RECORDING REQUESTED BY AND WHEN RECORDED RETURN
TO:
XXXXXX, XXXX & XXXXXXXX LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
DEED OF TRUST, SECURITY AGREEMENT,
FlNANCING
STATEMENT AND ASSIGNMENT OF
RESIDENT
AGREEMENTS
AND RENTS
(Secunty For Construction And
Mini-Pennanent Loan)
Grantor (Borrower): Emeritus Properties m, Inc.
Grantee (Lender): Ocwen Federal Bank FSB
Grantee (Trustee): Chicago Title Insurance Company
Legal Description (abbreviated): Lot 1, Columbia
Pacific Management Building Site Plan,
9507190625; Additional legal on Exhibit A
Assessor's Tax Parcel ID#6021650010
THIS DOCUMENT TO BE RECORDED BOTH
AS
A DEED OF TRUST AND FIXTURE
FILING
THIS DOCUMENT SECURES OBLIGATIONS WHICH
CONTAIN
PROVISIONS FOR A VARIABLE RATE OF
ITEREST
THIS DEED OF TRUST, SECURITY AGREEMENT,
FINANCING STATEMENT AND ASSIGNMENT OF RESIDENT
AGREEMENTS AND RENTS (this "Deed of Trust") is
made as of the 30th day of January, 1997, by and
between EMERITUS PROPERTIES III, INC., a
Washington corporation whose address is 0000
Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx
00000 ("Grantor"), CHICAGO TITLE INSURANCE
COMPANY, a Missouri corpora1ion, whose address is
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxxxx 00000, Attn: Xxxxx Xxxxxx, as Trustee
("Trustee") and OCWEN FEDERAL BANK FSB, a
federally chartered savings bank whose address is
0000 Xxxxx Xxxxx Xxxxx Xxxxxxxxx, Xxxx Xxxxx
Xxxxx0 Xxxxxxx 00000, Attention: Secretary
("Beneficiary").
Terms which are used in this Deed of Trust
and not otherwise defined herein shall have the
meanings ascribed to such terms in Article I
below.
RECITALS
THIS DEED OF TRUST CONSTITUTES A FIXTURE
FILING UNDER SECTIONS 9-313 AND 9-402 OF THE
UNIFORM COMMERCIAL CODE AS ADOPTED BY THE STATE OF
WASHINGTON. TO THE EXTENT THE GOODS ARE FIXTURES
UNDER THE LAWS OF THE STATE OF WASHINGTON, THE
FIXTURES ARE OR ARE TO BECOME FIXTURES ON THE REAL
PROPERTY LOCATED IN THE COUNTY OF XXXXXX, STATE OF
WASHINGTON, MORE PARTICULARLY DESCRIBED ON EXHIBIT
A ATTACHED HERETO. THE NAME OF THE RECORD OWNER OF
THE REAL PROPERTY IS GRANTOR
Of even date herewith, Grantor, as Xxxxxxxx,
and Beneficiary, as Lender, have entered into a
Loan Agreement (the "LOAN AGREEMENT") pursuant to
which Beneficiary has agreed to make a loan (the
"Loan") to Grantor in the original principal sum
of Six Million Four Hundred Sixty-Five Thousand
and No/100 Dollars ($6,465,000) upon the terms and
conditions set forth therein. The Loan is
evidenced by a Promissory Note (the "Note") in the
original principal amount of the Loan executed by
Grantor and payable to the order of Beneficiary.
As security for the Loan, and as partial
consideration therefor, Xxxxxxx has agreed to
execute and deliver this Deed of Trust as one of
the Loan Documents described in the Loan
Agreement.
NOW, THEREFORE, in consideration of the
making of the Loan and other good and valuable
consideration, the receipt, adequacy and
sufficiency of which are hereby conclusively
acknowledged, to secure the Loan and the other
Indebtedness, Grantor has granted, mortgaged,
bargained, sold, alienated, enfeoffed, released,
conveyed and confirmed, and by these presents does
xxxxx, mortgage, bargain, sell, alienate, enfeoff,
release, convey and confirm unto the Trustee, in
trust, WITH POWER OF SALE, in fee simple, all that
land situated in Xxxxxx County, Washington, and
more particularly described on Exhibit A attached
hereto and made a part hereof for all purposes
(the "Land"), together with the buildings and
improvements erected or to be erected thereon,
including but not limited to all appurtenant
parking areas, driveways, roadways, walkways and
landscaped areas (the "IMPROVEMENTS");
TOGETHER with all the walks, fences,
shrubbery, driveways, fixtures, equipment,
machinery, apparatus, fittings, building materials
and other articles of personal property of every
kind and nature whatsoever, now or hereafter
ordered for eventual delivery to the Land (whether
or not delivered thereto), and all such as are now
or hereafter located in or upon any interest or
estate in the Land or any part thereof and used or
usable in connection with any present or future
operation of the Land now owned or hereafter
acquired by Grantor, including, without limiting
the generality of the foregoing, all heating,
lighting, laundry, clothes washing, clothes
drying, incinerating and power equipment, engines,
boilers, pipes, tanks, motors, conduits,
switchboards, plumbing, lifting, cleaning,
fire-prevention, fire-extinguishing,
refrigerating, ventilating, and communications
apparatus, telephones and offfice equipment,
television sets, radio systems, recording systems,
computer equipment, copiers, chairs, desks,
tables, sofas, air-cooling and air-conditioning
apparatus, elevators, escalators, shades, awnings,
draperies, curtains, curtain rods, mirrors,
paneling, fans, furniture, furnishings, beds,
mattresses, linens, bedding, towels, wheel chairs,
walkers, canes, medical equipment and supplies,
vans and other transportation equipment,
carpeting, linoleum and other floor coverings,
screens, storm doors and windows, stoves, dishes,
glasses, silverware and other kitchen and
restaurant equipment and supplies, gas and
electric ranges, refrigerators, garbage disposals,
sump pumps, dishwashers, bath tubs, water heaters,
water closets, sinks, attached cabinets,
partitions, ducts and compressors, landscaping,
swimming pools, lawn and garden equipment,
security systems and including all materials and
equipment installed or to be installed or used or
usable in the construction, reconstruction,
alteration, repair and operation of the building
or buildings or appurtenant facilities erected or
to be erected in or upon the Land; it being
understood that all of the aforesaid shall be
deemed to be fuctures and part of the Land, but
whether or not of the nature of fixtures they
shall be deemed and shall constitute part of the
security for the Indebtedness and shall be covered
by this Deed of Trust excluding, however, only
personal property owned by any resident actually
occupying all or part of the premises. Except as
otherwise expressly allowed pursuant to this Deed
of Trust, disposition of any of the aforesaid or
of any interest therein is prohibited; however, if
any disposition is made in violation hereof,
Beneficiary shall have a security interest in the
proceeds therefrom to the fullest extent permitted
by the laws of the State of Washington; and
2
TOGETHER with all and singular the rights,
rights-of-way, strips and gores of land, streets,
alleys, ways, passages, sewer rights, water, water
courses, water rights and powers, air rights and
development rights, mineral, oil and gas rights,
easements, tenements, privileges, advantages,
accessions, hereditaments and appurtenances
belonging or in any way appertaining to the Land
and other property described herein, and the
reversions and remainders, earnings, revenues,
rents, royalties, issues and profits thereof and
including any right, title, interest or estate
hereafter acquired by Grantor in the Land and
other property described herein, and all land
lying in the bed of any street, road or avenue,
opened or proposed, in front of or adjoining the
Mortgaged Property (hereinafta defined) to the
center line thereof and all the estates, rights,
titles, interests, dower and rights of dower,
curtesy and rights of curtesy, property,
possession, claim and demand whatsoever both at
law and in equity, of Grantor of, in and to the
Mortgaged Property and every part and parcel
thereof, with the appurtenances thereto; and
TOGETHER with all the right, title and
interest (but not the obligations) of Grantor,
present and future, in and to all present and
future accounts, contract rights (including all
rights of Grantor set forth in the Loan
Agreement), general intangibles, chattel paper,
documents and instruments including but not
limited to licenses, construction contracts,
management contracts, service contracts, utility
contracts, options, Permits, public works
agreements, architectural and engineering
agreements, all architectural, engineering and
similar plans, specifications, drawings, reports,
surveys, plats, permits, bonds, deposits and
payments thereunder, relating or appertaining to
the Land and other property described herein and
its development, occupancy and use; provided,
however, that nothing herein shall be construed to
grant Trustee or Beneficiary any right, title, or
interest in or to any such items, to the extent
such grant would be in violation of any applicable
Governmental Requirement; and
TOGETHER with any right to payment of the
rental for the use or occupancy (transient or
otherwise) of rooms or other space, including,
without limitation, any residential unit or bed,
any hotel or motel rooms, meeting, banquet,
restaurant, parking, health or health service,
medical recreational or spa facilities, or for
goods sold or leased or for services rendered,
whether or not yet earned by performance, arising
from the operation of the Improvements or any
other facility on the Land, including, without
limitation, (1) all accounts arising from the
operation of the Improvements and all proceeds
thereof (whether cash or noncash, movable or
immovable, tangible or intangible) received upon
the sale, exchange, transfer, collection or other
disposition or substitution thereof, and (2) all
rights to payment from any consumer credit/charge
card organization or entity, including, without
limitation, payments arising from the use of the
American Express Card, Visa Card, Xxxxx Xxxxxxx
Card, MasterCard, Diner's Club, or any other
credit card, including those now existing or
hereafter created or any substitutions therefor
and all proceeds thereof (whether cash or
non-cash, movable or immovable, tangible or
intangible) received upon the sale, exchange,
transfer, collection, or other disposition or
substitution thereof; provided, hawever, that
nothing herein shall be construed to grant Trustee
or Beneficiary any right, title, or interest in or
to any such items, to the extent such grant would
be in violation of any applicable Governmental
requirement; and
TOGETHER with all of the rents, royalties,
revenues, income, proceeds, profits and other
benefits paid or payable by parties to the
Resident Agreements for using, leasing, licensing,
possessing, occupying, operating from, residing
in, selling or otherwise enjoying the Land, the
improvements, and other property securing the
Indebtedness, or any portion thereof; provided,
however, that nothing herein shall be construed to
grant Trustee or Beneficiary any right, title, or
interest in or to any such items, to the extent
such grant would be in violation of any applicable
Governmental Requirement; and
3
TOGETHER with all of Grantor's right, title
and interest in and to any and all judgments,
awards of damages (including but not limited to
severance and consequential damages), payments,
proceeds, settlements or other compensation
(collectively, the "Awards") heretofore or
hereafter made, including interest thereon, and
the right to receive the same, as a result of, in
connection with, or in lieu of: (a) any taking of
the Mortgaged Property or any part thereof by the
exercise of the power of condemnation or eminent
domain, or the police power; (b) any change or
alteration of the grade of any street or (c) any
other injury or decrease in the value of the
Mortgaged Property or any part thereof (including
but not limited to destruction or decrease in
value by fire or other casualty), all of which
Awards, rights thereto and shares therein are
hereby assigned to Beneficiary, who is hereby
authorized to collect and receive the proceeds
thereof and to give property receipts and
acquittances therefor and to apply, at its option,
the net proceeds thereof, after deducting expenses
of collection, as a credit upon any portion, as
selected by Beneficiary, of the Indebtedness
secured hereby; and
TOGETHER with all of Xxxxxxx's right, title
and interest in and to any and all payments,
proceeds, settlements or other compensation
heretofore or hereafter made, including any
interest thereon, and the right to receive the
same from any and all insurance policies covering
the Property or any portion thereof, or any of the
other property described herein; and
TOGETHER with the interest of Grantor in any
cash escrow fund and in any and all funds,
securities, instruments, documents and other
property which are at any time paid to, deposited
with, under the control of, or in the possession
of Beneficiary, or any of its agents, branches,
affiliates, correspondents or others acting on its
behalf, which rights shall be in addition to any
right of set-off or right of lien that Beneficiary
may otherwise enjoy under applicable law,
regardless of whether the same arose out of or
relates in any way, whether directly or
indirectly, to the Mortgaged Property; and
TOGETHER with the interest of Grantor in and
to any and all funds created or established and
held by Beneficiary pursuant to any indenture of
trust or similar instrument authorizing the
issuance of bonds or notes for the purpose of
financing the Project; and
TOGETHER with all inventory, including raw
materials, components, work-inprogress, finished
merchandise and packing and shipping materials
owned by Grantor and located on the Mortgaged
Property; and
TOGETHER with all proceeds, products,
returns, additions, accessions and substitutions
of and to any or all of the above; and
TOGETHER with all of the records and books of
account now or hereafter maintained by or on
behalf of Grantor in connection with the Project;
and
TOGETHER with all names now or hereafter used
in connection with the Project and the goodwill
associated therewith.
The Land, the Improvements and all of the
property, rights, privileges and franchises
referenced hereinabove and/or granted herein by
Grantor to Beneficiary, together with the
proceeds, products, replacements, additions,
substitutions, renewals and accessions of or to
any and all of the foregoing, are collectively
referred to herein as the "MORTGAGED PROPERTY."
4
TO HAVE AND TO HOLD all and singular the
Mortgaged Property unto the Trustee, its
successors and assigns forever; PROVIDED, HOWEVER,
that these presents are upon the condition that if
Grantor shall pay and fully perform the Loan,
including, without limitation, all sums,
including, without limitation, the principal,
interest and Additional Interest payable in
respect to the Note, Loan Agreement and Loan
Documents and all amounts and any other promissory
note or evidence of indebtedness secured by this
Deed of Trust, at the times and in the manner
stipulated therein and herein, all without any
deduction or credit for taxes or other similar
charges paid by Grantor, and shall keep, perform
and observe all and singular the terms,
conditions, covenants and provisions in the Note,
Loan Agreement and Loan Documents, and any
renewal, extension, consolidation or modification
thereof and in this Deed of Trust expressed to be
kept, performed and observed by and on the part of
Grantor, all without fraud or delay, then the
Trustee shall, upon receipt of the written request
of Xxxxxx, and at the expense of Grantor, release
and discharge this Deed of Trust of record and
shall transfer and deliver up to Grantor any
property at the time subject to this Deed of Trust
which may be then in its possession, provided the
Trustee hereunder shall be entitled to a
reasonable fee for the release and reconveyance of
such property.
This Deed of Trust does not secure any funded
or unfunded commitment to any governmental agency
to pay for the construction or maintenance of any
sidewalks, roads, traffic controls, storm or
sanitary sewer lines, landscaping or other
improvements to or in the vicinity of the
Mortgaged Property or any extension fees or other
sums due in connection therewith if and to the
extent such commitment is or becomes secured by a
separate deed of trust.
ARTICLE I
DEFINITIONS
When used in this Deed of Trust, the
following terms shall have the respective meanings
assigned to them or if no definition is set forth
herein, then the meanings assigned to such terms
in the Loan Agreement:
"ACCREDITATION BODY" shall have the meaning
ascribed to such term in the Operating
"AFFILIATE" shall have the meaning ascribed
to such term in the Operating Agreement.
"ASSIGNMENT OF LICENSES AND PERMITS" shall
mean the Assignment of Licenses and Permits dated
of even date herewith executed by Xxxxxxx and
delivered to Beneficiary, as the same may be
amended from time to time.
"ASSIGNMENT OF RENTS AND LEASES" shall mean
the Assignment of Rents and Leases dated of even
date herewith executed by Xxxxxxx and delivered to
Beneficiary, as the same may be amended from time
to time.
"ASSISTED LIVING FACILITY" shall have the
meaning ascribed to such term in the Loan
"BORROWING GROUP" shall mean collectively,
Grantor, Guarantor, any Person which is an
Affiliate of Grantor or Guarantor or any Manager
which is an Affiliate of Grantor or Guarantor.
5
"BUSINESS DAY" shall mean any day other than
a Saturday or Sunday or any day which is a legal
holiday in Florida or any day on which banking
institutions are authorized or are required by law
or other governmental action to close.
"COLLATERAL" shall mean the Mortgaged
Property and all additional property covered by
any Security Agreement or any of the other Loan
Documents and identified as collateral or security
for the Loan.
"CONTRACTS" shall mean all agreements
(including, without limitation, Provider
Agreements and Resident Agreements), contracts
(including without limitation, construction
contracts, subcontracts, and architects'
contracts), contract rights, warranties and
representations, franchises, and records and books
of account banefiting, relating to or affecting
the Project or the ownership, construction,
development, maintenance, management, repair, use,
occupancy, possession, or operation thereof, or
the operation of any programs or services in
conjunction with the Project and all renewals,
replacements and substitutions therefor, now or
hereafter issued by or entered into with any
Governmental Authority, Accreditation Body or
Third Party Payor or maintained or used in
conjunction with the Project by any member of the
Borrowing Group or entered into in conjunction
with the Project by any member of the Borrowing
Group with any other Person.
"DEFAULT RATE" shall mean the rate of
interest set forth in the Note as the applicable
interest rate after the occurrence of an Event of
Default or after the Maturity Date.
"ENVIRONNNENTAL LAWS" shall mean any
Governmental Requirement applicable to Grantor or
to the Mortgaged Property relating to industrial
hygiene or to environmental or unsafe conditions,
including but not limited to, those relating to
the generation, manufacture, storage, handling,
transportation, disposal, release, emission or
discharge of Substances, those in coMection with
the construction, fuel supply, power generation
and transmission, waste disposal or any other
operations or processes relating to the Mortgaged
Property, and those relating to the atmosphere,
soiL surface and ground water, wetlands, stream
sediments and vegetation on, under, in or about
the Mortgaged Property. Environmental Laws also
shall include, but not be limited to, the Model
Toxics Control Act, as adopted in the State of
Washington and amended from time to time, the
Comprehensive Environmental Response, Compensation
and Liability Act, the Emergency PlaMing and
Community Right-to-Know Act of 1986, the Hazardous
Materials Transportation Act, the Resource
Conservation and Recovery Act, the Solid Waste
Disposal Act, the Clean Water Act, the Clean Air
Act, the Toxic Substance Control Act, the Safe
Dnnking Water Act and the Occupational Safety and
Health Act, and all regulations adopted in respect
to the foregoing laws.
"ENVIRONMENTAL REPORT" shall mean the Phase I
Environmental Report dated October 3, 1996,
prepared by Xxxxxxx Consultants, Inc. with respect
to the Land.
"GOVERNMENTAL AUTHORITY" shall mean the
United States, the state, the county, the city, or
any other political subdivision in which the
Mortgaged Property is located, and any other
political subdivision, agency or instrumentality
exercising jurisdiction over Grantor, Guarantor,
the Project, or if the context requires, any
Design Professional, the General Contractor, any
subcontractor, the Developer, or the Manager under
the Management Contract.
6
"GOVERARNENTAL REQUIREMENTS" shall mean shall
mean all laws, statutes, ordinances, bylaws,
codes, rules, regulations, restrictions, orders,
writs, injunctions, judgments or decrees
(including, without limitation, all applicable
building, health code, zoning, subdivision, and
other land use and health-care licensing statutes,
ordinances, by-laws, codes, rules and
regulations), whether now or hereafter enacted,
promulgated or issued by any Governmental
Authority, Accreditation Body or Third Party
Payor, applicable at any time and from time to
time to Beneficiary, any member of the Borrowing
Group (to the extent applicable to the Project or
the Loan), the Project or if the context requires,
any Design Professional, the General Contractor,
any subcontractor, the Developer or the Manager
under the Management Contract, or the ownership,
construction, development, maintenance,
management, repair, use, occupancy, possession or
operation of the Project, or the operation of any
programs or services in comection with the
Project, including, without limitation, any of the
foregoing which may (i) require repairs,
modifications or alterations in or to the Project7
(ii) in any way affect (adversely or otherwise)
the use and enjoyment of the Project7 or (iii)
require the assessment, monitoring, clean-up,
containment, removal, remediation or other
treatment of any Substances on7 under or from the
Project. Without limiting the foregoing, the term
Governmental Requirements includes all Permits and
Contracts issued or entered into by any
Governmental Authority, any Accreditation Body
and/or any Third Party Payor and the requirements
of Chapter 18.20 of the Revised Code of
Washington.
"HIGHEST LAWFUL RATE" shall have the meaning
ascribed to such term in Section 5.8
"INDEBTEDNESS" shall mean the Loan7 all
liabilities and obligations of Grantor, Guarantor
and other Persons owing to Lender under the Loan
Documents and all other amounts which by the terms
of this Deed of Trust or the Loan Documents are
secured by this Deed of Trust.
"INTENDED USE" shall mean the use of the
Land, Improvements and other Mortgaged Property as
an assisted living facility and such ancillary
uses as are permitted by law and may be necessary
in coMection therevvith or incidental thereto.
"LOAN DOCUMENTS" shall mean the Loan
Application7 the Loan Agreement, the Note, this
Deed of Trust, the Assignment of Licenses and
Permits, the Assignment of Rents and Leases, the
Conditional Assignment of Management Contract, the
Operating Agreement, the Security Agreements, the
Guaranties, the Loan Disbursing Agreement,
Borrower's Counsel's Opinion7 each Consent of
Design Professional, each Consent of Contractor,
and all other documents, instruments and
agreements now existing or hereafter entered into
by Grantor or any Guarantor with or for the
benefit of Beneficiary in relation to the Loan7 as
the same may be amended from time to time,
including all documents evidencing the authority
and capacity of Grantor and Guarantor to
consummate the transactions contemplated by the
Loan Agreement.
"MEDICAID" shall have the meaning ascribed to
such term in the Operating Agreement.
"MEDICARE" shall have the meaning ascribed to
such term in the Operating Agreement.
"OPERATING AEREEMENT" shall mean that certain
Washington Assisted Living Facilities Operating
and Licensing Agreement dated of even date
herewith executed by Xxxxxxx and Beneficiary.
7
"PERMITS" shall mean collectively, all
permits, licenses, approvals, variances,
permissive uses, accreditations, certificates,
certifications, consents, agreements, contracts,
contract rights, franchises, interim licenses,
permits and other authorizations of every nature
whatsoever required by, or issued under,
applicable Governmental Requirements banefiting,
relating or affecting the Project or the
construction, development, maintenance,
management, use or operation thereof, or the
operation of any programs or services in
conjunction with the Project and all renewals,
replacements and substitutions therefor, now or
hereafter required or issued by any Governmental
Authority, Accreditation Body or Third Party
Payor, or maintained or used in conjunction with
the Project by any member of the Borrowing Group,
or entered into in conjunction with the Project by
any member of the Borrowing Group with any Person.
"PERMITTED ENCUMBRANCES" shall mean (i) the
liens and security interests of Beneficiary
arising under this Deed of Trust and the other
Loan Documents; (ii) such matters as are expressly
stated as exceptions to title in any Title
Insurance Policy accepted by Beneficiary; (iii)
liens for taxes, assessments, or governmental
charges or levies not yet due and payable, or
being contested in good faith by appropriate
proceedings promptly initiated and diligently
conducted, provided that a reserve or other
appropriate provision as may be required by GAAP
shall have been made therefor and no foreclosure,
distraint, sale or other similar proceedings shall
have been commenced and any additional
requirements with respect thereto imposed by the
Loan Documents have been satisfied; (iv) Resident
Agreements on a form previously approved by
Beneficiary and other residency agreements that
are acceptable to Beneficiary; and (v) such other
matters affecting the Mortgaged Property as
Beneficiary may accept in writing from time to
time in Baneficiaris sole discretion.
"PERSON" shall mean any individual, sole
proprietorship, partnership, joint venture, trust,
unincorporated organization, association,
corporation, institution, entity, party or
government (whether territorial, national,
federal, state, county, city, municipal or
otherwise, including, without limitation, any
instrumentality, division, agency, body or
department thereof).
"PROJECT" shall mean the acquisition of the
Land and the development, construction and
operation of a one hundred (100) unit Assisted
Living Facility thereon, including assisted living
residences and related amenities including
activity lounges, dining facilities, a library and
a xxxxxx/beauty salon. All references to the term
Project shall be deemed to include the Mortgaged
Property.
"PROVIDER AGREEMENT" shall have the meaning
ascribed to such term in the Operating
"RESIDENT AGREEMENTS" shall mean all
contracts, agreements and consents executed by or
on behalf of any resident or other Person seeking
services at the Project, including without
limitation, assignments of benefits and
guarantees. Resident Agreements shall include all
agreements pursuant to which Persons are granted
the right to reside or remain in the Project for
any period of time.
"SUBSTANCES" shall mean all substances which
are regulated by Environmental Laws or other
Governmental Requirements as to use, generation,
collection, storage, treatment or disposal.and
include, without limitatiorg petroleum and
petroleum products (excluding a small quantity of
gasoline used in maintenance equipment on the
Mortgaged Property), fammable explosives,
radioactive materials (excluding radioactive
materials in smoke detectors), polychlorinated
biphenyL asbestos in any form that is or could
become friable, hazardous waste, toxic or
hazardous substances or other related materials
whether in the form of chemical element,
8
compound, solution, mixture or otherwise,
including but not limited to, those materials
defined as "hazardous substances,n "extremely
hazardous substances,n "hazardous chernicals,n
"toxic waste," "toxic materials," "hazardous
materials," "toxic substances," ntoxic chemicals,n
"air pollutants," "toxic pollutants," "hazardous
wastes," "extremely hazardous waste," or
"resuicted hazardous waste" by Environmental Laws.
"THIRD PARTY PAYORS" shall have the meaning
ascribed to such term in the Operating
ARTICLE II
COVENANTS, AGREEMENTS, REPRESENTATIONS
AND WARRANTIES OF GRANTOR
2. l TITLE TO MORTGAGED PROPERTY. Grantor
represents and warrants to Beneficiary that at the
time of the execution and delivery of this Deed of
Trust it has good title to all of the Mortgaged
Property described in the granting clauses of this
Grantor as being presently granted, assigned,
conveyed and transferred hereunder. Grantor hereby
warrants generally and shall defend the title to
the Mortgaged Property, and every part thereof,
whether now owned or hereafter acquired, unto
Trustee, its successors and assigns, against all
claims and demands by any Person whatsoever,
subject only to the Permitted Encumbrances.
Grantor covenants that Grantor shall comply with
all the terms, covenants and conditions of all
agreements and instruments, recorded and
unrecorded, affecting the Mortgaged Property,
including all Permitted Encumbrances.
2.2 GRANTOR.
2.2.1 SINGLE ASSET ENTITY. Grantor shall own
only the Mortgaged Property as its sole asset and
shall not own or operate any other real or
personal property other than the Mortgaged
Property, shall not operate or conduct any
business other than the operation of the Mortgaged
Property, and shall not incur any liability or
obligation other than those incurred in connection
with the ownership and operation of the Mortgaged
Property.
2.2.2 NO OTHER NAME. Grantor has never used
any other name (including a trade name) other than
the name set forth in the first paragraph of this
Deed of Trust, and Grantor has not changed its
identity or partnership or corporate structure, as
applicable, so as to make the use of Grantor's
name as set forth in the first paragraph of this
Deed of Trust in a filed financing statement
materially misleading.
2.3 FURTHER ASSURANCES.
2.3.1 ASSURANCES. At any and all times
Grantor shall furnish and record all and every
such further assurances as may be requisite or as
Beneficiary shall reasonably require for the
better assuring and confirming unto Trustee and/or
Beneficiary of the estate and property hereby
granted, assigned, conveyed or transferred, or
intended so to be whether now owned or hereafter
acquired, and Grantor shall bear all expenses,
charges and taxes in connection therewith.
2.3.2 AMENDMENTS TO FINANCING STATEMENTS. If,
at any time, any of the information contained in
any financing statement filed in connection with
the security interests created by this Deed of
Trust, including without limitation, the
description of the Collateral, shall change in any
manner so as to cause such financing statement to
become misleading in any material respect or to
impair the perfection of the
security interests intended to be created by this
Deed of Trust, then Grantor shall immediately
advise Beneficiary of such change and, upon
Beneficiary's request, Grantor shall promptly
prepare any amendments to any affected financing
statement necessary in order to protect and
continue the perfection of the security interest
intended to be created thereby, and will obtain
the signatures of the debtor and secured party to
such amendment, and file the same in all offices
where such amendment is required to be filed in
order to protect and continue the perfection of
the security interest intended to be created
thereby. Grantor shall prepare, have executed and
file (and hereby irrevocably constitutes and
appoints Beneficiary as its attorney-in-fact to
prepare, execute and file) any amendments to the
financing statements filed with respect to the
security interests created by this Deed of Trust
in such form as Beneficiary may require in order
to continue the perfection of such security
interests. Grantor shall pay all costs and
expenses incurred in connection with the
performance of its obligations set forth in this
Section.
2.4 CHANCE IN TAX LAW. In the event of the
passage of any law after the date of this Deed of
Trust, which law changes in any way the laws for
the taxation of mortgages, deeds of trust or debts
secured by mortgages or deeds of trust, or the
manner of collection of any such taxation so as to
affect this Deed of Trust, Beneficiary may give
thirty (30) days' written notice to Grantor
requiring the payment of the Indebtedness secured
hereby. If such notice be given, the Indebtedness
secured hereby shall become due and payable at the
expiration of said thirty (30) days; provided,
hawever, that such requirement of payment shall be
ineffective if Grantor is permitted by law to pay
the whole of such tax in addition to all other
payments required hereunder, without any penalty
or charge thereby accruing to Beneficiary, and if
Grantor expressly assumes in writing the
obligation to pay to Beneficiary an amount equal
to, and in fact pays the amount of, such tax to
Beneficiary prior to the date upon which such tax
is due and payable by Beneficiary.
2.5 MAINTENANCE AND CONTINUED OWNERSHIP OF
MORTGAZED PROPERTY.
2.5.1 REPAIR. Grantor (a) shall repair,
restore, replace or rebuild any part of the
Mortgaged Property that is damaged or destroyed by
casualty or the remainder of the Mortgaged
Property after a taking by eminent domain
proceedings whether or not covered by insurance or
award; (b) shall keep the Mortgaged Property in
good order, condition and repair, and shall not
commit, permit or suffer any waste thereof; (c)
shall make all needful and commercially reasonable
renewals, replacements and additions of and to the
same and shall permit Beneficiary or its designee
to enter upon and inspect the Mortgaged Property
at any time or times; (d) shall not alter or tear
down the Improvements on or to be made on the Land
or change them nor permit them to be torn down or
changed, without the written consent of
Beneficiary; and (e) shall not make or permit
residents, tenants or others to make any
improvements to or on the Mortgaged Property,
without the written consent of Beneficiary.
2.5.2 NO IMPAIRMENT. Grantor shall not suffer
any act to be done or any conditions to exist on
the Mortgaged Property or any part thereof or any
thing or article to be brought thereon (a) which
may cause structural injury to the Improvements;
or (b) which would cause the value or usefulness
of the Mortgaged Property or any part thereof to
diminish (ordinary wear and tear excepted); or (c)
which may be dangerous, unless safeguarded as
required by law; or (d) which may in fact or in
law, constitute a nuisance, public or private; or
(e) which may void or make voidable any insurance
then in force or required by the terms of the
Operating Agreement and other Loan Documents to be
in force.
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2.5.3 COMPLIANCE WITH GOVERNMENTAL
REQUIREMENTS. Grantor shall observe and comply
with all conditions and requirements necessary to
obtain, preserve and extend any and all Permits
and shall promptly and faithfully comply with and
obey all other Governmental Requirements with
respect to the Mortgaged Property; provided,
however, nothing herein or in any of the other
Loan Documents shall be construed to require
Grantor to participate in or, if at any time
during the term of the Loan Grantor elects to
participate in, to continue to participate
Medicare or Medicaid.
2.5.4 NO TRANSFER. It is understood and
agreed by Xxxxxxx that as part of the inducement
of Beneficiary to make the Loan, Beneficiary has
relied upon the creditworthiness and the
reliability and reputation of Grantor. Grantor
shall not sell, abandon, cease to own, lease
(except as authorized herein), assign, transfer,
or dispose of the Mortgaged Property or any
interest therein or portion thereof (except as
authorized herein) nor permit the sale,
assignment, or transfer of any shares or
partnership interests, as applicable, in Grantor,
without the prior written consent of Beneficiary
other than in the ordinary course of the operation
of the Project for its Intended Use. Any such
sale, conveyance, transfer, pledge, lease or
encumbrance made without Beneficiary's prior
written consent shall constitute an Event of
Default hereunder. Baneficiaris consent may be
withheld in its absolute and sole discretion, or
it may be conditioned upon a number of actions to
be determined in Beneficiary's sole discretion,
including but not limited to a determination of
the transferee's creditworthiness, the payment of
any assumption fee and associated costs and
expenses, and a modification of the Note, this
Deed of Trust, the Loan Agreement or the other
Loan Documents, and any and all terms and
provisions thereof. A contract to deed or an
agreement for deed or an assignment of beneficial
interest in any trust shall constitute a transfer
pursuant to the provisions of this Section. If any
Person should obtain any interest in all or any
part of the Mortgaged Property (without implying
Beneficiary's consent or acquiescence to such
acquisition, which consent is hereby expressly
denied), whether pursuant to execution or
enforcement of any lien, security interest or
other right, equal or subordinate to this Deed of
Trust or the lien and security interests hereof,
such event shall be deemed to be a transfer by
Grantor and unless expressly authorized herein or
approved hereunder, shall be an Event of Default
under this Deed of Trust.
2.6 ENCUMBRANCES.
2.6.1 NO FURTHER ENCUMBRANCES. Grantor shall
keep the Mortgaged Property free from all liens,
claims, and other encumbrances of every kind
except the Permitted Encumbrances and such other
encumbrances as are approved in writing by
Beneficiary. In the event Beneficiary consents to
an encumbrance on the Property, a default under
the terms of any document creating such an
encumbrance shall be an Event of Default
hereunder.
2.6.2 NO TITLE RETENTION. Grantor shall not,
without the prior written permission of
Beneficiary, place any personal property upon the
Mortgaged Property or any part thereof or attach
any fixture that is subject to a title retention
agreement, security agreement, or other
encumbrance, whether said lien or interest is
prior to the legal operation and effect of this
Deed of Trust or subsequent thereto, nor shall
Grantor place or permit to be placed any personal
property upon the Mortgaged Property or any part
thereof, other than the personal property of
Grantor, of any resident or tenant actually
occupying all or part of the Mortgaged Property
pursuant to a binding Resident Agreement, or of
the Manager pursuant to the Management Contract.
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2.7 RESIDENT AGREEMENTS.
2.7.1 COMPLIANCE WITH RESIDENT ACREEMENTS.
Grantor shall carry out or cause to be carried out
all of the agreements and covenants of owner or
landlord under the Resident Agreements and not
further encumber, assign or permit further
encumbrance or assignment of the owner's or
landlord's interest in such agreements. No
Resident Agreement shall include any space, or
grant to any resident any right or interest in any
area outside of the limits of the Mortgaged
Property and no Resident Agreement shall obligate
the owner or landlord thereunder to provide
services outside of the Mortgaged Property, except
as otherwise agreed by Beneficiary, which approval
may be evidenced by Beneficiary's approval of a
form of Resident Agreement as provided in the Loan
Agreement. Upon demand of Beneficiary, Grantor
shall furnish Beneficiary with an executed copy of
each Resident Agreement immediately upon its
execution. All Resident Agreements shall be
written on the standard form accepted by
Beneficiary, with only such changes as Beneficiary
shall have approved in writing or pursuant to
agreements otherwise approved by Beneficiary.
2.7.2 ASSIGNMENT OF RESIDENT AGREEMENTS.
Grantor hereby assigns and transfers to
Beneficiary all Resident Agreements, subleases,
rents, issues and profits of the Mortgaged
Property. Grantor hereby irrevocable appoints
Beneficiary its true and lawful attorney-in-fact,
at the option of Beneficiary, at any time and from
time to time, to demand, receive and enforce
payment, give receipts, releases and
satisfactions, and to sue, in the name of Grantor
or Beneficiary, for all such rents, issues and
profits. Grantor, however, shall have the right to
collect such rents, issues and profits (but not
more than one (l) month in advance) prior to or at
any time there is not an Event of Default under
this Deed of Trust. The assignment of Resident
Agreements, subleases, rents, issues and profits
of the Mortgaged Property in this Section is
intended to operate as an absolute assignment, not
merely the passing of a security interest, to the
fullest extend permissible by Washington law. If
required by Beneficiary, Grantor will specifically
assign to Beneficiary all such Resident Agreements
whether now existing or hereafter created.
2.7.3 COLLECTION UPON DEFAULT. Beneficiary
may, upon any Event of Default under this Deed of
Trust, and at any time thereafter without notice
unless such Event of Default has been cured to
Beneficiary's satisfaction and Beneficiary has not
elected to exercise its remedies in accordance
with Article IV hereof, and either in person, by
agent or by a receiver appointed by the court, and
without regard to the adequacy of any security for
the Indebtedness hereby secured, enter upon and
take possession of the Mortgaged Property, or any
part thereof. Upon any Event of Default,
Beneficiary may, in its own name, sue for or
otherwise collect such rents, issues, and profits,
including those past due and unpaid, and apply
same less costs and expenses of operation and
collection, including litigation expenses, court
costs, costs of suit, cost of an abstract of title
and other title evidence and attorneys' fees, and
paralegal charges, including all appellate
proceedings and disbursements, upon any
Indebtedness secured hereby and in such order as
Beneficiary may determine. The collection of such
rents, issues and profits or the entering upon and
taking possession of the Mortgaged Property, or
application thereof as aforesaid, shall not cure
or waive any default or notice of default
hereunder or invalidate any act done in response
to such default or pursuant to such notice of
default, or otherwise invalidate, impair, nullify,
waive or extinguish the rights and protections
afforded Beneficiary under the other provisions of
this Deed of Trust or the provisions of any of the
other Loan Documents. Furthermore, upon the
occurrence of an Event of Default, Beneficiary may
apply for a court order requiring Grantor to
deposit all rents in the court registry. Grantor
hereby consents to entry of such an order upon the
sworn ex parse motion of Beneficiary that an Event
of Default has occurred hereunder.
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2.7.4 MODIFICATION OF RESIDENT AGREEMENTS.
Other than may be reasonably necessary in the
ordinary course of Grantor's business or as
required by applicable Governmental Requirements,
Grantor will not modify, surrender, or terminate,
either orally or in writing, any Resident
Agreement now existing or hereafter created upon
the Mortgaged Property, nor will Grantor permit an
assignment or sublease thereof without the express
prior written consent of Beneficiary, which
consent shall not be unreasonably withheld.
2.7.5 ASSIENMENT OF BANKRUPTCV AWARDS.
Grantor hereby assigns to Beneficiary any award
made hereafter to Grantor in any bankruptcy,
insolvency or reorganization proceeding (whether
federal or state) involving any of the residents
of the Project and all payments by any tenant in
lieu of rent pursuant to or as a result of such
proceedings.
2.7.6 LIMITATION OF LIABILITY UNDER RESIDENT
AGREEMENTS. Beneficiary shall not be obligated to
perform or discharge any obligation or duty to be
performed or discharged by Grantor under any
Resident Agreement; and Grantor hereby agrees to
indemnify Beneficiary for and to save Beneficiary
harmless from, any and all liability arising from
any Resident Agreement, or this assigarnent
thereof, except liability resulting solely from
the gross negligence, willfull misconduct or fraud
of Beneficiary or Beneficiarys officers,
directors, employees or duly authorized agents,
and this assignment shall not place the
responsibility for the control, care, management
or repair of the Mortgaged Property upon
Beneficiary, nor make Beneficiary liable for any
negligence in the management, operation, upkeep,
repair or control of the Mortgaged Property
resulting in loss or injury or death to any
tenant, agent, guest, or stranger.
2.8 CONTRACTS.
2.8.1 COMPLIANCE WITH CONTRACTS. Grantor
shall carry out or cause to be carried out all of
its agreements and covenants under and relating to
all Contracts and not permit a lien or other
encumbrance superior to such Contracts other than
this Deed of Trust and the Permitted Encumbrances.
Upon demand of Beneficiary, Grantor shall furnish
Beneficiary an executed copy of each Contract
immediately upon its execution.
2.8.2 ASSIGNMENT OF CONTRACTS. Grantor hereby
assigns and transfers to Beneficiary all Contracts
and all rents, issues, profits and other revenues
generated from such Contracts. Grantor hereby
irrevocably appoints Beneficiary its true and
lawful attorney-in-fact, at the option of
Beneficiary, at any time and from time to time, to
demand, receive and enforce payment, give
receipts, releases and satisfactions, and to sue,
in the name of Grantor or Beneficiary, for or
under all such Contracts. Grantor, however, shall
have the right to collect such issues and profits
prior to or at any time there is not an Event of
Default under this Deed of Trust. The assignment
of Contracts, rents, issues and profits of the
Mortgaged Property in this Section is intended to
operate as an absolute assignment, not merely the
passing of a security interest, to the fullest
extent permissible by Washington law. If required
by Beneficiary, Grantor will specifically assign
to Beneficiary all Contracts whether now existing
or hereafter created.
2.8.3 COLLECTION UPON DEFAULT. Beneficiary
may, upon any Event of Default under this Deed of
Trust, and at any time thereafter without notice
unless such Event of Default has been cured to
Baneficiaris satisfaction and Beneficiary has not
elected to exercise its remedies in accordance
with Article IV hereof, in its own name, sue for
or otherwise collect all revenues generated by all
Contracts ("Revenues"), including those past due
and unpaid, and apply same less costs and expenses
of operation and collection, including litigation
expenses, court costs, costs of suit, cost of an
abstract of title and other title evidence and
attorneys' fees, and paralegal charges, including
all
13
appellate proceedings and disbursements, upon any
Indebtedness secured hereby and in such order as
Beneficiary may determine. The collection of such
Revenues or application thereof as aforesaid,
shall not cure or waive any default or notice of
de&tilt hereunder or invalidate any act done in
response to such default or pursuant to such
notice of default, or otherwise invalidate,
impair, nullify, waive or extinguish the rights
and protections afforded Beneficiary under
Washington law. Furthermore, upon the occurrence
of an Event of Default, Beneficiary may apply for
a court order requiring Grantor to deposit all
Revenues in the court registry. Grantor hereby
consents to entry of such an order upon the sworn
ex parse motion of Beneficiary that an Event of
Default has occurred hereunder.
2.8.4 LIMITATION OF LIABILITY UNDER
CONTRACTS. Beneficiary shall not be obligated to
perform or discharge any obligation or duty to be
performed or discharged by Grantor under any
Contract and Grantor hereby agrees to indemnify
Beneficiary for and to save Beneficiary harmless
from, any and all liability arising from any
Contract, or this assignment thereof, except
liability resulting solely from the gross
neglicence, willful misconduct or fraud of
Beneficiary or Beneficiarys officers, directors,
employees or duly authorized agents, and this
assignment shall not place the responsibility for
the control, care, management or repair of the
Mortgaged Property upon Beneficiary nor make
Beneficiary liable for any negligence in the
management, operation, upkeep, repair or control
of the Mortgaged Property resulting in loss or
injury or death to any resident, tenant, agent,
guest, or stranger.
2.9 ENVIRONMENTAL MATTERS.
2.9.1 NO SUBSTANCES PRESENT. Grantor hereby
represents and warrants to Beneficiary that, to
the best of its knowledge, after a physical
inspection of the Mortgaged Property and all
appropriate investigation, except as disclosed in
the Environmental Report, (a) there are not now
and have never been any Substances located on or
near the Mortgaged Property other than those being
used in compliance with all applicable
Environmental Laws, and (b) the Mortgaged Property
is not now being used nor has it ever been used in
the past for any activities involving the use,
generation, collection, storage, treatment, or
disposal of any Substances. Grantor will not place
or permit to be placed any Substances on or near
the Mortgaged Property except for those Substances
that (i) are typically used in connection with the
maintenance and operation of an Assisted Living
Facility, provided the same are in appropnate
quantities to ensure compliance with all
applicable Environmental Laws and other
Governmental Requirements, (ii) are stored, used,
and disposed of properly, or (iii) are approved in
writing by Beneficiary.
2.9.2 ACTING UPON PRESENCE OF SUBSTANCES.
Grantor hereby covenants and agrees that, if at
any time (a) Substances are spilled, emitted,
disposed, or leaked on, in, or under the Mortgaged
Property in any amount in excess of that permitted
under applicable Environmental Laws, or (b) it is
determined that there are Substances located on,
in, or under the Mortgaged Property other than
those of which Beneficiary has approved in writing
or which are permitted to be used on the Mortgaged
Property without Beneficiarys written approval
pursuant to subsection 2.9.1 of this Section,
Grantor shall immediately notify Beneficiary and
any Governmental Authorities or private Persons
required by law to be not)fied, and shall, within
thirty (30) days thereafter or sooner if required
by Beneficiary or any Governmental Authority, take
or cause to be taken, at Grantor's sole expense,
such action as may be required by Beneficiary or
any Governmental Authority. If Grantor shall fail
to take such action, Beneficiary may make advances
or payments towards performance or satisfaction of
the same but shall be under no obligation so to
do; and all sums so advanced or paid,
14
including all sums advanced or paid in connection
with any investigation or judicial or
administrative proceeding relating thereto,
including, without limitation, reasonable
attorneys' fees, expert fees, fines, or other
penalty payments, shall be at once repayable by
Grantor and shall bear interest at the Default
Rate, from the date advanced or paid by
Beneficiary until the date paid by Grantor to
Beneficiary, and all sums so advanced or paid,
with interest as aforesaid, shall become a part of
the Indebtedness secured hereby. Notwithstanding
the foregoing, nothing contained herein shall be
construed to prevent Grantor from seeking
reimbursement for, or other compensation for, the
existence of any Substances on, in, or under the
Mortgaged Property from any Person responsible
therefor, provided Xxxxxxx's obligations to
Beneficiary hereunder shall not be conditioned or
dependent upon any such reimbursement or
compensation.
2.9.3 ENVIRONMENTAL AUDITS. Grantor, promptly
upon the written request of Beneficiary from time
to time, shall provide Beneficiary, at Grantor's
expense, from time to time with an environmental
site assessment or environmental audit report, or
an update of such an assessment or report, all in
scope, form, and content satisfactory to
Beneficiary.
2.9.4 ENVIRONMENTAL NOTICES. Grantor shall
furnish to Beneficiary duplicate copies of all
correspondence, notices, or reports it receives
from any Governmental Authority or any other
Person regarding environmental matters or
Substances at or near the Mortgaged Property,
immediately upon Grantor's receipt thereof.
2.9.5 CONDITION OF PROPERTY. Grantor hereby
represents and warrants that, to the best of its
knowledge, after a physical inspection of the
Mortgaged Property and all appropriate
investigation, except as disclosed in the
Environmental Report and on the Survey, there are
no xxxxx or septic tanks on the Mortgaged Property
serving any other property; no xxxxx or septic
tanks on other property serving the Mortgaged
Property; no burial grounds, archeological sites,
or habitats of endangered or threatened species on
the Mortgaged Property; and that no part of the
Mortgaged Property is subject to tidal waters; has
been designated as wetlands by any Governmental
Authority; or is located in a special flood hazard
area.
2.9.6 ENVIRONMENTAL INDEMNITY.
2.9.6.1 Grantor shall at all times indemnify
and hold harmless Beneficiary and Trustee against
and from any and all claims, suits, actions,
debts, damages, costs, losses, obligations,
judgments, charges, and expenses, of any nature
whatsoever suffered or incurred by Beneficiary or
Trustee, whether as Beneficiary or trustee of this
Deed of Trust, as Beneficiary in possession, or as
successor-in-interest to Grantor by foreclosure
deed or deed in lieu of foreclosure, under or on
account of the Environmental Laws or any similar
laws or regulations, including the assertion of
any lien thereunder, with respect to:
(a) any discharge of Substances, the threat
of a discharge of any Substances, or the presence
of any Substances affecting the Mortgaged Property
whether or not the same originates or emanates
from the Mortgaged Property or any contiguous real
estate including any loss of value of the
Mortgaged Property as a result of any of the
foregoing;
(b) any costs of removal or remedial action
incurred by any state or the United States
Government or any costs incurred by any other
person or damages from injury to, destruction of,
or loss of natural resources, including reasonable
costs of assessing such injury, destruction or
loss incurred pursuant to any Environmental Laws;
15
(c) liability for personal injury or property
darnage arising under any statutory or common law
tort theory, including, without limitation,
damages assessed for the maintenance of a public
or private nuisance or for the carrying on of an
abnormally dangerous activity at or near the
Mortgaged Property; and/or
(d) any other environmental matter affecting
the Property within the jurisdiction of the
Environmental Protection Agency or any other
Governmental Authority.
2.9.6.2 Grantor's obligations under this
Section shall arise upon the discovery of the
presence of any Substance, whether or not the
Environmental Protection Agency or any other
Governmental Authority has taken or threatened any
action in connection with the presence of any
Substances.
2.9.7 CONTROLLING AGREEMENT. Grantor
acknowledges that Beneficiary has agreed to make
the Loan in reliance upon Xxxxxxx's
representations, warranties and covenants in this
Section 2.9. Grantor further acknowledges that in
addition to the representations, warranties and
covenants contained in this Section 2.9, Grantor
has made additional representations, warranties
and covenants with respect to Substances and
Environmental Laws in the Environmental Indemnity
Agreement dated of even date herewith by and among
Grantor, Emeritus and Beneficiary, and that such
additional representations, warranties and
covenants are intended to be in addition to, and
not in lieu of, the representations, warranties
and covenants set forth herein. Moreover, although
Grantor and Beneficiary intend for all such
representations, warranties and covenants
regarding Substances and Environnnental Laws to be
read together and to be consistent, to the extent
of any inconsistencies between the
representations, warranties and covenants set
forth in this Deed of Trust regarding Substances
and Environmental Laws and those set forth in the
Environmental Indemnity Agreement, the
representations, warranties and covenants set
forth in the Environmental Indemnity Agreement
shall govern All of the representations,
warranties, covenants and indemnities of this
Section 2.9 shall survive the repayment of the
Note and/or the release of the operation and
effect of this Deed of Trust and shall survive the
transfer of any or all right, title and interest
in and to the Mortgaged Property by Grantor to any
party, whether or not affiliated with Grantor.
2.10 ADDITIONAL ADVANCES. If Grantor shall
fail to perform any of the covenants or satisfy
any of the conditions contained herein,
Beneficiary may make advances or payments towards
performance or satisfaction of the same but shall
be under no obligation so to do; and all sums so
advanced or paid shall be at once repayable by
Grantor and shall bear interest at the Default
Rate from the date advanced until the date paid,
and all sums so advanced or paid, with interest as
aforesaid, shall become a part of the Indebtedness
secured hereby; but no such advance or payment
shall relieve Grantor from any default or Event of
Default hereunder. If Grantor shall fail to
perform any of the covenants or satisfy any of the
conditions contained herein, Beneficiary may use
any funds of Grantor, including any funds held as
Tax Deposits or Insurance Deposits under the
Operating Agreement, towards performance or
satisfaction of the same but shall be under no
obligation so to do; and no such use of funds
shall relieve Grantor from any default hereunder,
including the obligation to make sufficient Tax
Deposits and Insurance Deposits as required by the
Operating Agreement.
2.11 CONDEMNATION AWARDS. Should the
Mortgaged Property or any part thereof or interest
therein be taken or damaged by reason of any
public use or improvement or by condemnation or
eminent domain proceedings or in any other manner,
or should the grade of any street be altered as a
result of condemnation or eminent domain
proceedings or otherwise, all or such part of any
award or proceeds derived therefrom as Beneficiary
in its sole discretion may determine in writing
shall be
16
paid to Beneficiary and applied to the payment of
the Indebtedness secured hereby (in such manner or
combination thereof, including inverse order of
maturity of installments of principal, if any, as
Beneficiary may, in its sole discretion, elect)
and all such proceeds are hereby assigned to
Beneficiary; provided. however. should Beneficiary
notify Grantor that Grantor is obligated to repair
or replace any portion of the Mortgaged Property
damaged or taken in such condemnation proceeding,
Beneficiary shall make the proceeds of such
condemnation actually received by Beneficiary
available to Grantor for such purposes. Any such
condemnation proceeds shall be advanced to Grantor
in accordance with the provisions of the Loan
Agreement governing Advances, following receipt
and approval by Beneficiary of such plans,
specifications, construction contracts,
contractors, suppliers and similar matters as
Beneficiary deems reasonably necessary to ensure
that the necessary repair and replacement is
completed in accordance with the requirements of
the Loan Documents and that sufficient funds are
available for such purpose.
2.12 COSTS OF DEFENDING AND ENFORCING LIEN.
Grantor shall pay all costs, charges and expenses,
including appraisals, title examinations, and
reasonable attorney's fees, which Beneficiary may
incur in defending or enforcing the validity or
priority of the legal operation and effect of this
Deed of Trust, or any term, covenant or condition
hereof, or in collecting any sum secured hereby,
or in protecting the security of Beneficiary,
including without limitation being a party in any
condemnation, bankruptcy or administrative
proceedings, or, if an Event of Default shall
occur, in administering and executing the trust
hereby created and performing its powers,
privileges and duties hereunder. Beneficiary may
make advances or payments for such purposes but
all advances or payments made by Beneficiary for
such purposes shall be repayable immediately by
Grantor and shall bear interest at the Default
Rate from the date the same shall become due and
payable until the date paid, and any such sum or
sums with interest as aforesaid shall become a
part of the indebtedness secured hereby; but no
such advance or payment shall relieve Grantor from
any default hereunder.
2.13 MODIFICATION OF TERMS: NO NOVATION.
Beneficiary may at any time, and from time to
time, extend the time for payment of the
Indebtedness secured hereby, or any part thereof,
or interest thereon, and waive, modify or amend
any of the terms, covenants or conditions in the
Note, in this Deed of Trust or in any other paper
or document executed in connection with the Loan,
in whole or in part, either at the request of
Grantor or of any person having an interest in the
Mortgaged Property, accept one or more notes in
replacement or substitution of the Note, consent
to the release of all or any part of the Mortgaged
Property from the legal operation and effect of
this Deed of Trust, take or release other
security, release any party primarily or
secondarily liable on the Note or hereunder or on
such other security, grant extensions, renewals or
indulgences therein or herein, apply to the
payment of the principal and interest and premium,
if any, of the Indebtedness secured hereby any
part or all of the proceeds obtained by sale or
otherwise as provided herein, uithout resort or
regard to other security, or resort to any one or
more of the securities or remedies which
Beneficiary may have and which in its absolute
discretion it may pursue for the payment of all or
any part of the Indebtedness secured hereby, in
such order and in such manner as it may determine,
all without in any way releasing Grantor or any
party secondarily liable from any of the terms,
covenants or conditions of the Note, this Deed of
Trust, or other paper or document executed in
connection with the Loan, or relieving the
unreleased Mortgaged Property from the legal
operation and effect of this Deed of Trust for all
amounts owing under the Note and this Deed of
Trust. Beneficiary and Grantor recognize and agree
that the provisions of this Deed of Trust, the
Note, and the other Loan Documents may be modified
by agreement between Beneficiary and Grantor or
their successors or assigns at any time before or
after default (which modification may involve
increasing the rate of interest in the Note,
agreeing that other charges should be paid, or
modifying any other provision in any such
17
instruments). Beneficiary may extend the time of
payment, may agree to alter the terms of payment
of the Indebtedness, and may grant partial
releases of any portion of the property included
herein. No such modification by Beneficiary and
Grantor nor any such action by Beneficiary
referred to above shall be a substitution or
novation of the original Indebtedness or
instruments evidencing or securing the same, but
shall be considered a possible occurrence within
the original contemplation of the parties.
2.14 GOVERNMENTAL ACTION ADVERSELY AFFECTING
MORTGAGED PROPERTY. Grantor agrees that in the
event of the enactment of any law or ordinance,
the promulgation of any zoning or other
governmental regulation, or the rendition of any
judicial decree restricting or affecting the use
of the Mortgaged Property or rezoning the area
wherein the same shall be situate which
Beneficiary reasonably believes adversely affects
the Mortgaged Property or the ability of Grantor
to maintain and operate the Project for its
Intended Use, Beneficiary may, upon at least sixty
(60) days' written notice to Grantor, require
payment of the Indebtedness secured hereby at such
time as may be stipulated in such notice, and the
whole of the Indebtedness secured hereby, shall
thereupon become due and payable.
2.15 USE OF MORTGAGED PROPERTY. Grantor shall
at all times operate the Mortgaged Property for is
Intended Use in accordance with the requirements
of the Operating Agreement.
ARTICLE III
EVENTS OF
DEFAULT
The occurrence of one of more of the
following events (herein called an "Event of
Default") shall constitute and be an Event of
Default:
(a) Any sale, lease, exchange, assignment,
conveyance, transfer of possession or other
transfer or disposition of the Mortgaged Property
or any portion thereof or interest therein other
than as expressly permitted in the Loan Documents
or in the ordinary course of the operation of the
Project for its Intended Use, regardless of
whether such sale, lease or other disposition
shall diminish the value of the security for the
Indebtedness, increase the LikeLihood of the
occurrence of some other Event of Default,
increase the Likelihood that Beneficiary will have
to resort to any security for payment of the
Indebtedness or add or remove the liability of any
Person for payment or performance of the
Indebtedness; or
(b) If title of Grantor to any or all of the
Mortgaged Property or the status of this Deed of
Trust as a first and prior lien and security
interest on the Mortgaged Property shall be
challenged or endangered by any Person whatsoever,
and Grantor shall fail to cure the same upon
demand by Beneficiary; or
(c) The occurrence of an event of default
(regardless of how such default may be defined or
described) under the Note or any of the other Loan
Documents and the expiration of any cure period
expressly provided with respect thereto.
18
ARTICLE IV
REMEDIES
4.1 ACCELERATION. If one or more of the
Events of Default shall occur, Beneficiary may, at
its option, declare the entire unpaid principal
amount of the Note (if not already due and
payable) to be due and payable immediately, by
delivery to Trustee of written declaration of
default and demand for sale and written notice of
default and of election to cause the Mortgaged
Property to be sold, which notice Trustee shall
cause to be duly filed for record. Beneficiary
shall also deposit with the Trustee this Deed of
Trust, the Note and all documents evidencing the
expenditures secured hereby. If Beneficiary
exercises Beneficiary's option to declare the
entire unpaid principal amount of the Note to be
due and payable, Grantor covenants to pay
immediately the full amount of the Indebtedness
secured hereby even though foreclosure or other
court proceedings to collect the Indebtedness have
not been commenced. Acceleration of maturity, once
declared by Beneficiary, may at the option of
Beneficiary, be rescinded by written
acknowledgment to that effect by Beneficiary, but
the tender and acceptance of partial payments
alone shaLI not rescind or affect in any way such
acceleration of maturity.
4.2 POSSESSION OF MORTGAGED PROPERTY. If one
or more of the Events of Default shall occur,
Grantor shall, upon demand, forthwith surrender
the actual possession, and, to the extent
permitted by law, Beneficiary, by such officers or
agents as it may appoint, may enter and take
possession of the Mortgaged Property and may
exclude Grantor, its agents and servants, wholly
therefrom, and having and holding the same, may
use, operate, manage and control the Mortgaged
Property or any part thereof, and upon every such
entry Beneficiary, at the expense of Grantor and
of the Mortgaged Property, from time to time may
make all necessary or proper repairs, renewals,
replacements and useful or required alterations,
additions, betterments and improvements to and
upon the Property as to it may seem judicious and
pay all costs and expenses of so taking, holding
and managing the same, including reasonable
compensation to its employees and other agents
(including, without Limitation, attorneys' fees
and management and rental commissions) and any
taxes, assessments and other charges prior to the
legal operation and effect of this Deed of Trust
which Beneficiary may deem it wise or desirable to
pay, and in such case Beneficiary shall have the
right to manage the Mortgaged Property and to
carry on the business and exercise all rights and
powers of Grantor, either in the name of Grantor,
or otherwise, as Beneficiary shall deem advisable;
and Beneficiary shall be entitled to collect and
receive all rents thereof and therefrom. The
taking of possession and collection of rents by
Beneficiary shall not be construed to be an
affirmation of any Resident Agreement or
acceptance of anornment with respect to any
Resident Agreement covering all or any portion of
the Mortgaged Property. After deducting the
expenses of operating the Mortgaged Property and
of conducting the business thereof, and of all
repairs, maintenance, renewals, replacements,
alterations, additions, beuerments, improvements
and all payments which it may be required or may
elect to make for taxes or other proper charges on
the Mortgaged Property, or any part thereof, as
well as just and reasonable compensation for all
its employees and other agents (including, without
limitation, anorney's fees and management and
rental commissions) engaged and employed, the
moneys arising as aforesaid shall be applied to
the Indebtedness secured hereby. Whenever all that
is due upon the principal of and interest on the
Note and under any of the terms of this Deed of
Trust shall have been paid and all defaults made
good, Beneficiary shall surrender possession to
Grantor. The same right of entry, however, shall
exist if any subsequent Event of Default shall
occur.
19
4.3 APPOINTMENT OF A RECEIVER. Until one or
more of the Events of Default shall occur (but not
thereafter), Grantor shall have possession of the
Mortgaged Property and shall have the right to use
and enjoy the same and to receive the rents
thereof and therefrom. If one or more of the
Events of Default shall occur, and without the
requirement of any other showing, Beneficiary
shall be entitled as a matter of right and to the
extent permiKed by law, without notice to Grantor,
and without regard to the adequacy of the
security, to the immediate appointment of a
receiver of the Mortgaged Property in an ex parse
proceeding with all such other powers as the court
or courts making such appointment shall confer to
take charge of, manage, preserve, protect,
complete construction of and operate the Mortgaged
Property and any business or businesses located
thereon; to collect rents, issues, profits and
income therefrom from whatever source derived; to
make all necessary and needed repairs to the
Mortgaged Property; to pay all taxes and
assessments against the Mortgaged Property and
insurance premiums for insurance thereon and
thereupon, it being hereby expressly covenanted
and agreed that the court shall forthwith appoint
such receiver with the usual powers and duties in
like cases; and such appointment shall be made by
the court as a matter of strict right to the
Beneficiary, and without reference to the adequacy
or inadequacy of the value of the Mortgaged
Property, or to the solvency or insolvency of
Grantor, and after payment of the expense of the
receivership, including reasonable attorney's fees
to Beneficiary's anorney, and after compensation
to the receiver for management and completion of
the Mortgaged Property, to apply the net proceeds
derived therefrom in reduction of the Indebtedness
secured hereby or in such other manner as such
court shall direct. All expenses, fees and
compensation incurred pursuant to a receivership
approved by such court shall be secured by the
lien of this Deed of Trust until paid. Grantor
hereby specifically waives the right to object to
the appointment of a receiver as aforesaid and
hereby consents that such appointment shall be
made as an admired equity and as a matter of
absolute right to the Beneficiary and that the
same may be done without notice to Grantor or any
other defendant to such suit and without the
requirement of any other showing and without
regard to the adequacy of the security. Grantor
shall deliver to the receiver appointed pursuant
to the provisions of this Section, or to
Beneficiary in the event of entry pursuant to the
terms of the preceding Section, all original
records, books, bank accounts, Resident Agreement,
agreements, security deposits of the residents and
all other materials relating to the operation of
the Mortgaged Property except those, if any, which
Grantor is required to maintain as confidential or
in its possession pursuant to applicable
Governmental Requirements.
4.4 POSSESSION AND DISPOSITION OF PERSONAL
PROPERTY.
4.4.1 ASSEMBLY OF MORTGAGED PROPERTY. If one
or more of the Events of Default shall occur,
Beneficiary may at its discretion require Grantor
to assemble such items of the Mortgaged Property
as may be designated by Beneficiary and make them
available to Beneficiary at a place reasonably
convenient to both parties to be designated by
Beneficiary. Upon the occurrence of an Event of
Default under this Deed of Trust, Beneficiary
shall have the right to take possession of such
items of the Mortgaged Property as Beneficiary may
elect except those, if any, which Grantor is
required to maintain as confidential or in its
possession pursuant to applicable Governmental
Requirements. In taking possession Beneficiary may
proceed without judicial process if this can be
done without breach of the peace. Beneficiary
shall have the further right to remove such items
of the Mortgaged Property as it may choose to any
location or locations selected by Beneficiary
except those, if any, which Grantor is required to
maintain as confidential or in its possession
pursuant to applicable Governmental Requirements,
and Grantor shall pay the costs of such removal
and for the storage and protection of such items
immediately upon demand therefor.
20
4.4.2 SECURITY AGREEMENT. This Deed of Trust
shall be construed as a security agreement and
financing statement under the Uniform Commercial
Code as adopted and in force, from time to time,
in the State of Washington, and shall be operative
and effective as such in addition to, and not in
substitution for, any other security agreement
executed by Grantor in connection with the
transaction secured hereby. This Deed of Trust
further constitutes a fixture filing under
Sections 62A9-313 and 62A9-402(6) of the
Washington Uniform Commercial Code, as amended or
recodified from time to time; provided, however
that the execution and/or filing hereof does not
imply that the items of personal property included
in the Mortgaged Property are or are to become
fixtures. The filling hereof as a fixture filing
is intended to protect the parties from
unwarranted assertions by third Persons. Grantor
agrees to and shall, upon the request of
Beneficiary, execute and deliver to Beneficiary,
in form satisfactory to Beneficiary, such
"financing statements," descriptions of property
and such further assurances as Beneficiary, in its
sole discretion, may, from time to time, consider
necessary to create, perfect and preserve the lien
and encumbrance hereof and the security interest
granted herein upon and both the real property,
the Improvements, and all rights and interest of
Grantor in the Mortgaged Property described
herein. Beneficiary, at the expense of Grantor,
may cause such statements, descriptions and
assurances, and this Deed of Trust to be recorded
and re-recorded, filed and remfiled, at such times
and in such places as may be required or permitted
by law to so create, perfect and preserve the lien
and encumbrance hereof and the security interest
granted herein upon and in all of said Mortgaged
Property. With respect to such Mortgaged Property,
the Beneficiary is a "secured party" and the
Grantor is a "debtor" under the Washington Unifomn
Commercial Code with its address being as set
forth in this Deed of Trust. If Beneficiary elects
to proceed under the Washington Uniform Commercial
Code to dispose of some of the Mortgaged Property,
Beneficiary shall give Grantor notice by certified
mail, postage prepaid, retum receipt requested, of
the time and place of any public sale of any of
such property, or of the time after which any
private sale or other intended disposition thereof
is to be made by sending notice to Grantor at
least five (5) Business Days before the time of
the sale or other disposition, which provisions
for notice Grantor and Beneficiary agree are
reasonable; provided, however, that nothing herein
shall preclude Beneficiary from proceeding as to
all the Mortgaged Property to the maximum extent
pemitted by applicable Washington law in
accordance with the rights and remedies of
Beneficiary in respect of the real property.
Notwithstanding any release of any or all of the
property included in the Mortgaged Property which
is deemed "real property", any proceedings to
foreclose this Deed of Trust, or its satisfaction
of record, the temls hereof shall survive as a
security agreement with respect to the security
interest created hereby and referred to above
until the repayment or satisfaction in full of the
obligations of Grantor as are now or hereafter
evidenced by the Note and Loan Agreement.
4.5 FORECLOSURE SALE.
4.5.1 If one or more of the Events of Default
shall occur, Beneficiary may request that Trustee
sell the Mortgaged Property in accordance with the
Deed of Trust Act of the State of Washington (RCW
Chapter 61.24 as existing now, or hereafter
amended) and the Unifomm Commercial Code of the
State of Washington where applicable, at public
auction to the highest bidder for cash at such
time and at such place as are statutorily
prescribed. Grantor acknowledges that there is no
right to an extension of the trustee's sale on
"equitable" or other grounds, and that
Beneficiary's remedies under this Deed of Trust
shall not be affected or impaired by the exercise
of any right of setoff or to collect and apply
rents, profits, insurance proceeds or condemnation
awards.
21
Any person except Trustee may bid at a Trustee's
sale. The Trustee is not obligated to notify any
party hereto of pending sale under any other deed
of trust or of any action or proceeding in which
Grantor, Trustee or Beneficiary shall be a party,
unless such action or proceeding is brought by the
Trustee. If the Mortgaged Property consists of
several known lots or parcels, Beneficiary may
designate the order in which such parcels shall be
sold or offered for sale.
4.5.2 Trustee may postpone sale of all or any
portion of the Mortgaged Property by public
announcement at such time and place of sale, and
from time to time thereafter may postpone such
sale by public announcement at the time fixed by
the preceding postponement.
4.5.3. Without declaring the entire unpaid
principal balance due, Beneficiary may foreclose
only as to the sum past due without injury to this
Deed of Trust or the displacement or impairment of
the remainder of the lien thereof and at such
foreclosure sale the Mortgaged Property shall be
sold subject to all remaining items of
Indebtedness and Beneficiary may again foreclose
in the same manner as often as there may be any
sum past due.
4.5.4 Beneficiary shall have the right to
judicially foreclose this Deed of Trust as a
mortgage. If this Deed of Trust is foreclosed by
judicial procedure, Beneficiary will be entitled
to a judgment which will provide that if the
foreclosure sale proceeds are insufficient to
satisfy the judgment, execution may issue for any
amount by which the unpaid balance of the
obligations secured by this Deed of Trust exceeds
the net sale proceeds payable to Beneficiary,
subject to any limitations with respect thereto
set forth in the Note. In the event Grantor
remains in possession of the Mortgaged Property
after the Mortgaged Property is sold as provided
above or Beneficiary otherwise becomes entitled to
possession of the Mortgaged Property upon default
of Grantor, Grantor shall become a tenant at will
of Beneficiary or the purchaser of the Mortgaged
Property and shall pay a reasonable rental for use
of the Mortgaged Property while in Grantor's
possession. The purchaser at any foreclosure sale
may (but shall be under no obligation to), during
any redemption period, make -such repairs and
alterations to the improvements as may be
appropriate for the proper operation, care,
preservation, and protection thereof-, pay any
taxes and assessments due during such period;
insure the improvements on the Mortgaged Property
against loss by casualty and itself against
liability arising from its ownership and use of
the Mortgaged Property; and pay liens not
extinguished by the foreclosure and any other
amounts relating to the Mortgaged Property to the
extent due during such redemption period, and all
of such expenses and payments, together with
interest thereon from the date so paid to
reimbursement at the rate provided for any other
redemption amounts, shall be included in the
amount required to be paid by any person to redeem
the Mortgaged Property.
4.5.5 Beneficiary may exercise all other
remedies available, whether at law or equity, in
such order as Beneficiary may elect. All such
other rights and remedies available to Beneficiary
with respect to this Deed of Trust shall be
cumulative and may be pursued concurrently or
successively. The failure or omission on the part
of Beneficiary to exercise the option for
acceleration of maturity and/or foreclosure
following any default, as aforesaid, or to timely
exercise any other option, right, or remedy
conferred upon the Beneficiary herein, or the
acceptance by Beneficiary of partial payments
hereunder, shall not constitute a waiver of any
such default or the right to exercise any such
option, but such operation shall remain
continuously in force.
4.5.6 Beneficiary may bid and become the
purchaser at any sale under this Deed of Trust. If
Beneficiary is the purchaser at any such sale,
Beneficiary may apply the outstanding Indebtedness
against all or any portion of the purchase price,
including the deposit.
22
ARTICLE V
MISCELLANEOUS
5.1 TRUSTEE.
5.1.1 ACTIONS OF TRUSTEE. The Trustee shall
be protected in acting upon any notice, request,
consent, demand, statement, note or other paper or
document believed by it to be genuine and to have
been signed by the party or parties purporting to
sign the same. The Trustee shall not be liable for
any error of judgment, nor for any act done or
step taken or omitted, nor for any mistake of law
or fact, nor for anything which it may do or
refrain from doing in good faith nor generally
shall a Trustee have any accountability hereunder
except for its own individual willful default.
5.1.2 RETENTION OF MONIES. All monies
received by Trustee shall, until used or applied
as herein provided, be held in trust for the
purposes for which they were received, but need
not be segregated in any manner from any other
monies (except to the extent required by law) and
Trustee shall have no liability for interest on
any monies received by it hereunder.
5.1.3 TRUSTEE AS ATTORNEY. The Trustee may
act hereunder and may sell and convey the
Mortgaged Property as herein provided although the
Trustee has been, may now be or may hereafter be,
an attorney or agent of Beneficiary, in respect of
any matter or business whatsoever.
5.1.4 SUCCESSOR TRUSTEE. Trustee may resign
by giving of notice of such resignation in writing
to Beneficiary. If Trustee shall die, resign or
become disqualified from acting in the execution
of this trust or shall fail or refuse to exercise
the same when required by Beneficiary so to do or
if for any reason and without cause Beneficiary
shall prefer to appoint a substitute trustee to
act instead of the original Trustee named herein,
or any prior successor or substitute trustee,
Beneficiary shall have full power to appoint a
substitute trustee and, if preferred, several
substitute trustees in succession who shall
succeed to all the estates, rights, powers and
duties of the aforenamed Trustee.
5.1.5 SUCCESSION INSTRUMENTS. Any new Trustee
appointed pursuant to any of the provisions hereof
shall, without any further act, deed or
conveyance, become vested with all the estates,
property, title, rights, powers, privileges,
discretions, trusts, duties and obligations of its
predecessor or predecessors in the trust hereunder
with lilce effect as if originally named as
Trustee hereunder; but nevertheless, upon the
written request of Beneficiary or its successor
trustee, the Trustee ceasing to act shall execute
and deliver an instrument transferring to such
successor trustee, upon the trust herein
expressed, all the estates, properties, rights,
powers and trusts of the Trustee so ceasing to
act, and shall duly assign, transfer and deliver
any of the property and monies held by the Trustee
to the successor trustee so appointed in its or
his place.
5.1.6 PERFORMANCE OF DUTIES BY AGENT. Trustee
may authorize one or more parties to act on its
behalf to perform the ministerial functions
required of Trustee hereunder including, without
limitation, the transmittal and posting of any
notices.
23
5.2 ASSIGNMENT OF BANK ACCOUNTS. Upon the
occurrence of an Event of Default under this Deed
of Trust any funds on deposit with Beneficiary in
the name of Grantor, and any securities and
property given unto or left in the possession of
the Beneficiary by Grantor, whether as collateral
security or held in escrow or otherwise, are
hereby assigned to Beneficiary, shall be held by
it as additional security for the Loan and may be
applied to the payment of any sums due it under
the terms of the Note or the other Loan Documents.
5.3 FUTURE ADVANCES. This Deed of Trust is
given to secure not only the existing Indebtedness
of the Grantor to the Beneficiary evidenced by the
Loan Documents secured hereby, but also such
future advances, plus interest thereon, together
with any disbursements made by Beneficiary for
payment of taxes, insurance or other liens on the
Mortgaged Property, together with interest on such
disbursements at the maximum rate permitted under
Washington law, which advances shall be secured
hereby to the same extent as if such future
advances were made on this date. The total amount
of Indebtedness secured hereby may increase or
decrease from time to time. This Deed of Trust
shall also secure any sums due pursuant to the
Loan Documents as a charge, fee or premium
expressly provided for in the Loan Documents in
the event of acceleration of any monetary
obligations due to a default therein or a
prepayment thereof. The provisions of this Section
shall not be construed to imply any obligation on
Beneficiary to make any future advances, it being
the intention of the parties that any future
advances shall be solely at the discretion and
option of Beneficiary (except as may be otherwise
expressly provided in the Loan Agreement). Any
reference to monetary obligations in this Deed of
Trust shall be construed to reference any future
advances made pursuant to this Section.
5.4 SUBROGATION. This Deed of Trust, as
additional security, is hereby subrogated to the
lien or liens and to the rights of the owners and
holders thereof of each and every mortgage, lien
or other encumbrance on the Mortgaged Property, or
any part thereof, or any claim or demand which is
paid or satisfied, in whole or in part, out of the
proceeds of the Indebtedness secured hereby and
the respective liens of said mortgages, liens and
other encumbrances and claims and demands shall
pass to and be held by Beneficiary as additional
security for the Indebtedness to Beneficiary to
the same extent that they would have been
preserved and would have been passed to and been
held by Beneficiary had they each been duly and
regularly assigned, transferred, set over and
delivered to Beneficiary by separate deed of
assignment, notwithstanding the fact the same may
be or may have been satisfied and canceled of
record, it being the intention of the parties
hereto that the same will be satisfied and
canceled of record at or about the time they are
paid or satisfied out of the proceeds of the Loan.
5.5 NOTICES. No notice or other communication
shall be deemed given unless sent in the manner,
and to the persons, specified in this Section at
the addresses or telecopy numbers (or at such
other address or telecopy number for a party as
will be specified by like notice), set forth in
this Section 5.6. All notices and other
communications hereunder shall be in writing and
shall be deemed given (a) upon receipt if
delivered personally or if deposited with the
United States Postal Service as registered or
certified mail, return receipt requested, (b) at
noon on the first Business Day xxxx dispatch if
sent by reputable overnight courier capable of
providing evidence of delivery, or (c) upon the
completion of transmission (which is confirmed
telephonically by the receiving party) if
transmitted by telecopy or other means of
facsimile which provides immediate or near
immediate transmission to compatible equipment in
the possession of the recipient.
24
If to Grantor: Emeritus Properties m, Inc.
c/o Emeritus Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx
000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: President
Telecopy or Facsimile
Number: (000) 0000000
Confirmation Number: (206)
298-2909
With a copy to: The Xxxxxxxxx Group
0000 Xxxxxx Xxxxxx, Xxxxx
000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx
Xxxxxxxxx, Esq.
Telecopy or
Facsimile Number: (000) 000-0000
Confirmation Number:
(000) 000-0000
If to Beneficiary: Ocwen Federal Bank FSB
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx
00000
Attention: Secretary
Telecopy Number: (561)
820-8838
ConfirmationNumber: (000) 000-0000
Notwithstanding the foregoing, any notice in
fact received shall be effective as of the time of
receipt.
5.6 LEGAL CONSTRUCTION. This Deed of Trust
shall be govemed by and construed in accordance
with the laws of the State of Washington
(excluding conflicts of law) and the United States
of America. Xxxxxx County, Washington, shall be a
proper place of venue for all suits to enforce
this Deed of Trust. Grantor and Beneficiary each
hereby irrevocably agree that any legal proceeding
arising out of or in connection with this Deed of
Trust shall be brought in the superior courts of
Xxxxxx County, Washington or the United States
District Court for the Westem District of
Washington.
5.7 UNENFORCEABLE PROVISIONS. In the event
any provision of this Deed of Trust is declared or
adjudged to be unenforceable or unlawful by any
Govemmental Authority, then such unenforceable or
unlawful provisions shall be excised herefrom, and
the remainder of this Deed of Trust, together with
all rights and remedies granted thereby, shall
continue and remain in full force and effect.
5.8 USURY LIMITATIONS. It is the intention of
the parties to confomn strictly to applicable
usury laws from time to time in force, and all
agreements between Grantor and Beneficiary,
whether now existing or hereafter arising and
whether oral or written, are hereby expressly
limited so that in no contingency or event
whatsoever, whether by acceleration of maturity of
the Note or otherwise, shall the amount paid or
agreed to be paid to Beneficiary, or collected by
Beneficiary, for the use, forbearance or detention
of the money to be loaned pursuant to the Loan
Agreement, this Deed of Trust or the other Loan
Documents or otherwise, or for the payment or
performance of any covenant or obligation
contained herein or in any other Loan Document, or
in any other document evidencing, securing, or
pertainLng to the Indebtedness secured hereby,
exceed the maximum amount permissible under
applicable usury laws (the "Highest Lawful Rate").
If under any circumstances whatsoever furfillment
of any provision hereof or any other Loan
Documents, at the time performance of such
provision shall be due, shall involve an amount or
any portion thereof in excess of the Highest
Lawful Rate, then ipso facto, the payment to be
made or the amount to be delivered to be furfilled
shall be reduced to
25
the limit of such validity; and if under any
circumstances Beneficiary shall ever receive an
amount deemed interest by applicable law which
would exceed the Highest Lawful Rate, such amount
that would be excessive interest under applicable
usury laws shall be applied to the reduction of
the principal amount owing under the Note or to
other Indebtedness secured by this Deed of Trust
and not to the payment of interest, or if such
excessive interest exceeds the unpaid balance of
principal and other indebtedness, the excess shall
be deemed to have been a payment made by mistake
and shall be refunded to Grantor or to any other
person making such payment on Grantor's behalf.
All sums paid or agreed to be paid to Beneficiary
for the use, forbearance or detention of the
indebtedness of Grantor evidenced and secured
hereby, outstanding from time to time shall, to
the extent permitted by applicable law, be
amortized, prorated, allocated and spread from the
date of disbursement of the proceeds of the Note
until payment in full of such indebtedness so that
the actual rate of interest on account of such
indebtedness is uniform through the term hereof.
The terms and provisions of this paragraph shall
control and supersede every other provision of all
agreements between Beneficiary and Grantor and any
endorser or guarantor of the Note.
5.9 RIGHTS OF BENEFICIARY.
5.9.1 RIGHTS NOT LIMITED. The rights, powers,
privileges and discretions (hereinafter
collectively called the "rights") specifically
granted to Beneficiary under this Deed of Trust
are not in limitation of but in addition to those
to which they are entitled under any general or
local law relating to deeds of trust and mortgages
in the State of Washington, now or hereafter
existing.
5.9.2 BENEFIT TO SUCCESSORS AND ASSIGNS. The
rights to which Beneficiary may be entitled shall
inure to the benefit of its successors and
assigns.
5.9.3 RIGHTS CUMULATIVE. All the rights of
Beneficiary are cumulative and not alternative and
may be enforced successively or concurrently.
5.10 NO WAIVER. Failure of Beneficiary to
exercise any of its rights shall not impair any of
its rights nor be deemed a waiver thereof, and no
waiver of any of its rights shall be deemed to
apply to any other such rights, nor shall it be
effective unless in writing and signed by the
party waiving the right. The acceptance by
Beneficiary of any partial payment after default
or an Event of Default, with or without knowledge
of the default or Event of Default, shall not be a
waiver of the default or Event of Default unless
Beneficiary shall specifically state in writing
that the acceptance waives the default or Event of
Default or states further conditions which must be
satisfied to constitute such a waiver. The failure
of Beneficiary to exercise the option for
acceleration of maturity, foreclosure, or either,
following an Event of Default or to exercise any
other option or privilege granted to Beneficiary
hereunder in any one or more instances, shall not
constitute a waiver of any such default, but such
option or privilege shall remain continuously in
force.
5.11 MUTUAL WAIVER OF JURY TRIAL. GRANTOR AND
BENEFICIARY EACH WAIVE ALL RIGHTS TO TRIAL BY JURY
OF ANY AND ALL CLAIMS, COUNTERCLAIMS, AND DEFENSES
AMONG AND BETWEEN ANY OF THEM ARISING UNDER THIS
DEED OF TRUST OR THE OTHER LOAN DOCUMENTS, OR ANY
OTHER AGREEMENT OR AGREEMENTS BETWEEN OR AMONG ANY
OF THEM AT ANY TIME RELATING TO THE LOAN,
INCLUDING ANY SUCH AGREEMENTS, WHETHER WRITTEN OR
ORAL, MADE OR ALLEGED TO HAVE BEEN MADE AT ANY
TIME PRIOR TO THE DATE HEREOF, AND ALL AGREEMENTS
MADE HEREAFTER OR OTHERWISE. IN
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MAKING THIS WAIVER GRANTOR AND BENEFICIARY
ACKNOWLEDGE AND AGREE THAT ANY AND ALL SUCH
CLAIMS, COUNTERCLAIMS, AND DEFENSES SHALL BE HEARD
BY A JUDGE OF A COURT OF COMPETENT JURISDICTION,
WITHOUT A JURY. GRANTOR AND BENEFICIARY
ACKNOWLEDGE AND AGREE THAT THIS WAIVER OF TRIAL BY
JURY IS A MATERIAL ELEMENT OF THE CONSIDERATION
FOR THIS DEED OF TRUST. GRANTOR AND BENEFICIARY
ACKNOWLEDGE THAT THIS IS A WAIVER OF A LEGAL RIGHT
AND THAT TH[S WAIVER IS MADE KNOWINGLY AND
VOLUNTARILY AFTER CONSULTATION WITH, OR THE
OPPORTUNITY TO CONSULT WITH COUNSEL OF ITS CHOICE.
5.12 NO PARTNERSHIP. Grantor acknowledges and
agrees that nothing contained in the terms and
conditions of this Deed of Trust or any other Loan
Document shall be deemed to create a partnership,
joint venture or joint enterprise between the
parties hereto, each of which is acting
independently and for its own account and benefit.
The relationship created is that of lender and
borrower. The Beneficiary's commitment to make the
Loan and its financing of the development and
construction of the Project does not create, and
shall not be deemed to create, a partnership,
joint venture or joint enterprise between the
parties.
5.13 BINDING EFFECT. This Deed of Trust shall
be binding upon and inure to the benefit of
Grantor, its successors, and those assigns
consented to in writing by Beneficiary, and upon
Beneficiary, its successors and assigns. Any
assignment attempted by Grantor without the
written consent of Beneficiary shall be void.
Wherever the word "Beneficiary" is used herein it
shall be deemed to include also the successors and
assigns of Beneficiary, and the word "Grantor"
shall include the successors of Grantor and shall
include those assignees of Grantor consented to in
writing by Beneficiary. No consent by Beneficiary
of an assignment by Grantor shall release Grantor
as a party primarily obligated and liable under
the terms of this Deed of Trust unless Grantor
shall be released specifically by Beneficiary in
writing. No consent by Beneficiary to an
assignment shall be deemed to be a waiver of the
requirement of consent by Beneficiary of each and
every further assignment, as a condition precedent
to the effectiveness of such assignment.
5.14 GENDER. Unless the context clearly
indicates to the contrary, words singular or
plural in number shall be deemed to include the
other and pronouns having a neuter, masculine or
feminine gender shall be deemed to include the
others.
5.15 TIME OF ESSENCE. Time is of the essence
of the obligations of Grantor in this Deed of
Trust and each and every term, covenant and
condition made herein by or applicable to Grantor.
5.16 CAPTIONS. The captions used for the
Articles and Sections in this Deed of Trust are
inserted only as a matter of convenience and for
reference and in no way define, limit or describe
the scope or intent of this Deed of Trust or any
Article or Section hereof.
5.17 DRAFTING OF LOAN DOCUMENTS. The parties
hereto acknowledge and agree that the terms,
covenants, and conditions of the Loan Documents
have been drafted, reviewed, negotiated, and
revised by all the parties, with the assistance of
counsel of their choice, and that should any
ambiguities occur herein, such ambiguities shall
not be construed or interpreted against one party
or another by virtue of that party's status as
drafting or reviewing party.
5.18 ORAL AGREEMENTS OR ORAL COMMITMENTS TO
LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE
UNDER WASHINGTON LAW.
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IN WITNESS WHEREOF, Xxxxxxx has caused this
Deed of Trust to be duly executed on its behalf as
of the date first above written.
EMERITUS
PROPERTIES III, INC,
a Washington
corporation
By: /s/
Xxxxx X. Xxxxx
------
--------------------
Name: Xxxxx
X. Xxxxx
Title:
Secretary
28
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 31st day of January, 1997, before me
personally, appeared Xxxxx X. Xxxxx, to me
personally known to be the Secretary of Emeritus
Properties III, Inc., the corporation that
executed the within and foregoing instrurnent, and
acknowledged said instrument to be the free and
voluntary act and deed of said corporation for the
uses and purposes therein mentioned, and on oath
stated that (s)he was authorized to execute said
instrument and that the seal affixed, if any, is
the seal of said corporation.
IN WITNESS WHEREOF, I have hereunto set my
hand and affixed my seal the day and year first
above written.
(Seal or Stamp)
/s/ Xxxxxxx X. Xxxx
------------------------------------
Notary Public in and for the State of
Washington residing at Bellevue
Printed Xxxxx Xxxxxxx X. Xxxx
My appointment expires: 7-24-98
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