GUARANTY
For a valuable consideration, receipt of
which is hereby acknowledged, the
undersigned, EMERITUS CORPORATION, a
Washington corporation (hereinafter called
"GUARANTOR"), absolutely, unconditionally and
irrevocably guarantees and agrees (a) to pay
to GMAC COMMERCIAL MORTGAGE CORPORATION, a
California corporation (hereinafter called
"CREDITOR") at the address designated in the
Note (as hereinafter defined) for payment
thereof or as such address may be changed as
provided in the Note, all indebtedness of ESC
II, L.P., a Washington limited partnership
(hereinafter called "DEBTOR"), to Creditor
under the promissory note, dated of even date
herewith, in the original principal amount of
SEVENTEEN MILLION AND NO/100 DOLLARS
($17,000,000.00) payable to the order of
Creditor, and all modifications, renewals and
extensions of and substitutions for said
promissory note (said promissory note and all
modifications, renewals and extensions
thereof and all substitutions therefore
hereinafter called the "NOTE"), together with
all interest, reasonable attorneys' fees and
collection costs provided in the Note, and
all indebtedness under and pursuant to the
Deed of Trust, Mortgage and Security
Agreement (hereinafter called the "DEED OF
TRUST") securing the payment of the Note, and
all other instruments securing the payment of
the Note (all such indebtedness hereinafter
called the "INDEBTEDNESS"); (B) TO PERFOMR
FULLY AND PROMPTLY WHEN DUE ALL OF THE
COVENTANTS, AGREEMENTS AND OTHER OBLIGATIONS
UNDERTAKEN BY Debtor in the Note and the Deed
of Trust and all other instruments securing
the payment of the Note and in the
Construction Loan Agreement (the "LOAN
AGREEMENT"), of even date herewith between
Debtor and Creditor relating to the
indebtedness evidenced by the Note, including
without limitation, the completion of the
Improvements (as defined in the Loan
Agreement) (all of such instruments being
collectively hereinafter called the "LOAN
DOCUMENTS") and all of such covenants,
agreements and other obligations being
collectively hereinafter called the
"OBLIGATIONS"); and (c) to pay any and all
costs, attorney's fees and expenses incurred
or expended by Creditor in collecting any of
the Indebtedness or due to any default in the
performance of the Obligations or in
enforcing any right granted hereunder.
Guarantor expressly waives presentment
for payment, demand, notice of demand and of
dishonor and nonpayment of the Indebtedness,
notice of intention to accelerate the
maturity of the Indebtedness or any part
thereof, notice of disposition of collateral,
protest and notice of protest, diligence in
collecting, and the bringing of suit against
any other party. Creditor shall be under no
obligation to notify Guarantor of its
acceptance hereof or of any advances made or
credit extended on the faith hereof or the
failure of Debtor to pay any of the
Indebtedness as it matures or any default in
the performance of any of the Obligations, or
to use diligence in preserving the liability
of any person on the Indebtedness or the
Obligations or in bringing suit to enforce
collection of the Indebtedness or performance
of the Obligations. Guarantor waives all
defenses given to sureties or guarantors at
law or in equity other than the actual
payment of the Indebtedness and performance
of the Obligations and all
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defenses based upon questions as to the
validity, legality or enforceability of the
Indebtedness and/or the Obligations and
agrees that Guarantor shall be primarily
liable hereunder.
Creditor, without authorization from or
notice to Guarantor and without impairing,
modifying, changing, releasing, limiting or
affecting the liability of Guarantor
hereunder, may from time to time at its
discretion and with or without valuable
consideration, after, compromise, accelerate,
renew, extend or change the time or manner
for the payment of any or all of the
Indebtedness, increase or reduce the rate of
interest thereon, take and surrender
security, exchange security by way of
substitution, or in any way it deems
necessary take, accept, withdraw,
subordinate, alter, amend, modify or
eliminate security, add or release or
discharge endorsers, guarantors, or other
obligors, make changes of any sort whatever
in the terms of payment of the Indebtedness,
in the Obligations or in the manner of doing
business with Debtor, or settle or compromise
with Debtor or any other person or persons
liable on the Indebtedness or the Obligations
on such terms as it may see fit, and may
apply all moneys received from the Debtor or
others, or from any security held (whether
held under a security instrument or not), in
such manner upon the Indebtedness (whether
then due or not) as it may determine to be in
its best interest, without in any way being
required to marshal securities or assets or
to apply all or any part of such moneys upon
any particular part of the Indebtedness. It
is specifically agreed that Creditor is not
required to retain, hold, protect, exercise
due care with respect thereto, perfect
security interests in or otherwise assure or
safeguard any security for the Indebtedness;
no failure by Creditor to do any of the
foregoing and no exercise or nonexercise by
Creditor of any other right or remedy of
Creditor shall in any way affect any of
Guarantor's obligations hereunder or any
security furnished by Guarantor or give
Guarantor any recourse against Creditor.
The liability of Guarantor hereunder
shall not be modified, changed, released,
limited or impaired in any manner whatsoever
on account of any or all of the following:
(a) the incapacity, death, disability,
dissolution or termination of Guarantor,
Debtor, Creditor or any other person or
entity; (b) the failure by Creditor to file
or enforce a claim against the estate (either
in administration, bankruptcy or other
proceeding) of Debtor or any other person or
entity; (c) recovery from Debtor or any other
person or entity becomes barred by any
statute of limitations or is otherwise
prevented; (d) any defenses, set-offs or
counterclaims which may be available to
Debtor or any other person or entity; (e) any
transfer or transfers of any of the property
covered by the Deed of Trust or any other
instrument securing the payment of the Note;
(f) any release of Debtor, any coguarantor or
any other person (other than Guarantor)
primarily or secondarily liable for the
payment of the Indebtedness or the
performance of the Obligations or any part
thereof; (g) any modifications, extensions,
amendments, consents, releases or waivers
with respect to the Note, the Deed of Trust,
any other instrument now or hereafter
securing the payment of the Note, or this
Guaranty; (h) any failure of Creditor to give
any notice to Guarantor of any default under
the Note, the Deed of Trust, any other
instrument securing the payment of the Note,
or this Guaranty; (i) Guarantor is or becomes
liable for any indebtedness owing by Debtor
to Creditor other than under this Guaranty;
or (j)
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any impairment, modification, change, release
or limitation of the liability of, or stay of
actions or lien enforcement proceedings
against, Debtor, its property, or its estate
in bankruptcy resulting from the operation of
an resent or future provision of the Federal
Bankruptcy Code (hereinafter called the
Bankruptcy Code ) or other similar federal or
state statute or from the decision of any
court.
Creditor shall not be required to pursue
any other remedies before invoking the
benefits of the guaranties contained herein,
and specifically it shall not be required to
make demand upon or institute suit or
otherwise pursue its remedies against Debtor
or any surety other than Guarantor or to
proceed against any security now or hereafter
existing for the payment of any of the
Indebtedness. Creditor may maintain an action
on this Guaranty without joining Debtor
therein and without bringing a separate
action against Debtor.
If for any reason whatsoever (including
but not limited to ultra xxxxx, lack of
authority, illegality, force majeure, act of
God or impossibility) the Indebtedness or the
Obligations cannot be enforced against
Debtor, such unenforceability shall in no
manner affect the liability of Guarantor
hereunder and Guarantor shall be liable
hereunder notwithstanding that Debtor may not
be liable for such Indebtedness or such
Obligations and to the same extent as
Guarantor would have been liable if such
Indebtedness or Obligations had been
enforceable against Debtor.
Guarantor absolutely and unconditionally
covenants and agrees that in the event that
Debtor does not or is unable so to pay the
Indebtedness or perform the Obligations for
any reason, including, without limitation,
liquidation, dissolution, receivership,
conservatorship, insolvency, bankruptcy,
assignment for the benefit of creditors, sale
of all or substantially all assets,
reorganization, arrangement, composition, or
readjustment of, or other similar proceedings
affecting the status; composition, identity,
existence, assets or obligations of Debtor,
or the disaffirmance or termination of any of
the Indebtedness or Obligations in or as a
result of any such proceeding, Guarantor
shall pay the Indebtedness and perform the
Obligations and no such occurrence shall in
any way affect Guarantor's obligations
hereunder.
Should the status of Debtor change, this
Guaranty shall continue and also cover the
Indebtedness and Obligations of Debtor under
the new status according to the terms hereof.
In the event any payment by Debtor to
Creditor is held to constitute a preference
under the bankruptcy laws, or if for any
other reason Creditor is required to refund
such payment or pay the amount thereof to any
other party, such payment by Debtor to
Creditor shall not constitute a release of
Guarantor from any liability hereunder, but
Guarantor agrees to pay such amount to
Creditor upon demand and this Guaranty shall
continue to be effective or shall be
reinstated, as the case may be, to the extent
of any such payment or payments.
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Guarantor agrees that it shall not have
(a) the right to the benefit of, or to direct
the application of, any security held by
Creditor (including the property covered by
the Deed of Trust and any other instrument
securing the payment of the Note), any right
to enforce any remedy which Creditor now has
or hereafter may have against Debtor, or an
right to participate in any security now or
hereafter held b Creditor, or (b) any defense
arising out of the absence, impairment or
loss of any right of reimbursement or
subrogation or other right or remedy of
Guarantor against Debtor or against any
security resulting from the exercise or
election of any remedies by Creditor
(including the exercise of the power of sale
under the Deed of Trust), or any defense
arising by reason of any disability or other
defense of Debtor or by reason of the
cessation, from any cause, of the liability o
f Debtor.
The payment by Guarantor of any amount
pursuant to this Guaranty shall not in any
way entitle Guarantor to any right, title or
interest (whether by way of subrogation or
otherwise) in and to any of the Indebtedness
or any proceeds thereof, or any security
therefor, unless and until the full amount
owing to Creditor on the Indebtedness has
been fully paid, but when the same has been
fully paid Guarantor shall be subrogated as
to any payments made by it to the rights of
Creditor as against Debtor and/or any
endorsers, sureties or other guarantors.
Guarantor expressly subordinates its
rights to payment of any indebtedness owing
from Debtor to Guarantor, whether now
existing or arising at any time in the
future, to the prior right of Creditor to
receive or require payment in full of the
Indebtedness and until payment in full of the
Indebtedness (and including interest accruing
on the Note after any petition under the
Bankruptcy Code, which post-petition interest
Guarantor agrees shall remain a claim that is
prior and superior to any claim of Guarantor
notwithstanding any contrary practice, custom
or ruling in proceedings under the Bankruptcy
Code generally), Guarantor agrees not to
accept any payment or satisfaction of any
kind of indebtedness of Debtor to Guarantor
or any security for such indebtedness. If
Guarantor should receive any such payment,
satisfaction or security for any indebtedness
of Debtor to Guarantor, Guarantor agrees
forthwith to deliver the same to Creditor in
the form received, endorsed or assigned as
may be appropriate for application on account
of, or as security for, the Indebtedness and
until so delivered, agrees to hold the same
in trust for Creditor.
Notwithstanding anything to the apparent
contrary contained herein, Guarantor does not
herein expressly or impliedly waive or
release any rights of subrogation that
Guarantor may have against Debtor (except as
same are expressly subordinated as provided
herein), rights of contribution that
Guarantor may have against any other
guarantor of, or other person secondarily
liable for, the payment of the Indebtedness
or performance of the Obligations or rights
of reimbursement that Guarantor may have as
against Debtor (except as same may be limited
herein).
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It is the intent of Guarantor and
Creditor in the execution and acceptance of
this Guaranty to contract in strict
compliance with applicable usury law. In
furtherance thereof, Guarantor and Creditor
stipulate and agree that none of the terms
and provisions contained in this Guaranty, or
in any other instrument now or hereafter
executed in connection herewith, shall ever
be construed to create a contract to pay for
the use, forbearance or detention of money,
interest at a rate in excess of the maximum
interest rate permitted to be charged by
applicable law. Guarantor shall never be
required to pay interest on the Indebtedness
at a rate in excess of the maximum interest
that may be lawfully charged under applicable
law, and the provisions of this paragraph
shall control over all other provisions of
this Guaranty, and any other instruments now
or hereafter executed in connection herewith
or any other oral or written agreement which
may be in apparent conflict herewith.
Creditor expressly disavows any intention to
charge or collect excessive unearned interest
or finance charges in the event the maturity
of the Indebtedness is accelerated. If the
maturity of the Note shall be accelerated for
any reason or if the principal of the Note is
paid prior to the end of the term of the
Note, and as a result thereof the interest
received from Guarantor for the actual period
of existence of the loan evidenced by the
Note exceeds the amount of interest at the
applicable maximum lawful rate under
applicable law, Creditor shall, at its
option, either refund to Guarantor the amount
of such excess or credit the amount of such
excess against the principal balance of the
Note then outstanding and thereby shall
render inapplicable any and all penalties of
any kind provided by applicable law as a
result of such excess interest. In the event
that Creditor shall collect moneys and/or any
other thing of value from Guarantor which are
deemed to constitute interest which would
increase the effective interest rate on the
Indebtedness to a rate in excess of that
permitted to be charged by applicable law, an
amount equal to interest in excess of the
lawful rate shall, upon such determination,
at the option of Creditor, be either
immediately returned to Guarantor or credited
against the principal balance of the Note
then outstanding, in which event any and all
penalties of any kind under applicable law as
a result of such excess interest shall be
inapplicable. By execution of this Guaranty,
Guarantor acknowledges that Guarantor
believes the Indebtedness to be non-usurious
and agrees that if, at any time, Guarantor
should have reason to believe that the
Indebtedness is in fact usurious
,Guarantor will give Creditor notice of such
condition and Guarantor agrees that Creditor
shall have ninety (90) days in which to make
appropriate refund or other adjustment in
order to correct such condition if in fact
such exists. The term "applicable law" as
used in this paragraph shall mean the laws of
the State of Texas or the laws of the United
States, whichever laws allow the greater rate
of interest, as such laws now exist or may be
changed or amended or come into effect in the
future.
Each Guarantor hereby severally
represents, warrants and covenants to and
with Creditor as follows: (a) Guarantor is
solvent, is not bankrupt and has no
outstanding liens, garnishments, bankruptcies
or court actions which could render guarantor
insolvent or bankrupt, and there has not been
filed by or against Guarantor a petition in
bankruptcy or a petition or answer seeking an
assignment for the benefit of creditors, the
appointment of a receiver, trustee, custodian
or liquidator with respect to Guarantor or
any substantial portion of
5
Guarantor's property, reorganization,
arrangement, rearrangement, composition,
extension, liquidation or dissolution or
similar relief under the Bankruptcy Code or
any state law; (b) all reports, financial
statements and other financial and other data
which have been or may hereafter be furnished
by Guarantor to Creditor in connection with
this Guaranty are or shall be true and
correct in all material respects and do not
and will not omit to state any fact or
circumstance necessary to make the statements
contained therein not misleading and do or
shall fairly represent the financial
condition of Guarantor as of the dates and
the results of Guarantor's operations for the
periods for which the same are furnished, and
no material adverse change has occurred since
the dates of such reports, statements and
other data in the financial condition of
Guarantor (for the purposes of this clause
(b) and the preceding clause (a), Guarantor
shall also include any joint venturer or
general partner of Guarantor); (c) the
execution
,delivery and performance of this Guaranty do
not contravene, result in the breach of or
constitute a default under any mortgage, deed
of trust, lease, promissory note, loan
agreement or other contract or agreement to
which Guarantor is a party or by which
Guarantor or any of its properties may be
bound or affected and do not violate or
contravene any law, order, decree, rule or
regulation to which Guarantor is subject; (c)
there are no judicial or administrative
actions, suits or proceedings pending or, to
the best of Guarantor s knowledge, threatened
against or affecting Guarantor or involving
the validity, enforceability or priority of
this Guaranty; and (e) this Guaranty
constitutes the legal, valid and binding
obligation of Guarantor enforceable in
accordance with its terms.
Each Guarantor will deliver to Creditor
within one hundred twenty (120) days after
the close of each fiscal year of Guarantor:
(a) a statement of condition or balance sheet
of Guarantor as at the end of such fiscal
year; (b) an annual operating statement
showing in reasonable detail all income and
expenses of Guarantor for such fiscal year;
(c) a cash flow statement showing in
reasonable detail all cash flow of Guarantor
for such fiscal year; and (d) a projected
cash flow statement showing in reasonable
detail all projected cash flow for the then
current fiscal year. All of the foregoing
shall be in scope and detail reasonably
satisfactory to Creditor and any or all of
the foregoing shall be furnished quarterly,
in addition to annually, upon request of
Creditor. The statements in (a), (b) and (c)
above shall be certified as to accuracy by an
independent certified public accountant or,
with the consent of Creditor, by a
representative of Guarantor acceptable to
Creditor. The statement described in (d)
above shall contain a representation or
certification in form reasonably satisfactory
to Creditor by Guarantor.
Where two or more persons or entities
have executed this Guaranty, unless the
context clearly indicates otherwise, all
references herein to "Guarantor" shall mean
the guarantors hereunder or either or any of
them. Except for the obligation of Guarantor
to deliver the financial information
described in the immediately preceding
paragraph, all of the obligations and
liability of said guarantors hereunder shall
be joint and several. Suit may be brought
against said guarantors, jointly and
severally, or against any one or more of
them, less than all, without impairing the
rights of Creditor against the
6
other or others of said guarantors; and
Creditor may compound with any one or more of
said guarantors for such sums or sum as it
may see fit and/or release such of said
guarantors from all further liability to
Creditor for such indebtedness without
impairing the right of Creditor to demand and
collect the balance of such indebtedness from
the other or others of said guarantors not so
compounded with or released; but it is agreed
among said guarantors themselves, however,
that such compounding and release shall in
nowise impair the rights of said guarantors
as among themselves.
The rights of Creditor are cumulative
and shall not be exhausted by its exercise of
any of its rights hereunder or otherwise
against Guarantor or by any number of
successive actions until and unless all
Indebtedness has been paid, all Obligations
have been performed and each of the
obligations of Guarantor hereunder has been
performed. The existence of this Guaranty
shall not in any way diminish or discharge
the rights of Creditor under any prior or
future guaranty agreement executed by
Guarantor.
All property of Guarantor now or
hereafter in the possession or custody of or
in transit to Creditor for any purpose,
including safekeeping, collection or pledge,
for the account of Guarantor, or as to which
Guarantor may have any right or power, shall
be held by Creditor subject to a lien and
security interest in favor of Creditor to
secure payment and performance of all
obligations and liabilities of Guarantor to
Creditor hereunder. The balance of every
account of Guarantor with, and each claim of
Guarantor against, Creditor existing from
time to time shall be subject to a lien and
subject to set-off against any and all
liabilities of Guarantor to Creditor, and
Creditor may, at any time and from time to
time at its option and without notice,
appropriate and apply toward the payment of
any of such liabilities the balance of each
such account or claim of Guarantor against
Creditor.
Any notice or communication required or
permitted hereunder shall be given in
writing, sent by (a) personal delivery, or
(b) expedited delivery service with proof of
delivery, or (c) United States mail, postage
prepaid, registered or certified mail, or (d)
prepaid telegram, telex or telecopy, sent to
the intended addressee at the address shown
below, or to such other address or to the
attention of such other person as hereafter
shall be designated in writing by the
applicable party sent in accordance herewith.
Any such notice or communication shall be
deemed to have been given and received either
at the time of personal delivery or, in the
case of delivery service or mail, as of the
date of first attempted delivery at the
address and in the manner provided herein, or
in the case of telegram, telex or telecopy,
upon receipt.
THIS GUARANTY AND THE RIGHTS AND
OBLIGATIONS OF GUARANTOR HEREUNDER SHALL IN
ALL RESPECTS BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH. THE LAWS OF THE
STATE OF TEXAS (WITHOUT GIVING EFFECT TO
TEXAS' PRINCIPLES OF CONFLICTS OF LAW) AND
THE LAW OF THE UNITED STATES APPLICABLE TO
TRANSACTIONS IN SUCH STATE. GUARANTOR HEREBY
IRREVOCABLY SUBMITS TO THE
7
NONEXCLUSIVE JURISDICTION OF ANY TEXAS OR
FEDERAL COURT SITTING IN DALLAS. TEXAS (OR
ANY COUNTY IN TEXAS WHERE ANY PORTION OF THE
PROPERTY COVERED BY THE DEED OF TRUST IS
LOCATED) OVER ANY SUIT. ACTION OR PROCEEDING
RISING OUT OF OR RELATING TO THIS GUARANTY OR
ANY OF THE LOAN DOCUMENTS AND GUARANTOR
HEREBY AGREES AND CONSENTS THAT IN ADDITION
TO ANY METHODS OF SERVICE OF PROCESS PROVIDED
FOR UNDER APPLICABLE LAW ALL SERVICE OF
PROCESS IN ANY SUCH SUIT ACTION OR PROCEEDING
IN ANY TEXAS OR FEDERAL COURT SITTING IN
DALLAS TEXAS MAY BE MADE BY CERTIFIED OR
REGISTERED MAIL RETURN RECEIPT REQUESTED
DIRECTED TO GUARANTOR AT THE ADDRESS OF
GUARANTOR FOR THE GIVING OF NOTICES HEREUNDER
AND SERVICE SO MADE SHALL BE COMPLETE FIVE
(5) DAYS AFTER THE SAME SHALL HAVE BEEN SO
MAILED.
Guarantor hereby expressly and
unconditionally waives, in connection with
any suit, action or proceeding brought by
Creditor in connection with this Guaranty or
any of the loan documents, any and every
right it may have to (i) injunctive relief,
(ii) a trial by jury, (iii) interpose any
counterclaim therein, other than a compulsory
counterclaim) and (iv) have the same
consolidated with any other or separate suit,
action or proceeding. Nothing herein
contained shall prevent or prohibit Guarantor
from instituting or maintaining a separate
action against Creditor with respect to any
asserted claim.
This Guaranty may be executed in any
number of counterparts with the same effect
as if all parties hereto had signed the same
document. All such counterparts shall be
construed together and shall constitute one
instrument, but in making proof hereof it
shall only be necessary to produce one such
counterpart.
This Guaranty may only be modified,
waived, altered or amended by a written
instrument or instruments executed by the
party against which enforcement of said
action is asserted. Any alleged modification,
waiver, alteration or amendment which is not
so documented shall not be effective as to
any party.
The terms, provisions, covenants and
conditions hereof shall be binding upon
Guarantor and the heirs, devisees,
representatives, successors and assigns of
Guarantor and shall inure to the benefit of
Creditor and all transferees, credit
participants, successors, assignees and/or
endorsees of Creditor. Within this Guaranty,
words of any gender shall be held and
construed to include any other gender and
words in the singular number shall be held
and construed to include the plural, unless
the context otherwise requires. A
determination that any provision of this
Guaranty is unenforceable or invalid shall
not affect the enforceability or validity of
any other provision and any determination
that the application of any provision of this
Guaranty to any person or circumstance is
illegal or unenforceable shall not affect the
enforceability or validity of such provision
as it may apply to any other persons or
circumstances.
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EXECUTED as of the 26th day of
November,1996.
The address of Guarantor is:
0000 Xxxxxxx Xxxxxx
XXXXXXXX XXXXXXXXXXX,
Xxxxx 000
x Xxxxxxxxxx Xxxxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
--------------------------------
Its: President
--------------------------------
The address of Creditor is:
000 Xxxxx Xxxxxx Xxxxx Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
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STATE OF Washington )
)
COUNTY OF King )
The foregoing instrument was
acknowledged before me on 11-25, 1996, by
Xxxxxxx X. Xxxxxxxxxx President of EMERITUS
CORPORATION, a Washington corporation, on
behalf of said corporation.
/s/ Xxxxxxxxx X. Xxxxxxx
----------------------------------------
Notary Public, State of WA
Xxxxxxxxx X. Xxxxxxx
----------------------------------------
Printed name of Notary
My Commission Expires:
3-30-99
-----------------------------
[SEAL]
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