UNCONDITIONAL GUARANTY OF PAYMENT AND PERFORMANCE
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THIS
UNCONDITIONAL GUARANTY OF PAYMENT AND PERFORMANCE (this "Guaranty")
is
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made as of the 31st day of December, 2003, and is
effective as of January 1,
2004, by EMERITUS CORPORATION, a
Washington corporation ("Guarantor"), in favor
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of LASALLE BANK NATIONAL ASSOCIATION,
FORMERLY KNOWN AS LASALLE NATIONAL BANK,
AS TRUSTEE FOR GMAC COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES
1998-C2 ("Lender").
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ARTICLE I - BACKGROUND AND AGREEMENT
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1.01
Background.
On or about July 30, 1998, GMAC Commercial
Mortgage
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Inc., a California corporation ("Original
Lender"), made a $25,000,000 loan to
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ALS Financing Corporation, a Kansas corporation ("ALS"; and said loan is
---
hereinafter referred to as the "Loan"), which
Loan is evidenced by, among other
----
things, that certain Loan
Agreement, dated as of July 30, 1998, between Original
Lender and ALS (the "Loan Agreement") and that
certain Promissory Note, dated
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July 30, 1998, and made by ALS payable to the
order of Original Lender in the
stated principal amount of $25,000,000.00 (the "Note").
The Loan is
further
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evidenced and secured by, among other things, five (5) security
instruments
executed by ALS in favor of Original Lender (collectively, the
"Security
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Instruments"; and the Loan Agreement, the Note, and the
Security Instruments,
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together with any and all
other documents and instruments evidencing or securing
the Loan are hereinafter referred to collectively as the "Original Loan
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Documents"), encumbering five (5) separate facilities operated as assisted
-
living facilities and located in the
States of California, Kansas, and Colorado
(all such real and personal property, both tangible
and intangible, together
with all improvements, appurtenances, rights, and interests described in
and
encumbered by the Security
Instruments, are hereinafter referred collectively as
the "Properties"). The Loan was subsequently assigned by Original
Lender to
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Lender, and Lender is now the
owner and holder of the Loan and the Original Loan
Documents. Lender has been asked to consent to the
transfer of the Properties
to Emeritus Properties XVI, Inc., a
Nevada corporation ("Borrower"), and to the
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assumption by Borrower of the obligations of ALS
under the Loan and certain of
the Original Loan Documents,
and Lender has agreed to consent to the transfer of
the Properties and to the assumption of the Loan, on
and subject to the terms
and conditions set forth in that
certain Loan Assumption Agreement, dated as of
even date herewith, by and among Lender, Borrower,
Guarantor, ALS and Alterra
Healthcare Corporation, a Delaware
corporation (the "Assumption Agreement"; and
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the documents and instruments assumed by Borrower pursuant to
the Assumption
Agreement being collectively the "Assumed Loan Documents"). As a condition
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precedent to Lender's
execution and delivery of the Assumption Agreement,
Lender
requires that Guarantor enter into this
Guaranty, that
Borrower and Guarantor
enter into that certain
Environmental Indemnity Agreement, of even date herewith
(the "Environmental Indemnity Agreement"), and that Borrower consent to
the
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filing by Lender of certain UCC-1 financing statements
(the "UCCs"; and this
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Guaranty, the Environmental Indemnity Agreement,
the Assumption Agreement, the
Assumed Loan Documents, the
UCCs and any and all other documents and instruments
executed and delivered in favor of Lender by Borrower and/or Guarantor
as
contemplated by the
Assumption Agreement being hereinafter collectively
referred
to as the "Loan Documents").
Guarantor acknowledges
and agrees that substantial
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benefit will inure to
Guarantor as a result of the Assumption Agreement and
that
the execution, delivery, and acceptance by Lender of the
Assumption Agreement
will be to the direct interest and advantage of Guarantor.
1.02
Statement of Agreement. For and in consideration of the sum of
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$10.00 and other valuable consideration, the
receipt and sufficiency of which
are hereby acknowledged by Guarantor, and for
the purpose of seeking to induce
Lender to enter into the Assumption Agreement,
Guarantor does hereby make the
following guarantees to and agreements with Lender.
ARTICLE II - GUARANTEES
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2.01
Guaranty of Payment.
Guarantor does hereby
unconditionally guarantee
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to Lender the full and prompt
payment of the Note when due, whether at scheduled
maturity, by acceleration, or otherwise, with such interest as may accrue
thereon and such prepayment premiums and other charges as may be due in
connection therewith, either before or after maturity thereof.
2.02 Guaranty of Performance. Guarantor does hereby
unconditionally guarantee
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to Lender the full and prompt
payment and performance of any and all obligations
whatsoever of Borrower and
all other parties to Lender under the terms of any of
the Loan Documents and all
notes (including, without limitation, the Note), loan
agreements (including, without limitation,
the Loan Agreement), deeds to secure
debt, mortgages, and deeds of
trust (including, without limitation, the Security
Instruments), security agreements, and the other documents and
instruments
executed and delivered in connection with or as security
for the Loan and the
Loan Documents, whether such obligations now exist or arise hereafter.
2.03 Guarantor Obligations. Guarantor does hereby agree that if the Note
is
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not paid by Borrower in accordance
with its terms for any reason whatsoever, or
if any and all sums which are now or may
hereafter become due from Borrower to
Lender under the Loan Documents are not paid by Borrower in
accordance with
their terms as and when due or within
any applicable cure period for any reason
whatsoever, Guarantor will immediately make such payments.
Guarantor
further
agrees to pay Lender all expenses (including, without
limitation, reasonable
attorneys' fees) paid or
incurred by Lender in endeavoring to collect all or any
portion of the indebtedness evidenced by the Note, to enforce any other
obligations guaranteed hereby, or to enforce this Guaranty.
2.04 Loan Documents. The provisions of this Guaranty shall extend and be
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applicable to all renewals,
replacements, amendments, extensions, consolidations
and modifications of the Loan Documents, and any and
all references herein to
the Loan Documents or any of them
shall be deemed to include any such renewals,
replacements, amendments, extensions,
consolidations, or modifications thereof.
ARTICLE III - AGREEMENTS AND WARRANTIES
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3.01
Consents. Guarantor hereby consents and agrees that Lender may
at
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any time, and from time to time, without notice to or further
consent from
Guarantor, either with or without
consideration: (a)
release and surrender any
property (whether real or personal), rights, estates, and
interests now or at
any time hereafter securing
the payment of the Note and/or the other obligations
of Borrower under the Loan
Documents, whether held by Lender or by any person or
entity on Lender's behalf or for Lender's account (the "Collateral");
(b)
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substitute for any Collateral
held by or on behalf of Lender other collateral of
like kind, or of any kind; (c) make
over-advances or increase the amount of the
Loan; (d) agree to modify the terms of any one or
more of the Loan Documents;
(e) extend or renew the Note for any period; (f)
grant releases, compromises,
and indulgences with respect
to any one or more of the Loan Documents and to any
persons or entities now or
hereafter liable thereunder or hereunder; (g) release
any other guarantor or endorser of or other person or
entity liable upon the
Note or any other of the Loan
Documents; or (h) take or fail to take any action
of any type whatsoever. No such action which Lender shall
take or fail to take
in connection with the Loan Documents or any Collateral, nor any course
of
dealing with Borrower or any other person, shall limit, impair, or
release
Guarantor's obligations hereunder, affect this Guaranty in any way,
or afford
Guarantor any recourse against Lender.
Nothing contained in
this Section 3.01
shall be construed to require Lender to
take or refrain from taking any action
referred to herein.
3.02 Waiver and Subordination. Until the obligations of Borrower to
Lender
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have been paid in full, Guarantor hereby expressly waives any right of
contribution from or indemnity against Borrower,
whether at law or in equity,
arising from any payments made by Guarantor pursuant to the terms of
this
Guaranty, and Guarantor acknowledges that
Guarantor has no right whatsoever to
proceed against Borrower for reimbursement
of any such payments.
In connection
with the foregoing, until the obligations
of Borrower to Lender have been paid
in full, Guarantor expressly waives
any and all rights of subrogation to Lender
against Borrower, and Guarantor hereby waives any
rights to enforce any remedy
which Lender may have against Borrower and any rights to
participate in any
Collateral. In addition to and without in any
way limiting the foregoing or any
terms or provisions of the Loan Documents requiring
Borrower to be a special
purpose entity and limiting the permissible scope
of indebtedness Borrower may
incur, Guarantor hereby
subordinates any and all indebtedness of Borrower now or
hereafter owed to Guarantor
to all indebtedness of Borrower to Lender and agrees
with Lender that, at any time from and after and
during the continuance of an
Event of Default under the Loan
Documents, Guarantor shall not demand or accept
any payment of principal or interest from
Borrower, shall not claim any offset
or other reduction of Guarantor's obligations hereunder because of
any such
indebtedness, and shall not take any action to obtain any of
the Collateral.
3.03 Waiver of Defenses. Guarantor hereby waives and agrees
not to assert or
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take advantage of any defense
based upon: (a) any incapacity, lack of authority,
death, or disability of
Guarantor or any other person or entity; (b) any failure
of Lender to commence an action against
Borrower or any other person or entity
(including, without limitation, other
guarantors, if any) or to file or enforce
a claim against the estate (either in
administration, bankruptcy, or any other
proceeding) of Borrower or any other person or
entity, whether or not demand is
made upon Lender to file or enforce such claim; (c)
any failure of Lender to
give notice of the existence, creation, or
incurring of any new or additional
indebtedness or other obligation or of any action
or non-action on the part of
any other person or entity in connection with the Loan Documents or any
obligation hereby guaranteed;
(d) any failure on the part of Lender to ascertain
the extent or nature of the Collateral or any insurance
or other rights with
respect thereto, or the liability of any
party liable for the Loan Documents or
the obligations evidenced or secured thereby, or any failure on the
part of
Lender to disclose to Guarantor any facts Lender may now or hereafter
know
regarding Borrower, the Collateral, or such other parties; (e) any lack
of
acceptance or notice of acceptance of this
Guaranty by Lender; (f) any lack of
presentment, demand, protest, or notice of demand, protest, dishonor, or
non-payment with respect to any indebtedness or obligations
under any of the
Loan Documents; (g) any lack of notice of disposition or of manner of
disposition of any Collateral; (h) any lack of
other notices to which Guarantor
might otherwise be entitled; (i) failure
to properly record any document or any
other lack of due diligence by Lender in creating or perfecting a
security
interest in or collection, protection, or
realization upon any Collateral or in
obtaining reimbursement or performance from any person or entity now or
hereafter liable for the Loan Documents or any
obligation secured thereby; (j)
any invalidity, irregularity, or unenforceability,
in whole or in part, of any
one or more of the Loan Docu
