ex107112.htm


    EX-10.71.12

    
 

     

    UNCONDITIONAL PAYMENT
GUARANTY

     

     

    


     

     

    THIS
UNCONDITIONAL PAYMENT GUARANTY (“Guaranty”)
dated October 17, 2008, is given by EMERITUS CORPORATION, a Washington
corporation (“Guarantor”)
to and for the benefit of KEYBANK NATIONAL ASSOCIATION, a national banking
association, its successors and assigns (“Lender”).

     

    Recitals

     

    A.           On
or about the date hereof, EMERITOL DOWLEN OAKS LLC, a Delaware limited liability
company, and EMERITOL SADDLERIDGE LODGE LLC, a Delaware limited liability
company, and EMERITOL SEVILLE ESTATES LLC, a Delaware limited liability company
(individually and collectively, “Borrower”)
and Lender entered into that certain Loan Agreement (“Loan
Agreement”) whereby Lender agreed to make a loan (the “Loan”)
available to Borrower in the amount of SEVENTEEN MILLION, FIVE HUNDRED NINETY
FIVE THOUSAND and NO/100 DOLLARS ($17,595,000.00) to finance the Facilities
described in the Loan Agreement.  Capitalized terms used and not
otherwise defined herein shall have the meanings given to them in the Loan
Agreement.

     

    B.           In
connection with the Loan, Borrower has executed and delivered the Note in favor
of Lender of even date herewith in the amount of the Loan, payment of which is
secured by the Mortgages encumbering the Facilities located in the State of
Texas and the other Loan Documents.

     

    C.           Guarantor
will derive material financial benefit from the Loan evidenced and secured by
the Note, the Mortgages and the other Loan Documents.

     

    D.           Lender
has relied on the statements and agreements contained herein in agreeing to make
the Loan.  The execution and delivery of this Guaranty by Guarantor is
a condition precedent to the making of the Loan by Lender.

     

    Agreements

     

    NOW,
THEREFORE, intending to be legally bound, Guarantor, in consideration of the
matters described in the foregoing Recitals, which Recitals are incorporated
herein and made a part hereof, and for other good and valuable consideration the
receipt and sufficiency of which are acknowledged, hereby covenants and agrees
for the benefit of Lender and its respective successors, endorsees, transferees,
participants and assigns as follows:

     

    
      	
              1.  

            	
              Guarantor
      absolutely, unconditionally and irrevocably
  guarantees:

            


    

     

    
      	
              (a)  

            	
              The
      full and prompt payment of the principal of and interest on the Note when
      due, whether at stated maturity, upon acceleration or otherwise, and at
      all times thereafter, and the full and prompt payment of all sums
      which

            


    


    
      
         


      

      
        1

        
          

        

      

      
         


      

    


     

    may now
be or may hereafter become due and owing under the Note, the Loan Agreement and
the other Loan Documents;

     

    
      	
              (b)  

            	
              The
      prompt, full and complete performance of all of Borrower’s obligations
      under each and every covenant contained in the Loan Documents;
      and

            


    

     

    
      	
              (c)  

            	
              The
      payment of all amounts payable by Borrower under any Interest Rate
      Agreement entered into between Lender and Borrower with respect to the
      Loan.

            


    

     

    All
amounts due, debts, liabilities and payment obligations described in this Section 1 shall
be hereinafter collectively referred to as the “Indebtedness.”

     

    
      	
              2.  

            	
              If
      there is an Event of Default under the Loan Documents, Guarantor agrees,
      on written demand by Lender or the holder of the Note, to pay the
      Indebtedness regardless of any defense, right of set-off or claims which
      Borrower or Guarantor may have against Lender or the holder of the
      Note.

            


    

     

    
      	
              3.  

            	
              All
      of the remedies set forth herein and/or provided for in any of the Loan
      Documents or at law or equity shall be equally available to Lender, and
      the choice by Lender of one such alternative over another shall not be
      subject to question or challenge by Guarantor or any other person, nor
      shall any such choice be asserted as a defense, setoff, or failure to
      mitigate damages in any action, proceeding, or counteraction by Lender to
      recover or seeking any other remedy under this Guaranty, nor shall such
      choice preclude Lender from subsequently electing to exercise a different
      remedy.  The parties have agreed to the alternative remedies
      provided herein in part because they recognize that the choice of remedies
      in the event of a default hereunder will necessarily be and should
      properly be a matter of good faith business judgment, which the passage of
      time and events may or may not prove to have been the best choice to
      maximize recovery by Lender at the lowest cost to Borrower and/or
      Guarantor.  It is the intention of the parties that such good
      faith choice by Lender be given conclusive effect regardless of such
      subsequent developments.

            


    

     

    
      	
              4.  

            	
              Guarantor
      does hereby (a) waive notice of acceptance of this Guaranty by Lender
      and any and all notices and demands of every kind which may be required to
      be given by any statute, rule or law, other than notices specifically
      required under the Loan Documents or this Guaranty, (b) agree to
      refrain from asserting, until after repayment in full of the Loan, any
      defense, right of set-off or other claim which Guarantor may have against
      Borrower (c) waive any defense, right of set-off or other claim which
      Guarantor or Borrower may have against Lender, or the holder of the Note,
      (d) waive any and all rights Guarantor may have under any anti-deficiency
      statute or other similar protections, (e) waive presentment for
      payment, demand for payment, notice of nonpayment or dishonor, protest and
      notice of protest, diligence in collection and any and all formalities
      which otherwise might be legally required to charge Guarantor with
      liability, and (f) waive any failure by Lender to inform Guarantor of
      any facts Lender may now or hereafter know about Borrower, the Facilities,
      the Loan, or the transactions contemplated by the
  Loan

            


    


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


     

    Agreement,
it being understood and agreed that Lender has no duty so to inform and that
Guarantor is fully responsible for being and remaining informed by Borrower of
all circumstances bearing on the risk of nonperformance of Borrower’s
obligations.  Credit may be granted or continued from time to time by
Lender to Borrower without notice to or authorization from Guarantor, regardless
of the financial or other condition of Borrower at the time of any such grant or
continuation.  Lender shall have no obligation to disclose or discuss
with Guarantor its assessment of the financial condition of
Borrower.  Guarantor acknowledges that no representations of any kind
whatsoever have been made by Lender.  No modification or waiver of any
of the provisions of this Guaranty shall be binding upon Lender except as
expressly set forth in a writing duly signed and delivered by
Lender.

     

    
      	
              5.  

            	
              Guarantor
      further agrees that Guarantor’s liability as guarantor shall in not be
      impaired or affected by any renewals or extensions which may be made from
      time to time, with or without the knowledge or consent of Guarantor of the
      time for payment of interest or principal under the Note or by any
      forbearance or delay in collecting interest or principal under the Note,
      or by any waiver by Lender under the Loan Agreement, Mortgages or any
      other Loan Documents, or by Lender’s failure or election not to pursue any
      other remedies it may have against Borrower or Guarantor, or by any change
      or modification in the Note, Loan Agreement, Mortgages or any other Loan
      Document, or by the acceptance by Lender of any additional security or any
      increase, substitution or change therein, or by the release by Lender of
      any security or any withdrawal thereof or decrease therein, or by the
      application of payments received from any source to the payment of any
      obligation other than the Indebtedness even though Lender might lawfully
      have elected to apply such payments to any part or all of the
      Indebtedness, it being the intent hereof that, subject to Lender’s
      compliance with the terms of this Guaranty, Guarantor shall remain liable
      for the payment of the Indebtedness, until the Indebtedness has been paid
      in full, notwithstanding any act or thing which might otherwise operate as
      a legal or equitable discharge of a surety.  Guarantor further
      understands and agrees that Lender may at any time enter into agreements
      with Borrower to amend and modify the Note, Loan Agreement, Mortgages or
      other Loan Documents, and may waive or release any provision or provisions
      of the Note, Loan Agreement, Mortgages and other Loan Documents or any
      thereof, and, with reference to such instruments, may make and enter into
      any such agreement or agreements as Lender and Borrower may deem proper
      and desirable, without in any manner impairing or affecting this Guaranty
      or any of Lender’s rights hereunder or Guarantor’s obligations
      hereunder.

            


    

     

    
      	
              6.  

            	
              This
      is an absolute, present and continuing guaranty of payment and not of
      collection.  Guarantor agrees that this Guaranty may be enforced
      by Lender without the necessity at any time of resorting to or exhausting
      any other security or collateral given in connection herewith or with the
      Note, Loan Agreement, Mortgages or any of the other Loan Documents through
      foreclosure or sale proceedings, as the case may be, under the Mortgages
      or otherwise, or resorting to any other guaranties, and Guarantor hereby
      waives any right to require Lender
to

            


    


    
      
         


      

      
        3

        
          

        

      

      
         


      

    


     

    join
Borrower in any action brought hereunder or to commence any action against or
obtain any judgment against Borrower or to pursue any other remedy or enforce
any other right.  Guarantor further agrees that nothing contained
herein or otherwise shall prevent Lender from pursuing concurrently or
successively all rights and remedies available to it at law and/or in equity or
under the Note, Loan Agreement, Mortgages or any other Loan Documents, and the
exercise of any of its rights or the completion of any of its remedies shall not
constitute a discharge of Guarantor’s obligations hereunder, it being the
purpose and intent of Guarantor that the obligations of Guarantor to Lender
hereunder shall be absolute, independent and unconditional under any and all
circumstances whatsoever.  None of Guarantor’s obligations under this
Guaranty or any remedy for the enforcement thereof shall be impaired, modified,
changed or released in any manner whatsoever by any impairment, modification,
change, release or limitation of the liability of Borrower under the Note, Loan
Agreement, Mortgages or other Loan Documents or by reason of the bankruptcy of
Borrower or by reason of any creditor or bankruptcy proceeding instituted by or
against Borrower.  This Guaranty shall continue to be effective or be
reinstated (as the case may be) if at any time payment of all or any part of any
sum payable pursuant to the Note, Loan Agreement, Mortgages or any other Loan
Document is rescinded or otherwise required to be returned by Lender upon the
insolvency, bankruptcy, dissolution, liquidation, or reorganization of Borrower,
or upon or as a result of the appointment of a receiver, intervenor, custodian
or conservator of or trustee or similar officer for, Borrower or any substantial
part of its property, or otherwise, all as though such payment to Lender had not
been made, regardless of whether Lender contested the order requiring the return
of such payment.  In the event of the foreclosure of the Mortgages and
of a deficiency, Guarantor hereby promises and agrees forthwith to pay the
amount of such deficiency notwithstanding the fact that recovery of said
deficiency against Borrower would not be allowed by applicable law; however, the
foregoing shall not be deemed to require that Lender institute foreclosure
proceedings or otherwise resort to or exhaust any other collateral or security
prior to or concurrently with enforcing this Guaranty.

     

    
      	
              7.  

            	
              In
      the event Lender or any holder of the Note shall assign the Note to any
      Lender or other entity to secure a loan from such Lender or other entity
      to Lender or such holder for an amount not in excess of the amount which
      will be due, from time to time, from Borrower to Lender under the Note
      with interest not in excess of the rate of interest which is payable by
      Borrower to Lender under the Note, Guarantor will accord full recognition
      thereto and agree that all rights and remedies of Lender or such holder
      hereunder shall be enforceable against Guarantor by such Lender or other
      entity with the same force and effect and to the same extent as would have
      been enforceable by Lender or such holder but for such assignment;
      provided, however, that unless Lender shall otherwise consent in writing,
      Lender shall have an unimpaired right, prior and superior to that of its
      assignee or transferee, to enforce this Guaranty for Lender’s benefit to
      the extent any portion of the Indebtedness or any interest therein is not
      assigned or transferred.

            


    


    
      
         


      

      
        4

        
          

        

      

      
         


      

    


     

    
      	
              8.  

            	
              If:  (a) this
      Guaranty is placed in the hands of an attorney for collection or is
      collected through any legal proceeding; (b) an attorney is retained
      to represent Lender in any bankruptcy, reorganization, receivership, or
      other proceedings affecting creditors’ rights and involving a claim under
      this Guaranty; (c) an attorney is retained to provide advice or other
      representation with respect to this Guaranty; or (d) an attorney is
      retained to represent Lender in any proceedings whatsoever in connection
      with this Guaranty and Lender prevails in any such proceedings, then
      Guarantor shall pay to Lender upon demand all reasonable attorney’s fees,
      costs and expenses incurred in connection therewith (all of which are
      referred to herein as “Enforcement
      Costs”), in addition to the Indebtedness and all other amounts due
      hereunder, regardless of whether all or a portion of such Enforcement
      Costs are incurred in a single proceeding brought to enforce this Guaranty
      as well as the other Loan
Documents.

            


    

     

    
      	
              9.  

            	
              The
      parties hereto intend and believe that each provision in this Guaranty
      comports with all applicable local, state and federal laws and judicial
      decisions.  However, if any provision or provisions, or if any
      portion of any provision or provisions, in this Guaranty is found by a
      court of law to be in violation of any applicable local, state or federal
      ordinance, statute, law, administrative or judicial decision, or public
      policy, and if such court should declare such portion, provision or
      provisions of this Guaranty to be illegal, invalid, unlawful, void or
      unenforceable as written, then it is the intent of all parties hereto that
      such portion, provision or provisions shall be given force to the fullest
      possible extent that they are legal, valid and enforceable, that the
      remainder of this Guaranty shall be construed as if such illegal, invalid,
      unlawful, void or unenforceable portion, provision or provisions were not
      contained therein, and that the rights, obligations and interest of Lender
      or the holder of the Note under the remainder of this Guaranty shall
      continue in full force and effect.

            


    

     

    
      	
              10.  

            	
              TO
      THE GREATEST EXTENT PERMITTED BY LAW, GUARANTOR HEREBY WAIVES ANY AND ALL
      RIGHTS TO REQUIRE MARSHALLING OF ASSETS BY LENDER.  WITH RESPECT
      TO ANY SUIT, ACTION OR PROCEEDINGS RELATING TO THIS GUARANTY (EACH, A
      “PROCEEDING”),
      LENDER AND GUARANTOR IRREVOCABLY (A) SUBMITS TO THE NON-EXCLUSIVE
      JURISDICTION OF THE STATE AND FEDERAL COURTS HAVING JURISDICTION IN THE
      CITY OF SEATTLE AND STATE OF WASHINGTON AND (B) WAIVES ANY OBJECTION
      WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDING
      BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY PROCEEDING HAS BEEN
      BROUGHT IN AN INCONVENIENT FORUM AND FURTHER WAIVES THE RIGHT TO OBJECT,
      WITH RESPECT TO SUCH PROCEEDING, THAT SUCH COURT DOES NOT HAVE
      JURISDICTION OVER SUCH PARTY.  NOTHING IN THIS GUARANTY SHALL
      PRECLUDE LENDER FROM BRINGING A PROCEEDING IN ANY OTHER JURISDICTION NOR
      WILL THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE JURISDICTIONS
      PRECLUDE THE BRINGING OF A PROCEEDING IN ANY OTHER
      JURISDICTION.  LENDER AND GUARANTOR FURTHER AGREE AND CONSENT
      THAT, IN ADDITION TO

            


    


    
      
         


      

      
        5

        
          

        

      

      
         


      

    


     

    ANY
METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF
PROCESS IN ANY PROCEEDING IN ANY WASHINGTON STATE OR UNITED STATES COURT SITTING
IN THE CITY OF SEATTLE AND MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, DIRECTED TO THE APPLICABLE PARTY AT THE ADDRESS INDICATED
BELOW, AND SERVICE SO MADE SHALL BE COMPLETE UPON RECEIPT; EXCEPT THAT IF SUCH
PARTY SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE FIVE (5)
DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.

     

    
      	
              11.  

            	
              Any
      indebtedness of Borrower to Guarantor now or hereafter existing is hereby
      subordinated to the payment of the Indebtedness.  Guarantor
      agrees that, until the entire Indebtedness has been paid in full,
      Guarantor will not seek, accept, or retain for its own account, any
      payment from Borrower on account of such subordinated debt at any time
      while there is any continuing Event of Default under the Loan
      Documents.  Any payments to Guarantor on account of such
      subordinated debt while there is an Event of Default shall be collected
      and received by Guarantor in trust for Lender and shall be paid over to
      Lender on account of the Indebtedness without impairing or releasing the
      obligations of Guarantor hereunder.

            


    

     

    
      	
              12.  

            	
              Any
      amounts received by Lender from any source on account of the Loan may be
      utilized by Lender for the payment of the Indebtedness and any other
      obligations of Borrower to Lender in such order as Lender may from time to
      time elect.

            


    

     

    
      	
              13.  

            	
              GUARANTOR
      AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY WAIVE ANY RIGHT TO A TRIAL BY
      JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT UNDER THIS
      GUARANTY OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO OR ARISING FROM
      THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS GUARANTY AND AGREE
      THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
      BEFORE A JURY.

            


    

     

    
      	
              14.  

            	
              Any
      notice, demand, request or other communication which any party hereto may
      be required or may desire to give hereunder shall be in writing and shall
      be deemed to have been properly given (a) if hand delivered, when
      delivered; (b) if mailed by United States Certified Mail (postage prepaid,
      return receipt requested), three Business Days after mailing (c) if by
      Federal Express or other reliable overnight courier service, on the next
      Business Day after delivered to such courier service or (d) if by
      telecopier on the day of transmission so long as copy is sent on the same
      day by overnight courier as set forth
below:

            


    

     

    
      	
               
      

            	
              If
      to Guarantor:

            	
              Emeritus
      Corporation

            


    

     

    
      	
               
      

            	
              3131
      Elliott Avenue #500

            


    

     

    
      	
               
      

            	
              Seattle,
      WA  98121

            


    

     

    
      	
               
      

            	
              Attn:  Eric
      Mendelsohn

            


    

     

    
      	
               
      

            	
              Fax
      No.: 206-204-1490

            


    


    
      
         


      

      
        6

        
          

        

      

      
         


      

    


     

    
      	
               
      

            	
              With
      a copy to:

            	
              Pircher,
      Nichols & Meeks

            


    

    900 North
Michigan Avenue, Suite 1050

    Chicago,
Illinois 60611

    Attn:
Real Estate Notices (JDL / MJK)

    Facsimile:
(312) 915-3348

     

    
      	
              If
      to Lender:

            	
              KeyBank
      National Association

            


    

     

    
      	
               
      

            	
              Healthcare
      Services

            


    

     

    
      	
               
      

            	
              800
      Superior Avenue, 6th
      Floor

            


    

     

    
      	
               
      

            	
              Cleveland,
      OH  44114

            


    

     

    
      	
               
      

            	
              Attn:  CRE
      Client Services

            


    

     

    
      	
               
      

            	
              Mail
      Code:  OH-01-02-0628

            


    

     

    
      	
               
      

            	
              Fax
      No.:

            	
              216-828-7521

            


    

     

    or at
such other address as the party to be served with notice may have furnished in
writing to the party seeking or desiring to serve notice as a place for the
service of notice.

     

    
      	
              15.  

            	
              In
      order to induce Lender to make the Loan, Guarantor makes the following
      representations and warranties to Lender set forth in this
      Section.  Guarantor acknowledges that but for the truth and
      accuracy of the matters covered by the following representations and
      warranties, Lender would not have agreed to make the
  Loan.

            


    

     

    
      	
              (a)  

            	
              Guarantor’s
      address is as indicated in Section 14.

            


    

     

    
      	
              (b)  

            	
              Any
      and all balance sheets, net worth statements, and other financial data
      with respect to Guarantor which have heretofore been given to Lender by or
      on behalf of Guarantor fairly and accurately present the financial
      condition of Guarantor as of the respective dates
  thereof.

            


    

     

    
      	
              (c)  

            	
              To
      Guarantor’s knowledge, the execution, delivery, and performance by
      Guarantor of this Guaranty does not and will not contravene or conflict
      with (i) any Laws, order, rule, regulation, writ, injunction or
      decree now in effect of any Government Authority, or court having
      jurisdiction over Guarantor, (ii) any contractual restriction binding
      on or affecting Guarantor or Guarantor’s property or assets which may
      adversely affect Guarantor’s ability to fulfill its obligations under this
      Guaranty, (iii) the instruments creating any trust holding title to any
      assets included in Guarantor’s financial statements, or (iv) the
      organizational or other documents of
Guarantor.

            


    

     

    
      	
              (d)  

            	
              This
      Guaranty creates legal, valid, and binding obligations of Guarantor
      enforceable in accordance with its
terms.

            


    

     

    
      	
              (e)  

            	
              Except
      as disclosed in writing to Lender, there is no action, proceeding, or
      investigation pending or, to the knowledge of Guarantor, threatened or
      affecting Guarantor, which may adversely affect Guarantor’s ability
      to

            


    


    
      
         


      

      
        7

        
          

        

      

      
         


      

    


     

    fulfill
its obligations under this Guaranty.  There are no judgments or orders
for the payment of money rendered against Guarantor for an amount in excess of
$250,000 which have been undischarged for a period of ten (10) or more
consecutive days and the enforcement of which is not stayed by reason of a
pending appeal or otherwise.  Guarantor is not in default under any
agreements which may adversely affect Guarantor’s ability to fulfill its
obligations under this Guaranty.

     

    
      	
              (f)  

            	
              Guarantor’s
      federal tax identification number is
91-1605464.

            


    

     

    
      	
              (g)  

            	
              All
      statements set forth in the Recitals are true and
  correct.

            


    

     

    All of
the foregoing representations and warranties shall be deemed remade on the date
of the first disbursement of Loan proceeds, on the date of each advance of Loan
proceeds, and upon any extension of the Loan pursuant to the Loan
Agreement.  Guarantor hereby agrees to indemnify and hold Lender free
and harmless from and against all loss, cost, liability, damage, and expense,
including reasonable attorney’s fees and costs, which Lender may sustain by
reason of the inaccuracy or breach of any of the foregoing representations and
warranties as of the date the foregoing representations and warranties are made
and are remade.

     

    
      	
              16.  

            	
              Guarantor
      shall deliver or cause to be delivered to Lender all of the Guarantor
      financial statements to be delivered in accordance with the terms of the
      Loan Agreement.  Without limiting the foregoing, Guarantor
      agrees to provide to Lender:

            


    

     

    
      	
              (a)  

            	
              Quarterly
      internally prepared financial statements of Guarantor within 60 days after
      the end of each fiscal quarter, certified as correct and complete by the
      chief financial officer of
Guarantor;

            


    

     

    
      	
              (b)  

            	
              Annual
      consolidated and consolidating financial statements of Guarantor within
      120 days after the end of each fiscal year, which financial statements
      shall be audited by a CPA acceptable to Lender;
  and

            


    

     

    
      	
              (c)  

            	
              With
      respect to the Emeritus Covenants, within 45 days after the end of each
      calendar quarter, Quarterly Compliance Certificates in the form attached
      as Exhibit
      B to the Loan
Agreement.  

            


    

     

    
      	
              17.  

            	
              Guarantor
      agrees to comply with the Emeritus Covenants, as
  follows:

            


    

     

    
      	
              (a)  

            	
              Guarantor
      agrees to maintain minimum Liquid Assets of Twenty Million Dollars
      ($20,000,000.00);

            


    

     

    
      	
              (b)  

            	
              Guarantor
      agrees to maintain a minimum Fixed Charge Coverage Ratio of 1.10 to 1.00
      (measured at the end of each calendar quarter beginning with the calendar
      quarter ending December 31, 2008, and building to the previous four
      calendar quarters); and

            


    


    
      
         


      

      
        8

        
          

        

      

      
         


      

    


     

    
      	
              (c)  

            	
              Guarantor
      agrees to permit no Change of Control without the prior written consent of
      Lender.

            


    

     

    Guarantor
acknowledges that any failure by Guarantor to comply with the foregoing covenant
is an Event of Default under the Loan Agreement.  In addition, if
Emeritus agrees with any other entity providing financing to Emeritus or to any
Affiliate of Emeritus to comply with any more restrictive covenants than the
foregoing, failure by Emeritus to comply with those more restrictive covenants
within any applicable grace period or cure period shall, at the option of
Lender, be an Event of Default under the Loan Agreement.

     

    
      	
              18.  

            	
              This
      Guaranty shall be binding upon the successors and assigns of
      Guarantor.

            


    

     

    
      	
              19.  

            	
              THIS
      GUARANTY, THE NOTE, AND ALL OTHER INSTRUMENTS EVIDENCING AND SECURING THE
      LOAN SECURED HEREBY WERE NEGOTIATED IN THE STATE OF WASHINGTON AND
      DELIVERED BY GUARANTOR OR BORROWER, AS APPLICABLE, AND ACCEPTED BY LENDER
      IN THE STATE OF WASHINGTON, WHICH STATE THE PARTIES AGREE HAS A
      SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND THE UNDERLYING TRANSACTIONS
      EMBODIED HEREBY.  IN ALL RESPECTS, INCLUDING, WITHOUT
      LIMITATION, PERFORMANCE OF THIS GUARANTY AND THE OBLIGATIONS ARISING
      HEREUNDER, THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
      WITH, THE INTERNAL LAWS OF THE STATE OF WASHINGTON APPLICABLE TO CONTRACTS
      MADE AND TO BE PERFORMED IN SUCH STATE AND ANY APPLICABLE LAWS OF THE
      UNITED STATES OF AMERICA.

            


    

     

    
      	
              20.  

            	
              Lender
      shall be entitled to honor any request for Loan proceeds made by Borrower
      and shall have no obligation to see to the proper disposition of such
      advances.  Guarantor agrees that its obligations hereunder shall
      not be released or affected by reason of any improper disposition by
      Borrower of such Loan proceeds.

            


    

     

    
      	
              21.  

            	
              ORAL
      AGREEMENTS OR ORAL COMMITMENTS TO LEND MONEY, EXTEND CREDIT, OR FORBEAR
      FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
      LAW.

            


    


    
      
         


      

      
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    IN
WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty as of the
date first written above.

     

    “Guarantor”

     

    EMERITUS
CORPORATION, a Washington corporation

    


    


       By:      
/s/ Eric Mendelsohn ___

       Name:  Eric
Mendelsohn

       Title:    Senior
VP Corporate Development

    



    
      
         


      

      
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