall be considered as cumulative with and in addition to any rights, powers or
remedies of the Company and no one of them shall be deemed exclusive of the
others or exclusive of any of the other rights, powers and remedies allowed by
law.  The exercise or partial exercise of any right, power or remedy shall
neither constitute the election thereof nor the waiver of any other right, power
or remedy.
 
7. Governing Law; Attorneys’ Fees
 
This Agreement shall be governed by and construed in accordance with the laws of
the state of Washington.  In the event of a dispute, the substantially
prevailing party shall be entitled to recover reasonable attorneys’ fees and
costs.
 
8. Disputes
 
(i) Except as expressly set forth elsewhere in this Agreement, it is mutually
agreed between the parties that arbitration shall be the sole and exclusive
remedy to redress any dispute, claim or controversy (thereinafter referred to as
“dispute”) involving the interpretation of this Agreement or the terms or
conditions.  It is the intention of the parties that the arbitration award will
be final and binding and that a judgment on the award may be entered in any
court of competent jurisdiction and enforcement may be had according to its
terms.
 
(ii) The arbitrator shall be chosen from a list provided by the American
Arbitration Association and the Arbitration shall be conducted before a single
arbitrator in Seattle, Washington, pursuant to the Commercial Dispute Resolution
Rules of the American Arbitration Association then in effect. Emeritus shall
bear all expenses of the arbitration.  Each party shall be responsible for the
costs of their own attorneys and related costs (expert witnesses, exhibits,
etc.), except to the extent that the arbitrator awards attorneys’ fees as part
of the arbitration decision.
 
(iii) The arbitrator shall not have jurisdiction or authority to change any
provision of this Agreement by alterations of, additions to or subtractions from
the terms hereof.  The arbitrator’s sole authority shall be to interpret or
apply any provision(s) of this Agreement.
 

 
 

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(iv)           The parties agree that the provisions hereof, and the decision of
the arbitrator with respect to any dispute, shall be the sole and exclusive
remedy for any alleged breach of this Agreement or the employment
relationship.  The parties hereby acknowledge that since arbitration is the
exclusive remedy, neither party has the right to resort to any federal, state or
local court or administrative agency concerning breaches of this Agreement and
that the decision of the arbitrator shall be a complete defense of any suit,
action or proceeding instituted in any federal, state or local court before any
administrative agency with respect to any dispute which is subject to
arbitration as herein set forth.  The arbitration provisions hereof shall, with
respect to any dispute, survive the termination or expiration of this Agreement.
 
9. Severability
 
Each provision of this Agreement shall be construed and considered separate and
severable from the validity and enforceability of the other provisions
hereof.  Each provision hereof shall be enforced to the fullest extent permitted
by law, and any court interpreting or applying the provisions hereof is
authorized and directed to narrow the scope of any invalid provision hereof to
the extent necessary so that its application and enforcement will be lawful.
 
10. Titles and Headings
 
Titles and headings to sections hereof are for purposes of reference only and
shall in no way limit, define or otherwise affect the provisions hereof.
 
11. Counterparts
 
This Agreement may be executed in any number of counterparts, each of which,
when so executed and delivered, shall be deemed to be an original and all of
which, taken together, shall constitute one and the same instrument.
 
12. Entire Agreement
 
This Agreement contains the entire agreement of the parties hereto and may be
modified or amended only by a written instrument executed by all such parties.
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written
 
EMERITUS CORPORATION

By: /s/ Granger Cobb
Granger Cobb
Co-CEO and President

 
 

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EXECUTIVE

/s/ Daniel R. Baty
Daniel R. Baty

ACKNOWLEDGED AND AGREED
THIS 19th DAY OF JANUARY, 2011

COLUMBIA PACIFIC MANAGEMENT

By: /s/ Brandon Baty
      Brandon Baty                                                              
Its: President                                                               

 
 

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