EXHIBIT 10.75
When Recorded Mail To:
Xxxxx X. Xxxxxxx, Esq.
Xxxxxxxxx & Xxxxxx Professional Corporation
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
DEED OF TRUST, SECURITY AGREEMENT, AND FIXTURE FILING
WITH ASSIGNMENT OF RENTS AND AGREEMENTS
This Deed of Trust, Security Agreement, and Fixture Filing with Assignment
of Rents and Agreements (this "DEED OF TRUST") is made as of September 29, 1997,
by VALLEY LIVING CENTER, LLC, A Delaware limited liability company ("TRUSTOR"),
to BONNEVILLE LAND & TITLE COMPANY, an Idaho corporation ("TRUSTEE"), for the
benefit of G&L REALTY PARTNERSHIP, L.P., a Delaware limited partnership
("BENEFICIARY").
Witnesseth:
Trustor does irrevocably grant, transfer, and assign to Trustee, in trust,
with power of sale, all Trustor's right, title, and interest now owned or later
acquired in the real property ("LAND") located in Bonneville County, Idaho, and
more particularly described in attached Exhibit A, incorporated by reference
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(Trustor agrees that any greater title to the Land later acquired during the
term of this Deed of Trust will be subject to this Deed of Trust); together with
the rents, issues, and profits, subject however, to the right, power, and
authority granted and conferred on Trustor in this Deed of Trust to collect and
apply the rents, issues, and profits; and Trustor also irrevocably grants,
transfers, and assigns to Trustee, in trust, with power of sale, all of
Trustor's right, title, and interest now owned or later acquired to the
following property (including the rights or interests pertaining to the
property) located at the Property:
(1) all buildings ("BUILDINGS") and improvements now or later on the Land,
and all appurtenances, easements, water and water rights, and pumps and pumping
plants, and all shares of stock evidencing these; all machinery, equipment,
appliances, and fixtures for generating or distributing air, water, heat,
electricity, light, fuel, or refrigeration or for ventilating or sanitary
purposes or for the exclusion of vermin or insects or for the removal of dust,
refuse, or garbage; all wall safes, built-in furniture, and installations,
shelving, lockers, partitions, doorstops, vaults, elevators, dumbwaiters,
awnings, window shades, venetian blinds, light fixtures, fire hoses and brackets
and boxes for them, fire sprinklers, alarm systems, draperies, drapery rods and
brackets, screens, linoleum, carpets, furniture,
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furnishings, fixtures, plumbing, laundry tubs and trays, iceboxes,
refrigerators, heating units, stoves, water heaters, incinerators, and
communication systems and installations for which any Building is specially
designed; all of these items, whether now or later installed, being declared to
be for all purposes of this Deed of Trust a part of the Land, the specific
enumerations in this Deed of Trust not excluding the general;
(2) the rents, issues, profits, and proceeds; and
(3) the Property to the extent not included in clauses (1) and (2) above.
For the purpose of securing, in the order of priority that Beneficiary
determines:
(1) payment of the indebtedness evidenced by (i) a Promissory Note of
Trustor dated as of the same date as this Deed of Trust in the principal amount
of One Hundred Fifteen Thousand Two Hundred Seventy-Two Dollars and No/Cents
($115,272.00)("NOTE"), payable to Beneficiary or to order, and all extensions,
modifications, or renewals of the Note; and (ii) a Promissory Note of Xxxxxx
Skilled Nursing Facility, LLC, a Delaware limited liability company ("BSNF"),
dated as of the same date as this Deed of Trust in the principal amount of Eight
Hundred Seventy Thousand Dollars and No/Cents ($870,000.00) ("XXXXXX NOTE"),
payable to Beneficiary or to order, and all extensions, modifications, or
renewals of the Xxxxxx Note.
(2) payment of the interest on that indebtedness according to the terms of
the Note;
(3) payment of all other sums (with interest as provided in this Deed of
Trust) becoming due and payable to Beneficiary or Trustee pursuant to the terms
of this Deed of Trust;
(4) performance of every obligation contained in this Deed of Trust, the
Note, any instrument now or later evidencing or securing any indebtedness
secured by this Deed of Trust, and any agreements, supplemental agreements, or
other instruments of security executed by Trustor as of the same date of this
Deed of Trust or at any time subsequent to the date of this Deed of Trust for
the purpose of further securing any indebtedness secured by this Deed of Trust,
or any part of it, or for the purpose of supplementing or amending this Deed of
Trust or any instrument secured by this Deed of Trust;
(5) payment of all other obligations owed by Trustor to Beneficiary that
by their terms recite that they are secured by this Deed of Trust, including
those incurred as primary obligor or as guarantor; and
(6) performance of every obligation contained in that certain Deed of
Trust, Security Agreement, and Fixture Filing With Assignment of Rents and
Agreements dated as of the same date as this Deed of Trust from BSNF, as
trustor, in favor of Beneficiary ("XXXXXX
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DEED OF TRUST") any instrument now or later evidencing or securing any
indebtedness secured by the Xxxxxx Deed of Trust, and any agreements,
supplemental agreements, or other instruments of security executed as of the
same date of the Xxxxxx Deed of Trust or at any time subsequent to the date of
the Xxxxxx Deed of Trust for the purpose of further securing any indebtedness
secured by the Xxxxxx of Trust, or any part of it, or for the purpose of
supplementing or amending the Xxxxxx Deed of Trust or any instrument secured by
the Xxxxxx Deed of Trust.
Regardless of anything stated above or any other term contained in this
Deed of Trust or in the Loan Documents (as defined in this Deed of Trust), none
of Trustor's obligations under or pursuant to the Certification Agreement (as
defined in this Deed of Trust) will be secured by the lien of this Deed of
Trust.
1. DEFINITIONS.
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1.1 CERTAIN DEFINED TERMS. As used in this Deed of Trust the following
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terms will have the following meanings:
"ASSIGNMENT OF LEASES": The Assignment of Leases and Rents dated as
of the same date as this Deed of Trust executed by Trustor in favor of
Beneficiary.
"BUILDINGS": The Buildings as defined above in this Deed of Trust.
"CERTIFICATION AGREEMENT": The Environmental Certification Agreement
and Indemnity of Borrower dated on the same date as this Deed of Trust and
executed by Trustor in favor of Beneficiary.
"COLLATERAL": The Collateral as defined in Section 9.1 of this Deed
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of Trust.
"DEFAULT RATE": A rate of interest per annum equal to five percent
(5%) per annum above the Loan Rate.
"FIXTURES": All fixtures located on the Improvements (as defined in
this Deed of Trust) or now or later installed in, or used in connection with,
any of the Improvements, including, but not limited to, all partitions, screens,
awnings, motors, engines, boilers, furnaces, pipes, plumbing, elevators,
cleaning and sprinkler systems, fire-extinguishing apparatus and equipment,
water tanks, heating, ventilating, air-conditioning and air-cooling equipment,
built-in refrigerators, and gas and electric machinery, appurtenances, and
equipment, whether or not permanently affixed to the Land or the Improvements.
"HAZARDOUS SUBSTANCE":
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(a) any oil, flammable substance, explosive, radioactive material,
hazardous waste or substance, toxic waste or substance, or any other waste,
material, or pollutant that:
(1) poses a hazard to the Property or to persons on the
Property, or
(2) causes the Property to be in violation of any Hazardous
Substance Law;
(b) asbestos in any form;
(c) urea formaldehyde foam insulation;
(d) transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls;
(e) radon gas;
(f) any chemical, material, or substance defined as or included in
the definition of hazardous substance, hazardous substances, hazardous wastes,
hazardous materials, extremely hazardous waste, restricted hazardous waste, or
toxic substances or words of similar import under any applicable local, state,
or federal law or under the regulations adopted or publications promulgated
pursuant to those laws, including, but not limited to, any Hazardous Substance
Law, as amended from time to time;
(g) any other chemical, material, or substance, exposure to which is
prohibited, limited, or regulated by any governmental authority or which may
pose a hazard to the health and safety of the occupants of the Property or the
owners or occupants of property adjacent to or surrounding the Property, or any
other person coming on the Property or any adjacent property; and
(h) any other chemical, material, or substance that may pose a
hazard to the environment.
"HAZARDOUS SUBSTANCE CLAIM": Any enforcement, cleanup, removal,
remedial, or other governmental, regulatory, or private actions, agreements, or
orders threatened, instituted, or completed pursuant to any Hazardous Substance
Law, together with all claims made or threatened by any third party against
Trustor or the Property relating to damage, contribution, cost-recovery
compensation, loss, or injury resulting from the presence, release, or discharge
of any Hazardous Substance.
"HAZARDOUS SUBSTANCE LAW": Any federal, state, or local law,
ordinance, regulation, or policy relating to the environment, health, and
safety, any Hazardous Substance (including, without limitation, the use,
handling, transportation, production, disposal,
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discharge, or storage of the substance), industrial hygiene, soil, groundwater,
and indoor and ambient air conditions or the environmental conditions on the
Property, including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended from time to time;
the Hazardous Substances Transportation Act, as amended from time to time; the
Resource Conservation and Recovery Act, as amended from time to time; the
Federal Water Pollution Control Act, as amended from time to time; the Hazardous
Substance Account Act, as amended from time to time; the Hazardous Waste Control
Law, as amended from time to time; the Medical Waste Management Act, as amended
from time to time; the Emergency Planning and Community Right-to-Know Act of
1986, as amended from time to time; the Solid Waste Disposal Act, as amended
from time to time; the Clean Water Act, as amended from time to time; the Clean
Air Act, as amended from time to time; the Toxic Substances Control Act, as
amended from time to time; the Safe Drinking Water Act, as amended from time to
time; the Occupational Safety and Health Act, as amended from time to time; and
the Xxxxxx-Cologne Water Quality Control Act, as amended from time to time, and
all rules and regulations adopted in respect of the foregoing laws whether
presently in force or coming into being and/or effectiveness hereafter.
"IMPOSITIONS" All real estate and personal property taxes and other
taxes and assessments, water and sewer rates and charges, and all other
governmental charges and any interest or costs or penalties with respect to
those charges, assessments, or taxes, ground rent and charges for any easement
or agreement maintained for the benefit of the Property, general and special,
ordinary and extraordinary, foreseen or unforeseen, of any kind that at any time
prior to or after the execution of the Loan Documents may be assessed, levied,
imposed, or become a lien on the Property or the rent or income received from
the Property, or any use or occupancy of the Property; and any charges,
expenses, payments, or assessments of any nature, if any, that are or may become
a lien on the Property or the rent or income received from the Property.
"IMPOSITION AND INSURANCE IMPOUND FUND": The fund that Trustor is
required to maintain pursuant to Section 4.4(c) of this Deed of Trust for the
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payment of Impositions and Insurance Premiums.
"IMPROVEMENTS": All Buildings, improvements, and appurtenances on
the Land, and all improvements, additions, and replacements of those
improvements and other buildings and improvements, at any time later constructed
or placed on the Land.
"INDEBTEDNESS": The principal of and interest on, and all other
amounts, payments, and premiums due under, the Note, the Xxxxxx Note and any
extensions or renewals (including, without limitation, extensions or renewals at
a different rate of interest, regardless of whether evidenced by a new or
additional promissory note or notes), and all other indebtedness of Trustor to
Beneficiary under or secured by the Security Documents (defined in this Deed of
Trust), together with all other sums owed by Trustor to Beneficiary, including
those incurred as primary obligor or as guarantor, that recite that they are
secured by the Security Documents.
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"INSURANCE PREMIUMS": The amounts Trustor is required to pay as
provided in Section 4.4(d).
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"LAND": The Land as defined in this Deed of Trust.
"LEASES": All leasehold interests, including subleases and tenancies
following attornment, affecting or covering any portion of the Property.
"LOAN": The loan secured by this Deed of Trust and evidenced by the
Note.
"LOAN DOCUMENTS": The Note, the Xxxxxx Note, the Security Documents
(including, but not limited to, the Xxxxxx Deed of Trust), and all other
documents (including guaranties) evidencing, securing, or relating to the Loan,
except the Certification Agreement.
"LOAN PARTIES": Trustor, BSNF and any guarantors of the loan or any
obligations under the Loan, together with their respective affiliates and their
respective members and officers.
"LOAN RATE": The rate at which the principal accrues interest as set
forth in the Note.
"MATERIAL ADVERSE CHANGE": Any material and adverse change in:
(a) the business or properties or condition (financial or
otherwise) of Trustor, or
(b) the condition or operation of the Property.
"NOTE": The Note as defined in this Deed of Trust.
"OBLIGATIONS" All of the covenants, promises, and other obligations
(other than the Indebtedness):
(a) made or owing by Trustor to or due to Beneficiary under or
as set forth in the Loan Documents, and
(b) made or owing by Trustor to every other Person, a breach of
which would or may affect Trustor's ownership, development, or operation of the
Property, except any covenants, promises, and other obligations of Trustor to
Beneficiary under the Certification Agreement.
"PERSON": Any natural person, corporation, firm, association,
government, governmental agency, or any other entity, whether acting in an
individual, fiduciary, or other capacity.
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"PERSONALTY": Trustor's interest in all accounts, contract rights,
and general intangibles (specifically including any insurance proceeds and
condemnation awards) arising out of the ownership, development, or operation of
the Property, and all furniture, furnishings, equipment, machinery, construction
materials and supplies, leasehold interests in personal property, and all other
personal property (other than Fixtures) now or later on the Property, together
with all present and future attachments, accessions, replacements,
substitutions, and additions, and the cash and noncash proceeds.
"PROPERTY": The Land, the Improvements, the Fixtures, and the
Personalty, together with:
(a) all rights, privileges, tenements, hereditaments, rights-of-way,
easements, and appurtenances of the Land or the Improvements now or later
belonging to the Property, and all right, title, and interest of Trustor in any
streets, ways, alleys, strips, or gores of land adjoining the Land; and
(b) all of Trustor's right, title, and interest in the Land, the
Improvements, the Fixtures, and the Personalty, including any award for any
change of grade of streets affecting the Land, the Improvements, the
Fixtures, or the Personalty.
"RECEIVER": Any trustee, receiver, custodian, fiscal agent,
liquidator, or similar officer.
"RELEASE": Any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing into
the environment, including continuing migration, of Hazardous Substances that
goes into the soil, surface water, or groundwater of the Property, whether or
not caused by, contributed to, permitted by, acquiesced to, or known to Trustor.
"SECURITY DOCUMENTS": This Deed of Trust, the Assignment of Leases,
the Xxxxxx Deed of Trust and all other documents now or later securing any part
of the payment of the Indebtedness or the observance or performance of the
Obligations.
"TITLE POLICY": The title insurance policy issued by Xxxxxxx Title
Guaranty Company to Beneficiary.
"USER": Any person, other than Trustor, who occupies, used, or comes
into or has occupied, used, or come into the Property or any part of it and any
agent or contractor of that person.
2. WARRANTY OF TITLE. Trustor warrants that:
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(a) Trustor is the lawful owner of the Property,
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(b) Trustor will maintain and preserve the lien of this Deed of
Trust until the Indebtedness has been paid in full,
(c) Trustor has good, right, and lawful authority to grant the
Property as provided in this Deed of Trust, and
(d) Trustor will forever warrant and defend the grant made in this
Deed of Trust against all claims and demands, except as are specifically
set forth in this Deed of Trust.
3. REPRESENTATIONS AND WARRANTIES. Trustor represents and warrants to
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Beneficiary that as of the date of this Deed of Trust:
3.1 ORGANIZATION OF THE LOAN PARTIES.
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(a) Trustor is a limited liability company organized, validly
existing, and in good standing under the laws of the State of Delaware and is
qualified to do business in Oregon.
(b) Trustor has the requisite power and authority to own and manage
its properties, to carry on its business as now being conducted, and to own,
develop, and operate the Property.
(c) Trustor is qualified to do business in every jurisdiction in
which the nature of its business or its properties makes qualification
necessary.
(d) Trustor and its third party operator of the Property is in
compliance with all laws, regulations, ordinances, and orders of public
authorities applicable to it.
(e) Trustor's third party operator of the Property shall operate a
nursing care facility on the Property in compliance with all laws, regulations,
ordinances and orders of public authority.
3.2 VALIDITY OF LOAN DOCUMENTS.
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(a) The execution, delivery, and performance by the Loan Parties of
the Loan Documents and the borrowings evidenced by the Note:
(1) are within the power of the Loan Parties,
(2) have been duly authorized by all requisite limited
liability company, corporate or partnership actions, as appropriate,
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(3) have received all necessary governmental approval, and
(4) will not violate any provision of law, any order of any
court or agency of government, the charter documents of any Loan Party, or any
indenture, agreement, or any other instrument to which any Loan Party is a party
or by which any Loan Party or any of its property is bound, nor will they
conflict with, result in a breach of, or constitute (with due notice and lapse
of time) a default under any indenture, agreement, or other instrument, or
result in the creation or imposition of any lien, charge, or encumbrance of any
nature on any of the property or assets of any Loan Party, except as
contemplated by the provisions of the Loan Documents.
(b) Each of the Loan Documents, when executed and delivered to
Beneficiary, will constitute a valid obligation, enforceable in accordance with
its terms.
(c) The Note, this Deed of Trust and the other Loan Documents are
not subject to any right of rescission, set-off, counterclaim or defense,
including the defense of usury, nor would the operation of any of the terms of
the Note, this Deed of Trust or any of the other Loan Documents, or the exercise
of any right thereunder, render this Deed of Trust unenforceable, in whole or in
part, or subject to any right of rescission, set-off, counterclaim or defense,
including the defense of usury.
3.3 FINANCIAL STATEMENTS.
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(a) All financial statements and data that have been given to
Beneficiary with respect to any Loan Party:
(1) are complete and correct in all material respects;
(2) accurately present the financial condition of that Loan
Party on each date as of which they have been furnished, and accurately present
the results of the operations of that Loan Party for the periods for which they
have been furnished; and
(3) have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods covered.
(b) All balance sheets and the notes with respect to the Loan
Parties furnished to Beneficiary disclose all liabilities of the Loan Parties,
fixed and contingent, as of their respective dates, as well as all obligations
of those Loan Parties under any guaranties.
(c) There has been no Material Adverse Change in the financial
condition or operations of Trustor since:
(1) the date of the most recent financial statement given to
Beneficiary with respect to Trustor of the Property, or
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(2) the date of the financial statements given to Beneficiary
immediately prior to the date of this Deed of Trust, other than changes in the
ordinary course of business, none of which constitute a Material Adverse Change,
either individually or in the aggregate.
3.4 USE OF PROCEEDS OF LOAN. Trustor will use the Loan to assist in the
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acquisition of the Property.
3.5 OTHER ARRANGEMENTS. Trustor is not a party to any agreement or
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instrument materially and adversely affecting Trustor's present or proposed
business, properties, assets, operation, or condition, financial or otherwise;
and Trustor is not in default in the performance, observance, or fulfillment of
any of the material obligations, covenants, or conditions in any agreement or
instrument to which Trustor is a party that materially affect Trustor's present
or proposed business, properties, assets, operation, or condition, financial or
otherwise.
3.6 OTHER INFORMATION. All other reports, papers, data, and information
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given to Beneficiary with respect to Trustor and the Property are accurate and
correct in all material respects and complete insofar as completeness may be
necessary to give Beneficiary a true and accurate knowledge of the subject
matter.
3.7 LITIGATION. There is not now pending against or affecting any Loan
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Party, nor to the knowledge of any Loan Party is there threatened, any action,
suit, or proceeding at law or in equity or before any administrative agency
that, if adversely determined, would materially impair or affect:
(a) the financial condition or operations of Trustor, or
(b) the condition or operation of the Property.
3.8 OTHER WARRANTIES.
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(a) The Property is not used for agricultural or grazing purposes,
and
(b) Trustor's third party operator of the Property is engaged in the
operation of a nursing care facility.
3.9 TAXES. Trustor has filed all federal, state, county, and municipal
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income tax returns required to have been filed and has paid all taxes that have
become due pursuant to those returns or pursuant to any assessments received by
Trustor, and Trustor does not know of any basis for any additional assessment
against Trustor in respect of those taxes.
3.10 COMPLIANCE WITH LAWS. Except as otherwise provided in this Deed of
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Trust, the Property and the proposed and actual use of the Property comply with
all laws, ordinances,
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rules, and regulations of all local, regional, county, state, and federal
governmental authorities having jurisdiction (including, but not limited to, the
Americans With Disabilities Act), and there is no action or proceeding pending
or, to the knowledge of Trustor after due inquiry, threatened before any court,
quasi-judicial body, or administrative agency at the time of any disbursement by
Beneficiary relating to the validity of the Loan or the proposed or actual use
of the Property. All rights to appeal any decision rendered will have expired
prior to the date of this Deed of Trust.
3.11 SINGLE ASSET ENTITY. Trustor does not own and will not own any other
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asset or property other than (i) the Property, and (ii) incidental personal
property necessary for the ownership and operation of the Property.
3.12 BROKERS, AGENTS, ADVISORS, CONSULTANTS AND FINDERS. No financial
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advisors, brokers, underwriters, placement agents, agents or finders have been
dealt with by the Trustor in connection with the Loan.
3.13 TAXED AS PARTNERSHIP. Trustor is currently taxed as a partnership
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for income tax purposes.
4. AFFIRMATIVE COVENANTS. Until the entire Indebtedness has been paid in
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full, Trustor covenants to and agrees with Beneficiary as follows:
4.1 OBLIGATIONS OF TRUSTOR. Trustor will pay the Indebtedness and
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Trustor will continue to be liable for the payment of the Indebtedness until it
has been paid in full. Trustor:
(a) will timely perform all the covenants, agreements, terms, and
conditions to be performed by Trustor:
(1) under this Deed of Trust;
(2) as seller under each contract of sale of, and as lessor
under each lease of, for any portion of the Property for which a contract of
sale or lease has been approved in writing by Beneficiary;
(3) as required of Trustor under each document and agreement
constituting one of the Security Documents;
(4) under all other agreements between Trustor and Beneficiary
in accordance with the respective terms of the agreement; and
(5) as required of Trustor under all other agreements to which
Trustor is a party with respect to the Property;
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(b) will not cancel, surrender, modify, amend, or permit the
cancellation, surrender, modification, or amendment of any of the previously
mentioned agreements or any of the covenants, agreements, terms, or conditions
contained in any of them without the prior written consent, in each case, of
Beneficiary; and
(c) will keep Beneficiary indemnified against all actions,
proceedings, costs (including, without limitation, Beneficiary's counsel fees
and disbursements), claims, and damages incurred or sustained by Beneficiary in
respect of the nonpayment of any charges or the nonobservance or nonperformance
of any of the covenants, agreements, terms, or conditions in any of the
previously mentioned agreements.
4.2 INSURANCE.
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(a) Trustor, at its sole cost and expense, will keep the Property
insured for the mutual benefit of Trustor and Beneficiary against loss or damage
by earthquake and fire, and against loss or damage by other risks embraced by
coverage of the type now known as the broad form of extended coverage,
including, but not limited to, riot and civil commotion, vandalism, malicious
mischief, burglary, theft, and mysterious disappearance, and against any other
risks or hazards that Beneficiary may from time to time reasonably designate, in
an amount not less than one hundred percent (100%) of the then full replacement
cost of the Improvements, without deduction for physical depreciation. The
policies of insurance carried in accordance with this section shall contain the
Replacement Cost Endorsement with a waiver of depreciation, and shall have a
deductible no greater than $10,000.00 unless so agreed by Beneficiary.
Notwithstanding the above, with respect to earthquake insurance, (A) such
insurance shall be required only to the extent it is available at commercially
reasonable prices, and (B) such insurance shall be on commercially reasonable
terms and with commercially reasonable deductible amounts.
(b) Trustor, at its sole cost and expense, but for the mutual
benefit of Trustor and Beneficiary, will maintain during the term of this Deed
of Trust the following policies of insurance:
(i) Flood insurance if any part of the Property is located in
an area identified by the Federal Emergency Management Agency as an area having
special flood hazards and in which flood insurance has been made available under
the National Flood Insurance Program in an amount at least equal to the
outstanding principal amount of the Loan or the maximum limit of coverage
available with respect to the Property under said Program, whichever is less.
(ii) Commercial general liability insurance, including broad
form property damage, blanket contractual and personal injuries (including death
resulting therefrom) coverages and containing minimum limits per occurrence of
$1,000,000 and $2,000,000 in the aggregate for any policy year. In addition, at
least $5,000,000 excess and/or umbrella liability insurance shall be obtained
and maintained for any and all claims,
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including all legal liability imposed upon Trustor and all court costs and
attorneys' fees incurred in connection with the ownership, operation and
maintenance of the Property.
(iii) Rental loss and/or business interruption insurance in an
amount equal to the greater of (A) estimated gross revenues for eighteen (18)
months from the operations of the Property or (B) the projected operating
expenses (including debt service) for eighteen (18) months for the maintenance
and operation of the Property.
(iv) Insurance against loss or damage from (A) leakage of
sprinkler systems and (B) explosion of steam boilers, air conditioning
equipment, high pressure piping, machinery and equipment, pressure vessels or
similar apparatus now or hereafter installed in the Improvements (without
exclusion for explosions), to the extent that such items now or hereafter exist
upon the Property, in an amount at least equal to the outstanding principal
amount of the Note.
(v) If the Property includes commercial property, workers'
compensation insurance with respect to any employees of Trustor, as required by
any governmental authority or legal requirement.
(vi) During any period of repair or restoration, builder's
"all risk" insurance in an amount equal to not less than the full insurable
value of the Property insuring against such risks (including, without
limitation, fire and extended coverage and collapse of the Improvements to
agreed limits) as Beneficiary may request, in form and substance acceptable to
Beneficiary.
(vii) Ordinance or law coverage to compensate for the cost of
demolition and the increased cost of construction.
(viii) Such other insurance as may from time to time be
reasonably required by Beneficiary in order to protect its interests, including
earthquake insurance coverage.
(c) Effective on the occurrence of any Event of Default, all of
Trustor's right, title, and interest in all policies of property insurance and
any unearned premiums paid are assigned to Beneficiary, who may assign them to
any purchaser of the Property at any foreclosure sale.
(d) All policies of insurance (the "POLICIES") required pursuant to
this Section: (i) shall be issued by companies approved by Beneficiary and
licensed to do business in the state where the Property is located, with a
claims paying ability rating of "AA" or better by Standard & Poor's Rating
Services, a division of the McGraw Hill Companies, Inc. and/or a rating of "A:X"
or better in the current Best's Insurance Reports; (ii) shall name Beneficiary
and its successors and/or assigns as their interest may appear as the
beneficiary/ mortgagee; (iii) shall contain a non-contributory standard
mortgagee clause and a lender's loss payable
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endorsement or their equivalents, naming Beneficiary as the person to which all
payments made by such insurance company shall be paid; (iv) shall contain a
waiver of subrogation against Beneficiary; (v) shall be maintained throughout
the term of this Deed of Trust without cost to Beneficiary; (vi) shall be
assigned and the originals delivered to Beneficiary; (vii) shall contain such
provisions as Beneficiary deems reasonably necessary or desirable to protect its
interest including, without limitation, endorsements providing that neither
Trustor, Beneficiary nor any other party shall be a co-insurer under said
Policies and that Beneficiary shall receive at least thirty (30) days prior
written notice of any modification, reduction or cancellation; and (viii) shall
be satisfactory in form and substance to Beneficiary and shall be approved by
Beneficiary as to amounts, form, risk coverage, deductibles, loss payees and
insureds. Trustor shall pay the premiums for such Policies (the "INSURANCE
PREMIUMS") as the same become due and payable and shall furnish to Beneficiary
evidence of the renewal of each of the Policies with receipts for the payment of
the Insurance Premiums or other evidence of such payment reasonably satisfactory
to Beneficiary (provided, however, that Trustor is not required to furnish such
evidence of payment to Beneficiary in the event that such Insurance Premiums
have been paid by Beneficiary pursuant to Section 4.4 hereof). If Trustor does
-----------
not furnish such evidence and receipts at least thirty (30) days prior to the
expiration of any expiring Policy, then Beneficiary may procure, but shall not
be obligated to procure, such insurance and pay the Insurance Premiums promptly
on demand. Within thirty (30) days after request by Beneficiary, Trustor shall
obtain such increases in the amounts of coverage required hereunder as may be
reasonably requested by Beneficiary, taking into consideration changes in the
value of money over time, changes in liability laws, changes in prudent customs
and practices.
4.3 MAINTENANCE, WASTE, AND REPAIR. Trustor will maintain the
------------------------------
Improvements now or later existing in good and tenantable repair, and will not
structurally alter them without the prior written consent of Beneficiary, or
remove or demolish them in whole or in part, nor will Trustor suffer any waste
of the Property or make any change in the use of the Property that will in any
way increase any ordinary fire or other hazard insurance premiums or permit
anything that may in any way impair the security of this Deed of Trust. Trustor
will not abandon the Property or lease the Property unprotected, vacant, or
deserted.
4.4 IMPOSITION AND INSURANCE; IMPOUNDS.
----------------------------------
(a) Trustor will pay when due all Impositions that are or that may
become a lien on the Property or are assessed against the Property or its rents,
royalties, profits, and income.
(b) Trustor will file all federal, state, provincial, county, and
municipal income tax returns required to be filed and will pay all taxes that
become due pursuant to the returns or pursuant to any assessments received by
Trustor.
(c) Trustor shall pay to Beneficiary on the first day of each
calendar month (a) one-twelfth of the Impositions that Beneficiary estimates
will be payable during the next ensuing twelve (12) months in order to
accumulate with Beneficiary sufficient funds to pay all
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such Impositions at least thirty (30) days prior to their respective due dates,
and (b) one-twelfth of the Insurance Premiums that Beneficiary estimates will be
payable for the renewal of the coverage afforded by the Policies upon the
expiration thereof in order to accumulate with Beneficiary sufficient funds to
pay all such Insurance Premiums at least thirty (30) days prior to the
expiration of the Policies (said amounts in (a) and (b) above hereinafter called
the "IMPOSITION AND INSURANCE IMPOUND FUND"). The Imposition and Insurance
Impound Fund and the payments of interest or principal or both, payable pursuant
to the Note, shall be added together and shall be paid as an aggregate sum by
Trustor to Beneficiary. Beneficiary will apply the Imposition and Insurance
Impound Fund to payments of Impositions and Insurance Premiums required to be
made by Trustor pursuant to Sections 4.2(f) and 4.4(a) hereof. In making any
--------------------------
payment relating to the Imposition and Insurance Impound Fund, Beneficiary may
do so according to any xxxx, statement or estimate procured from the appropriate
public office (with respect to Impositions) or insurer or agent (with respect to
Insurance Premiums), without inquiry into the accuracy of such xxxx, statement
or estimate or into the validity of any tax, assessment, sale, forfeiture, tax
lien or title or claim thereof. If the amount of the Imposition and Insurance
Impound Fund shall exceed the amounts due for Impositions and Insurance Premiums
pursuant to Sections 4.2(f) and 4.4(a) hereof, Beneficiary shall, in its sole
--------------------------
discretion, return any excess to Trustor or credit such excess against future
payments to be made to the Imposition and Insurance Impound Fund. In allocating
such excess, Beneficiary may deal with the person shown on the records of
Beneficiary to be the owner of the Property. If at an time Beneficiary
determines that the Imposition and Insurance Impound Fund is not or will not be
sufficient to pay the items set forth in (a) and (b) above, Beneficiary shall
notify Trustor of such determination and Trustor shall increase its monthly
payments to Beneficiary by the amount that Beneficiary estimates is sufficient
to make up the deficiency at least thirty (30) days prior to delinquency of the
Impositions and/or expiration of the Policies, as the case may be. Until
expended or applied as above provided, any amounts in the Imposition and
Insurance Impound Fund shall constitute additional security for the
Indebtedness. The Imposition and Insurance Impound Fund shall not constitute a
trust fund. No earnings or interest on the Imposition and Insurance Impound Fund
shall be payable to Trustor. If Beneficiary so elects at any time, Trustor shall
provide, at Trustor's expense, a tax service contract for the Loan term issued
by a tax reporting agency acceptable to Beneficiary. If Beneficiary does not so
elect, Trustor shall reimburse Beneficiary for the cost of making annual tax
searches throughout the Loan term.
(d) Trustor hereby pledges to Beneficiary and grants to Beneficiary
a security interest in any and all monies now or hereafter deposited in the
Imposition and Insurance Impound Fund as additional security for the payment of
the Indebtedness. Upon the occurrence of an Event of Default, Beneficiary may
apply any sums then present in the Imposition and Insurance Impound Fund to the
payment of the Indebtedness in any order in its sole discretion.
(e) By exercising any of its rights or remedies under this Section
-------
4.4 (including, without limitation, taking possession of the Imposition and
---
Insurance Impound Fund), Beneficiary shall not be deemed to have exercised any
equitable right of setoff,
-15-
foreclosed any statutory banker's lien, initiated or prosecuted any "action" to
enforce the rights and obligations secured by this Deed of Trust, or the Loan
Documents, as the term "action" is used under the laws of the state where the
Property is located, or to have violated the "security first" principle, if any,
under the laws of the state where the Property is located. Accordingly, the
exercise of any or all of Beneficiary's rights and remedies under this Section
-------
4.4 shall not in any way prejudice or affect Beneficiary's right to initiate and
---
complete a judicial or nonjudicial foreclosure under this Deed of Trust. This
Deed of Trust evidences the consensual granting of a personal property security
interest in the Imposition and Insurance Impound Fund as permitted by the
Uniform Commercial Code of the laws of the state where the Property is located;
the parties do not intend that the exercise by Beneficiary of any of its rights
or remedies hereunder shall have any different consequences under the laws of
the state where the Property is located than the exercise of rights or remedies
under any other security agreement under which a secured party has been granted
a security interest in other types of personal property.
4.5 COMPLIANCE WITH LAW. Trustor will preserve and keep in full force
-------------------
its existence, rights, and powers. Trustor will promptly and faithfully comply
with all present and future laws, ordinances, rules, regulations, and
requirements of every governmental authority or agency and of every board of
fire underwriters (or similar body exercising similar functions) having
jurisdiction that may be applicable to it or to the Property or to the use or
manner of occupancy, possession, operation, maintenance, alteration, or repair
of the Property or any part of it, whether the law, ordinance, rule, order,
regulation, or requirement necessitates structural changes or improvements or
interferes with the use or enjoyment of the Property.
4.6 BOOKS AND RECORDS. Trustor will maintain complete books of account
-----------------
and other records reflecting the results of Trustor's operations in a form
satisfactory to Beneficiary, and furnish to Beneficiary any information about
the financial condition of Trustor, and the sales and operations of the Property
as Beneficiary reasonably requests, including, but not limited to, the following
information, which will be furnished without request:
(a) within twenty (20) days after the end of each month, a statement
of revenues and expenses relating to all of Trustor's business operations for
the month just ended, including without limitation, operations of the Property
for the month just ended;
(b) as soon as available and in any event within sixty (60) days
after the end of each fiscal year of Trustor, a copy of the annual audit report
for the fiscal year for Trustor, including a balance sheet of Trustor as of the
end of the fiscal year, and statements of income and retained earnings and of
change in financial position of Trustor for the fiscal year, in each case
certified in a manner acceptable to Beneficiary by independent public
accountants acceptable to Beneficiary;
(c) promptly upon their becoming available, copies of all financial
statements, reports, and notices (including tax returns) sent by Trustor to its
partners or any governmental authority succeeding to any of its functions; and
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(d) promptly upon receipt, copies of any reports by independent
public accountants submitted to Trustor concerning its properties or operations.
Beneficiary will have the right, at all reasonable times and on reasonable
notice, to audit, at Trustor's sole cost and expense, Trustor's books of account
and records, all of which will be made available to Beneficiary and
Beneficiary's representatives for that purpose, from time to time, on
Beneficiary's request. Trustor's failure to comply with the requirements of this
Section 4.6 within fifteen (15) days after written notice from Beneficiary shall
-----------
be an Event of Default hereunder. Notwithstanding the above, if the above
records and information are within the control of any third party operator,
Trustor shall not be in default hereunder so long as Trustor exercises
commercially reasonable efforts to require such operator to provide such
information under its lease or other operative agreement with Trustor.
4.7 FURTHER ASSURANCES. Trustor, at Trustor's expense and at any time on
------------------
the reasonable request of Beneficiary, will execute, acknowledge, and deliver
any additional papers and instruments (including, without limitation, a
declaration of no setoff) and any further assurances of title and will do or
cause to be done all further acts and things that may be proper or reasonably
necessary to carry out the purpose of this Deed of Trust and of the Loan
Documents and to subject to the liens any property intended by the terms to be
covered and any renewals, additions, substitutions, replacements, or
betterments.
4.8 STATEMENT BY TRUSTOR. Trustor, on ten (10) days' written request,
--------------------
will furnish a statement of the amount due or outstanding on the Note and a
statement of any offsets, counterclaims, or defenses to the payment.
4.9 INDEMNITY. In addition to any other indemnifications provided
---------
herein or in the other Loan Documents, Trustor shall protect, defend, indemnify
and save harmless Beneficiary and Trustee from and against all liabilities,
obligations, claims, demands, damages, penalties, causes of action, losses,
fines, costs and expenses (including, without limitation, reasonable attorneys'
fees and disbursements whether or not suit is filed), imposed upon or incurred
by or asserted against Beneficiary or Trustee by reason of (a) ownership of this
Deed of Trust, the Property or any interest therein or receipt of any Payments;
(b) any accident, injury to or death of persons or loss of or damage to property
occurring in, on or about the Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;
(c) any use, nonuse or condition in, on or about the Property or any part
thereof or on adjoining sidewalks, curbs, adjacent property or adjacent parking
areas, streets or ways; (d) any failure on the part of Trustor or Trustee to
perform or comply with any of the terms of this Deed of Trust; (e) performance
of any labor or services or the furnishing of any materials or other property in
respect of the Property or any part thereof; (f) the presence, disposal, escape,
seepage, leakage, spillage, discharge, emission, release, or threatened release
of any Hazardous Substance on, from or affecting the Property; (g) any personal
injury (including wrongful death) or property damage (real or personal) arising
out of or related to such Hazardous Substance; (h) any lawsuit brought or
threatened, settlement reached, or government order relating to such Hazardous
Substance; (i) any violation of the Hazardous Substance Laws, which are based
upon or in any way related to
-17-
such Hazardous Substance including, without limitation, the costs and expenses
of any remedial work, attorney and consultant fees and disbursements,
investigation and laboratory fees, court costs, and litigation expenses; (j) any
failure of the Property to comply with any Access Laws; (k) any representation
or warranty made in the Note, this Deed of Trust or any of the other Loan
Documents being false or misleading in any material respect as of the date such
representation or warrant was made; (l) any claim by brokers, finders or similar
persons claiming to be entitled to a commission in connection with the Loan or
other transaction involving the Property or any part thereof under any legal
requirement or any liability asserted against Beneficiary with respect thereto;
and (m) the claims of any lessee of any portion of the Property or any person
acting through or under any lessee or otherwise arising under or as a
consequence of any Leases. Any amounts payable to Beneficiary or Trustee by
reason of the application of this paragraph shall be secured by this Deed of
Trust and shall become immediately due and payable and shall bear interest at
the Default Rate from the date loss or damage is sustained by Beneficiary or
Trustee until paid. The obligations and liabilities of Trustor under this
Section 4.9 shall survive the termination, satisfaction, or assignment of this
-----------
Deed of Trust and the exercise by Beneficiary of any of its rights or remedies
hereunder, including, but not limited to, the acquisition of the Property by
foreclosure or a conveyance in lieu of foreclosure.
4.10 REIMBURSEMENT. Beneficiary will have the right to declare
-------------
immediately due any amount paid by it for any Impositions, tax, stamp tax,
assessment, water rate, sewer rate, Insurance Premium, repair, rent charge,
debt, claim, inspection, or lien having priority over this Deed of Trust, or
over any other agreement given to secure the Indebtedness.
4.11 LITIGATION. Trustor will promptly give written notice to Beneficiary
----------
of any litigation commenced or threatened affecting Trustor or the Property
other than unlawful detainer proceedings brought by Trustor.
4.12 TAX RECEIPTS. Subject to the provisions of Section 4.4 of this Deed
------------ -----------
of Trust, Trustor will exhibit to Beneficiary, within seven (7) days after
demand, bills (that will be receipted from and after the date receipted bills
are obtainable) showing the payment to the extent then due of all taxes,
assessments (including those payable in periodic installments), water rates,
sewer rates, or any other Imposition that may have become a lien on the Property
or any Personalty prior to the lien of this Deed of Trust.
4.13 DUPLICATE PLANS. Trustor will submit to Beneficiary a duplicate set
---------------
of plans and specifications for approval before any material improvements,
repairs, or alterations are begun that affect the Property.
4.14 ADDITIONAL INFORMATION. Trustor will furnish to Beneficiary, within
----------------------
seven (7) days after written request, all information that Beneficiary may
request concerning the performance by Trustor of the covenants of the Loan
Documents, and Trustor will permit Beneficiary or its representatives at all
reasonable times to make investigation or examination concerning that
performance.
-18-
4.15 RIGHT OF ENTRY. Trustor grants to Beneficiary and its agents,
--------------
employees, consultants, and contractors the right to enter on the Property for
the purpose of making any inspections, reports, tests (including, without
limitation, soils borings, groundwater testing, xxxxx, or soils analysis),
inquiries, and reviews that Beneficiary, in its sole and absolute discretion,
deems necessary to assess the then current condition of the Property.
Beneficiary will provide Trustor with one (1) business day's notice of the
entry. However, Trustor's consent will not be required for entry or for the
performance of tests. All costs, fees, and expenses (including, without
limitation, those of Beneficiary's outside counsel and consultants) incurred by
Beneficiary with respect to the inspections, reports, tests, inquiries, and
reviews, together with all related preparation, consultation, analyses, and
review, will be paid by Trustor to Beneficiary on demand, will accrue interest
at the Default Rate until paid, and will be secured by this Deed of Trust, prior
to any right, title, or interest in or claim on the Property attaching or
accruing subsequent to the lien of this Deed of Trust.
4.16 HANDICAPPED ACCESS.
------------------
(a) The Property shall at all times strictly comply to the extent
applicable with the requirements of the Americans with Disabilities Act of 1990,
the Fair Housing Amendments Act of 1988 (if applicable), all state and local
laws and ordinances related to handicapped access and all rules, regulations,
and order issued pursuant thereto including, without limitation, the Americans
with Disabilities Act Accessibility Guidelines for Buildings and Facilities
(collectively, "ACCESS LAWS").
(b) Trustor agrees to give prompt notice to Beneficiary of the
receipt by Trustor of any complaints related to violation of any Access Laws and
of the commencement of any proceedings or investigations which relate to
compliance with applicable Access Laws.
4.17 TAXED AS PARTNERSHIP. Trustor will continue to be taxed as a
--------------------
partnership for income tax purposes during the term of this Deed of Trust.
4.18 LIMITED LIABILITY COMPANY FILINGS. Trustor will make all filings as
---------------------------------
required under the laws of the state where the Property is located concerning
foreign limited liability companies, and deliver same to Beneficiary within ten
(10) days of filing.
4.19 THIRD PARTY OPERATOR. Trustor will preserve and keep in full force
--------------------
and effect that certain Skilled Nursing Facility Lease dated September 12, 1997
between Trustor, as lessor, and Kimburida Management Group, an Idaho joint
venture, organized as an Idaho general partnership made up of Northwest Bec-
Corp, a Nevada corporation licensed to do business in Idaho, general partner,
and XxXxxx Grain, Inc., an Idaho corporation, general partner, as lessee, with
respect to the operation of the Property as a nursing care facility, or will
enter into and keep in full force and effect and maintain during the entire term
of the Loan a lease with such other third party operator which is acceptable to
Beneficiary (which acceptance shall have been obtained from Beneficiary in
writing prior to entering into such lease) concerning the operation of the
Property as a nursing care facility.
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5. NEGATIVE COVENANTS. Until the entire Indebtedness has been paid in full,
------------------
Trustor covenants to and agrees with Beneficiary as follows:
5.1 RESTRICTIVE USES. Trustor covenants not to initiate, join in, or
----------------
consent to any change in any zoning ordinance, private restrictive covenant,
assessment proceedings, or other public or private restriction limiting or
restricting the uses that may be made of the Property or any part of it without
the prior written consent of Beneficiary.
5.2 OTHER FINANCING. Except for the liens securing the Indebtedness,
---------------
Trustor will not create or permit to continue in existence any mortgage, pledge,
encumbrance, lien, or charge of any kind (including purchase money and
conditional sale liens) on any of the Property except for:
(a) liens for taxes not yet delinquent, and
(b) any other liens or charges that are specifically approved in
writing by Beneficiary prior to the recordation.
Any transaction in violation of this section will cause all Indebtedness,
irrespective of the maturity dates, at the option of the holder and without
demand or notice, to immediately become due, together with any prepayment
premium in accordance with the terms of the Note.
5.3 TRANSFER OR ENCUMBRANCE OF THE PROPERTY.
---------------------------------------
(a) Trustor acknowledges that Beneficiary has examined and relied on
the creditworthiness and experience of Trustor in owning and operating the
Property in agreeing to make the Loan, and that Beneficiary will continue to
rely on Trustor's ownership of the Property as a means of maintaining the value
of the Property as security for repayment of the Indebtedness. Trustor
acknowledges that Beneficiary has a valid interest in maintaining the value of
the Property so as to ensure that, should Trustor default in the repayment of
the Indebtedness, Beneficiary can recover the Indebtedness by a sale of the
Property. Trustor shall not, without the prior written consent of Beneficiary,
sell, convey, alienate, mortgage, encumber, pledge or otherwise transfer the
Property or any part thereof, or permit the Property or any part thereof to be
sold, conveyed, alienated, mortgaged, encumbered, pledged or otherwise
transferred.
(b) A sale, conveyance, alienation, mortgage, encumbrance, pledge or
transfer within the meaning of this Section 5.3 shall be deemed to include (i)
-----------
an installment sales agreement wherein Trustor agrees to sell the Property or
any part thereof for a price to be paid in installments; (ii) an agreement by
Trustor leasing all or a substantial part of the Property for other than actual
occupancy by a space tenant thereunder or a sale, assignment or other transfer
of, or the grant of a security interest in, Trustor's right, title and interest
in and to any Leases or any Payments; (iii) if Trustor or any general partner or
managing member of Trustor is a corporation, the voluntary or involuntary sale,
conveyance or transfer of such corporation's stock (or the stock of any
corporation directly or indirectly controlling such corporation by operation of
law or otherwise) or the creation or issuance of new stock in one or a series of
transactions by which an aggregate of more than 50% of such
-20-
corporation's stock shall be vested in a party or parties who are not now
stockholders or any change in the control of such corporation; (iv) if Trustor
or any general partner of Trustor is a limited or general partnership, joint
venture or limited liability company, the change, removal, resignation or
addition of a general partner, managing partner, or joint venturer or the
transfer of any ownership interest of any general partner, managing partner or
joint venturer or the transfer, assignment or pledge of any ownership interest
of any general partner, managing partner or joint venturer; (v) if Trustor is a
limited partnership, the voluntary or involuntary sale, conveyance, transfer or
pledge of any limited partnership interests or the creation or issuance of new
limited partnership interests, by which an aggregate of more than 50% of such
limited partnership interests are held by parties who are not currently limited
partners; or (vi) if Trustor is a limited liability company, the voluntary or
involuntary sale, conveyance or transfer of more than 50% of the members'
interests. Notwithstanding anything herein to the contrary, the following
transfers of ownership interests in any Trustor entity shall be permitted
transfers hereunder without Beneficiary's consent and shall not constitute a
default hereunder: (i) any transfers into or out of a trust, family limited
partnership, or other similar entity or device for tax or estate planning
purposes; and (ii) any transfers resulting from the death of an individual,
including without limitation, pursuant to a will, trust or intestate proceeding.
(c) Beneficiary shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order
to declare the Indebtedness immediately due and payable upon Trustor's sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Property without Beneficiary's consent. This provision shall apply to every
sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Property regardless of whether voluntary or not, or whether or not Beneficiary
has consented to any previous sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer of the Property.
(d) Beneficiary's consent to one sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer of the Property shall not be deemed to
be a waiver of Beneficiary's right to require such consent to any future
occurrence of same. Any sale, conveyance, alienation, mortgage, encumbrance,
pledge or transfer of the Property made in contravention of this Section shall
be null and void and of no force and effect.
(e) Trustor agrees to bear and shall pay or reimburse Beneficiary on
demand for all reasonable expenses (including, without limitation, reasonable
attorneys' fees and disbursements, title search costs and title insurance
endorsement premiums) incurred by Beneficiary in connection with the review,
approval and documentation of any such sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer.
(f) Beneficiary's consent to the sale or transfer of the Property
will not be unreasonably withheld after consideration of all relevant factors,
provided that:
-21-
(i) no Event of Default or event which with the giving of
notice or the passage of time would constitute an Event
of Default shall have occurred and remain uncured;
(ii) the proposed transferee ("TRANSFEREE") shall be a
reputable entity or person of good character,
creditworthy, with sufficient financial worth considering
the obligations assumed and undertaken, as evidenced by
financial statements and other information reasonably
requested by Beneficiary;
(iii) the Transferee and its property manager (if any) shall
have sufficient experience in the ownership and
management of properties similar to the Property, and
Beneficiary shall be provided with reasonable evidence
thereof;
(iv) the Transferee shall have executed and delivered to
Beneficiary an assumption agreement in form and substance
acceptable to Beneficiary, evidencing such Transferee's
agreement to abide and be bound by the terms of the Note,
this Deed of Trust and the other Loan Documents, together
with such legal opinions and title insurance endorsements
as may be reasonably requested by Beneficiary; and
(v) Beneficiary shall have received the payment of all costs
and expenses incurred by Beneficiary in connection with
such assumption (including reasonable attorneys' fees and
costs).
5.4 REPLACEMENT OF FIXTURES AND PERSONALTY. Trustor will not permit any
--------------------------------------
of the Fixtures or Personalty to be removed at any time from the Property
without the prior written consent of Beneficiary unless actually replaced by
articles of equal suitability and value owned by Trustor free and clear of any
lien or security interest except as may be approved in writing by Beneficiary.
5.5 LIMITED LIABILITY COMPANY CHANGES. Trustor will make no material
---------------------------------
changes nor materially amend or modify Trustor's articles of organization or
operating agreement without first obtaining Beneficiary's prior written consent
(which consent shall not be unreasonably withheld or delayed), nor compromise
any members' obligations to contribute capital or enter into any merger or
consolidation without first obtaining Beneficiary's prior written consent of
same. Trustor will in writing immediately notify Beneficiary of any planned or
anticipated dissolution of Trustor or of any event likely to result in
dissolution of Trustor.
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6. ENVIRONMENTAL PROVISIONS.
------------------------
6.1 REPRESENTATIONS AND WARRANTIES. Except as disclosed in writing to,
------------------------------
and acknowledged in writing by, Beneficiary, Trustor represents and warrants
that:
(a) during the period of Trustor's ownership of the Property:
(1) there has been no use, generation, manufacture, storage,
treatment, disposal, discharge, Release, or threatened Release of any Hazardous
Substance by any person on or around the Property; and
(2) there have been no Hazardous Substances transported over or
through the Property;
(b) after diligent inquiry, Trustor has no knowledge of, or reason to
believe that, there has been:
(1) any use, generation, manufacture, storage, treatment,
disposal, Release, or threatened Release of any hazardous waste or substance by
any prior owners or prior occupants of the Property or by any third parties onto
the Property; or
(2) any actual or threatened litigation or claims of any kind by
any person relating to these matters;
(c) no Hazardous Substances in excess of permitted levels or
reportable quantities under applicable Hazardous Substance Laws are present in
or about the Property or any nearby real property that could migrate to the
Property;
(d) no Release or threatened Release exists or has occurred;
(e) no underground storage tanks of any kind are or ever have been
located in or about the Property;
(f) the Property and all operations and activities at, and the use
and occupancy of, the Property, comply with all applicable Hazardous Substance
Laws;
(g) Trustor and every User has, and is now in strict compliance with,
every permit, license, and approval required by all applicable Hazardous
Substance Laws for all activities and operations at, and the use and occupancy
of, the Property;
(h) to the best of Trustor's knowledge, after diligent inquiry, there
are no Hazardous Substance Claims pending or threatened with regard to Property
or against Trustor or any Loan Parties;
-23-
(i) the Property has not been nor is it within 2,000 feet of any
other property designated as hazardous waste property or border zone property
pursuant to the laws of the state where the Property is located, and no
proceedings for a determination of this designation are pending or threatened;
(j) to the best of its knowledge after diligent inquiry, there exists
no occurrence or condition on any real property adjoining or within 2,000 feet
of the Property that would cause the Property or any part of it to be designated
as hazardous waste property or border zone property under the laws of the state
where the Property is located;
(k) that the current use of the Property is as a nursing care
facility;
(l) any written disclosure submitted by or on behalf of Trustor to
Beneficiary concerning any Release or threatened Release, past or present
compliance by Trustor, or any User or other person of any Hazardous Substance
Laws applicable to the Property, the past and present use and occupancy of the
Property, and any environmental concerns relating to the Property, was true and
complete when submitted and continues to be true and complete as of the date of
this Deed of Trust.
6.2 COVENANTS. Trustor agrees, except in the ordinary course of business
---------
and in strict compliance with all applicable Hazardous Substance Laws, as
follows:
(a) not to cause or permit the Property to be used as a site for the
use, generation, manufacture, storage, treatment, Release, discharge, disposal,
transportation, or presence of any Hazardous Substance;
(b) not to cause, contribute to, permit, or acquiesce in any Release
or threatened Release;
(c) not to change or modify the use of the Property without the prior
written consent of Beneficiary;
(d) to comply with and to cause the Property and every User of the
Property to comply with all Hazardous Substance Laws;
(e) to immediately notify Beneficiary in writing and to provide
Beneficiary with a reasonably detailed description of:
(1) any noncompliance of the Property with any Hazardous
Substance Laws;
(2) any Hazardous Substance Claim;
(3) any Release or threatened Release;
-24-
(4) the discovery of any occurrence or condition on any real
property adjoining or in the vicinity of the Property that would cause the
Property or any part of it to be designated as hazardous waste property or
border zone property under the laws of the state where the Property is located;
(f) in the event that Trustor discovers a Release or the presence of
any Hazardous Substance on or about the Property in violation of any Hazardous
Substance Law, to:
(1) notify Beneficiary of that discovery together with a
reasonably detailed description;
(2) promptly after a request by Beneficiary, engage a qualified
environmental engineer reasonably satisfactory to Beneficiary to investigate
these matters and prepare and submit to Beneficiary a written report containing
the findings and conclusions resulting from that investigation, all at the sole
expense of Trustor; and
(3) take, at Trustor's sole expense, all necessary actions to
remedy, repair, clean up, or detoxify any Release or Hazardous Substance,
including, but not limited to, any remedial action required by any Hazardous
Substance Laws or any judgment, consent, decree, settlement, or compromise in
respect of any Hazardous Substance Claims, these actions to be performed:
(i) in accordance with Hazardous Substance Laws;
(ii) in a good and proper manner;
(iii) under the supervision of a qualified environmental
engineer approved in writing by Beneficiary;
(iv) in accordance with plans and specifications for these
actions approved in writing by Beneficiary; and
(v) using licensed and insured qualified contractors
approved in writing by Beneficiary;
(g) immediately furnish to Beneficiary copies of all written
communications received by Trustor from any governmental authority or other
person or given by Trustor to any person and any other information Beneficiary
may reasonably request concerning any Release, threatened Release, Hazardous
Substance Claim, or the discovery of any Hazardous Substance on or about the
Property in violation of any Hazardous Substance Law; and
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(h) keep Beneficiary generally informed regarding any Release,
threatened Release, Hazardous Substance Claim, or the discovery of any Hazardous
Substance on or about the Property in violation of any Hazardous Substance Law.
6.3 ENVIRONMENTAL MONITORING. Trustor shall permit Beneficiary to join
------------------------
and participate in, as a party if it so elects, any legal proceedings or action
initiated with respect to the Property in connection with any Hazardous
Substance Law or Hazardous Substance, and Trustor shall pay all attorneys' fees
and disbursements incurred by Beneficiary in connection therewith. Upon
Beneficiary's request, at any time and from time to time while this Deed of
Trust is in effect, but not more frequently than once per calendar year, unless
Beneficiary has determined (in the exercise of its good faith judgment) that
reasonable cause exists for the performance of an environmental inspection or
audit of the Property, Trustor shall provide at Trustor's sole expense an
inspection or audit of the Property prepared by a licensed hydrogeologist or
licensed environmental engineer approved by Beneficiary indicating the presence
or absence of Hazardous Substances in, or near the Property. If Trustor fails
to provide such inspections or audits within thirty (30) days after such
request, Beneficiary may order same, and Trustor hereby grants to Beneficiary
and its employees and agents access to the Property and a license to undertake
those inspections or audits. The cost of such inspections or audits shall be
added to the principal balance of the sums due under the Note and this Deed of
Trust and shall bear interest thereafter until paid at the Default Rate (as
defined in the Note). In the event that any environmental site assessment
report prepared in connection with such inspection or audit recommends that an
operations and maintenance plan be implemented for any Hazardous Substance,
Trustor shall cause such operations and maintenance plan to be prepared and
implemented at Trustor's expense upon request of Beneficiary. Trustor shall
commence and thereafter diligently prosecute to completion any remedial work
within thirty (30) days after written demand by Beneficiary for performance
thereof (or any such shorter period of time as may be required under applicable
law). All remedial work shall be performed by contractors approved in advance
by Beneficiary, and under the supervision of a consulting engineer approved by
Beneficiary. All costs and expenses of such remedial work shall be paid by
Trustor including, without limitation, Beneficiary's reasonable attorneys' fees
and costs incurred in connection with monitoring or review of such remedial
work. In the event Trustor shall fail to timely commence, or cause to be
commenced, or fail to diligently prosecute to completion, such remedial work,
Beneficiary may, but shall not be required to, cause such remedial work to be
performed, and all costs and expenses thereof, or incurred in connection
therewith, shall become part of the Indebtedness and shall bear interest
thereafter until paid at the Default Rate.
6.4 INSPECTION AND RECEIVERSHIP RIGHTS. Upon Beneficiary's reasonable
----------------------------------
belief of the existence of a past or present Release or threatened Release not
previously disclosed by Trustor in connection with the making of the Loan or the
execution of this Deed of Trust or upon Beneficiary's reasonable belief that
Trustor has failed to comply with any environmental provision of this Deed of
Trust or any other Loan Document and upon reasonable prior notice (except in the
case of an emergency) to Trustor, Beneficiary or its representatives, employees,
and agents, may from time to time and at all reasonable times (or at any time in
the case of an
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emergency) enter and inspect the Property and every part of it (including all
samples of building materials, soil, and groundwater, and all books, records,
and files of Trustor relating to the Property) and perform those acts and things
that Beneficiary deems necessary or desirable to inspect, investigate, assess,
and protect the security of this Deed of Trust, for the purpose of determining:
(a) the existence, location, nature, and magnitude of any past or
present Release or threatened Release;
(b) the presence of any Hazardous Substances on or about the Property
in violation of any Hazardous Substance Law; and
(c) the compliance by Trustor of every environmental provision of
this Deed of Trust and every other Loan Document. In furtherance of the purposes
above, without limitation of any of its other rights, Beneficiary may:
(1) obtain a court order to enforce Beneficiary's right to enter
and inspect the Property under the laws of the state where the Property is
located, to which the decision of Beneficiary as to whether there exists a
Release, a threatened Release, any Hazardous Substances on or about the Property
in violation of any Hazardous Substance Law, or a breach by Trustor of any
environmental provision of this Deed of Trust or any other Loan Document, will
be deemed reasonable and conclusive as between the parties; and
(2) have a receiver appointed to enforce Beneficiary's right to
enter and inspect the Property for the purpose set forth above.
All costs and expenses incurred by Beneficiary with respect to the audits,
tests, inspections, and examinations that Beneficiary or its agents,
representatives, or employees may conduct, including the fees of the engineers,
laboratories, contractors, consultants, and attorneys, will be paid by Trustor.
All costs or expenses incurred by Trustee and Beneficiary pursuant to this
subsection (including without limitation court costs, consultant's fees, and
attorney fees, whether incurred in litigation and whether before or after
judgment) will bear interest at the Default Rate from the date they are incurred
until those sums have been paid in full. Except as provided by law, any
inspections or tests made by Beneficiary or its representatives, employees, and
agents will be for Beneficiary's purposes only and will not be construed to
create any responsibility or liability on the part of Beneficiary to Trustor or
to any other person. Beneficiary will have the right, but not the obligation, to
communicate with any governmental authority regarding any fact or reasonable
belief of Beneficiary that constitutes or could constitute a breach of any of
Trustor's obligations under any environmental provision contained in this Deed
of Trust or any Loan Document.
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6.5 RELEASE AND INDEMNITY. Trustor:
---------------------
(a) releases and waives any future claims against Beneficiary for
indemnity or contribution in the event Trustor becomes liable for cleanup or
other costs under any Hazardous Substance Laws or under any Hazardous Substance
Claim;
(b) agrees to reimburse Beneficiary, on demand, for all costs and
expenses incurred by Beneficiary in connection with any review, approval,
consent, or inspection relating to the environmental provisions in this Deed of
Trust together with interest, after demand, at the Default Rate; and
(c) agrees to indemnify, defend, and hold Beneficiary and Trustee
harmless from all losses, costs, claims, damages, penalties, liabilities, causes
of action, judgments, court costs, attorney fees and other legal expenses, costs
of evidence of title, cost of evidence of value, and other expenses
(collectively, "Expenses"), including, but not limited to, any Expenses incurred
or accruing after the foreclosure of the lien of this Deed of Trust, which
either may suffer or incur and which directly or indirectly arises out of or is
in any way connected with the breach of any environmental provision either in
this Deed of Trust or in any Loan Document or as a consequence of any Release or
threatened Release on the presence, use, generation, manufacture, storage,
disposal, transportation, Release, or threatened Release of any Hazardous
Substance on or about the Property, including the soils and groundwaters, caused
or permitted by Trustor, any prior owner or operator of the Property, any
adjoining landowner or any other party, including, without limitation, the cost
of any required or necessary repair, cleanup, remedy, or detoxification of any
Hazardous Substance and the preparation of any closure, remedial action, or
other required plans, whether that action is required or necessary by reason of
acts or omissions occurring prior to or following the recordation of this Deed
of Trust. Trustor's obligations will survive the satisfaction, release, or
cancellation of the Indebtedness, the release and reconveyance or partial
release and reconveyance of this Deed of Trust, and the foreclosure of the lien
of this Deed of Trust or deed in lieu of the Deed of Trust.
6.6 REQUEST FOR INFORMATION. Trustor and Beneficiary agree that:
-----------------------
(a) this Section 6.6 is intended as Beneficiary's written request for
-----------
information and Trustor's written response concerning the environmental
condition of the Property; and
(b) each representation, warranty, covenant, or indemnity made by
Trustor in this Section 6 or in any other provision of this Deed of Trust or any
---------
Loan Document that relates to the environmental condition of the Property is
intended by Trustor and Beneficiary to be an environmental provision for
purposes of the laws of the state where the Property is located and will survive
the payment of the Indebtedness and the termination or expiration of this Deed
of Trust and will not be affected by Beneficiary's acquisition of any interest
in the Property, whether by full credit bid at foreclosure, deed in lieu of
that, or otherwise. If there is
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any transfer of any portion of Trustor's interest in the Property, any
successor-in-interest to Trustor agrees by its succession to that interest that
the written request made pursuant to this Article will be deemed remade to the
successor-in-interest without any further or additional action on the part of
Beneficiary and that by assuming the debt secured by this Deed of Trust or by
accepting the interest of Trustor subject to the lien of this Deed of Trust, the
successor remakes each of the representations and warranties in this Deed of
Trust and agrees to be bound by each covenant in this Deed of Trust, including,
but not limited to, any indemnity provision.
6.7 EFFECT OF SITE ASSESSMENT. Even though Trustor may have provided
-------------------------
Beneficiary with an environmental site assessment or other environmental report
together with other relevant information regarding the environmental condition
of the Property, Trustor acknowledges and agrees that Beneficiary is not
accepting the Property as security for the Loan based on that assessment,
report, or information. Rather Beneficiary has relied on the representations and
warranties of Trustor in this Deed of Trust, and Beneficiary is not waiving any
of its rights and remedies in the environmental provisions of this Deed of Trust
or any other Loan Document.
7. CASUALTIES AND CONDEMNATION.
---------------------------
7.1 CASUALTIES.
----------
(a) Trustor will promptly notify Beneficiary in writing after any
loss or damage caused by fire or other casualty to the Property, and prior to
the making of any repairs. Trustor will furnish to Beneficiary within sixty (60)
days after the loss or damage the following:
(1) evidence satisfactory to Beneficiary of the cost of repair
or reconstruction;
(2) evidence satisfactory to Beneficiary that sufficient funds
are available or committed for the benefit of Beneficiary, including insurance
proceeds, payment and performance bonds, or otherwise, to complete the repair or
reconstruction; and
(3) evidence satisfactory to Beneficiary that the repair or
reconstruction may be completed in accordance with all applicable laws, rules,
regulations, and ordinances and that all necessary permits and approvals have
been or will be obtained.
If Trustor does not furnish this evidence to Beneficiary within the sixty-
day period, or if Beneficiary in its reasonable discretion determines that
repair or reconstruction is not economically feasible, then within sixty (60)
days after the expiration of the sixty-day period, Beneficiary will have the
option ("REPAYMENT OPTION") to have all insurance proceeds applied against the
Indebtedness. If Beneficiary elects the Repayment Option, Trustor will
immediately transfer to Beneficiary all insurance proceeds received by it, if
any, to the extent of the Indebtedness, and Beneficiary will apply the insurance
proceeds received by it, if any, against
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the Indebtedness. If the insurance proceeds held by Trustor and Beneficiary
exceed the Indebtedness, any excess insurance proceeds will belong and be paid
over to, or be retained, by Trustor.
(b) If Beneficiary does not elect the Repayment Option within the
specified time period, Trustor will, with all diligence, repair or otherwise
reconstruct the damage to the Property, all according to the original plans and
specifications for the Improvements or any modified plans and specifications
conforming to the then laws and regulations as will first have been approved in
writing by Beneficiary and any occupants of the Improvements having the right to
approve. Beneficiary will use all insurance proceeds, if any, received by it
relating to the damage or destruction to reimburse Trustor from time to time for
expenditures made for repair of the damage or for the erection of any building,
structure, or improvements in their place if permitted as follows:
(1) At the end of each month against Trustor's architect's
certificate, an amount that will be that proportion of the insurance proceeds
held in trust that ninety percent (90%) of the payments to be made to the
contractors or materialmen for work done, materials supplied, and services
rendered during that month bears to the total contract price.
(2) At the completion of the work, the balance of the proceeds
required for completing the payments for the work will be paid to or for the
account of Trustor, provided that at the time of the payment:
(i) there are no liens (as evidenced by an endorsement
satisfactory to Beneficiary issued by Trustee) against the Property by reason of
the work, or proof satisfactory to Beneficiary has been submitted that all costs
of the work have been paid; and
(ii) Trustor's architect will certify that all required work
is completed and is proper and of a quality and class of the original work
required by the original plans and specifications and in accordance with the
approved plans and specifications.
If the insurance proceeds exceed the costs of completing the work, the
excess insurance proceeds will belong and be retained by or be paid over to
Beneficiary to be applied against the Indebtedness. If the costs of completing
the work exceed the insurance proceeds, Trustor will, no later than ninety (90)
days before commencement of the work, provide evidence satisfactory to
beneficiary that Trustor has the funds to complete the work and shall, before
commencement of the work, deposit with Beneficiary said funds which shall be
used to reimburse Trustor in the same manner as insurance proceeds.
7.2 CONDEMNATION. Trustor, immediately upon obtaining knowledge of the
------------
institution of any proceedings for the condemnation of the Property or any
portion of it, will notify Trustee and Beneficiary of the pendency of the
proceedings. Trustee and Beneficiary
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may participate in any proceedings and Trustor from time to time will deliver to
Beneficiary all instruments requested by Beneficiary to permit participation. If
there are condemnation proceedings, the award or compensation payable is
assigned to and will be paid to Beneficiary. Beneficiary will be under no
obligation to question the amount of any award or compensation and may accept it
in the amount in which it is paid. In any condemnation proceedings, Beneficiary
may be represented by counsel selected by Beneficiary. The proceeds of any award
or compensation received will be paid over to Trustor for restoration of the
Improvements in accordance with the provisions of Section 7.1 of this Deed of
-----------
Trust or, if the Improvements will not be restored, will be applied, without
premium, to the prepayment of the Note.
8. EVENTS OF DEFAULT AND REMEDIES OF BENEFICIARY.
---------------------------------------------
8.1 EVENTS OF DEFAULT. The following events are each an Event of
-----------------
Default:
(a) Default in the payment of any sum of principal or interest when
due under the Note or any other sum due under the Loan Documents, provided that
such failure continues for five (5) business days after written notice of such
default.
(b) The failure (without cure during the applicable period, if any,
for cure) of any Loan Party to observe, perform, or discharge any obligation,
term, covenant, or condition of the Loan Documents, any agreement relating to
the Property, or any agreement or instrument between any Loan Party and
Beneficiary, provided that such failure continues for thirty (30) days after
written notice of such default, or such longer period of time up to one-hundred
twenty (120) days to cure such default if Trustor commences a cure within such
30 day period and thereafter diligently prosecutes such cure to completion.
(c) The entry of an order for relief under federal bankruptcy laws as
to Trustor or the adjudication of Trustor as insolvent or bankrupt pursuant to
the provisions of any state insolvency or bankruptcy act; the commencement by
Trustor of any case, proceeding, or other action seeking any reorganization,
arrangement, composition, adjustment, liquidation, dissolution, or other relief
for debtors; Trustor's consent to, acquiescence in, or attempt to secure the
appointment of, any Receiver of all or any substantial part of its properties or
of the Property; Trustor's generally not paying its debts as they become due or
admitting in writing its inability to pay its debts or making a general
assignment for the benefit of creditors; or Trustor's taking of any action to
authorize any of the acts set forth above in this section.
(d) Any case, proceeding, or other action against Trustor is
commenced, seeking to have an order for relief entered against it as a debtor or
seeking any reorganization, arrangement, composition, adjustment, liquidation,
dissolution, or similar relief under any present or future statute, law, or
regulation relating to bankruptcy, insolvency, reorganization, or other relief
for debtors, or seeking appointment of any Receiver for Trustor or for all or
any substantial part of its property or for the Property, and that case,
proceeding, or other action:
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(1) results in the entry of an order for relief against it that
is not fully stayed within sixty (60) days after the entry, or
(2) remains undismissed for an aggregate of sixty (60) days
(whether or not consecutive);
or the possibility that any portion of the Property would, by operation of law
or otherwise, devolve on or pass to any Person other than Trustor and that
situation continues and is not remedied by Trustor within sixty (60) days after
the happening of the event.
(e) The assignment by Trustor, as lessor or sublessor, as the case
may be, of the rents or the income of the Property or any part of it (other than
to Beneficiary) without first obtaining the written consent of Beneficiary.
(f) The following events:
(1) The filing of any claim or lien against the Property or any
part of it, whether or not the lien is prior to this Deed of Trust, and the
continued maintenance of the claim or lien for a period of sixty (60) days
without discharge, satisfaction, or adequate bonding in accordance with the
terms of this Deed of Trust;
(2) the existence of any interest in the Property other than
those of Trustor, Beneficiary, and any tenants of Trustor; or
(3) the sale, hypothecation, conveyance, or other disposition of
the Property except in accordance with Sections 5.2 or 5.3 of this Deed of
-------------------
Trust, any of which will be an Event of Default because Trustor's obligation to
own and operate the Property is one of the inducements to Beneficiary to make
the Loan;
(g) Default under any agreement to which Trustor is a party, which
agreement relates to the borrowing of money by Trustor from any Person.
(h) Any representation or warranty made by any Loan Party or any
other Person under this Deed of Trust or in, under, or pursuant to the Loan
Documents, is false or misleading in any material respect as of the date on
which the representation or warranty was made.
(i) Any of the Loan Documents, at any time after their respective
execution and delivery and for any reason, cease to be in full force or are
declared null and void, or the validity or enforceability is contested by any
Loan Party or any stockholder or partner of any Loan Party, or any Loan Party
denies that it has any or further liability or obligation under any of the Loan
Documents to which it is a party.
-32-
(j) Any of the Security Documents, at any time after their respective
execution and delivery and for any reason, cease to constitute valid and
subsisting liens or valid and perfected security interests in and to the
property purported to be subject to any of the Security Documents;
(k) Any representation made by any Loan Party in the Certification
Agreement is false or misleading in any material respect as of the date made, or
any breach or default in any of Trustor's obligations under the Certification
Agreement.
(l) The occurrence of any Material Adverse Change.
If one or more Event of Default occurs and is continuing, then Beneficiary
may declare all the Indebtedness to be due and the Indebtedness will become due
without any further presentment, demand, protest, or notice of any kind, and
Beneficiary may:
(1) in person, by agent, or by a receiver, and without regard to
the adequacy of security, the solvency of Trustor, or the existence of waste,
enter on and take possession of the Property or any part of it in its own name
or in the name of Trustee, xxx for or otherwise collect the rents, issues, and
profits, and apply them, less costs and expenses of operation and collection,
including reasonable attorney fees, upon the Indebtedness, all in any order that
Beneficiary may determine. The entering on and taking possession of the
Property, the collection of rents, issues, and profits, and the application of
them will not cure or waive any default or notice of default or invalidate any
act done pursuant to the notice;
(2) commence an action to foreclose this Deed of Trust in the
manner provided by law for the foreclosure of mortgages of real property and
following any sale under judicial foreclosure, bring actions, suits and
proceedings against Trustor and any other Loan Parties, for any amount by which
the unpaid balance of the Indebtedness secured by this Deed of Trust exceeds the
net proceeds payable to Beneficiary, and Beneficiary shall be entitled to a
deficiency judgment in such amount;
(3) deliver to Trustee a written declaration of default and
demand for sale, and a written notice of default and election to cause the
Property to be sold, which notice Trustee or Beneficiary will cause to be filed
for record;
(4) with respect to any Personalty, proceed as to both the real
and personal property in accordance with Beneficiary's rights and remedies in
respect of the Land, or proceed to sell the Personalty separately and without
regard to the Land in accordance with Beneficiary's rights and remedies; or
(5) exercise any of these remedies in combination or any other
remedy at law or in equity.
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8.2 POWER OF SALE.
-------------
(a) If Beneficiary elects to foreclose by exercise of the power of
sale in this Deed of Trust, Beneficiary will also deposit with Trustee this Deed
of Trust, the Note, and any receipts and evidence of expenditures made and
secured as Trustee may require. If notice of default has been given as then
required by law, and after lapse of the time that may then be required by law,
after recordation of the notice of default, Trustee, without demand on Trustor,
will, after notice of sale having been given as required by law, sell the
Property at the time and place of sale fixed by it in the notice of sale, either
as a whole or in separate parcels as Trustee determines, and in any order that
it may determine, at public auction to the highest bidder. Trustee may postpone
sale of all or any portion of the Property by public announcement at the time
and place of sale, and from time to time after that may postpone the sale by
public announcement at the time fixed by the preceding postponement, and without
further notice make the sale at the time fixed by the last postponement; or
Trustee may, in its discretion, give a new notice of sale. Beneficiary may
rescind any notice of default at any time before Trustee's sale by executing a
notice of rescission and recording it. The recordation of the notice will
constitute a cancellation of any prior declaration of default and demand for
sale and of any acceleration of maturity of Indebtedness affected by any prior
declaration or notice of default. The exercise by Beneficiary of the right of
rescission will not constitute a waiver of any default then existing or
subsequently occurring, or impair the right of Beneficiary to execute other
declarations of default and demand for sale, or notices of default and of
election to cause the Property to be sold, nor otherwise affect the Note or this
Deed of Trust, or any of the rights, obligations, or remedies of Beneficiary or
Trustee. After sale, Trustee will deliver to the purchaser its deed conveying
the property sold, but without any covenant or warranty, express or implied. The
recitals in the deed of any matters or facts will be conclusive proof of their
truthfulness. Any Person, including Trustor, Trustee, or Beneficiary, may
purchase at that sale. If allowed by law, Beneficiary, if it is the purchaser,
may turn in the Note at the amount owing on it toward payment of the purchase
price (or for endorsement of the purchase price as a payment on the Note if the
amount owing exceeds the purchase price). Trustor expressly waives any right of
redemption after sale that Trustor may have at the time of sale or that may
apply to the sale.
(b) Trustee, upon the sale, will make (without any covenant or
warranty, express or implied), execute and, after due payment made, deliver to a
purchaser and its heirs or assigns a deed or other record of interest, as the
case may be, to the Property sold, which will convey to the purchaser all the
title and interest of Trustor in the Property and will apply the proceeds of the
sale in payment:
(1) first, of the expenses of the sale together with the
expenses of the trust, including, without limitation, attorney fees, that will
become due on any default made by Trustor, and also any sums that Trustee or
Beneficiary have paid for procuring a search of the title to the Property
subsequent to the execution of this Deed of Trust; and
-34-
(2) second, in payment of the Indebtedness then remaining
unpaid, and the amount of all other monies with interest in this Deed of Trust
agreed or provided to be paid by Trustor.
Trustee will pay the balance or surplus of the proceeds of sale to Trustor
and its successors or assigns as its interests may appear.
8.3 PROOF OF DEFAULT. If there is a sale of the Property, or any part of
----------------
it, and the execution of a deed for it, the recital of default and of recording
notice of breach and election of sale, and of the elapsing of the required time
between the recording and the following notice, and of the giving of notice of
sale, and of a demand by Beneficiary that the sale should be made, will be
conclusive proof of the default, recording, election, elapsing of time, and the
due giving of notice, and that the sale was regularly and validly made on proper
demand by Beneficiary. Any deed with these recitals will be effectual and
conclusive against Trustor, its successors, and assigns, and all other Persons.
The receipt for the purchase money recited or in any deed executed to the
purchaser will be sufficient discharge to the purchaser from all obligations to
see to the proper application of the purchase money.
8.4 PROTECTION OF SECURITY. If an Event of Default occurs and is
----------------------
continuing, Beneficiary or Trustee, without limitation to do so, without notice
to or demand upon Trustor, and without releasing Trustor from any obligations or
defaults may:
(a) enter on the Property in any manner and to any extent that either
deems necessary to protect the security of this Deed of Trust;
(b) appear in and defend any action or proceeding purporting to
affect, in any manner, the Obligations or the Indebtedness, the security of this
Deed of Trust, or the rights or powers of Beneficiary or Trustee;
(c) pay, purchase, or compromise any encumbrance, charge, or lien
that in the judgment of Beneficiary or Trustee is prior or superior to this Deed
of Trust; and
(d) pay necessary expenses, employ counsel, and pay reasonable
attorney fees.
Trustor agrees to repay on demand all sums expended by Trustee or Beneficiary
pursuant to this section with interest at the Default Rate, and those sums, with
interest, will be secured by this Deed of Trust.
8.5 RECEIVER. If an Event of Default occurs and is continuing,
--------
Beneficiary, as a matter of strict right and without notice to Trustor or anyone
claiming under Trustor and without regard to the then value of the Property,
will have the right to apply ex parte or by noticed motion to any court having
jurisdiction to appoint a Receiver of the Property. Any Receiver will have all
the powers and duties of receivers in similar cases and all the powers
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and duties of Beneficiary in case of entry as provided in this Deed of Trust,
and will continue as such and exercise all those powers until the date of
confirmation of sale, unless the receivership is terminated sooner.
8.6 CURING THE DEFAULTS. If Trustor at any time fails to perform or
-------------------
comply with any of the terms, covenants, and conditions required on Trustor's
part to be performed and complied with under this Deed of Trust, the Note, any
of the other Loan Documents, or any other agreement that, under the terms of
this Deed of Trust, Trustor is required to perform, then Beneficiary, after ten
(10) days' notice to Trustor (or without notice if Beneficiary determines that
an emergency exists), and without waiving or releasing Trustor from any of the
Obligations, may, subject to the provisions of any of the agreements:
(a) make from its own funds any payments payable by Trustor and take
out, pay for, and maintain any of the insurance policies provided for; and
(b) perform any other acts on the part of Trustor to be performed and
enter on the Property for that purpose. The making by Beneficiary of payments
out of Beneficiary's own funds will not, however, be deemed to cure the default
by Trustor, and they will not be cured unless and until Trustor reimburses
Beneficiary for the payments. All sums paid and all reasonable costs and
expenses incurred by Beneficiary in connection with the performance of any act,
together with interest on unpaid balances at the Default Rate from the
respective dates of Beneficiary's making of each payment, will be added to the
principal of the Indebtedness, will be secured by the Security Documents and by
the lien of this Deed of Trust, prior to any right, title, or interest in or
claim on the Property attaching or accruing subsequent to the lien of this Deed
of Trust, and will be payable by Trustor to Beneficiary on demand.
8.7 INSPECTION RIGHTS. On reasonable notice (except in the case of an
-----------------
emergency), and without releasing Trustor from any obligation to cure any
default of Trustor, Beneficiary or its agents, representatives, and employees
acting by themselves or through a court-appointed receiver, may, from time to
time and at all reasonable times (or at any time in the case of an emergency)
enter and inspect the Property and every part of it (including all samples of
building materials, soil, and groundwater, and all books, records, and files of
Trustor relating to the Property) and perform any acts and things as Beneficiary
deems necessary or desirable to inspect, investigate, assess, and protect the
security of this Deed of Trust, for the purpose of determining:
(a) the existence, location, nature, and magnitude of any past or
present Release or threatened Release,
(b) the presence of any Hazardous Substances on or about the Property
in violation of any Hazardous Substance Law, and
(c) the compliance by Trustor of every environmental provision of
this Deed of Trust and every other Loan Document.
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In furtherance of these purposes, without limitation of any of its other
rights, Beneficiary may:
(a) obtain a court order to enforce Beneficiary's right to enter and
inspect the Property, to which the decision of Beneficiary as to whether there
exists a Release, threatened Release, any Hazardous Substances on or about the
Property in violation of any Hazardous Substance Law, or a breach by Trustor of
any environmental provision of this Deed of Trust or any other Loan Document,
will be deemed reasonable and conclusive as between Trustor, Trustee, and
Beneficiary; and
(b) have a receiver appointed to enforce Beneficiary's right to enter
and inspect the Property for Hazardous Substances.
All costs and expenses incurred by Beneficiary with respect to the audits,
tests, inspections, and examinations that Beneficiary or its agents,
representatives, or employees may conduct, including the fees of the engineers,
laboratories, contractors, consultants, and attorneys, will be paid by Trustor.
All costs or expenses incurred by Trustee and Beneficiary pursuant to this
subsection (including, without limitation, court costs, consultants fees, and
attorney fees, whether incurred in litigation and whether before or after
judgment) will bear interest at the Default Rate from the date they are incurred
until they have been paid in full. Except as provided by law, any inspections or
tests made by Beneficiary or its representatives, employees, and agents, will be
for Beneficiary's purposes only and will not be construed to create any
responsibility or liability on the part of Beneficiary to Trustor or to any
other person. Beneficiary will have the right, but not the obligation, to
communicate with any governmental authority regarding any fact or reasonable
belief of Beneficiary that constitutes or could constitute a breach of any of
Trustor's obligations under any environmental provision in this Deed of Trust or
any Loan Document.
8.8 JUDGMENT ON ENVIRONMENTAL PROVISION. Beneficiary or its agents,
-----------------------------------
representatives, and employees may seek a judgment that Trustor has breached its
covenants, representations, or warranties in Article 6 of this Deed of Trust or
---------
any other covenants, representations, or warranties that are deemed to be
environmental provisions under the laws of the state where the Property is
located (each an "ENVIRONMENTAL PROVISION"), by commencing and maintaining an
action or actions in any court of competent jurisdiction under the laws of the
state where the Property is located, whether commenced prior to or after
foreclosure of the lien of this Deed of Trust. Beneficiary or its agents,
representatives, and employees may also seek an injunction to cause Trustor to
xxxxx any action in violation of any Environmental Provision and may seek the
recovery of all costs, damages, expenses, fees, penalties, fines, judgments,
indemnification payments to third parties, and other out-of-pocket costs or
expenses actually incurred by Beneficiary (collectively, "ENVIRONMENTAL COSTS")
incurred or advanced by Beneficiary relating to the cleanup, remedy, or other
response action required by any Hazardous Substances Law, or any Hazardous
Substance Claim, or which Beneficiary believes necessary to protect the
Property. It will be conclusively presumed between Beneficiary and Trustor that
all Environmental Costs incurred or advanced by
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Beneficiary relating to the cleanup, remedy, or other response action of or to
the Property were made by Beneficiary in good faith. All Environmental Costs
incurred by Beneficiary under this subsection (including, without limitation,
court costs, consultant fees, and attorney fees, whether incurred in litigation
and whether before or after judgment) will bear interest at the Default Rate
from the date of expenditure until those sums have been paid in full.
Beneficiary will be entitled to bid, at any trustee's or foreclosure sale of the
Property, the amount of the costs, expenses, and interest in addition to the
amount of other Indebtedness.
8.9 WAIVE LIEN. Beneficiary or its agents, representatives, and
----------
employees may waive its lien against the Property or any portion of it,
including the Improvements and the Personal Property, to the extent that the
Property is found to be environmentally impaired under the laws of the state
where the Property is located, and to exercise all rights and remedies of an
unsecured creditor against Trustor and all of Trustor's assets and property for
the recovery of any deficiency and Environmental Costs, including, but not
limited to, seeking an attachment order under the laws of the state where the
Property is located. As between Beneficiary and Trustor, Trustor will have the
burden of proving that Trustor or any related party (or any affiliate or agent
of Trustor or any related party) was not in any way negligent in permitting the
Release or threatened Release of the Hazardous Substances.
8.10 REMEDIES CUMULATIVE. All remedies of Beneficiary provided for in
-------------------
this Deed of Trust are cumulative and will be in addition to all other rights
and remedies provided in the other Loan Documents or provided by law, including
any banker's lien and right of offset. The exercise of any right or remedy by
Beneficiary will not in any way constitute a cure or waiver of default, will not
invalidate any act done pursuant to any notice of default, nor will it prejudice
Beneficiary in the exercise of any of its rights unless, in the exercise of
those rights, Beneficiary collects the total amount of the Indebtedness.
9. SECURITY AGREEMENT.
------------------
9.1 GRANT OF SECURITY INTEREST. Trustor also grants to Beneficiary a
--------------------------
security interest in all of Trustor's right, title, and interest now owned or
later acquired to the following property (collectively, "COLLATERAL") now or
later affixed to or located on the Property, or used in connection with the
operation of the Property or the Improvements and all the rents, revenues,
issues, profits and proceeds of that property: the Personalty; the Fixtures; all
machinery, equipment, engines, appliances, and fixtures for generating or
distributing air, water, heat, electricity, light, fuel, or refrigeration, or
for ventilating or sanitary purposes, or for the exclusion of vermin or insects,
or for the removal of dust, refuse, or garbage; all wallbeds, wall safes, built-
in furniture and installations, shelving, lockers, partitions, doorstops,
vaults, motors, elevators, dumbwaiters, awnings, window shades, venetian blinds,
light fixtures, fire hoses and brackets and boxes for them, fire sprinklers,
alarm systems, draperies, drapery rods and brackets, mirrors, mantles, screens,
linoleum, carpets and carpeting, plumbing, bathtubs, sinks, basins, pipes,
faucets, water closets, laundry equipment, washers, dryers, iceboxes,
refrigerators, heating units, stoves, ovens, ranges, dishwashers, disposals,
water heaters, incinerators, furniture, fixtures, and furnishings; all
communication
-38-
systems; all specifically designed installations and furnishings; all building
materials, supplies, and equipment now or later delivered to the Property; all
office equipment, including, without limitation, all computers, computer
systems, hardware and software, access codes, access keys, computer programs,
file names, typewriters, duplicating machines, word processing equipment, adding
machines, calculators, dictating equipment, printing presses, and related
equipment; all inventories and supplies, including, without limitation, office
supplies, soap, light bulbs, toilet paper, and linens; all clocks, television
sets, radios, and other electronic or audio/video equipment; all podiums,
microphones, movie and slide projectors and screens, and other property relating
to conference and convention facilities; all security and cleaning deposits
collected from any tenants or lessees of any part of the Property, all deposits
collected from purchasers pursuant to contracts for sale of the Property or any
portion of the Property; and, subject to the other provisions of this Deed of
Trust, all proceeds of any fire and builders' risk insurance policy, or of any
policy insuring the Property (and the contents of the Improvements) against any
other perils, all awards made in eminent domain proceedings, or purchased in
lieu of that, made with respect to the Property, and any compensation, award,
payment, or relief given by any governmental agency or other source because of
damage to the Property resulting from earthquake, flood, windstorm, or any
emergency or any other event or circumstance. The specific enumerations in this
Deed of Trust do not exclude the general.
The security interest also includes all additions to, substitutions for,
changes in, or replacements of the whole or any part of these articles of
property, together with all contract rights of Trustor in construction
contracts, bonds, agreements for purchase and sale of the Property, all policies
of insurance arising out of the improvement or ownership of the Property, and
all accounts, contract rights, chattel paper, instruments, general intangibles,
receivables and other obligations of any kind now or later existing, arising out
of, or in connection with the operation or development of the Property. The
security interest also includes all rights now or later existing in all security
agreements, leases, and other contracts securing or otherwise relating to any
accounts, contract rights, chattel paper, instruments, general intangibles, or
obligations; all causes of action and recoveries now or later existing for any
loss or diminution in value of the Property; all proceeds of any of the
Collateral; and, to the extent not otherwise included, all payments under
insurance (whether Beneficiary is the loss payee), or any indemnity, warranty,
or guaranty payable by reason of loss or damage to or otherwise with respect to
any of the Collateral.
9.2 REMEDIES. This Deed of Trust constitutes a security agreement with
--------
respect to the Collateral in which Beneficiary is granted a security interest.
Beneficiary has all of the rights and remedies of a secured party under the
Uniform Commercial Code of the laws of the state where the Property is located
as well as all other rights and remedies available at law or in equity. Trustor
agrees to execute and deliver on demand, and irrevocably constitutes and
appoints Beneficiary the attorney-in-fact of Trustor to execute, deliver, and
file, any security agreements, financing statements, continuation statements, or
other instruments that Beneficiary may request to impose, perfect, or continue
the perfection of the lien or security interest created by this Deed of Trust.
On the occurrence of any Event of Default (taking into account any applicable
period of grace or cure), Beneficiary will have the right to sell at any
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public or private sales as permitted by applicable law any of the Collateral
that is personal property. Beneficiary will also have any other rights and
remedies, whether at law, in equity, or by statute that are available to secured
creditors. Any disposition may be conducted by an employee or agent of
Beneficiary or Trustee. Any Person, including both Trustor and Beneficiary, will
be eligible to purchase any part or all of the Collateral at any disposition.
9.3 EXPENSES.
--------
Expenses of retaking, holding, and preparing for sale, selling, or the like
will be borne by Trustor and will include Beneficiary's and Trustee's attorney
fees and legal expenses. Trustor, on demand of Beneficiary, will assemble the
Collateral and make it available to Beneficiary at the Property, a place deemed
to be reasonably convenient to Beneficiary and Trustor. Beneficiary will give
Trustor at least ten (10) days' prior written notice of the time and place of
any public sale or other disposition of the Collateral or of the time of or
after which any private sale or any other intended disposition is to be made. If
the notice is sent to Trustor in the manner provided for the mailing of notices
in this Deed of Trust, it is deemed reasonable notice to Trustor.
9.4 FIXTURE FILING.
--------------
(a) This Deed of Trust constitutes a financing statement filed as a
fixture filing in the Official Records of the County Recorder of the county in
which the Property is located with respect to all Fixtures included within the
term Property as used in this Deed of Trust and with respect to any goods,
Collateral, or other personal property that may now be or later become fixtures.
(b) It is understood and agreed that, to protect Beneficiary against
the effect of Uniform Commercial Code (S) 9313 or the state law equivalent of
the state where the Property is located, if any fixture owned by Trustor on the
Property, or any part of any fixture, is replaced or added to, or any new
fixture owned by Trustor is installed by Trustor, and in each case the fixture
has a cost or fair market value in excess of One Thousand Dollars ($1,000.00)
and the fixture is or may be subject to a security interest held by a seller or
any other party, the following will apply:
(1) Trustor or any owner of all or any part of the Property
will, before the replacement, addition, or installation of any fixture, obtain
the prior written approval of Beneficiary, and give Beneficiary written notice
that a security agreement with respect to the fixture has been or will be
consummated, and the notice will contain the following information:
(i) description of the fixtures to be replaced, added to,
installed, or substituted;
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(ii) a recital of the location at which the fixtures will
be replaced, added to, installed, or substituted;
(iii) a statement of the name and address of the holder
and amount of the security interest; and
(iv) the date of the purchase of the fixtures.
Neither this subsection nor any consent by Beneficiary pursuant to this
subsection will constitute an agreement to subordinate any right of Beneficiary
in fixtures or other property covered by this Deed of Trust.
(2) Beneficiary may at any time pay the balance due under the
security agreement and the amount paid will be:
(i) secured by this Deed of Trust and will be a lien on
the Property, enjoying the same priorities as this Deed of Trust,
(ii) added to the amount of the Note or other obligation
secured by this Deed of Trust, and
(iii) on demand with interest at the Default Rate from the
time of the payment; and if Trustor is in default for ten (10) days after
demand, the entire principal sum secured with all unpaid interest will, at the
Beneficiary's option, become immediately due, regardless of any contrary
provision in this Deed of Trust or the Note; or Beneficiary will have the
privilege of acquiring by assignment from the holder of the security interest
any contract rights, accounts receivable, chattel paper, negotiable or
nonnegotiable instruments, or other evidence of Trustor's indebtedness for the
fixtures, and, on acquiring these interests by assignment, will have the right
to enforce the security interest as an assignee, in accordance with the Uniform
Commercial Code, the laws of the state where the Property is located and/or
other applicable law.
(3) Whether Beneficiary has paid or taken an assignment of the
security interest, if at any time Trustor is in default for a period of ten (10)
days under the security agreement covering the fixtures, that default will be
considered a material breach of Trustor's covenants under this Deed of Trust,
and will, at Beneficiary's option, constitute a default under this Deed of
Trust, and the principal sum secured will, at Beneficiary's option, become
immediately due.
(4) The provisions of subsections (ii) and (iii) above will not
apply if the goods that may become fixtures are of at least equivalent value and
quality as any property being replaced and if the rights of the party holding
the security interest have been expressly subordinated, at no cost to
Beneficiary, to the lien of this Deed of Trust in a manner satisfactory to
Beneficiary, including, without limitation, at Beneficiary's option, providing
to
-41-
Beneficiary a satisfactory opinion of counsel that this Deed of Trust
constitutes a valid and subsisting first lien on the fixtures that is not
subordinate to the lien of the security interest under any applicable law,
including, without limitation, the provisions of Uniform Commercial Code (S)
9313 or the state law equivalent of the state where the Property is located.
9.5 ASSIGNMENT OF AGREEMENTS.
------------------------
(a) As partial security for the Loan, Trustor sells, assigns,
transfers, sets over, and delivers to Beneficiary all of Trustor's right, title,
and interest in all agreements, permits, and contracts pertaining to the use or
operation of the Property, including, but not limited to, environmental impact
reports; negative declarations; map approvals; grading and construction permits;
conditional use permits; applications for all permits; management agreements;
all development rights in the Property that Trustor may now or later acquire
(including, without limitation, development rights arising in connection with
any action by a governmental entity, including, by way of illustration, but not
of limitation, inducement resolutions of county, municipal, or other
governmental entities); agreements with contractors, suppliers, and construction
managers; and agreements pertaining to the transfer of development rights or
permitted floor area under applicable laws or ordinances (collectively,
"AGREEMENTS"), as they may be amended or otherwise modified from time to time,
including, without limitation, the right of Trustor to terminate any of the
Agreements, to perform under them, and to compel performance and otherwise
exercise all remedies under them, together with the immediate and continuing
right to collect and receive all sums that may become due to Trustor, or which
Trustor may now or later become entitled to demand or claim, arising or issuing
out of the Agreements, including, without limitation, claims of Trustor for
damages arising out of breach of or default under any of the Agreements and all
rights of Trustor to receive proceeds of any insurance, indemnity, warranty, or
guaranty with respect to any of the Agreements. However, so long as no Event of
Default has occurred and is continuing, Trustor will have the right under a
license granted to collect and retain all sums that may become payable to
Trustor under the Agreements.
(b) Trustor covenants and agrees to punctually observe, perform, and
discharge the obligations, terms, covenants, conditions, and warranties to be
observed, performed, and discharged by it under the Agreements. Beneficiary,
upon an Event of Default, at its option and upon written notice to Trustor, will
have the right to declare the assignment in this Section 9.5 to be absolute,
-----------
and, in addition, Beneficiary will have the complete right then or later to
exercise and enforce all of the rights and remedies provided by law.
(c) The acceptance by Beneficiary of the assignment in this Section
-------
9.5, with all the rights, powers, privileges, and authority granted will not,
---
prior to the exercise of Beneficiary's right to declare the assignment in this
Section 9.5 to be absolute, obligate Beneficiary to assume any obligations under
-----------
the Agreements or to take any action under them, or to expend any money or incur
any expense or perform or discharge any obligation, duty, or liability under the
Agreements, or to assume any obligation or responsibility for the nonperformance
of the provisions by Trustor.
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10. ASSIGNMENT OF LEASES AND RENTS.
------------------------------
10.1 ASSIGNMENT. Trustor irrevocably assigns to Beneficiary:
----------
(a) all of Trustor's right, title, and interest in all leases;
licenses; agreements relating to the management, leasing, or operation of the
Property; and other agreements of any kind relating to the use or occupancy of
the Property, whether now existing or entered into after the date of this Deed
of Trust, including, without limitation, that certain lease referenced in
Section 4.19 hereof ("LEASES"), and
------------
(b) the rents, issues, and profits of the Property, including,
without limitation, all amounts payable and all rights and benefits accruing to
Trustor under the Leases ("PAYMENTS"), for the purposes and on the terms and
conditions below. The term Leases will also include all guarantees of and
security for the lessees' performance, and all amendments, extensions, renewals,
or modifications that are permitted. This is a present and absolute assignment,
not an assignment for security purposes only, and Beneficiary's right to the
Leases and Payments is not contingent on, and may be exercised without,
possession of the Property.
10.2 LICENSE. Beneficiary confers on Trustor a license ("LICENSE") to
-------
collect and retain the Payments as they become due until the occurrence of an
Event of Default. Upon an Event of Default, the License will be automatically
revoked and Beneficiary may collect and retain the Payments without notice and
without taking possession of the Property. Trustor irrevocably authorizes and
directs the lessees under the Leases to rely on and comply with any notice or
demand by Beneficiary for the payment to Beneficiary of any rental or other sums
that may at any time become due under the Leases, or for the performance of any
of the lessees' undertakings under the Leases. The lessees will have no right or
duty to inquire as to whether any Default has actually occurred or is then
existing. Trustor relieves the lessees from any liability to Trustor by reason
of relying on and complying with any notice or demand by Beneficiary.
10.3 EFFECT OF ASSIGNMENT. The assignment will not impose on Beneficiary
--------------------
any duty to produce rents, issues, or profits from the Property, or cause
Beneficiary to be:
(a) a mortgagee-in-possession for any purpose;
(b) responsible for performing any of the obligations of the lessor
under any of the Leases; or
(c) responsible for any waste committed by lessees or any other
parties, any dangerous or defective condition of the Property, or any negligence
in the management, upkeep, repair, or control of the Property. Beneficiary will
not be liable to Trustor or any other party as a consequence of the exercise of
the rights granted to Beneficiary under this assignment or the failure of
Beneficiary to perform any obligation of Trustor arising under the Leases.
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10.4 LEASING COVENANTS. Trustor covenants and agrees as follows:
-----------------
(a) At Trustor's sole cost to:
(1) perform all obligations of the lessor under the Leases and
enforce performance by the lessees of their obligations under the Leases;
(2) subject to the provisions of Section 10.4(b)(5) below,
enforce all remedies available to Trustor in case of default by the lessees
under any of the Leases and prosecute and defend any action, arbitration, or
other controversy relating to any of the Leases or to Trustor's interest in any
of the Leases;
(3) give Beneficiary prompt notice of any default that occurs
under any of the Leases, whether by the lessees or Trustor;
(4) exercise diligent, good-faith efforts to keep all portions of
the Property leased at all times and at rentals not less than the fair market
rental value;
(5) promptly upon execution, deliver to Beneficiary fully
executed counterpart originals of the Leases; and
(b) except with Beneficiary's prior written consent, not to:
(1) enter into any Leases after the date of this Deed of Trust;
(2) enter into any leases except those which provide solely for
the payment of rent which qualifies as "rents from real property" as that phrase
is defined in Internal Revenue Code Section 856(d);
(3) execute any other assignment relating to any of the Leases
or the Payments;
(4) discount any rent or other sums due under the Leases or
collect them in advance, other than to collect rent one (1) month in advance of
the time when it becomes due;
(5) terminate, modify, or amend any of the terms of the Leases
or release or discharge the lessees from any obligations;
(6) consent to any assignment or subletting by any lessee; or
(7) subordinate any of the Leases to any other deed of trust or
encumbrance.
-44-
Any attempted action in violation of the provisions of Section 10.4(b) will be
---------------
voidable at Beneficiary's election.
10.5 APPLICATION OF RENTS. Beneficiary, in its sole discretion, may
--------------------
apply, or require the application of, all amounts received pursuant to the
assignment to the payment of any one or more of the Obligations in any order
that Beneficiary may elect.
10.6 ESTOPPEL CERTIFICATES. Within twenty (20) days after request by
---------------------
Beneficiary, Trustor will deliver to Beneficiary and to any party designated by
Beneficiary estoppel certificates executed by Trustor and by each of the
lessees, in recordable form, certifying:
(a) that the assignment and the Leases are in full force;
(b) the date of each lessee's most recent payment of rent;
(c) that there are no defenses or offsets outstanding, or stating
those claimed by Trustor or lessees under the assignment or the Leases,; and
(d) any other information reasonably requested by Beneficiary.
10.7 REMEDIES. In addition to any other remedies in this Deed of Trust,
--------
Beneficiary will have the following rights and remedies upon the occurrence of
an Event of Default:
(a) To receive the Payments and any other amounts arising or accruing
under the Leases or from the Property;
(b) To collect, xxx for, settle, compromise, and give releases for
the Payments and pursue any remedies for the enforcement of the Leases or
Trustor's rights under the Leases; and
(c) To take possession of the Property, and hold, manage, lease, and
operate it on any terms and for any period of time that Beneficiary may deem
proper and, either with or without taking possession of the Property, in its own
name, make from time to time all alterations, renovations, repairs, or
replacements that Beneficiary may deem proper.
10.8 DEFINITIONS. The terms lessor and lessors as used in this Deed of
-----------
Trust will include all owners, landlords, licensors, and other parties in a
similar position with respect to the Leases. The terms lessee and lessees will
include any tenants and licensees and any other parties in a similar position
and will also include any guarantors of or other obligors under the Leases.
10.9 NONDISTURBANCE AGREEMENTS. At Trustor's request, Beneficiary shall
-------------------------
enter into a nondisturbance and attornment agreement with respect to Trustor's
lease of the Property
-45-
to a third party operator, which shall provide that Beneficiary shall recognize
the lessee's rights under the lease following a foreclosure if the lessee is not
in default under the lease at the time of the foreclosure.
11. MISCELLANEOUS.
-------------
11.1 SUCCESSOR TRUSTEE. Beneficiary may remove Trustee or any successor
-----------------
trustee at any time and appoint a successor trustee by recording a written
substitution in the county where the Property is located, or in any other manner
permitted by law. Upon that appointment, all of the powers, rights, and
authority of Trustee will immediately become vested in the successor.
11.2 CHANGE OF LAW. If any law is passed, after the date of this Deed of
-------------
Trust, that deducts from the value of the Property, for the purposes of
taxation, any lien on it, or changes in any way the laws now in force for the
taxation of mortgages, deeds of trust, or debts secured by mortgage or deed of
trust (other than laws imposing taxes on income) or the manner of the collection
of any taxes so as to affect adversely the rights of Beneficiary as holder of
the Note and Beneficiary under this Deed of Trust, the Indebtedness will become
due at Beneficiary's option, exercised by thirty (30) days' notice to Trustor
unless Trustor, within that thirty (30) day period, if permitted by law, assumes
the payment of any tax or other charge imposed on Beneficiary for the period
remaining until full payment by Trustor of the Indebtedness.
11.3 NO WAIVER. No waiver by Beneficiary of any default or breach by
---------
Trustor will be implied from any omission by Beneficiary to take action on
account of that default if the default persists or is repeated. Also, no express
waiver will affect any default other than the default in the waiver and the
waiver will be operative only for the time and to the extent stated. Waivers of
any covenant, term, or condition in this Deed of Trust will not be construed as
a waiver of any subsequent breach of the same covenant, term, or condition. The
consent or approval by Beneficiary for any act by Trustor requiring further
consent or approval will not be deemed to waive or render unnecessary the
consent or approval for any subsequent similar act.
11.4 ABANDONMENT. Subject to any chattel mortgages, security agreements,
-----------
or other liens on title that may exist with the consent of Beneficiary, or any
provided for in this Deed of Trust, all Personalty that upon foreclosure of the
Property is owned by Trustor and is used in connection with the operation of the
Property will be deemed at Beneficiary's option to have become on that date a
part of the Property and abandoned to Beneficiary in its then condition.
11.5 NOTICES. All notices, advices, demands, requests, consents,
-------
statements, satisfactions, waivers, designations, refusals, confirmations, or
denials that may be required or contemplated under this Deed of Trust for any
party to serve on or give to any other will be in writing, and, if not in
writing, will not be deemed to have been given. Also, they must be
-46-
either personally served or sent with return receipt requested by registered or
certified mail with postage (including registration or certification charges)
prepaid in a securely enclosed and sealed envelope as follows:
(a) If to Trustor, addressed to:
Valley Living Center, LLC
c/o Continuum Health Incorporated
00000 Xxxxxx Xxxxx Xxxx, Xx. 0
Xxx Xxxx Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxx
(b) If to Beneficiary, addressed to:
G&L Realty Partnership, L.P.
000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxx Xxxxxxxxx
With a copy to:
Xxxxxxxxx & Xxxxxx Professional Corporation
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
11.6 SURVIVAL. The covenants and agreements in this Deed of Trust will
--------
bind and inure to the benefit of Beneficiary and Trustor and their successors
and assigns, provided that nothing herein shall waive the provisions of Section
-------
5.3. It is agreed that Beneficiary may assign to or grant a participation in
---
any one or more lenders, free from any right of counterclaim, recoupment, or
setoff by Trustor, Beneficiary's rights and obligations in whole or in part
under the Loan Documents. Nothing in this Section 11.6 is intended to limit
------------
other provisions in the Loan Documents that by their terms survive the repayment
of the Indebtedness or the termination of any Loan Document.
11.7 SEVERABILITY. If any term, provision, covenant, or condition of this
------------
Deed of Trust or any application of it is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, in whole or in part, all
terms, provisions, covenants, and conditions of this Deed of Trust and all
applications of it not held invalid, void, or unenforceable will continue in
full force and will not be affected, impaired, or invalidated.
11.8 REFERENCES TO FORECLOSURE. References in this Deed of Trust to
-------------------------
foreclosure and related phrases are references to the appropriate procedure in
connection with Trustee's
-47-
private power of sale, any judicial foreclosure proceeding, and any deed given
in lieu of foreclosure.
11.9 JOINDER OF FORECLOSURE. If Beneficiary holds any other or additional
----------------------
security for the payment of any Indebtedness or performance of any Obligation,
its sale or foreclosure, on any default in the payment or performance, in
Beneficiary's sole discretion, may be prior to, subsequent to, or joined or
otherwise contemporaneous with any sale or foreclosure. In addition to the
rights in this Deed of Trust specifically conferred, Beneficiary, at any time
and from time to time, may exercise any right or remedy now or later given by
law to beneficiaries under deeds of trust generally, or to the holders of any
obligations of the kind secured.
11.10 COPIES. Trustor will promptly give to Beneficiary copies of all:
------
(a) notices of violation that Trustor receives from any governmental
agency or authority, and
(b) notices of default that Trustor receives under any agreement
relating to the borrowing of money by Trustor from any Person.
11.11 ERISA COMPLIANCE. Trustor will at all times comply with the
----------------
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), with respect to any retirement or other employment benefit plan to
which it is a party as employer. As soon as possible after Trustor knows, or has
reason to know, that any Reportable Event (defined in ERISA) with respect to any
plan of Trustor has occurred, it will furnish to Beneficiary a statement in
writing setting forth details about the Reportable Event and the action, if any,
that Trustor proposes to take, together with a copy of the notice of the
Reportable Event furnished to the Pension Benefit Guaranty Corporation. In
addition, if at any time the loan evidenced by the Note is deemed in whole or in
part to be a transaction prohibited by the provisions of ERISA, Trustor will
immediately reimburse Beneficiary on demand for all taxes levied against or
costs incurred by Beneficiary or Trustee by reason of the Reportable Event.
11.12 SUBORDINATION. At the option of Beneficiary, this Deed of Trust will
-------------
become subject and subordinate, in whole or in part (but not with respect to
priority of entitlement to any insurance proceeds, damages, awards, or
compensation resulting from damage to the Property or condemnation or exercise
of power of eminent domain), to any contracts of sale or any leases of the
Property on the execution by Beneficiary and recording of a unilateral
declaration to that effect in the official records of the county and state where
the Property is located. Beneficiary may require the issuance of any title
insurance endorsements to the Title Policy in connection with any subordination
that Beneficiary, in its judgment, determines are appropriate, and Trustor will
be obligated to pay any cost or expense incurred in connection with the
issuance.
11.13 NO MERGER. So long as any of the Indebtedness remains unpaid or
---------
Trustor has any further obligation under the Loan Documents, unless Beneficiary
otherwise consents in
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writing, the fee estate of Trustor in the Property or any part of it will not
merge, by operation of law or otherwise, with any leasehold or other estate in
the Property or any part of it, but will always be kept separate and distinct,
regardless of the union of the fee estate and the leasehold or other estate in
Trustor or any other Person.
11.14 INSPECTION OF PROPERTY. Beneficiary is authorized by itself or its
----------------------
agents, employees, or workers, to enter at any reasonable time on prior written
notice to Trustor on any part of the Property for the purpose of inspecting it,
and for the purpose of performing any of the acts it is authorized to perform
under the terms of this Deed of Trust. Trustor agrees to cooperate with
Beneficiary to facilitate any inspection.
11.15 PERFORMANCE BY TRUSTOR. Trustor will faithfully perform every
----------------------
covenant to be performed by Trustor under any lien or encumbrance, including,
without limiting the generality of this Deed of Trust, mortgages, deeds of
trust, leases, declarations or covenants, conditions and restrictions, and other
agreements that affect the Property, in law or in equity, that Beneficiary
reasonably believes may be prior and superior to or on a parity with the lien or
charge of this Deed of Trust. A breach of or a default under any lien or
encumbrance that exists after any applicable grace period in the pertinent
instrument has expired without that breach or default having been cured, will
constitute an Event of Default under this Deed of Trust. If Trustor fails to do
so, Beneficiary, without demand or notice and in its sole judgment, may do any
things required by Trustor by any of the provisions in this Deed of Trust and
incur and pay expenses in connection with that. Nothing in this section affects
Trustor's obligations pursuant to Sections 5.2 and 5.3 of this Deed of Trust or
--------------------
limits Beneficiary's rights.
11.16 PERSONALTY SECURITY INSTRUMENTS. Trustor agrees that if Beneficiary
-------------------------------
at any time holds additional security for any obligations secured by this Deed
of Trust, it may enforce the terms of it or otherwise realize on it, at its
option, either before or concurrently or after a sale is made under this Deed of
Trust, and may apply the proceeds on the Indebtedness secured without affecting
the status or waiving any right to exhaust any other security, including the
security under this Deed of Trust, and without waiving any breach or default or
any right or power, whether exercised under this Deed of Trust or in any other
security.
11.17 SUITS TO PROTECT PROPERTY. Trustor agrees to appear in and defend
-------------------------
any action or proceeding purporting to affect the security of this Deed of Trust
or any additional or other security for the obligations secured, the interest of
Beneficiary or the rights, powers, or duties of Trustee, and to pay all costs
and expenses, including, without limitation, cost of evidence of title and
attorney fees, in any action or proceeding in which Beneficiary or Trustee may
appear or be made a party, including, but not limited to, foreclosure or other
proceeding commenced by those claiming a right to any part of the Property under
subordinate liens, in any action to partition or condemn all or part of the
Property, whether pursued to final judgment, and in any exercise of the power of
sale in this Deed of Trust, whether the sale is actually consummated.
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11.18 JUNIOR LIENS. Trustor agrees:
------------
(a) that as of the date of this Deed of Trust there are no
encumbrances to secure debts junior to this Deed of Trust; and
(b) that there are to be none as of the date when this Deed of Trust
becomes of record.
11.19 FURTHER ADVANCES. On the request of Trustor or its permitted
----------------
successors in ownership of the Land, Beneficiary may, at its option, at any time
before full payment of the Indebtedness, make further advances to Trustor or the
successors in ownership, with interest and late charges to be secured by this
Deed of Trust. However, the amount of principal secured by this Deed of Trust
and remaining unpaid will not at the time of and including any advance exceed
the original principal sum secured. Also, if Beneficiary, at its option, makes a
further advance or advances, Trustor or the successors in ownership agree to
execute and deliver to Beneficiary a note, payable on or before the maturity of
the Indebtedness secured and bearing any other terms that Beneficiary will
require.
11.20 WAIVER OF STATUTE OF LIMITATIONS. The pleading of any statute of
--------------------------------
limitations as a defense to any obligations secured by this Deed of Trust is
waived, to the fullest extent permissible by law.
11.21 CHARGES FOR STATEMENTS. Trustor agrees to pay Beneficiary's
----------------------
reasonable charge, to the maximum amount permitted by law, for any statement
regarding the obligations secured by this Deed of Trust requested by Trustor or
on its behalf.
11.22 ENTIRE AGREEMENT. This Deed of Trust and the other Loan Documents
----------------
set forth the entire understanding between Trustor and Beneficiary and they will
not be amended except by a written instrument duly executed by each of Trustor
and Beneficiary. Any previous representations, warranties, agreements, and
understandings among the parties regarding the subject matter of the Loan or the
Loan Documents, whether written or oral, are superseded by this Deed of Trust
and the other Loan Documents.
11.23 INCORPORATION. All terms of the Loan Documents are incorporated in
-------------
this Deed of Trust by this reference. All persons who may have or acquire an
interest in the Property will be deemed to have notice of the terms of the Loan
Documents and to have notice, if provided for, that the rate of interest on one
or more Obligations may vary from time to time.
11.24 WAIVER OF MARSHALING RIGHTS. Trustor, for itself and for all parties
---------------------------
claiming through or under Trustor, and for all parties who may acquire a lien on
or interest in the Property, waives all rights to have the Property or any other
property that is now or later may be security for any Obligation ("OTHER
PROPERTY") marshaled on any foreclosure of this Deed of Trust or on a
foreclosure of any other security for any of the Obligations. Beneficiary will
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have the right to sell, and any court in which foreclosure proceedings may be
brought will have the right to order a sale of, the Property and any of the
Other Property as a whole or in separate parcels, in any order that Beneficiary
may designate.
11.25 ACCEPTANCE OF TRUST; POWERS AND DUTIES OF TRUSTEE. Trustee accepts
-------------------------------------------------
this trust when this Deed of Trust is recorded. From time to time on written
request of Beneficiary and presentation of this Deed of Trust for endorsement,
and without affecting the personal liability of any person for payment of any
indebtedness or the performance of any obligations, Trustee may, without
liability and without notice:
(a) reconvey all or any part of the Property;
(b) consent to the making of any map or plat; and
(c) join in any grant of easement, any declaration of covenants,
conditions, and restrictions, any extension agreement, or any agreement
subordinating the lien or charge of this Deed of Trust. Except as may be
required by applicable law, Trustee or Beneficiary may from time to time apply
to any court of competent jurisdiction for aid and direction in the execution of
the trust and the enforcement of the rights and remedies available, and may
obtain orders or decrees directing, confirming, or approving acts in the
execution of the trust and the enforcement of the remedies. Trustee has no
obligation to notify any party of any pending sale or any action or proceeding,
including, without limitation, actions in which Trustor, Beneficiary, or Trustee
will be a party, unless held or commenced and maintained by Trustee under this
Deed of Trust. Trustee will not be obligated to perform any act required of it
under this Deed of Trust unless the performance of the act is requested in
writing and Trustee is reasonably indemnified and held harmless against any
loss, cost, liability, or expense.
11.26 RELEASES, EXTENSIONS, MODIFICATIONS, AND ADDITIONAL SECURITY.
------------------------------------------------------------
Without notice to or the consent, approval, or agreement of any persons or
entities having any interest at any time in the Property or in any manner
obligated under the Obligations ("INTERESTED PARTIES"), Beneficiary may, from
time to time, release any person or entity from liability for the payment or
performance of any Obligation; take any action or make any agreement extending
the maturity or otherwise altering the terms or increasing the amount of any
Obligation; or accept additional security or release the Property or other
security for any Obligation. None of these actions will release or reduce the
personal liability of any of the Interested Parties, or release or impair the
lien of this Deed of Trust, or the priority of it on the Property. However, no
action taken or agreement made by Beneficiary to extend the maturity or
otherwise alter the terms or increase the amount of any Obligation will be
binding on Trustor without Trustor's consent.
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11.27 RECONVEYANCE.
------------
(a) Upon the payment and performance of all Obligations and payment
of all Indebtedness, including, without limitation, Beneficiary's receipt of all
sums owing and outstanding under the Note, Beneficiary will deliver to Trustee a
written request for reconveyance, and will surrender to Trustee for cancellation
this Deed of Trust and any note or instrument evidencing the Obligations.
However, Beneficiary will have no obligation to deliver the written request and
documents until Beneficiary has been paid by Trustor, in immediately available
funds, all escrow, closing, and recording costs, the costs of preparing and
issuing the reconveyance, and any trustee's or reconveyance fees. On Trustee's
receipt of the written request by Beneficiary and the documents, Trustee will
reconvey, without warranty, the Property or that portion then held. To the
extent permitted by law, the reconveyance may describe the grantee as the person
or persons legally entitled and the recitals of any matters or facts in any
reconveyance will be conclusive proof of the truthfulness of them. Neither
Beneficiary nor Trustee will have any duty to determine the rights of persons
claiming to be rightful grantees of any reconveyance. When the Property has been
fully reconveyed, the last reconveyance will operate as a reassignment of all
future rents, issues, and profits of the Property to the person legally
entitled.
(b) Anything to the contrary herein notwithstanding, provided no
Event of Default has occurred and is continuing, Trustor shall be entitled to
the release of the Property from the lien of this Deed of Trust, and from the
lien of any and all other Loan Documents encumbering this Property, only upon
payment to Beneficiary of (i) all sums due and payable under the Note,
including, but not limited to, all accrued but unpaid principal and interest
payable thereunder, plus (ii) the difference between the amount payable in (i)
above and Four Hundred Ninety-Two Thousand Six Hundred Thirty-Six Dollars and
No/Cents ($492,636.00). Trustor will pay all costs and expenses incurred in
connection with any such release, including, but not limited to, all Trustee's
fees, reconveyance fees, recording fees, premiums for title insurance
endorsements, Beneficiary's costs in connection with such release (including
attorneys' fees and costs) and escrow fees.
11.28 SUBROGATION. Beneficiary will be subrogated to the lien of all
-----------
encumbrances, whether released of record, paid in whole or in part by
Beneficiary pursuant to this Deed of Trust, or by the proceeds of any loan
secured by this Deed of Trust.
11.29 OBLIGATIONS OF TRUSTOR, JOINT AND SEVERAL. If more than one person
-----------------------------------------
has executed this Deed of Trust as Trustor, the obligations of all those persons
will be joint and several.
11.30 RECOURSE TO SEPARATE PROPERTY. Any married person who executes this
-----------------------------
Deed of Trust as a Trustor agrees that any money judgment that Beneficiary or
Trustee obtains pursuant to the terms of this Deed of Trust or any other
obligation of that married person secured by this Deed of Trust may be collected
by execution on that person's separate property, and any community property of
which that person is a manager.
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11.31 RULES OF CONSTRUCTION. When the identity of the parties or other
---------------------
circumstances make it appropriate, the singular number includes the plural.
11.32 NO OFFSET. Trustor will pay to Beneficiary all amounts owing under
---------
the Note, this Deed of Trust, or any of the other Loan Documents without
deduction, offset, or counterclaim of any kind.
11.33 GOVERNING LAW. The parties expressly agree that this Deed of Trust
-------------
(including, without limitation, all questions regarding permissive rates of
interest) will be governed by or construed in accordance with the laws of the
state in which the Property is located and the applicable laws of the United
States of America.
11.34 WAIVER OF JURY TRIAL. TRUSTOR HEREBY AGREES NOT TO ELECT A TRIAL BY
--------------------
JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY TRUSTOR, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY
EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD
OTHERWISE ACCRUE. BENEFICIARY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY TRUSTOR.
11.35 NO DEFAULT AFFIDAVITS. After request by Beneficiary, Trustor shall
---------------------
within ten (10) days furnish Beneficiary with a statement, duly acknowledged and
certified, setting forth (i) the amount of the original principal amount of the
Note, (ii) the unpaid principal amount of the Note, (iii) the rate of interest
of the Note, (iv) the date installments of interest and/or principal were last
paid, (v) any offsets or defenses to the payment of the Indebtedness, if any,
(vi) that the Note, this Deed of Trust and the other Loan Documents are valid,
legal and binding obligations and have not been modified or if modified, giving
particulars of such modification; and (vii) reaffirming all representations and
warranties of Trustor set forth herein and in the other Loan Documents as of the
date requested by Beneficiary or, to the extent of any changes to any such
representations and warranties, so stating such changes.
11.36 CONTROLLING AGREEMENT. It is expressly stipulated and agreed to be
---------------------
the intent of Trustor, and Beneficiary at all times to comply with applicable
state law or applicable United States federal law (to the extent that it permits
Beneficiary to contract for, charge, take, reserve, or receive a greater amount
of interest than under state law) and that this Section 11.36 (and the similar
-------------
paragraph contained in the Note) shall control every other covenant and
agreement in this Deed of Trust and the other Loan Documents. If the applicable
law (state or federal) is ever judicially interpreted so as to render usurious
any amount called for under the Note or under any of the other Loan Documents,
or contracted for, charged, taken, reserved,
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or received with respect to the Indebtedness, or if Beneficiary's exercise of
the option to accelerate the maturity of the Note, or if any prepayment by
Trustor results in Trustor having paid any interest in excess of that permitted
by applicable law, then it is Trustor's and Beneficiary's express intent that
all excess amounts theretofore collected by Beneficiary shall be credited on the
principal balance of the Note and all other Indebtedness (or, if the Note and
all other Indebtedness have been or would thereby be paid in full, refunded to
Trustor), and the provisions of the Note and the other Loan Documents
immediately be deemed reformed and the amounts thereafter collectible hereunder
and thereunder reduced, without the necessity of the execution of any new
documents, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder or thereunder. All
sums paid or agreed to be paid to Beneficiary for the use, forbearance, or
detention of the Indebtedness shall, to the extent permitted by applicable law,
be amortized, prorated, allocated, and spread throughout the full stated term of
the Indebtedness until payment in full so that the rate or amount of interest on
account of the Indebtedness does not exceed the maximum lawful rate from time to
time in effect and applicable to the Indebtedness for so long as the
Indebtedness is outstanding. Notwithstanding anything to the contrary contained
herein or in any of the other Loan Documents, it is not the intention of
Beneficiary to accelerate the maturity of any interest that has not accrued at
the time of such acceleration or to collect unearned interest at the time of
acceleration.
11.37 NO CREDITS ON ACCOUNT OF THE DEBT. Trustor will not claim or demand
---------------------------------
or be entitled to any credit or credits on account of the Indebtedness for any
part of the Impositions assessed against the Property, or any part thereof, and
no deduction shall otherwise be made or claimed from the assessed value of the
Property, or any part thereof, for real estate tax purposes by reason of this
Deed of Trust or the Indebtedness. In the event such claim, credit and
deduction shall be required by law, Beneficiary shall have the option, by
written notice of not less than ninety (90) days, to declare the Indebtedness
immediately due and payable.
11.38 DOCUMENTARY STAMPS. If at any time the United States of America, any
------------------
State thereof or any subdivision of any such State shall require revenue or
other stamps to be affixed to the Note or this Deed of Trust, or impose any
other tax or charge on the same, Trustor will pay for the same, with interest
and penalties thereon, if any.
11.39 REASONABLENESS. Lender shall act reasonably and in good faith in
--------------
exercising any approval rights or other rights hereunder.
11.40 ATTORNEYS' FEES AND COSTS. If the Indebtedness is not paid when due
-------------------------
after the expiration of any grace period, or if any Event of Default occurs,
Trustor promises to pay all costs of enforcement and collection, including, but
not limited to, court costs and reasonable attorneys' fees, whether or not such
enforcement and collection includes the filing of a lawsuit. All provisions in
this Deed of Trust for payment of attorneys' fees in any suit, action or other
proceeding shall be construed to include all such fees in any bankruptcy,
receivership or other proceedings, at any trial, on any appeal, and on any
petition for review, in addition to all other sums provided by law.
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11.41 WAIVERS.
-------
(a) Trustor warrants that (i) Beneficiary has made no representation
to Trustor as to the creditworthiness of BSNF, and (ii) Trustor has established
adequate means of obtaining from BSNF on a continuing basis financial and other
information pertaining to BSNF's financial condition. Trustor agrees to keep
adequately informed from such means as it deems appropriate of any facts, events
or circumstances which might in any way affect Trustor's risks hereunder and
Trustor further agrees that Beneficiary shall have no further obligation to
disclose to Trustor information or materials required in the course of
Beneficiary's relationship with BSNF.
(b) Trustor hereby waives any right to require Beneficiary to: (i)
proceed against any person, including BSNF, (ii) proceed against or exhaust any
security held from BSNF or any other person, (iii) pursue any other remedy in
Beneficiary's power, or (iv) make any presentments or demands for performance or
give any notices of nonperformance, protest, or dishonor in connection with any
of the indebtedness held by Beneficiary. Trustor waives any defense arising by
reason of: (1) any disability or other defense of BSNF or any other person, (2)
the cessation or limitation of the liability of BSNF for any cause whatsoever,
other than payment in full of all indebtedness owed to Beneficiary, (3) the
application by BSNF of the proceeds of any obligation secured hereby for
purposes other than the purposes represented by BSNF to Beneficiary or intended
or understood by Beneficiary or BSNF, (4) any act or omission by Beneficiary
which directly or indirectly results in or aids the discharge of BSNF or any
obligation secured hereby by operation of law or otherwise, or (5) any
modification of the obligations secured hereby in any form whatsoever,
including, without limitation, the renewal, extension, acceleration or other
change in the terms of such obligations or any part thereof, including increase
or decrease of the rate of interest thereon. Trustor waives all rights and
defenses arising out of an election of remedies by the creditor, even though
that election of remedies,such as a nonjudicial foreclosure with respect to
security for a guaranteed obligation, has destroyed the Trustor's rights of
subrogation and reimbursement against the principal by the operation of law or
otherwise. Trustor shall have no right of subrogation and Trustor waives any
defense that may have been based upon any election of remedies by Beneficiary
which destroys Trustor's rights to proceed against BSNF for reimbursement,
including, without limitation, any loss of rights Trustor may suffer by reason
of any rights, powers, or remedies of BSNF in connection with any anti-
deficiency laws or any other laws limiting, qualifying or discharging Trustor's
obligations. Trustor further waives any right to enforce any remedy which
Beneficiary now has or may hereafter have against BSNF or any other person and
waives any benefit of or any right to participate in any security whatsoever now
or hereafter held by Beneficiary. If any amount shall be paid to Trustor at any
time when any indebtedness owing to Beneficiary shall not have been paid in
full, such amount shall be held in trust for the benefit of Beneficiary and
shall forthwith be paid to Beneficiary to be credited and applied upon such
indebtedness, whether matured or unmatured. Trustor warrants and agrees that
each of the waivers set forth above is made with Trustor's full knowledge of its
significance and consequences and that under the circumstances the waivers are
reasonable. If
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any said waivers are determined to be contrary to any application of law or
public policy, such waivers shall be effective only to the extent permitted by
law.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day
and year first above written.
VALLEY LIVING CENTER, LLC,
a Delaware limited liability company
By:____________________________________
Name:_______________________________
Title:______________________________
-00-
XXXXXXXXXX XXX-XXXXXXX XXXXXXXXXXXXXX
Xxxxx of California )
) ss.
County of _______________ )
On ______________ (date) before me, _____________________ (name and title
"Notary Public"), personally appeared ________________________ (name of
signer(s)), personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
__________________________________
(signature of Notary) (seal of Notary)
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EXHIBIT A
---------
[Legal Description]
Beginning at a point on the North right-of-way line of 00xx Xxxxxx that is
East 1072.50 feet along the City Monumented Section line and North 40.00
feet from the Southwest Corner of Section 22, Township 2 North, Range 00
Xxxx xx xxx Xxxxx Xxxxxxxx, Xxxxxxxxxx Xxxxxx, Xxxxx; and running thence
East 140.64 feet along said North right-of-way line; thence North 495.00
feet; thence West 140.64 feet; thence South 495.00 feet to the point of
beginning.
A-1
[Acknowledgements]
Acknowledgements - Page 1
