GUARANTY
FOR VALUE RECEIVED, and in consideration
of any loan or other financial accommodation
heretofore or hereafter at any time made or
granted to Emeritus Properties V, Inc., a
Washington corporation, 0000 Xxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000
(hereinafter referred to as the "Debtor"),
pursuant to that certain Credit Agreement
dated as of May 1, 1997 (as amended and in
effect from time to time, the "Credit
Agreement"), by and between the Debtor and
High Yield Partners LLC (hereinafter referred
to as the "Lender"), a Delaware limited
liability company, c/o Hanseatic Corporation,
000 Xxxx Xxxxxx - Xxxxx 0000, Xxx Xxxx, Xxx
Xxxx 00000 (hereinafter, together with its
successors and assigns, called the "Lender"),
by the Lender, the undersigned hereby
absolutely and unconditionally guarantees the
full and prompt payment when due, whether by
acceleration or otherwise, and at all times
thereafter, of all obligations of the Debtor
to the Lender howsoever created, arising or
evidenced, whether direct or indirect,
absolute or contingent, or now or hereafter
existing, or due or to become due and the
performance and observance of all terms,
covenants, conditions, obligations and
provisions to be performed, paid or observed
by the Debtor to the Lender, in each case,
under the Credit Agreement and the other Loan
Documents (all such obligations being
hereinafter collectively called the
"Liabilities"). To the fullest extent
permitted by law, the undersigned further
agrees that the Liabilities may be increased,
modified, amended, extended or renewed, in
whole or in part, without notice or further
assent from it, and that it will remain bound
upon this guaranty notwithstanding any
increase, modification, amendment, extension
or renewal of any Liability. Capitalized
terms used herein and not otherwise defined
shall have the meanings assigned to such
terms in the Credit Agreement.
This guaranty shall in all respects be a
continuing, absolute and unconditional
guaranty, and shall remain in full force and
effect (notwithstanding, without limitation,
the dissolution of the undersigned), subject
to discontinuance as to the undersigned only
upon actual receipt by the Lender of written
notice from such undersigned or any person
duly authorized and acting on behalf of such
undersigned of the discontinuance hereof as
to such under-signed; provided, however, that
no such notice of discontinuance shall affect
or impair, any of the agreements and
obligations of such undersigned hereunder
with respect to any and all Liabilities
existing prior to the time of actual receipt
of such notice by the Lender, any and all
Liabilities created or acquired thereafter
pursuant to any commitments to the Debtor
made by the Lender prior to the time of
actual receipt of such notice by the Lender
(including, without limitation, all
commitments to lend any sums pursuant to the
Credit Agreement), and any and all extensions
or renewals of any of the foregoing, and any
and all interest on any of the foregoing; and
all of the agreements and obligations of such
undersigned under this guaranty shall,
notwithstanding any such notice of
discontinuance, remain fully in effect until
all such Liabilities (including any
extensions or renewals of any thereof) and
all such interest and expenses shall have
been paid in full. Any such notice of
discontinuance by or on behalf of any of the
undersigned shall not affect or impair the
obligations hereunder of any other of the
undersigned.
The undersigned further agree(s) that,
if at any time all or any part of any payment
theretofore applied by the Lender to any of
the Liabilities is or must be rescinded or
returned by the Lender for any reason
whatsoever (including, without limitation,
the insolvency, bankruptcy or reorganization
of the Debtor), such
Liabilities shall, for the purposes of this
guaranty, to the extent that such payment is
or must be rescinded or returned, be deemed
to have continued in existence,
notwithstanding such application by the
Lender, and this guaranty shall continue to
be effective or be reinstated, as the case
may be, as to such Liabilities, all as though
such application by the Lender had not been
made.
The Lender, may, from time to time
whether before or after any discontinuance of
this guaranty, at its sole discretion and
without notice to the undersigned, take any
or all of the following actions: (a) retain
or obtain a security interest in any property
to secure any of the Liabilities or any
obligation hereunder, (b) retain or obtain
the primary or secondary obligation of any
obligor or obligors, in addition to the
undersigned, with respect to any of the
Liabilities, (c) extend or renew for one or
more periods (whether or not longer than the
original period), alter, increase or
exchange, any of the Liabilities, or release
or compromise any obligation of the
undersigned hereunder or any obligation of
any nature of any other obligor with respect
to any of the Liabilities, (d) release or sub
ordinate its security interest in, or
surrender, release or permit any substitution
or exchange for, all or any part of any
property securing any of the Liabilities or
any obligation hereunder, or extend or renew
for one or more periods (whether or not
longer than the original period), or release,
compromise, alter or exchange, any
obligations of any nature of any obligor with
respect to any such property, and (e) resort
to the undersigned for payment of any of the
Liabilities, whether or not the Lender shall
have resorted to any property securing any of
the Liabilities or any obligation hereunder
or shall have proceeded against any other of
the undersigned or any other obligor
primarily or secondarily obligated with
respect to any of the Liabilities, and the
undersigned will remain bound upon this
guaranty notwithstanding any of the foregoing
actions of the Lender.
Any amount received by the Lender from
whatsoever source on account of the
Liabilities may be applied by it toward the
payment of such of the Liabilities, and,
subject to the terms of the Credit Agreement,
in such order of application, as the Lender
may from time to time elect; and,
notwithstanding any payments made by or for
the account of the undersigned pursuant to
this guaranty, the undersigned shall not be
subrogated to any rights of the Lender until
such time as this guaranty shall have been
discontinued as to the undersigned and the
Lender shall have received payment of the
full amount of all Liabilities and of all
obligations of the undersigned hereunder.
The undersigned for itself hereby
expressly waive(s): (a) acceptance and notice
of the acceptance by the Lender of this
guaranty, (b) notice of the existence or
creation or non-payment or demand for payment
of all or any of the Liabilities, (c)
presentment, demand, notice of dishonor,
protest and all other notices whatsoever, (d)
all diligence in collection or protection of
or realization upon the Liabilities or any
thereof, any obligation hereunder, or any
security for or guaranty of any of the
foregoing, (e) any present or future duty of
the Lender to disclose material information
regarding the Debtor and/or the Liabilities,
and (f) trial by jury and the right thereto
in any action or proceeding of any kind or
nature, arising on, under or by reason of or
relating in any way to this guaranty.
2
The creation or existence from time to
time of Liabilities in excess of the amount
to which the right of recovery under this
guaranty is limited is hereby authorized
without notice to the undersigned and shall
in no way affect or impair the rights of the
Lender and the obligation of the undersigned
under this guaranty.
The Lender may, from time to time,
whether before or after any discontinuance of
this guaranty, upon notice to the
undersigned, assign or transfer any or all of
the Liabilities; and, notwithstanding any
assignment or transfer or any subsequent
assignment or transfer thereof, such
Liabilities shall be and remain Liabilities
for the purposes of this guaranty, and each
and every immediate and successive assignee
or transferee of any of the Liabilities or of
any interest therein shall, to the extent of
the interest of such assignee or transferee
in the Liabilities, be entitled to the
benefits of this guaranty to the same extent
as if such assignee or transferee were the
Lender; provided, however, that, unless the
Lender shall otherwise consent in writing
(which consent shall not impair this guaranty
as to any and all of the undersigned), the
Lender shall have an unimpaired right, prior
and superior to that of any such assignee or
transferee, to enforce this guaranty, for the
benefit of the Lender, as to those of the
Liabilities which the Lender has not assigned
or transferred.
The obligations of the undersigned
hereunder shall not be affected by (i) the
failure of the Lender to assert any claim or
demand or to enforce any right or remedy
against the Debtor under the provisions of
the Credit Agreement or any other agreement
or otherwise; (ii) any extension or renewal
of any thereof; (iii) any rescission, waiver,
amendment or modification of any of the terms
or provisions of the Credit Agreement or any
other agreement; (iv) the creation, release
of, or failure to perfect any security held
by the Lender for the Liabilities or any of
them; (v) the failure of the Lender to
exercise any right or remedy against any
other guarantor of the Liabilities; (vi) the
exercise of rights by the Lender which
prevent the undersigned from exercising its
right of subrogation against the Debtor;
(vii) the failure of the Lender to file a
claim in any bankruptcy or reorganization
proceedings with respect to the Debtor or any
other failure to collect the Liabilities or
any of them from the Debtor; (viii) the
running of any applicable statute of
limitations with respect to the Liabilities
or any portion thereof; or (ix) any other
action or failure to take action by the
Lender which under applicable law would act
to release the Debtor regarding the
Liabilities.
The undersigned further agrees that this
guaranty constitutes a guarantee of payment
when due and not of collection, and, to the
fullest extent permitted by law, waives any
right to require that any resort be had by
the Lender to any security held for payment
of the Liabilities or to any balance or any
deposit account or credit on the books of the
Lender in favor of the Debtor or any other
person.
To the fullest extent permitted by law,
the obligations of the undersigned hereunder
shall not be subject to any reduction,
limitation, impairment or termination for any
reason, including, without limitation, any
claim of waiver, release, surrender,
alteration or compromise, and shall not be
subject to any defense of setoff,
counterclaim, recoupment or termination
whatsoever by reason of the invalidity,
illegality or unenforceability of the
Liabilities or otherwise.
3
Without limiting the generality of the
foregoing, the obligations of the undersigned
hereunder, to the fullest extent permitted by
law, shall not be discharged or impaired or
otherwise affected by the failure of the
Lender to assert any claim or demand or to
enforce any remedy under the Credit Agreement
or any other agreement, by any waiver or
modification of any thereof, by any default,
failure or delay, wilful or otherwise, in the
performance of the Liabilities, or by any
other act or thing or omission or delay to do
any other act or thing which may or might in
any manner or to any extent vary the risk of
the undersigned or would otherwise operate as
a discharge of the undersigned as a matter of
law or equity.
In furtherance of the foregoing and not
in limitation of any other right which the
Lender may have at law or in equity against
the undersigned by virtue hereof, upon the
failure of the Debtor to pay any of the
Liabilities when and as the same shall become
due, whether at maturity, by acceleration,
after notice of prepayment or otherwise, the
undersigned hereby promises to and will, upon
receipt of written demand by the Lender,
forthwith pay, or cause to be paid, to the
Lender in cash the amount of such unpaid
Liabilities.
Any and all rights and claims of the
undersigned against the Debtor or any of its
property, arising by reason of any payment by
the undersigned to the Lender pursuant to the
provisions of this guaranty, shall be
subordinate and subject in right of payment
to the prior payment in full of all
Liabilities to the Lender.
The undersigned hereby represents,
warrants and covenants to the Lender that:
(a) It is a corporation duly organized,
validly existing, and in good standing under
the laws of the State of Washington and is
duly qualified and in good standing in every
other jurisdiction where it is doing
business, and has full corporate power and
authority to perform all its obligations
under the Loan Documents to which it is a
party.
(b) The execution and delivery by it of
the Loan Documents to which it is a party,
the performance by it of its covenants and
agreements under the Loan Documents to which
it is a party, and the consummation by it of
the transactions contemplated by the Loan
Documents to which it is a party, have been
duly authorized by all necessary corporate
action. Upon execution and delivery thereof,
the Loan Documents to which it is a party
shall constitute its legal, valid and binding
obligation, enforceable against it in
accordance with their respective terms,
except as enforceability may be limited by
applicable bankruptcy, insolvency, moratorium
or similar laws affecting the enforcement of
creditors' rights generally as at the time in
effect.
(c) Neither the execution and delivery
of the Loan Documents to which it is a party,
nor the consummation by it of the
transactions contemplated in the Loan
Documents to which it is a party, nor the
performance by it of its obligations and
exercise of its rights under the Loan
Documents to which it is a party, will
violate, be in conflict with or be prohibited
or prevented by any provision of its
certificate of incorporation or by-laws, any
Requirement of Law or any other law, rule,
regulation, writ, judgment, injunction,
decree, determination,
4
award or other order of any Governmental
Authority binding upon it, or conflict with
or result in any breach of or event of
termination under any of the terms of, or the
creation or imposition of any mortgage, deed
of trust, pledge, lien, security interest or
other charge or encumbrance of any nature
pursuant to, the terms of any contract or
agreement to which it is a party or by which
it or any of its properties or assets is
bound. Without limiting the generality of the
foregoing, all Consents required for the
execution, delivery, performance of its
obligations, and exercise of its rights under
the Loan Documents to which it is a party,
have been obtained and copies thereof have
been furnished to the Lender.
(d) The obligations of the undersigned
to pay the obligations payable by the
undersigned hereunder, will, upon demand for
payment by the Lender, constitute direct,
unconditional and general obligations of the
undersigned and rank in right of payment pari
passu with all unsecured indebtedness and
liabilities for borrowed money, or other
obligations arising out of the extension of
credit, of the undersigned, unless such other
indebtedness is expressly subordinated to the
obligations under the Loan Documents. The
undersigned has not issued any such
indebtedness or incurred any such liability
or obligation which is subordinated to any
other such indebtedness, liability or
obligation but which will not be subordinated
to the payment in full of any and all
obligations under the Loan Documents.
Any and all Indebtedness of the Debtor
to the undersigned, or to any Affiliate of
the Debtor (not including the Lender), now or
hereafter existing, together with any
interest thereon, shall be, and such
Indebtedness is, hereby deferred, postponed
and subordinated to the prior, full and Non-
Contestable Payment and satisfaction of all
Obligations of the Borrower to the Lender
under the Credit Agreement, the Note, and the
other Loan Documents. Payment and
satisfaction of the Obligations shall be
deemed "Non-Contestable Payment" only upon
such payment and satisfaction and the
expiration of all periods of time within
which a claim for the recovery of a
preferential payment, or fraudulent
conveyance, or fraudulent transfer, in
respect of payments received by the Lender as
to the Obligations could be filed or asserted
with: (A) no such claim having been filed
or asserted, or (B) if so filed or asserted,
the final, non-appealable decision of a court
of competent jurisdiction denying the claim
or assertion.
At all times until the full and Non-
Contestable Payment and satisfaction of the
Obligations of the Debtor to the Lender,
neither the undersigned, nor any Affiliate
thereof shall accept any payment or
satisfaction for any kind of any Indebtedness
of the Debtor to the undersigned, or any
Affiliate thereof (not including the Lender),
and hereby assigns such Indebtedness to the
Lender, including, but not limited to, the
right to file proofs of claim and to vote
thereon in connection with any such case
under the Bankruptcy Code, as now or
hereafter in effect, and the right to vote on
any plan of reorganization. In furtherance of
the foregoing, the undersigned, and each
Affiliate thereof, will immediately pay over
to the Lender all amounts received by it in
payment of any Indebtedness owed to it by the
Debtor, in the precise form in which such
amounts are received (with any endorsements
thereon or assignments thereof as may be
required by the Lender), for application to
the Obligations in such order and relative
amounts as the Lender determines in its sole
discretion. In the event the undersigned, or
any Affiliate
5
thereof, fails to make any such endorsement
or assignment to the Lender, the Lender or
any of its officers or employees is hereby
irrevocably authorized to do so on behalf of
the undersigned, or any Affiliate thereof, as
its attorney-in-fact and, until so paid over,
such amounts shall be held in trust for the
Lender.
No delay on the part of the Lender in
the exercise of any right or remedy shall
operate as a waiver thereof, and no single or
partial exercise by the Lender of any right
or remedy shall preclude any other or further
exercise thereof or the exercise of any other
right or remedy; nor shall any modification,
amendment or waiver of any of the provisions
of, nor any consent required by, this
guaranty, nor any consent to any departure by
the undersigned therefrom, be binding upon
the Lender except as expressly set forth in a
writing duly signed and delivered by a duly
authorized representative of the Lender and
then such modification, amendment, waiver or
consent shall be effective only in the
specific instance and for the purpose for
which given. No notice to or demand on the
undersigned in any case shall entitle the
undersigned to any other or further notice or
demand in the same, similar or other
circumstances. No action of the Lender
permitted hereunder shall in any way affect
or impair the rights of the Lender or impair
the obligation of the undersigned under this
guaranty. For the purposes of this guaranty,
Liabilities shall include, without
limitation, all obligations of the Debtor to
the Lender under the Credit Agreement and the
other Loan Documents, notwithstanding any
right or power of the Debtor or anyone else
to assert any claim or defense as to the
invalidity or unenforceability of any such
obligation, and no such claim or defense
shall affect or impair the obligations of the
undersigned hereunder.
This guaranty shall be binding upon the
undersigned, and upon the successors and
assigns of the undersigned; and to the extent
that the Debtor or any of the undersigned is
either a partnership, joint venture, limited
liability company or a corporation, all
references herein to the Debtor and to the
undersigned, respectively, shall be deemed to
include any successor or successors, whether
immediate or remote, to such partnership,
joint venture, limited liability company or
corporation.
Without limiting any other provision
herein, in the event there is more than one
guarantor with respect to the Liabilities,
the obligations of the undersigned and each
such other guarantor shall be joint and
several; and the granting of a release of
liability to any one such guarantor shall be
effective solely with respect to the
guarantor so released and shall not in any
manner affect the liability of any other such
guarantor. Any prior or subsequent guaranty
to the Lender shall not be deemed to be in
lieu of or to supersede or terminate this
Guaranty but shall be construed as an
additional or supplementary guaranty.
No right, power or remedy herein
conferred upon or reserved to the Lender is
intended to be exclusive of any other right,
power or remedy or remedies, and each and
every right, power and remedy of the Lender
pursuant to this guaranty, the Credit
Agreement, or the Note or now or hereafter
existing at law or in equity or by statute or
otherwise shall, to the extent permitted by
law, be cumulative and concurrent and shall
be in addition to every other right, power or
remedy pursuant to this guaranty, or any
note, or now or hereafter existing at law
6
or in equity or by statute or otherwise, and
the exercise or beginning of the exercise by
the Lender of any one or more of such rights,
powers or remedies shall not preclude the
simultaneous or later exercise by the Lender
of any or all such other rights, powers or
remedies.
All notices, requests or instructions
hereunder shall be in writing and delivered
personally or sent by registered or certified
mail, postage prepaid, or by telecopy (or
like transmission), as follows:
(1) if to the undersigned:
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X.
Xxxxxxxxxx
Telecopy Number: (206) 301-
4500
with a copy to:
Xxxxx Xxxxxxxxx, Esq.
The Xxxxxxxxx Group
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Telecopy Number: (206) 623-
1738
(2) if to the Lender:
000 Xxxx Xxxxxx - Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Telecopy Number: (212) 223-
2425
with a copy to:
Xxxxxx Xxxxxx, Esq.
Krugman
Xxxxxxxx & Xxxxxxxx LLP
Park 00
Xxxx - Xxxxx Xxx
Xxxxxx
Xxxxx, Xxx Xxxxxx 00000
Telecopy Number: (201) 845-
9627
Any notice so addressed and mailed shall be
deemed to be given five Business Days after
deposit in the mails. Any notices addressed
and otherwise delivered shall be deemed to be
given when actually received by the
addressee. Any of the above addresses or
telecopy numbers may be changed at any time
by notice given
7
as provided above; provided, however, that
any such notice of change of address shall be
effective only upon receipt.
Each representation, warranty, covenant
and agreement herein contained, or contained
in any certificate delivered pursuant hereto,
shall survive the making by the Lender of all
loans and advances under the Credit Agreement
and the execution and delivery to the Lender
of any note, notwithstanding any
investigation at any time made by or on
behalf of any party, and shall continue in
full force and effect so long as any of the
Liabilities are outstanding and unpaid.
This guaranty shall be construed in
accordance with and governed by the laws of
the State of New York. Wherever possible each
provision of this guaranty shall be
interpreted in such manner as to be effective
and valid under applicable law, but if any
provision of this guaranty shall be
prohibited by or invalid under such law, such
provision shall be ineffective only to the
extent of such prohibition or invalidity,
without invalidating the remainder of such
provision or the remaining provisions of this
guaranty.
SIGNED AND DELIVERED AT Seattle, Washington,
this 1st day of April, 1997.
GUARANTOR:
EMERITUS CORPORATION
By: /s/ Xxxxxxx X.
Xxxxxxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: President
0000 Xxxxxxx
Xxxxxx
Xxxxx 000
Xxxxxxx,
Xxxxxxxxxx 00000
8
