EX 10.79.7
GUARANTY
This Guaranty is made as of the 7th day of
January, 1998, by Thilo Best, Xxxxx Investors
I, L.L.C., a Washington limited liability
company, and Xxxxx Xxxxxxxxx (each individually
a "Guarantor," and collectively "Guarantors"),
to and for the benefit of Emeritus Corporation,
a Washington corporation, and its successors,
participants, and assigns ("Emeritus").
RECITALS:
A. Contemporaneously with the execution
hereof, Aurora Bay Investments, L.L.C., a
Washington limited liability company ("Aurora
Bay"), has entered into a Credit Agreement
dated as of January 7,1998 between Aurora Bay
and Emeritus (the "Credit Agreement"),
establishing a $5 million credit facility in
favor of Aurora Bay, and in connection
therewith executed and delivered to Emeritus a
Convertible Promissory Note (the "Note").
B. Each of the Guarantors is a member of
Aurora Bay and will financially benefit from
Emeritus' extension of credit to Aurora Bay.
C. Each of the Guarantors is willing to
execute this nonrecourse guaranty in favor of
Emeritus and to pledge such Guarantor's equity
interest in Aurora Bay to secure repayment of
all amounts due and payable to Emeritus under
the Note and the Credit Agreement.
NOW, THEREFORE, in order to induce
Emeritus to extend credit to Aurora Bay,
Guarantor agrees as follows:
ARTICLE I. GUARANTY
Guarantor jointly, severally,
unconditionally, absolutely, and irrevocably
guarantees all past, present, and future
indebtedness of Aurora Bay to Emeritus,
including but not limited to (a) the due and
punctual payment of the principal and interest
of the Note and all money due or that may
become due thereunder, whether according to
the present terms of the Note or at any
earlier or accelerated date or dates as
provided therein, pursuant to any extension of
time, or pursuant to any amendment,
modification, or replacement of the Note
hereafter made or granted and (b) the due and
punctual payment of all money due or that may
become due under the Credit Agreement, whether
according to the present terms of the Credit
Agreement or at any earlier or accelerated
date or dates as provided therein, pursuant to
any extension of time, or pursuant to an
amendment, modification, or replacement of the
Credit Agreement hereafter made or granted
(collectively, "Obligations"). Guarantor
acknowledges and agrees that Guarantor's
liability hereunder is cumulative with the
liability of Guarantor under all other
unterminated guaranties of Guarantor.
ARTICLE II. WAIVERS BY GUARANTOR AND RIGHTS OF EMERITUS
Guarantor intends that it shall remain
unconditionally liable for payment of. all the
Obligations regardless of any act or omission
which might otherwise operate as a legal or
equitable defense to discharge Aurora Bay,
Guarantor, or any other guarantor in whole or
part. Therefore, Guarantor hereby waives any
defense Guarantor may have to
the enforceability of its obligations hereunder by
virtue of any of the following and Emeritus may do
any of the following things as many times as
Emeritus wishes, without Guarantor's permission
and without notifying Guarantor, and this will not
affect Guarantor's promise to pay Emeritus the
amount of the Obligations:
(a) Emeritus does not have to notify
Guarantor of Emeritus' acceptance of this
Guaranty;
(b) Emeritus does not have to notify
Guarantor when Emeritus, extends credit to Aurora
Bay, or pays the obligations of Aurora Bay;
(c) Emeritus does not have to notify
Guarantor of (i) Aurora Bay's failure to pay
Aurora Bay's obligations when due or (ii) Aurora
Bay's failure to perform any other obligation
under the Note or the Credit Agreement;
(d) Emeritus may extend, renew,
accelerate, or otherwise change the time for
payment of any of Aurora Bay's obligations to
Emeritus,
(e) Emeritus may make any other changes
in the terms of the Note or the Credit Agreement;
(f) Emeritus may release Aurora Bay, any
other guarantor, or anyone else against whom
Emeritus may have the right to collect amounts
that may become due under the Note or the Credit
Agreement;
(g) Emeritus may apply collateral and
direct the order or manner of sale thereof as
Emeritus in its discretion may determine;
(h) Emeritus may apply any money or
collateral received from or on behalf of the
Aurora Bay to the repayment of any indebtedness
due to Emeritus in any order Emeritus determines;
(i) Emeritus may release, surrender;
substitute, take additional, or exchange, any
collateral Emeritus now holds or may later acquire
as security for Aurora Bay's indebtedness to
Emeritus or Guarantor's obligations hereunder;
(j) Emeritus may forbear from pursuing
Aurora Bay or from foreclosing or otherwise
realizing upon any security interest, letter of
credit, or other
(k) Emeritus may impair any and all
collateral given, now or thereafter, to secure
Aurora Bay's performance of its Obligations
(collectively, the "Collateral") or Guarantor's
obligations hereunder by its acts or omissions,
including but not limited to failing to perfect a
security interest in any Collateral;
(l) Guarantor hereby waives any defense
arising out of the absence, impairment, or loss of
(i) any or all rights of recourse, reimbursement,
contribution, or subrogation or (ii) any other
right or remedy of Guarantor against Aurora Bay or
any other party or Collateral to collect amounts
that Guarantor is obligated to pay under this
Guaranty;.
(m) Guarantor hereby waives any defense
arising (i) by reason of any invalidity,
ineffectiveness, or unenforceability of all or any
portion of the Note or the
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Credit Agreement or (ii) on the basis of any other
defense available to Aurora Bay (other than full
payment in cash);
(n) Guarantor waives diligence, demand
for performance, notice of nonperformance,
presentment, protest, notice of dishonor, and
indulgences and notices of every other kind;.
(o) Guarantor agrees that Emeritus may
in its sole discretion proceed against all or any
portion of the Collateral by way of either
judicial or nonjudicial foreclosure.
ARTICLE III. EMERITUS' RIGHT NOT TO PROCEED
AGAINST AURORA BAY, OTHER GUARANTORS OR COLLATERAL
If an Event of Default occurs under the Note
or the Credit Agreement, Emeritus may enforce this
guaranty against Guarantor (a)without attempting
to collect or without exhausting Emeritus' efforts
to collect from Aurora Bay, any other guarantor,
or anyone else who is liable for the Obligations
or (b) without attempting to enforce Emeritus'
rights in any Collateral. Without limiting the
foregoing, Emeritus may xxx on the Note or the
Credit Agreement or may take any other action
authorized by law. In each case, Emeritus shall
have the right to exercise its remedies in
whatever order it elects and may join Guarantor in
any suit on the Note or the Credit Agreement or
can proceed against Guarantor in a separate
proceeding. In case of suit, sale, or foreclosure,
only the net proceeds therefrom, after deducting
all charges and expenses of any kind and nature
whatsoever, shall be applied to the reduction of
the amount due on the Note or the Credit
Agreement, and Emeritus shall not be required to
institute or prosecute proceedings to recover any
deficiency as a condition of payment under or
enforcement of this Guaranty. At any sale of the
Collateral, Emeritus may at its discretion
purchase all or any part of the Collateral and may
apply against the amount bid therefor all or any
portion of the balance due it pursuant to the
terms of the Note or the Credit Agreement.
Guarantor hereby waives the right to object to the
amount that may be bid by Emeritus at such
foreclosure sale.
ARTICLE IV. BANKRUPTCY AND ASSIGNMENT OF RIGHTS
Guarantor agrees that its obligation to make
payment under the terms of this Guaranty shall not
be impaired, modified, changed, released, or
limited in any manner by any impairment,
modification, change, release, defense, or
limitation of the liability of Aurora Bay or of a
receiver, trustee, debtor-in-possession, or estate
under any bankruptcy or receivership proceeding.
If any payment made by Aurora Bay is reclaimed in
a bankruptcy or receivership proceeding, Guarantor
shall pay to Emeritus the dollar amount of the
amount reclaimed. Guarantor further assigns to
Emeritus all rights Guarantor may have in any
proceeding under the U. S. Bankruptcy Code or any
receivership or insolvency proceeding until all
Indebtedness of Aurora Bay to Emeritus has been
paid in full. This assignment includes all rights
of Guarantor to be paid by Aurora Bay even if
those rights have nothing to do with this
Guaranty. This assignment does not prevent
Emeritus from enforcing Guarantor's obligations
under this Guaranty in any way.
ARTICLE V. GUARANTOR'S DUTY TO KEEP INFORMED OF AURORA
BAY'S
AND THE OTHER GUARANTOR'S FINANCIAL CONDITION
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Guarantor is now adequately informed of
Aurora Bay's financial condition, and Guarantor
agrees to keep so informed. Emeritus need not
provide Guarantor with any present or future
information concerning the financial condition of
Aurora Bay or any other guarantor, and changes in
Aurora Bay's or Guarantor's financial condition
shall not affect Guarantor's obligations under
this Guaranty. Guarantor has not relied on
financial information furnished by Emeritus, nor
will Guarantor do so in the future.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF GUARANTOR
Guarantor represents and warrants to Emeritus as
follows:
(a) The execution, delivery, and
performance by Guarantor of this Guaranty do not
and will not (i) conflict with or contravene any
law, rule, regulation, judgment, order, or decree
of any government, governmental instrumentality,
or court having jurisdiction over Guarantor or
Guarantor's activities or properties, (ii)
conflict with, or result in any default under, any
agreement or instrument of any kind to which
Guarantor is a party or by which Guarantor or any
of Guarantor's properties may be bound or
affected, or (iii) require the consent, approval,
order, or authorization of, or registration with,
or the giving of notice to any United States or
other governmental authority or any person or
entity;
(b) This Guaranty constitutes a legal,
valid, and binding obligation of Guarantor,
enforceable against Guarantor in accordance with
its terms;
(c) There is no action, litigation, or
other proceeding pending or to Guarantor's
knowledge threatened against Guarantor before any
court; arbitrator, or administrative agency that
may have a material adverse effect on the assets
or the business or financial condition of
Guarantor or that would prevent, hinder, or
jeopardize the performance by Guarantor of
Guarantor's obligations under this Guaranty;
(d) Guarantor is fully familiar with all
the covenants, terms, and conditions of the Note
or the Credit Agreement; and
(e) Guarantor is not party to any
contract, agreement, indenture, or instrument or
subject to any restriction individually or in the
aggregate would have a material adverse effect on
guarantor's financial condition or business or
that would in any way jeopardize the ability of
Guarantor to perform under this Guaranty.
ARTICLE VII. SUBORDINATION OF INDEBTEDNESS OF AURORA
BAY TO
GUARANTOR
Any Indebtedness of Aurora Bay now or
hereafter held by Guarantor is hereby subordinated
to the indebtedness of Aurora Bay to Emeritus, and
such indebtedness of Aurora Bay to Guarantor, if
Emeritus so requests and if there exists an event
of default under this Guaranty and/or under the
Credit Agreement, shall be collected, enforced,
and received by Guarantor as trustee for Emeritus
and be paid over to Emeritus on account of the
indebtedness of Aurora Bay to Emeritus, but
without reducing or affecting in any manner the
liability of Guarantor under the other provisions
of this Guaranty.
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ARTICLE VIII. WAIVER OF RIGHT OF SUBROGATION
Guarantor agrees that Guarantor shall not
have, and hereby expressly waives, any claim,
right, or remedy that Guarantor may now have or
hereafter acquire against. Aurora Bay including,
without limitation, any claim, remedy; or right of
subrogation, reimbursement, exoneration,
indemnification, or participation in any claim,
right, or remedy that Emeritus has or may
hereafter have against Aurora Bay or any
Collateral that Emeritus now has or hereafter
acquires, whether or not such claim, right,. or
remedy arises in equity, under contract, by
statute, under common law, or otherwise. Guarantor
hereby acknowledges and agrees that this waiver is
intended to benefit Aurora Bay and Emeritus and
shall not limit or otherwise affect Guarantor's
liability under this Guaranty. Notwithstanding the
foregoing, Guarantor shall not be obliged to waive
such rights of subrogation, as long as they are in
all respects subordinate to any and a11 rights
Emeritus may have or acquire against Aurora Bay,
and no payments may be made by Aurora Bay to
Guarantor with respect to such subrogation rights,
until any and a11 amounts owed by Aurora Bay to
Emeritus have been paid in full.
ARTICLE IX. PAYMENT OF OBLIGATIONS; EFFECT OF
BANKRUPTCY
This Guaranty shall terminate upon payment in
full of the Obligations and termination of
Emeritus' commitment to make advances of credit
and to lend funds to Aurora Bay; but this Guaranty
shall be automatically reinstated if. any payment
is reclaimed in a bankruptcy or receivership
proceeding, until Guarantor pays Emeritus the
amount reclaimed or the amount is otherwise paid
to Emeritus and is not subject to further
reclamation.
ARTICLE X. EVENTS OF DEFAULT; REMEDIES
10.1 EVENTS OF DEFAULT
"Event of Default," whenever used herein,
means any one of the following events (whatever
the reason for the Event of Default, whether it
shall relate to one or more of the parties hereto,
and whether it shall be voluntary or involuntary
or be pursuant to or effected by operation of
Applicable Law):
(a) If there shall occur an Event of
Default under the Note or the Credit Agreement; or
(b) If Guarantor fails to observe or
perform any term, covenant, or agreement to be
performed or observed pursuant to this Guaranty.
10.2 REMEDIES
(a) Upon the occurrence of any Event of
Default hereunder, the Obligations shall then or
at any time thereafter, at the option of Emeritus
become immediately due and payable without notice
or demand, and Emeritus shall have an immediate
right to pursue the remedies provided herein.
(b) If an Event of Default occurs
hereunder, Emeritus shall have all remedies
provided by law. Guarantor hereby waives any
notice of the occurrence of any Event of Default
hereunder.
ARTICLE XI. GENERAL PROVISIONS
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11.1 BENEFITS OF AGREEMENT
Guarantor agrees that (a) this Guaranty shall
inure to the benefit of and may be enforced by
Emeritus and any subsequent holder of any of the
Note or the Credit Agreement and (b) this Guaranty
shall be binding upon and enforceable against
Guarantor and its successors and assigns.
11.2 NO ASSIGNMENT
Guarantor agrees that no assignment of
Guarantor's obligations under this Guaranty may be
made to any person or entity without the prior
written consent of Emeritus.
11.3 RULES OF CONSTRUCTION
Unless some other meaning and intent is
apparent from the context, the plural shall
include the singular and vice versa, and
masculine, feminine, and neuter words shall be
used interchangeably.
11.4 GOVERNING LAW
This Guaranty shall be construed according to
the laws of the state of Washington, without
giving effect to its principles of conflicts of
law.
11.5 ENTIRE AGREEMENT; MERGER
This Agreement constitutes the entire
understanding between Emeritus and Guarantor with
respect to the subject matter hereof; no course of
prior dealing between the parties, no usage of
trade, and no parole or extrinsic evidence of any
nature shall be used to supplement or modify any
terms; and there are no conditions to the full
effectiveness of this Guaranty. All prior, and
contemporaneous negotiations, understandings, and
agreements between Guarantor and Emeritus with
respect to the subject matter hereof are merged in
this Guaranty.
11.6 INVALID PROVISIONS
If any provision of this Guaranty is invalid,
illegal, or unenforceable, such provision shall be
considered severed from the rest of this Guaranty
and the remaining provisions shall continue in
full force and effect as if the invalid provision
had not been included. This Guaranty may be
changed, modified, or supplemented only through a
writing signed by Guarantor and Emeritus.
11.7 ATTORNEYS' FEES AND COLLECTION EXPENSES
If there shall occur any Default or Event of
Default, Emeritus shall be entitled to recover
from Guarantor, upon demand, any costs and
expenses incurred in connection with the
preservation of rights under, and enforcement of,
this Guaranty and the Note or the Credit Agreement
whether or not any lawsuit or arbitration
proceeding is commenced, in all such cases
including, without limitation, reasonable
attorneys' fees and costs (including the allocated
fees of internal counsel). Costs and expenses as
referred to above shall include, without
limitation, a reasonable hourly rate for
collection personnel,
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whether employed in-house or otherwise, overhead
costs as reasonably allocated to the collection
effort, and all other expenses actually. incurred.
Reasonable attorneys' fees and costs shall
include, without limitation, attorneys' fees and
costs incurred in connection with any bankruptcy
case or other insolvency proceeding commenced by
or against Aurora Bay or any person granting a
security interest in any item of Collateral,
including all fees incurred in connection with (a)
moving for relief from the automatic stay, to
convert or dismiss the case or proceeding, or to
appoint a trustee or examiner or (b)proposing or
opposing confirmation of a plan of reorganization
or liquidation, in any case without regard to the
identity of the prevailing party.
11.8 CONSENT TO JURISDICTION AND VENUE
Guarantor hereby (a) irrevocably submits to
the jurisdiction of any state or federal court
sitting in Seattle, King County, Washington, in
any action or proceeding brought to enforce, or
otherwise arising out of or relating to, this
Guaranty; (6) irrevocably waives to the fullest
extent permitted by law any objection that
Guarantor may now or hereafter have to the laying
of venue in any such action or proceeding in any
such forum; and (c) further irrevocably waives any
claim that any such forum is an inconvenient
forum. Guarantor agrees that a final judgment in
any such action or proceeding shall be conclusive
and may be enforced in any other jurisdiction by
suit on the judgment or in any other manner
provided by law. Nothing herein shall impair the
right of Emeritus to bring any action or
proceeding against Guarantor in any court of any
other jurisdiction.
11.9 COUNTERPARTS
This Guaranty can be executed in counterpart
originals. This Guaranty shall be binding on each
person who signs a counterpart of this Guaranty
even if everyone listed in the Guaranty does not
agree to the Guaranty.
11.10 LIMITATIONS ON SCOPE OF GUARANTY
Anything contained herein to the contrary
notwithstanding, any claim based on or in respect
of any liability of Guarantor under this Guaranty
shall be "nonrecourse' and enforced only against
the collateral pledged by such Guarantor to secure
the payment and performance of the Obligations and
Emeritus shall not seek to procure payment out of
any other assets, properties or funds of Guarantor
(or any legal representative, heir, estate,
successor or assign thereof, nor to seek judgment
for any sums which are or may be due hereunder, as
well as any claim or judgment for any deficiency
remaining after exercising its rights against the
Collateral pledged by Guarantor.
THE UNDERSIGNED CLEARLY UNDERSTANDS THAT
EMERITUS DOES NOT HAVE TO PURSUE AURORA BAY OR
PURSUE ANY OTHER REMEDIES BEFORE DEMANDING PAYMENT
FROM GUARANTOR. GUARANTOR FURTHER UNDERSTANDS THAT
IT WILL HAVE TO PAY AMOUNTS THEN DUE EVEN IF
AURORA BAY OR ANY OF THE OTHER
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GUARANTORS DO NOT MAKE THE PAYMENTS OR ARE
RELIEVED OF THE OBLIGATION TO MAKE PAYMENTS.
Xxxxx Investors I, L.L.C., a
Washington
limited liability company
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx, Manager
/s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
/s/ Thilo Best
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Thilo Best
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