This instrument was prepared by the attorney referenced below in
consultation with counsel admitted to practice in the state in
which the property is located, and when recorded, counterparts
should be returned to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxxx & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
This instrument is a Mortgage, Open-End Mortgage, Advance Money
Mortgage, Trust Deed, Deed of Trust, Trust Indenture, Assignment,
Assignment of Rents, Security Agreement, including Fixtures,
Fixture Filing and Financing Statement. This instrument encumbers
property located in California, Florida, Idaho, Iowa, Montana,
Nevada and Washington. Notwithstanding anything to the contrary
herein contained, (a) as to any property located in the States of
California, Idaho, Nevada or Washington, this instrument is, inter
alia, a deed of trust; (b) as to any property located in the
States of Florida or Iowa, this instrument is, inter alia, a
mortgage; and (c) as to any property located in the State of
Montana, this instrument is, inter alia, a trust indenture. The
total outstanding principal amount of indebtedness secured by this
instrument shall not exceed SIXTEEN MILLION NINE HUNDRED FORTY-
NINE THOUSAND AND NO/100 DOLLARS ($ 16,949,000.00). This
instrument contains after-acquired property provisions and secures
obligations containing provisions for changes in interest rates,
extensions of time for payment and other modifications in the
terms of the obligations. The maturity date for the indebtedness
secured by this instrument is April 29, 2001. To the extent this
instrument is to be recorded in the State of Idaho and Nevada, it
secures future advances which are obligatory subject to the
provisions of the Loan Documents (as hereinafter defined). To the
extent this instrument is to be recorded in the State of Idaho,
this instrument is intended also to serve as a fixture, minerals
and timber filing and is to be indexed as such in the real
property records.
The mailing address of Mortgagee (as hereinafter defined) is
DEUTSCHE BANK AG, NEW YORK BRANCH
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
MORTGAGE, OPEN-END MORTGAGE, ADVANCE MONEY MORTGAGE ,
TRUST DEED, DEED OF TRUST, TRUST INDENTURE, ASSIGNMENT ,
ASSIGNMENT OF RENTS, SECURITY AGREEMENT,
INCLUDING FIXTURE FILING AND FINANCING STATEMENT
Dated June 3o,1998
EMERITUS PROPERTIES III, INC.
Grantor, Mortgagor
to
the parties designated as trustees herein with respect to
Mortgaged Property located in
particular states, as Trustee
and
DEUTSCHE BANK AG, NEW YORK BRANCH,
Mortgagee, Grantee, Beneficiary
THIS MORTGAGE, OPEN-END MORTGAGE, ADVANCE MONEY MORTGAGE, TRUST
DEED, DEED OF TRUST, TRUST INDENTURE, ASSIGNMENT, ASSIGNMENT OF
RENTS, SECURITY AGREEMENT, INCLUDING FIXTURES, FIXTURE FILING AND
FINANCING STATEMENT (as the same may from time to time be
extended, spread, split, consolidated, modified, restated and
renewed, this "Mortgage") made as of June 30,1998 by EMERITUS
PROPERTIES III, INC., a Washington corporation having an address
c/o Emeritus Corporation, 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxxxx 00000 ("Grantor"), to the extent the Mortgaged Property
(as hereinafter defined) is located in the State of Idaho, to
Chicago Title Insurance Company, a Missouri corporation having an
office at 0000 X. Xxxx Xxxx, Xxxxx, Xxxxx 00000, and, to the
extent that the Mortgaged Property is located in the State of
Montana, to Chicago Title Insurance Company, a Missouri, having an
address at 000 Xxxxxx Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxx 00000
and, to the extent that the Mortgaged Property is located in the
State of California, to Chicago Title Insurance Company, a
Missouri, having an address at 000 Xxxxx Xxxxxx Xxxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000 and, to the extent that the Mortgaged
Property is located in the State of Nevada, to United Title of
Nevada, 0000 Xxxxxx Xxxxxx Xxxx, -Xxx Xxxxx, XX 000, the
trustees hereunder to the extent that this Mortgage operates as a
deed of trust (collectively, "Trustee") and to or for the benefit
of, as applicable, DEUTSCHE BANK AG, a bank chartered under the
laws of the Federal Republic of Germany, acting by and through its
New York Branch having an address at 00 Xxxx 00"x Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000 being the mortgagee hereunder to the extent this
Mortgage operates as a mortgage, open-end mortgage, advance money
mortgage, and the beneficiary hereunder to the extent that this
Mortgage operates as a deed of trust (the "Mortgagee").
XXXXXX XXXX:
WHEREAS, pursuant to that certain Credit Agreement by and among
Emeritus Properties II, Inc. ("EII"), Emeritus Properties V, Inc.
("EV"), Emeritus Properties VII, Inc. ("EVII") and the Mortgagee,
dated as of April 29,1998 (the "Original Credit Agreement") as
amended by that certain Amendment to Credit Agreement by and among
EII, EV, EVII, Grantor and the Mortgagee, dated as of the date
hereof(the "Amendment"; the Original Credit Agreement as amended
by the Amendment is referred to herein as the "Credit Agreement"),
a copy of each of which may be examined at reasonable times at the
office of Mortgagee by persons who do or will hold an interest in
the Land (as hereinafter defined) or the Improvements (as
hereinafter defined)), and subject to the terms and conditions
therein set forth, the Mortgagee has agreed to make a loan to
Grantor in a principal amount of SIXTEEN MILLION NINE HUNDRED
FORTY-NINE THOUSAND AND NO/100 DOLLARS (16,949,000.00) (the
"Loan") with a maturity date of April 29, 2001; and
1
WHEREAS, to evidence such indebtedness Grantor has executed and
delivered the Credit Agreement and will execute and deliver a
promissory note (the "Note") to the order of Mortgagee in an
aggregate principal amount of equal to the Loan and issued
pursuant to, and dated the same date as, the Credit Agreement and
having a Maturity Date of April 29, 2001; and
WHEREAS, pursuant to the terms of the Credit Agreement, on April
29,1998, the Mortgagee made a separate loan to (a) EII in the
amount of SIXTEEN MILLION THIZEE HUNDRED TWENTY-EIGHT THOUSAND
AND NO/100 DOLLARS (16,328,000.00), (b) EV, in the amount of
THIRTY ONE MILLION THREE HUNDRED SIXTY FIVE THOUSAND AND NO/100
DOLLARS (31,365,000.00) and (c) EVII (collectively, the "Other
Borrowers ) in the amount of EIGHT MILLION FIVE HUNDRED THREE
THOUSAND AND NO/100 DOLLARS (8,593,000.00) (collectively, the
"Other Loans"); and
WHEREAS, each of the Other Loans is evidenced by a note by EII, EV
or EVII, as applicable, in an aggregate principal amount equal to
the Other Loans (collectively, the "Other Notes"); and
WHEREAS, in accordance with the terms of the Credit Agreement,
Grantor has guaranteed the obligations of the Other Borrowers
under the Other Notes (the "CrossGuaranty"); and .
WHEREAS, the total indebtedness and liabilities to be secured by
this Mortgage are as follows (all such indebtedness and
liabilities or the instruments evidencing same, as applicable,
being herein collectively called the "Obligations"):
(i) the aggregate principal amount of SIXTEEN MILLION NINE
HUNDRED FORTY-NINE THOUSAND AND NO/100 DOLLARS (16,949,000.00)
pursuant to the Note; plus
(ii) interest on such principal amount, as provided in the Credit
Agreement; plus
(iii) the obligation of the Grantor with respect to the Cross-
Guaranty; plus
(iv) all other amounts payable and all other obligations of
Grantor under the Credit Agreement, the Note, this Mortgage, and
any other document which relates to any of the Credit Agreement or
the Note or any of the security therefor (as the same may be
amended, modified, extended, renewed, or supplemented from time to
time, all of the foregoing being herein collectively called the
"Loan Documents"); and
2
WHEREAS, it has been agreed that the payment and performance of
the Obligations shall be secured by a mortgage, open-end mortgage,
advance money mortgage, trust deed, deed of trust, trust
indenture, assignment, assignment of rents, security agreement,
including fixtures, fixture filing and financing statement, as
applicable, of certain property as hereinafter identified; and
NOW, THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, to secure the punctual payment by Grantor
when due, whether at stated maturity, by acceleration or
otherwise, of the Obligations and the performance and observance
of all other covenants, obligations and liabilities of Grantor
under this Mortgage, as the same may be extended, modified or
renewed or repledged, Grantor does hereby grant, bargain, sell,
mortgage, warrant, convey, alien, remise, release, assign,
transfer, set over, deliver, confirm and convey unto Mortgagee
(where this instrument constitutes a mortgage) or Trustee (where
this instrument constitute a deed of trust or trust indenture),
upon the terms and conditions of this Mortgage, in trust with
power of sale and right of entry as provided hereinbelow, each and
all of the real properties described in the Granting Clauses
herein (which, together with all other property located therein or
described in the Granting Clauses herein, is hereinafter
collectively called the
"Mortgaged Property").
GRANTING CLAUSES
(a) All plots, pieces and parcels of land more particularly
described in Exhibit A attached hereto (the "Land"), together with
all of the easements, rights and appurtenances now or hereafter in
any way appertaining thereto, either at law or in equity, whether
now owned or hereafter acquired by Grantor;
(b) All structures, buildings and improvements of every kind and
description now or at any time hereafter located on the Land (the
"Improvements"), together with all the estate, right, title and
interest of Grantor in all fixtures and all appurtenances and
additions thereto and substitutions or replacements thereof owned
by Grantor and now or hereafter attached to the Premises (as
hereafter defined);
(c) All right, title and interest of Grantor in and to (i) the
streets, roads, sidewalks and alleys abutting the Land, (ii)
strips and gores within or adjoining the Land, (iii) the air space
and right to use said air space above the Land and any
transferable development or similar rights appurtenant thereto,
(iv) all rights of ingress and egress by motor vehicles to parking
facilities on or within the Land, (v) all easements now or
hereafter affecting the Land, (vi) all royalties and all rights
appertaining to the use and enjoyment of the Land, including
alley, drainage, mineral, water, oil and gas rights, (vii) all
sewer rights, and (viii) all other emblements
3
now or hereafter located on the Land or under or above the same or
any part thereof, and all estates, rights, interests and
appurtenances, reversions and remainders whatsoever, in any way
belonging or appertaining to the Premises or any part thereof,
whether now owned or hereafter acquired by Grantor;
(d) All right, title and interest of Grantor in and to all water,
ditches, xxxxx, reservoirs and drains and all water, ditch, well,
reservoir and drainage rights which are appurtenant to, located
on, under or above or used in connection with the Land or the
Improvements, or any part thereof, whether now existing or
hereafter created or acquired by Grantor;
(e) All right, title and interest of Grantor in and to all
minerals, crops, timber, trees, shrubs, flowers and landscaping
features now or hereafter located on, under or above the Land;
All right, title and interest of Grantor in and to all building
materials, supplies and equipment now or hereafter placed on the
Land or in the Improvements and all architectural renderings,
models, drawings, plans, specifications, studies and data now or
hereafter relating to the Land or the Improvements;
(g) All "Equipment" (as defined in the Uniform Commercial Code),
now or hereafter located on, attached to or contained in or used
or usable in connection with the Mortgaged Property, and shall
also mean and include all of Grantor's right, title and interest
in and to, all building materials, construction materials, movable
(personal) property constituting furniture, fittings, appliances,
apparatus, leasehold improvements, machinery, devices, interior
improvements, appurtenances, equipment, plant, furnishings,
fixtures, computers, electronic data processing equipment,
telecommunications equipment, elevator, kitchen, medical, dental
or rehabilitation fixtures, cleaning apparatus, beds, linens,
televisions, carpeting, telephones, cash registers, computers,
lamps, glassware, rehabilitation equipment, medical, dental,
therapeutic and paramedical equipment and other fixed assets now
owned or hereafter acquired by Grantor and now or hereafter used
in the operation of the business conducted at the Premises, and
all proceeds thereof as well as all additions to, substitutions
for, replacements of or accessions to any of the items recited as
aforesaid and all attachments, components, parts (including spare
parts) and accessories, whether installed thereon or affixed
thereto, and wherever located, now or hereafter owned by Grantor
and used or intended to be used in connection with, or with the
operation of, the Premises or the buildings, structures, or other
improvements now or hereafter located at such Premises, or in
connection with any construction being conducted or which may be
conducted thereon, all regardless of whether the same are located
on such Premises or are located elsewhere (including, without
limitation, in warehouses or other storage facilities or in the
possession of or on the premises of a bailee, vendor or
manufacturer) for purposes of manufacture, storage, fabrication or
transportation and all extensions and replacements to, and
proceeds of, any of the foregoing. For purposes of the preceding
sentence, "other fixed assets" shall also be deemed to
4
include any and all "furniture, furnishings and equipment" of the
Premises as such term is commonly understood in the assisted
living care industry (including, without limitation, any and all
fixtures, furnishings, equipment, furniture, and other items of
corporeal (tangible) movable (personal) property now or hereafter
located at the Premises or used in connection with the use,
occupancy, operation and maintenance of all or any part of the
Premises, other than stocks of food and other supplies held for
consumption in normal operation, but including, without
limitation, appliances, machinery, equipment, signs, artwork
(including paintings, prints, sculpture and other fine art),
office furnishings and equipment, guest room furnishings, and
specialized equipment for kitchens, laundries, bars, restaurant,
public rooms, health and recreational facilities, linens,
dishwashers, two-way radios, all partitions, screens, awnings,
shades, blinds, floor coverings, hall and lobby equipment,
heating, lighting, plumbing, ventilating, refrigerating,
incinerating, elevators, escalators, air conditioning and
communication plants or systems with appurtenant fixtures, vacuum
cleaning systems, call or beeper systems, security systems,
sprinkler systems and other fire prevention and extinguishing
apparatus and materials, reservation system computer and related
equipment, all equipment, manual, mechanical or motorized, for the
construction, maintenance, repair and cleaning of parking areas,
walks, underground ways, truck ways, driveways, common areas,
roadways, highways and streets, and motor vehicles) (the items
described in Granting Clauses (a) through (g) are herein
collectively referred to as the "Premises");
(h) All right, title and interest of Grantor in and to all leases,
subleases, lettings and, to the extent permitted by Law, licenses
affecting the Premises, including, without limitation, any
assignments thereof (including, without limitation, all guarantees
of any such leases, assignment of leases and subleases) and, to
the extent assignable, other agreements affecting the use,
enjoyment or occupancy of the Mortgaged Property heretofore or
hereafter entered into, and all amendments, modifications,
supplements, additions, extensions and renewals thereof (the
"Leases"), and all right, title and interest of Grantor in the
Occupancy Agreements (as hereafter defined), and all right, title
and interest of Grantor under the Leases and the Occupancy
Agreements, including cash and securities deposited thereunder (as
down payments, security deposits or otherwise), the right to
receive and collect the rents, security deposits, income,
proceeds, earnings, royalties, revenues, issues and profits
payable thereunder (including any claims (i) based on holdover by
any lessee, (ii) for damages sustained by Grantor or (iii) arising
under any federal, state or other law as a result ofor in
connection with the bankruptcy or insolvency, of any lessee) and
the rights to enforce, whether at law or in equity or by any other
means, all provisions and options thereof or thereunder (all of
the foregoing hereinafter collectively referred to as the "Rents")
and the right to apply the same to the payment and performance of
the Obligations;
(i) All rights, dividends and/or claims of any kind whatsoever
relating to the Premises (including damage, secured, unsecured,
lien, priority and administration claims); together with the right
to take any action or file any papers or process in any court of
competent
5
jurisdiction, which may in the opinion of Mortgagee be necessary
to preserve, protect, or enforce such rights or claims, including
the filing of any proof of claim in any insolvency proceeding
under any state, federal or other laws and any rights, claims or
awards accruing to or to be paid to Grantor in its capacity as
landlord under the Leases;
(j) All right, title and interest of Grantor in and to any
insurance policies covering the Mortgaged Property, including,
without limitation, all proceeds thereof and any unearned premiums
on any insurance policies covering the Mortgaged Property,
including, without limitation, the right to receive and apply the
proceeds of any insurance judgments, or settlements made in lieu
thereof, for damage to the Mortgaged Property or any part thereof,
subject to and in accordance with the terms and conditions of the
Leases;
(k) Subject to the terms and provisions of this Mortgage, the
right, in the name and on behalf of Grantor, to appear in and
defend any action or proceeding brought with respect to the
Mortgaged Property and to commence any action or proceeding to
protect the interest of Mortgagee in the Mortgaged Property or any
part thereof;
(I) All of the right, title and interest of Grantor in and to all
franchises, trade names, trademarks, symbols, service marks,
books, records, plans and specifications, contracts, licenses,
approvals, consents, subcontracts, service contracts, management
contracts, permits and other agreements of any nature whatsoever
now or hereafter obtained or entered into by Grantor, or any
manager of the Mortgaged Property on behalf of Grantor, with
respect to the use, occupation, development, construction and/or
operation of the Mortgaged Property or any part thereof or the
activities conducted thereon or therein, or otherwise pertaining
to the Mortgaged Property or any part thereof;
(m) All accounts receivable, contract rights, interests, estate or
other claims, both in law and in equity, which Grantor now has or
may hereafter acquire in the Mortgaged Property or any part
thereof, and all reserve accounts, accounts for the deposit,
collection and/or disbursement of Rents and other accounts now or
hereafter in existence with respect to the Loan;
(n) All rights which Grantor now has or may hereafter acquire, to
be indemnified and/or held harmless from any liability, loss,
damage, costs or expense (including, without limitation,
attorneys' fees and disbursements) relating to the Mortgaged
Property or any part thereof;
(o) All appurtenances in respect of or otherwise relating to the
Leases, including, but not limited to, all the estate and rights
of the Grantor of, in and to (i) all modifications, extensions and
renewals of the Leases and all rights to renew or extend the term
thereof, (ii) all of Grantor's rights, if any, pertaining to
deposits of the lessee under the Leases (including lessee security
deposits, if any), (iii) all the right or privilege of the Grantor
to
6
terminate, cancel, abridge, surrender, merge, modify or amend the
Leases and (iv) any and all possessory rights of the Grantor and
other rights and/or privileges of possession, including, without
limitation, the Grantor's right to elect to take possession of the
Mortgaged Property;
(p) All of the Grantor's claims and rights to damages and any
other remedies in connection with or arising from the rejection
ofthe Leases by the lessee or any trustee, custodian or receiver
pursuant to the U.S. Bankruptcy Code, as amended (the "Bankruptcy
Code") in the event that there shall be filed by or against the
Lessee any petition, action or proceeding under the Bankruptcy
Code or under any other similar federal or state law now or
hereafter in effect;
All present and future monetary deposits given by Grantor to any
public or private utility with respect to utility services
furnished to any part of the Premises or the Improvements;
(r) All right, title and interest of Grantor in and to all refunds
and rebates of taxes and assessments relating to the Premises and
Improvements (except to the extent such refunds and rebates relate
to taxes or assessments paid by the lessee under the Leases);
(s) All right, title and interest of Grantor in and to all
proceeds, products, substitutions and accessions (including claims
and demands therefor) of the conversion, voluntary or involuntary,
of any of the foregoing into cash or liquidated claims, including,
without limitation, the proceeds of insurance and condemnation
awards; and
(t) All other or greater rights and interests of every nature in
the Premises and in the possession or use thereof and income
therefrom, whether now owned or hereafter acquired by Grantor.
TOGETHER with all right, title and interest of Grantor in and to
all extensions, improvements, betterments, renewals, substitutes
and replacements of, and all additions and appurtenances to, any
of the foregoing hereafter acquired by, or released to, Grantor or
constructed, assembled or placed by Grantor on the Premises and
all conversions of the security constituted thereby, immediately
upon such acquisition, release, construction, assemblage,
placement or conversion, as the case may be, and in each such
case, without any further mortgage, conveyance, assignment or
other act by Xxxxxxx, shall become subject to the lien of this
Mortgage as fully and completely, and with the same effect, as
though now owned by Xxxxxxx and specifically described herein.
Notwithstanding anything to the contrary herein contained,
7
(i) to the extent the Mortgaged Property is located in any of the
following states, this Mortgage shall be deemed to be and shall be
enforceable as a mortgage, assignment, assignment of rents,
fixture filing and financing statement: the states of Florida or
Iowa;
(ii) to the extent that the Mortgaged Property is located in any
of the following states, this Mortgage shall be deemed to be and
shall be enforceable as a deed of trust, assignment, assignment of
rents, fixture filing and financing statement: the states of
California, Idaho, Nevada or Washington; or
(iii) to the extent that the Mortgaged Property is located in the
State of Montana, this Mortgage shall be deemed to be and shall be
enforceable as a trust indenture pursuant to Part 3 of Chapter 1,
Title 71 of the Montana Code Annotated (the Small Tract Financing
Act of Montana), and Grantor represents and warrants that the Land
located in the State of Montana does not exceed thirty (30) acres.
Wherever herein contained, the phrase "Trustee and/or Mortgagee"
or any similar phrase (1) shall be deemed to refer to Trustee for
the benefit of Mortgagee, as beneficiary, to the extent the
Mortgaged Property is located in any of the states listed in
subsection (ii) above and (2) shall be deemed to refer to
Mortgagee to the extent the Mortgaged Property is located in any
of the states listed in subsection (i) above and Trustee shall
have no rights, powers or obligations in those states. To the
extent the Mortgaged Property is located in any of the states
listed in subsection (ii) above, references to Mortgagee shall, if
the context so requires, be deemed to be references to Mortgagee,
as beneficiary.
To the extent any of the foregoing Mortgaged Property is not
considered "real property" under the Uniform Commercial Code of
the state in which the Premises are located ("UCC"), Grantor
hereby grants to Mortgagee a security interest (the "Security
Interest") as security for the Obligations in all such items of
Mortgaged Properly, and Mortgagee shall have, in addition to all
rights and remedies provided herein, and in any other agreements,
commitments and undertakings made by Grantor to Mortgagee, all of
the rights and remedies of a "secured party" under the UCC. To the
extent permitted under applicable law, this Mortgage shall be
deemed to be a "security agreement" for purposes of the UCC.
TO HAVE AND TO HOLD the Mortgaged Property unto Trustee,
Mortgagee, and their respective successors and assigns, forever.
ARTICLE I
8
Representations, Warranties and Covenants of Grantor
SECTION 1.01. Payment of Obligations. Grantor shall punctually pay
when due, and timely perform, the Obligations.
SECTION 1.02. Legal Status, Authority and Other Matters. (a) Legal
Status. Grantor represents and warrants that it is a corporation
duly organized and existing in good standing under the laws of
Washington and has the full power and authority to own the
Mortgaged Property and carry out its business in the state in
which the Mortgaged Property is located.
(b) No Actions Pending. Except as set forth on the Disclosure
Schedule (as defined in the Credit Agreement) there is no action,
suit or proceeding, judicial, administrative or otherwise, pending
or, to the best of Grantor's knowledge, overtly threatened or
contemplated against or affecting Grantor or the Mortgaged
Property which would cause a Material Adverse Effect.
SECTION 1.03. Warranty of Title. Grantor warrants that it has good
and marketable title to the Premises, in each case free and clear
of all liens, charges and encumbrances of every kind and
character, subject only to the encumbrances set forth on Exhibit B
hereto ("Permitted Encumbrances"); has and will continue to have
full power and lawful authority to encumber and convey the
Premises as provided herein; owns all other Mortgaged Property
free and clear of all liens, charges and encumbrances of every
kind and character, subject only to Permitted Encumbrances; and
this Mortgage is and will continue to remain a valid and
enforceable first mortgage lien on and security interest in the
Mortgaged Property, subject only to Permitted Encumbrances.
Grantor further covenants that it will preserve such title and
will forever warrant and defend the title to the Mortgaged
Property unto Trustee and Mortgagee against all lawful claims
whatsoever and will forever warrant and defend the validity,
enforceability and priority of the lien of this Mortgage against
the claims of all persons and parties whomsoever.
Grantor covenants that it will, at Grantor's sole cost and expense
and at the request of Trustee or Mortgagee, (i) promptly correct
any defect or error which may be discovered in the Loan Documents,
(ii) promptly do, execute, acknowledge and deliver, and record and
re-record, file and re-file and register and re-register, any and
all such instruments as Trustee or Mortgagee may require from time
to time in order to carry out more effectively the purposes of
this Mortgage and (iii) will promptly furnish Trustee and
Mortgagee with evidence satisfactory to Trustee and Mortgagee of
every such recording, filing or registration.
SECTION 1.04. Operation and Maintenance. (a) Repair and
Maintenance. Grantor will operate and maintain the Premises in
good order, repair and operating condition,
9
will promptly make all necessary repairs, restorations, renewals,
replacements, additions and improvements thereto, interior and
exterior, structural and nonstructural, foreseen and unforeseen,
or otherwise necessary to insure that the same as part of the
security under this Mortgage shall not in any way be diminished or
impaired, and will not cause or allow the Premises to be misused,
wasted or to deteriorate. No part of the Improvements shall be
removed, demolished or structurally or materially altered nor
shall any new building, structure, facility or other improvement
be constructed on the Land or the Leased Land without Mortgagee's
prior written consent in the case of each such removal,
demolition, alteration or construction.
(b) Replacement of Equipment. Grantor will keep the Premises fully
equipped and will replace all worn out or obsolete Equipment with
fixtures or personal property comparable thereto when new to the
extent necessary to operate the Mortgage, Property in accordance
with prudent business standards for assisted living facilities and
will not, without Mortgagee's consent, remove any Equipment or
other personal property from the Land, the Leased Land or the
Improvements unless, to the extent necessary to operate the
Mortgaged Property in accordance with prudent business standards
for assisted living facilities Grantor replaces the same with an
article of equal suitability and value when new, owned by Grantor
free and clear of any lien or security interest (other than
Permitted Encumbrances).
(c) Zoning; Title Matters. Grantor will not, without the prior
written consent of Mortgagee, (i) initiate or support any zoning
reclassification of the Premises, seek any variance under existing
zoning ordinances applicable to the Premises or use or permit the
use of the Premises in a manner which would result in such use
becoming a non-conforming use under applicable zoning ordinances,
(ii) modify or amend any of the Permitted Encumbrances, (iii)
impose any restrictive covenants or encumbrances upon the
Premises, execute or file any subdivision plat affecting the
Premises or consent to the annexation of the Premises to any
municipality or (iv) permit or suffer the Premises to be used by
the public or any person in such manner as might make possible a
claim of adverse usage or possession or of any implied dedication
or easement.
(d) Status of the Premises. (i) The Premises is not located in an
area identified by the Secretary of Housing and Urban Development
or a successor thereto as an area having special flood hazards
pursuant to the terms of the National Flood Insurance Act of 1968,
or the Flood Disaster Protection Act of 1973, as amended, or any
successor law; or if the Premises is located in such an area,
Grantor will obtain and maintain insurance against damage or loss
by flood on such basis and in such amounts as shall be required by
Mortgagee; (ii) the Premises is served by all utilities required
for the current use thereof; (iii) all streets necessary to serve
the Land; the Leased Land and the Improvements for the current use
thereof have been completed and are serviceable and have been
dedicated or accepted by the appropriate governmental entities and
Grantor has access from public roads to the Land, the Leased Land
and
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the Improvements; and (iv) there is no condemnation or similar
proceeding pending or threatened affecting any part of the
Premises that might materially adversely affect the Premises.
(e) Use. Grantor will use the Premises for substantially the same
use as in effect as of the date hereof and for no other use unless
consented to in writing by Mortgagee.
SECTION 1.05. Insurance. (a) Coverage. Grantor shall obtain and
maintain, or cause to be maintained, insurance for Grantor and the
Mortgaged Property providing at least the following coverages:
(i) comprehensive all risk insurance on the Improvements and the
Personal Property, including, but not limited to, coverage for
steam, pressure exploding, earthquakes, riot and civil commotion,
vandalism, malicious mischief, burglary and theft and contingent
liability from Operation of Building Laws, Demolition Costs and
Increased Cost of Construction Endorsements, in each case (A) in
an amount equal to 100"% of the "Full Replacement Cost", which for
purposes of this Mortgage shall mean actual replacement value
(exclusive of costs of excavations, foundations, underground
utilities and footings); (B) containing an agreed amount
endorsement with respect to the Improvements and Personal Property
waiving all co-insurance provisions; and (C) containing an
"Ordinance or Law Coverage" or "Enforcement" endorsement if any of
the Improvements or the use of the Premises shall at any time
constitute legal nonconforming structures or uses. In addition,
Trustor shall obtain flood hazard insurance if any portion of the
Premises is currently or at any time in the future located in a
federally designated "special flood hazard area", in an amount
equal to the lessor of (y) the outstanding principal balance of
the Loan or (z) the maximum amount of such insurance available
under the National Flood Insurance Act of 1968, the Flood Disaster
Protection Act of 1973 or the National Flood Insurance Reform Act
of 1994, as each case may be amended; provided that any such flood
hazard insurance shall be on terms consistent with the
comprehensive all risk insurance policy required under this
Section 1.05 except that the deductible on such insurance shall be
commercially reasonable and if not available from a private
carrier then from the government to the extent available;
(ii) comprehensive general liability insurance, including bodily
injury, death and property damage liability, and umbrella
liability insurance against any and all claims, including all
legal liability to the extent insurable, imposed upon Mortgagee
and all court costs and attorneys' fees and expenses, arising out
of or connected with the possession use, leasing, operation,
maintenance or condition of the Premises, in such amounts as are
generally available at reasonable premiums and are generally
required by institutional lenders for properties comparable to the
Premises;
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(iii) business interruption insurance, with loss payable to
Mortgagee, in an amount sufficient to avoid any co-insurance
penalty and to provide proceeds for a period not less than one (1)
year of loss of business income, the term "business income" to
mean the total anticipated loss income to be received by Grantor
from the use and occupancy of the Premises and the sale of goods
and rendering of services at the Premises, reduced to the extent
such amounts would not be received because of expenses not
incurred during a period of non-operation of that portion of the
Premises then not being operated. Mortgagee shall be entitled to
the insurance proceeds to the extent necessary to satisfy all
amounts due and payable to Mortgagee under the Note, which
insurance proceeds shall be held by Mortgagee and shall be applied
to the Obligations secured hereunder from time to time due and
payable hereunder and under the Note; provided, however, that
nothing herein contained shall be deemed to relieve Grantor of its
Obligations secured hereunder except to the extent such amounts
are actually paid out of the proceeds of such business income
insurance;
(iv) workers' compensation, subject to the statutory limits of the
state in which the Premises are located, and employer's liability
insurance;
(v) comprehensive boiler and machinery insurance, if applicable,
in amounts as shall be reasonably required by Mortgagee on terms
consistent with the comprehensive all risk insurance policy
required under Subsection 1.05(a)(i);
(vi) umbrella liability insurance in an amount not less than
$30,000,000 on terms consistent with the commercial general
liability insurance policy required under Subsection 1.05(a)(ii);
and
(vii) such other insurance and in such amount as (a) Mortgagee
from time to time may reasonably request, or (b) Grantor, as a
prudent owner of the Premises, deems appropriate, against such
other insurable hazards which at the time are commonly insured
against for property similar to the Premises and used as an
assisted living facility.
(b) Ratings. All policies of insurance (the "Policies") required
pursuant to this Section 1.05 shall be issued by an insurer
authorized to do business in the state in which the Premises are
located and having an A.M. Best rating of A:V or better and a
Standard & Poor's claims-paying ability rating of not less than
the greater of(A) for so long as any Securities shall have been
issued and be outstanding, one rating category below the higher
rating assigned to any such outstanding Securities, and (B) "BBB."
To the extent the Mortgaged Property is located in the State of
Nevada, the provisions of this Subsection 1.05(b) shall not apply
to worker's compensation insurance which is provided in accordance
with the laws of the State of Nevada.
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(c) Blanket Policies. The insurance coverage required under
Subsection 1.05(a) may be effected under a blanket policy or
policies covering the Premises and other property assets not
constituting a part of the Premises provided that (i) each such
blanket policy, except in the case of liability insurance, shall
specify thereon the total insurance allocated to the Premises,
which amount shall be not less than that required hereunder, (ii)
each such blanket policy shall otherwise comply in all respects
with this Mortgage, and (iii) Mortgagee shall be named as an
additional insured under each such blanket policy to the extent
required hereunder.
(d) Additional Insured. All Policies of insurance provided for or
contemplated by Subsection 1.05(a), except for the Policy
referenced in Subsection 1.05(a)(iv), shall name Mortgagee and
Trustee as the insured or additional insured, as their respective
interests may appear, and in the case of property damage, boiler
and machinery, flood and earthquake insurance, shall contain a so-
called New York standard non-contributing mortgagee clause in
favor of Mortgagee providing that the loss thereunder shall be
payable to Mortgagee notwithstanding the negligent or wilful acts
of omissions of Grantor.
(e) Form and Endorsements. All Policies shall be in such form and
with such endorsements as are comparable to the forms of and
endorsements to the Policies in effect, on the date hereof or
otherwise in accordance with commercially reasonable standards
applied by prudent owners of assisted care facilities in the
general vicinity of the Mortgaged Property. A certificate of
insurance with respect to all such Policies has been delivered to
Mortgagee and originals or certified copies of all such Policies
shall be delivered to Mortgagee when the same are available and
shall be held by Mortgagee. All Policies shall contain: (i) to the
extent available at commercially reasonable rates, a waiver of
subrogation endorsement as to Mortgagee; (ii) a provision that no
Policy shall be impaired or invalidated by virtue of any act,
failure to act, negligence of, or violation of declarations,
warranties or conditions contained in such Policy by Grantor,
Mortgagee or Trustee or any other named insured, additional
insured or loss payee, except for the wilful misconduct of
Mortgagee or Trustee knowingly in violation of the conditions of
such Policy; (iii) an endorsement providing for a deductible per
loss of an amount not more than that which is customarily
maintained by prudent owners of assisted care facilities in the
general vicinity of the Premises (but in no event greater than
$100,000); (iv) a provision that such Policies shall not be
canceled, terminated or expire without at lest thirty (30) days
prior written notice to Mortgagee in each instance; and (v) to the
extent Grantor determines such a waiver is available at
commercially reasonable rates, effective waivers by the insurer of
all claims for insurance premiums against all loss payees,
additional insureds and named insureds (other than Grantor).
Grantor shall deliver or cause to be delivered to Mortgagee (y)
not less than thirty (30) days prior to the expiration date of any
of the Policies required to be maintained hereunder, evidence
reasonably satisfactory to Mortgagee that such Policies will be
renewed or replaced and (z) prior to the expiration date of such
Policies, among other things, an original of the certificate of
insurance and evidence of payment of the applicable premium for
such renewal or replacement. Certified copies of such replacement
insurance policies shall be delivered to
13
Mortgagee promptly after Xxxxxxx's receipt thereof but in any case
within thirty (30) days after receipt thereof by Grantor. If
Grantor fails to maintain and deliver to Mortgagee the
certificates of insurance required by this Mortgage, Mortgagee
may, in accordance with the provisions hereof, procure such
insurance at the expense of Grantor, to be promptly reimbursed by
Xxxxxxx. To the extent the Mortgaged Property is located in the
State of Nevada, the provisions of this Subsection 1.05(e) shall
not apply to worker's compensation insurance which is provided in
accordance with the laws of the State of Nevada.
Delivery of Statements. Grantor shall furnish to Mortgagee
annually a statement certified by Grantor or a duly authorized
officer of Grantor of the amounts of insurance maintained in
compliance herewith, of the risks covered by such insurance and of
the insurance company or companies which carry such insurance and,
if requested by Mortgagee, verification of the adequacy of such
insurance by an independent insurance broker or appraiser to
Mortgagee.
(g) Protection of Beneficiary. If at any time Grantor fails to
maintain the insurance policies required hereunder, Mortgagee
shall have the right, without notice to Grantor, to take such
action as Mortgagee deems necessary to protect its interest in the
Premises, including, without limitation, the obtaining of such
insurance coverage as Mortgagee in its sole discretion deems
appropriate, and all reasonable expenses incurred by Mortgagee in
connection with such action or in obtaining such insurance and
keeping it in effect shall be paid by Grantor to Mortgagee upon
demand and until paid shall be secured by this Mortgage and shall
bear interest in accordance with Section 2.05(b) of the Credit
Agreement.
(h) Proceeds. All Insurance Proceeds shall be paid to Mortgagee
for application pursuant to Section 1.09. If the Mortgaged
Property shall be damaged or destroyed, in whole or in part, by
fire or other casualty, Grantor shall give prompt notice of such
damage to Mortgagee. Grantor shall promptly commence and
diligently prosecute the completion of the repair and restoration
of the Premises as nearly as possible to the condition the
Premises were in immediately prior to such fire or other casualty,
with such alterations as may be approved by Mortgagee (the
"Restoration") and otherwise in accordance with Section 1.09.
Grantor shall pay all costs of such Restoration whether or not
such costs are covered by insurance. Mortgagee may, but shall not
be obligated to make proof of loss if not made promptly by
Grantor. To the extent that the Insurance Proceeds received in
connection with such damage or destruction of the Mortgaged
Property are less than $15,000, then Grantor shall have the right
to use such Insurance Proceeds without Mortgagee's consent.
(i) Event of Foreclosure. In the event of foreclosure of this
Mortgage, or other transfer of title to the Premises in
extinguishment in whole or in part of the Obligations, all right,
title and interest of Grantor in and to such policies then in
force concerning the Premises and all proceeds payable thereunder
shall thereupon vest in the purchaser at such foreclosure or
Mortgagee or other transferee in the event of such other transfer
of title.
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(j) No Separate Insurance. Grantor shall not carry separate or
additional insurance concurrent in form or contributing, in the
event of loss, with that required under the Credit Agreement
unless endorsed in favor of Mortgagee and Trustee as loss payee or
additional insured, as applicable, and otherwise applicable to
Mortgagee in all respects. Nothing contained herein shall prohibit
Grantor from holding or obtaining an owner's policy of title
insurance covering the Premises.
SECTION 1.06. Liens and Liabilities. (a) Discharge of Liens.
Grantor will pay, bond or otherwise discharge, from time to time
when the same shall become due, all claims and demands of
mechanics, materialmen, laborers and others which, if unpaid,
might result in, or permit the creation of, a lien on the
Mortgaged Property.
(b) Creation of Liens. Grantor will not, without Mortgagee's
consent, create, place or permit to be created or placed or allow
to remain, and shall discharge and release within ten (10) days of
the placing thereof, any deed of trust, mortgage, trust deed,
voluntary or involuntary lien, security interest or other
encumbrance against or covering the Mortgaged Property, other than
Permitted Encumbrances, whether or not subordinate hereto.
(c) No Consent. Nothing in this Mortgage shall be deemed or
construed in any way as constituting the consent or request by
Trustee or Mortgagee, express or implied, to any contractor,
subcontractor, laborer, mechanic or materialman for the
performance of any labor or the furnishing of any material for any
improvement, construction, alteration or repair of the Premises.
Xxxxxxx further agrees that neither Trustee nor Mortgagee stands
in any fiduciary relationship to Grantor.
SECTION 1.07. Taxes and Other Charges. (a) Taxes on the Premises.
Grantor will promptly pay prior to delinquency and before any
penalty or interest may be added thereto, all taxes, assessments,
vault, water and sewer rents, rates, charges and assessments,
levies, permits, inspection and license fees and other
governmental and quasi-governmental charges and any penalties or
interest for non-payment thereof, heretofore or hereafter imposed,
or which may become a lien, upon the Mortgaged Property or arising
with respect to the occupancy, use or possession thereof
(collectively, "Impositions"). Grantor will also pay any penalty,
interest or cost for non-payment of Impositions which may become
due and payable.
(b) Receipts. Unless Grantor is making monthly deposits pursuant
to Section 1.08, Grantor will furnish to Mortgagee upon
Mortgagee's request, proof of payment at the time same is made,
and thereafter, upon receipt, validated receipts showing payment
in full of all Impositions.
15
(c) Increased Costs. In the event of the enactment after the date
hereof of any law in the state in which the Mortgaged Property is
located or any other governmental entity deducting from the value
of the Mortgaged Property for the purpose of taxation any lien or
security interest thereon, or changing in any way the laws for the
taxation of mortgages, deeds of trust or other liens or debts
secured thereby, or the manner of collection of such taxes, so as
to affect this Mortgage, the Obligations, Mortgagee or the holders
of the Obligations, then, and in such event, Grantor shall, on
demand, pay to Mortgagee or such holder, or reimburse Mortgagee or
such holder for payment of, all taxes, assessments, charges or
liens for which Mortgagee or such holder is or may be liable as a
result thereof, provided that if any such payment or reimbursement
shall be unlawful or would constitute usury or render the
Obligations wholly or partially usurious under applicable law,
then Mortgagee may, at its option, declare the Obligations
immediately due and payable or require Grantor to pay or reimburse
Mortgagee for payment of the lawful and non-usurious portion
thereof.
SECTION 1.08. Tax and Insurance Deposits. (a) Amount of Deposits.
Mortgagee may require that each month Grantor deposit with
Trustee, Mortgagee or any service or financial institution
designated for such purposes by Mortgagee (whichever of the
foregoing is applicable being the "Depository"), one-twelfth
(1/12) of the annual Impositions and premiums for insurance
required under Section 1.05, and Grantor shall accordingly make
such deposits. In addition, if required by Mortgagee, Grantor
shall also deposit with the Depository a sum of money which,
together with the aforesaid monthly installments, will be
sufficient to make payments of Impositions and premiums at least
thirty (30) days before such payments are delinquent. If the
amount of any such payment is not ascertainable at the time any
such deposit is required to be made, the deposit shall be made on
the basis of Mortgagee's estimate thereof, and when such amount is
fixed for the then-current year, Grantor shall promptly deposit
any deficiency with the Depository.
(b) Use of Deposits. All funds so deposited, until so applied,
shall constitute additional security for the Obligations, shall be
held by the Depository with interest payable to Grantor (except to
the extent required under applicable law), may be commingled with
other funds of the Depository and, provided that no Event of
Default (as defined in Section 5.01) shall have occurred and be
continuing hereunder, shall be applied in payment of the aforesaid
amounts prior to their becoming delinquent. If an Event of Default
shall have occurred and be continuing hereunder, or if the
Obligations shall be accelerated as herein provided, all funds so
deposited may, at Mortgagee's option, be applied to the
Obligations in the order determined by Mortgagee. If such deposits
are being made with the Depository, at least fifteen (15) days
before the date on which such charges first become payable,
Grantor shall furnish the Depository with bills for the charges
for which such deposits are required to be made hereunder and/or
such other documents necessary for the payment of the same.
16
SECTION 1.09. Damage and Destruction. (a) Grantor's Obligations.
In the event of any damage to or loss or destruction of the
Premises, Grantor shall (i) promptly notify Mortgagee of such
event and take such steps as shall be necessary to preserve any
undamaged portion of the Premises and (ii) unless otherwise
instructed by Mortgagee, regardless whether the insurance
proceeds, if any, shall be sufficient for the purpose or shall be
otherwise applied by Mortgagee as provided herein, promptly
commence and diligently pursue to completion the restoration,
replacement and rebuilding of the Premises to the condition of the
Premises affected thereby immediately prior to such damage, loss
or destruction in accordance with plans and specifications
approved, and with other provisions for the preservation of the
security hereunder established, by Mortgagee.
(b) Trustee's and Mortgagee's Rights; Application of Proceeds. In
the event that any portion of the Premises is so damaged,
destroyed or lost, and such damage, destruction or loss is
covered, in whole or in part, by insurance required by Section
1.05, then, (i) Mortgagee or Trustee may, but shall not be
obligated to, make proof of loss if not made promptly by Grantor
and is hereby authorized and empowered by Grantor to settle,
adjust or compromise any claims for damage, destruction or loss
thereunder, (ii) each insurance company concerned is hereby
authorized and directed to make payment therefor directly to
Mortgagee or Trustee; provided, however, that if all of the
conditions set forth in Section 1.09(c) are met and Grantor
delivers a written undertaking to expeditiously commence and to
satisfactorily complete with due diligence any such damage or
destruction in accordance with the terms hereof, the insurance
proceeds will be made available to Grantor in accordance with
Section 1.09(c).
(c) Proceeds for Restoration. Notwithstanding anything provided
herein to the contrary, if..
(i) less than (A) thirty percent (30%) of the Improvements and (B)
forty percent (40"%) of the Land have been taken or destroyed;
(ii) no monetary Default or Event of Default has occurred and is
continuing hereunder or under any of the other Loan Documents and
has not been waived;
(iii) the Restoration can, in Mortgagee's judgment, with diligent
work, be completed prior to the expiration of business
interruption insurance required hereunder;
(iv) the taking, fire or casualty did not occur during the six (6)
months prior to the maturity of the Note;
(v) all necessary governmental approvals can be obtained for the
Restoration;
17
(vi) there are sufficient sums available (through insurance
proceeds or
condemnation awards and contributions by Grantor, the full amount
of which shall have been deposited into an account pledged to
Mortgagee) for the Restoration (including, without limitation, for
any reasonable costs and expenses of Mortgagee to be incurred in
administering said restoration or repair) and for payment of
principal and interest to become due and payable under the Note
during the period necessary to complete the Restoration;
(vii) Grantor so elects by written notice delivered to Mortgagee
within thirty (30) days after settlement of the aforesaid
insurance or condemnation claim; and
(viii) the Restoration is done and diligently completed by Grantor
in compliance with all applicable Laws,
then, Mortgagee shall, solely for the purposes of the Restoration,
release so much of the remainder of such sums as may be required
for the Restoration, and any funds deposited by Mortgagor
therefor, to Mortgagor in the manner and upon such terms and
conditions as would be required by a prudent interim construction
lender, including, but not limited to, the prior approval by
Mortgagee of plans and specifications, contractors and form of
construction contracts and the furnishing to Mortgagee of permits,
bonds, lien waivers, invoices, receipts and affidavits from
contractors and subcontractors, in form and substance reasonably
satisfactory to Mortgagee in its reasonable discretion, with any
remainder being applied by Mortgagee, in its sole discretion, for
payment of the Obligations in whatever order Mortgagee directs in
its absolute discretion, with any remainder being paid to Grantor.
(d) Effect on the Obligations. Notwithstanding any loss, damage or
destruction referred to in this Section, Grantor shall continue to
pay and perform the Obligations as provided herein. Any reduction
in the Obligations resulting from such application shall be deemed
to take effect only on the date of receipt by Mortgagee or Trustee
of such insurance proceeds and application against the
Obligations, provided that if prior to the receipt by Trustee or
Mortgagee of such insurance proceeds the Mortgaged Property shall
have been sold on foreclosure of this Mortgage, or shall have been
transferred by deed in lieu of foreclosure of this Mortgage,
Mortgagee shall have the right to receive the same to the extent
of any deficiency found to be due upon such sale, with legal
interest thereon together with attorneys' fees and disbursements
incurred by Trustee or Mortgagee in connection with the collection
thereof.
SECTION 1.10. Condemnation. (a) Grantor's Obligations;
Proceedings. Grantor, promptly upon obtaining knowledge of any
pending or overtly threatened institution of any proceedings for
the condemnation of the Premises, or of any right of eminent
domain, or of any other proceedings arising out of injury or
damage to or decrease in the value of the Premises, including a
change in grade of any street, will notify Mortgagee of the threat
or pendency
18
thereof. Mortgagee may participate in any such proceedings, and
Grantor from time to time will execute and deliver to Mortgagee
all instruments requested by Mortgagee or as may be required to
permit such participation. Grantor shall, at its expense,
diligently prosecute any such proceedings, shall deliver to
Mortgagee copies of all papers served in connection therewith and
shall consult and cooperate with Mortgagee, its attorneys and
agents, in the carrying on and defense of any such proceedings;
provided that no settlement of any such proceeding shall be made
by Grantor without Mortgagee's consent.
(b) Trustee's and Mortgagee's Rights to Proceeds. All proceeds of
condemnation awards or proceeds of sale in lieu of condemnation,
and all judgments, decrees and awards for injury or damage to the
Premises (collectively, "Awards") are hereby assigned and shall be
paid to Mortgagee or Trustee. Grantor authorizes Mortgagee and
Trustee to collect and receive the same, to give receipts and
acquittances therefor, and to appeal from any Awards.
(c) Application of Proceeds. Mortgagee shall have the right to
apply any Awards, first, to reimburse Trustee and Mortgagee for
all costs and expenses, and, second, the remainder thereof in the
manner provided in Section 1.09. In the event that Grantor shall
have received all or any portion of such Awards, Grantor, upon
demand from Mortgagee, shall pay to Mortgagee or Trustee an amount
equal to the amount so received by Grantor, to be applied as
Mortgagee shall have the right pursuant to this subsection.
Notwithstanding anything herein or at law or in equity to the
contrary, none of the Awards paid to Mortgagee or Trustee under
this Section 1.10 shall be deemed trust funds and Mortgagee or
Trustee shall be entitled to apply the same as provided in this
Section 1.10.
(d) Effect on the Obligations. Notwithstanding any condemnation,
taking or other proceeding referred to in this Section 1.10,
Grantor shall continue to pay and perform the Obligations as
provided herein. Any reduction in the Obligations resulting from
such application shall be deemed to take effect only on the date
of receipt by Mortgagee or Trustee of such Awards and application
against the Obligations, provided that if prior to the receipt by
Trustee or Mortgagee of such Awards the Mortgaged Property shall
have been sold on foreclosure of this Mortgage, or shall have been
transferred by deed in lieu of foreclosure of this Mortgage,
Mortgagee shall have the right to receive the same to the extent
of any deficiency found to be due upon such sale, with legal
interest thereon together with attorneys' fees and disbursements
incurred by Trustee or Mortgagee in connection with the collection
thereof.
SECTION l.ll. Contest. Notwithstanding anything to the contrary
contained in Section 1.04(c),1.06 or 1.07, Grantor shall have the
right to contest in good faith and at its own expense the validity
or applicability of any duty or obligation described in Section
1.04(c), the validity of any lien, encumbrance, charge or security
referred to in Section 1.06 and any Imposition imposed upon the
Premises (a "Contest") by an appropriate legal proceeding which
proceeding must operate to prevent the collection of such
Impositions or other realization thereon
19
and the sale or forfeiture of the Mortgaged Property or any part
thereof to satisfy the same; provided that during the pendency of
such Contest, Grantor shall provide security satisfactory to
Mortgagee, assuring the discharge of Grantor's obligations that
are the subject of such Contest ("Contested Impositions") and of
any additional interest charge, penalty or expense arising from or
incurred as a result of such Contest; and provided, further, that
if at any time payment of such Contested Impositions shall become
necessary to prevent (i) the delivery of a tax deed conveying the
Mortgaged Property because of non-payment or (ii) the imposition
of any civil or criminal penalty or liability on Mortgagee,
Trustee or the holders of the Obligations, Grantor shall pay the
same in sufficient time to avoid the delivery of such tax deed or
the imposition of any such penalty or liability.
SECTION 1.12. Notice Limiting Amount. Grantor covenants that it
will not, without the prior written consent of Mortgagee, file of
record any notice limiting the maximum principal amount secured by
this Mortgage.
ARTICLE II
Assignment of Leases, Rents and Other Sums
SECTION 2.01. Assignment. (a) Grantor hereby absolutely and
presently bargains, sells, transfers, assigns and sets over to
Mortgagee, as further security for the payment of the Obligations,
all of its right, title and interest in and to all current and
future Leases and Rents payable thereunder and all rights of
Grantor thereunder and any and all deposits held as security under
the Leases, whether before or after foreclosure or during the full
period of redemption, if any, and shall, upon demand, deliver to
Mortgagee an executed counterpart of each Lease. The assignment of
the Leases and Rents, and of the aforesaid rights with respect
thereto, is intended to be and is an absolute present assignment
from Grantor to Mortgagee and not merely the passing of a security
interest. Such assignment and grant shall continue in effect until
the Obligations are paid, the execution of this Mortgage
constituting and evidencing the irrevocable consent of Grantor to
the entry upon and taking possession of the Premises by Mortgagee
pursuant to such grant, whether foreclosure has been instituted or
not and without applying for a receiver. Until the occurrence of
an Event of Default hereunder, Grantor shall be entitled to
collect and receive the Rents. Such right of Grantor to collect
and receive said Rents shall be automatically revoked upon the
occurrence of an Event of Default and thereafter Trustee or
Mortgagee shall have the right and authority to exercise any of
the rights or remedies referred to or set forth in Article V. In
addition, upon such an Event of Default, Grantor shall promptly
pay to Trustee or Mortgagee (i) all rent prepayments and security
or other deposits paid to Grantor pursuant to any lease assigned
hereunder and (ii) all charges for services or facilities or for
escalation which were paid pursuant to any such lease to the
extent allocable to any period from and after such Event of
Default. Nothing contained in this Section 2.01(a) shall be
20
construed to bind Mortgagee to the performance of any of the
covenants, conditions or provisions contained in any Lease or
otherwise to impose any obligation on Mortgagee (including any
liability under the covenant of quiet enjoyment contained in any
Lease or under any applicable law in the event that any tenant
shall have been joined as a party defendant in any action to
foreclose this Mortgage and shall have been barred and foreclosed
thereby of all right, title and interest and equity of redemption
in the Premises), except that Mortgagee shall be accountable for
any money actually received pursuant to such assignment. Grantor
hereby further grants to Mortgagee the right to notify the tenant
under any Lease of the assignment thereof and, after the
occurrence of an Event of Default hereunder (i) to demand that the
tenant under any Lease pay all amounts due thereunder directly to
Mortgagee, (ii) to enter upon and take possession of the Premises
for the purpose of collecting the Rents, (iii) to dispossess by
the usual summary proceedings any tenant defaulting in the payment
thereof, (iv) to let the Premises, or any part thereof, and (v) to
apply the Rents, after payment of all necessary charges and
expenses, on account of the Obligations.
(b) If Grantor is not required to surrender possession of the
Premises hereunder in the event of any Event of Default, Grantor
will pay monthly in advance to Mortgagee, on its entry into
possession pursuant to Article V, or to any receiver appointed to
collect said Rents, the fair and reasonable rental value for the
use and occupation of the Premises or such part thereof as may be
in the possession of Grantor. Upon a default in any such payment,
Grantor will vacate and surrender such possession to Mortgagee,
Trustee or such receiver, and, in default thereof, may be evicted
by summary or any other available proceedings or actions.
(c) Grantor will, as and when requested from time to time by
Xxxxxxxxx, execute, acknowledge and deliver to Mortgagee, in form
approved by Mortgagee, one or more general or specific assignments
of the lessor's interest under any Lease. Grantor will, on demand,
pay to Mortgagee, or reimburse Mortgagee for the payment of any
costs or expenses incurred in connection with the preparation or
recording of any such assignment.
SECTION 2.02. Leases and Rents. (a) Grantor will (i) perform or
cause to be performed all the lessor's obligations under any
Lease, (ii) enforce (including the termination and cancellation of
any Lease, so long as the same is a bona fide enforcement of
Grantor's right as lessor under any such Lease and such
termination or cancellation, either by itself or in the aggregate
with other terminations and cancellations, will not diminish or
impair the security of this Mortgage) the performance by the
lessee under its respective Lease of all of said xxxxxx's
obligations thereunder and (iii) give Mortgagee prompt notice and
a copy of any notice of default, event of default, termination or
cancellation sent or received by Grantor.
(b)(i) Grantor will not, without Mortgagee's consent, (1) assign,
mortgage, pledge or otherwise transfer, dispose of or encumber,
whether by operation of law or otherwise, any Lease or the Rents,
(2) accept or permit the acceptance of a prepayment of any amounts
21
payable under such Lease for more than one month in advance of the
due date therefor, (3) enter into, amend or modify any Lease, (4)
cancel, terminate or accept a surrender of any Lease (5) enter
into any Lease (A) with Grantor or any affiliate of Grantor or its
constituent partners or (B) which would be a "disqualified lease",
as defined in Section 168(h)(1)(B)(ii) of the Internal Revenue
Code of 1986, as amended. Grantor will not enter into or amend,
without Mortgagee's consent, any Occupancy Agreement other than in
the ordinary course of business for prudent assisted living
facilities. "Occupancy Agreement" means any agreement by and
between Grantor and any resident of the Premises.
(ii) Supplementing the provisions of clause (i) of this Section
2.02(b), if the lessee under any Lease (or any receiver, trustee,
custodian or other party who succeeds to the rights of any lessee)
rejects or disaffirms such Lease pursuant to any Bankruptcy Law,
Grantor hereby assigns to Mortgagee the proceeds of any claims
(including the right to retain or apply any security deposits)
that Grantor may have against the lessee (or receiver, trustee,
custodian or other party who succeeds to the rights of any lessee)
and any guarantor of any of the Leases, under any one or more of
the Leases or any guaranty thereof based upon (1) any breach by
such lessee of the terms and provisions of the applicable Lease
(including any claim that Grantor may have by reason of a
termination, rejection or disaffirmance of such Lease pursuant to
any Bankruptcy Law), and (2) the use and occupancy of the premises
demised thereby, whether or not pursuant to the applicable Lease
(including any claim for use and occupancy arising under any
Bankruptcy Law). Grantor, immediately upon obtaining knowledge of
any such breach or use by any such lessee, will notify Mortgagee
of any such breach or use. Upon the occurrence of an Event of
Default, Mortgagee shall have the sole right to elect, either:
(A) to proceed against such lessee or guarantor as if it were the
named lessor thereunder, in Grantor's name or in Mortgagee's name
as agent for Grantor and Grantor agrees to cooperate with
Mortgagee in such action and shall execute any and all documents
required in furtherance of such action; or
(B) to have Grantor proceed in Grantor's and Mortgagee's behalf in
which event Mortgagee may participate in any such proceedings, and
Grantor from time to time will deliver to Mortgagee all
instruments requested by Mortgagee or as may be required to permit
such participation. Grantor shall, at its expense, diligently
prosecute any such proceedings, shall deliver to Mortgagee copies
of all papers served in connection therewith and shall consult and
cooperate with Mortgagee, its attorneys and agents, in the
carrying on and defense of any such proceedings; provided that no
settlement of any such proceeding shall be made by Grantor without
Mortgagee's consent.
ARTICLE III
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Additional Advances; Expenses; Indemnity
SECTION 3.01. Additional Advances and Disbursements. (a) Grantor
agrees that, upon the occurrence of an Event of Default, Trustee
or Mortgagee shall have the right without notice to Grantor to
advance all or any part of amounts owing or to perform any or all
required actions. No such advance or performance shall be deemed
to have cured such Default by Grantor or any Event of Default with
respect thereto. All sums advanced and all expenses incurred by
Trustee or Mortgagee in connection with such advances or actions,
and all other sums advanced or expenses incurred by Trustee or
Mortgagee hereunder or under applicable law (whether required or
optional and whether indemnified hereunder or not) shall be part
of the Obligations, shall bear interest at the Default Rate and as
provided in the Credit Agreement and shall be secured by this
Mortgage.
(b) This Mortgage secures not only existing indebtedness, but also
future or additional advances made pursuant hereto or to the
Credit Agreement, whether such advances are obligatory or
optional.
SECTION 3.02. Other Expenses. Grantor will pay or, on demand,
reimburse Trustee, Mortgagee or any holder of the Obligations for
the payment of any and all costs or expenses (including attorneys'
fees and disbursements) incurred in connection with (i) any
default or Event of Default by Grantor hereunder, (ii) the
exercise or enforcement by or on behalf of Trustee, Mortgagee or
any holder of the Obligations of any of its rights or of Grantor's
obligations under the Loan Documents or (iii) the granting,
administration, enforcement and closing of the transactions
contemplated hereunder.
SECTION 3.03. Indemnity. Grantor agrees to indemnify and hold
harmless Trustee, Mortgagee, the holders of the Obligations and
their respective officers, directors, employees, agents and
shareholders (the "Indemnified Parties") from and against any and
all losses, damages, claims, costs and expenses (including
attorneys' fees and disbursements) which may be imposed on,
incurred by or asserted against any of the Indemnified Parties in
connection with any transaction in any way connected with the
Mortgaged Property or the Loan Documents, except to the extent any
such loss, damage, claim, cost or expense is the result of the
willful misconduct or gross negligence of the Indemnified Party.
Any amount payable under this Section 3.03 shall be deemed a
demand obligation, shall be added to and become a part of the
Obligations, shall bear interest at the rate and as provided in
the Credit Agreement, and shall be secured by this Mortgage.
SECTION 3.04. Interest After Default. If any payment due hereunder
or under the other Loan Documents is not paid in full when due,
whether by acceleration or otherwise, then the same shall bear
interest hereunder at the Default Rate and as provided in the
Credit
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Agreement, and such interest shall be added to and become a part
of the Obligations and shall be secured hereby.
ARTICLE IV
Sale or Transfer of the Premises
SECTION 4.01. Continuous Ownership. Grantor acknowledges that the
continuous ownership of the Mortgaged Property by Grantor, except
as otherwise permitted in the other Loan Documents, is of a
material nature to the transaction hereinabove described and
Mortgagee's agreement to create the Obligations. Without
Mortgagee's prior written consent, Grantor will not, whether
voluntarily or involuntarily, (a) sell, grant, convey, assign or
otherwise transfer, by operation of law or otherwise, (b) permit
to be the subject of any transaction described in clause (a)
above, (c) enter into an agreement for any transaction described
in clause (a) above, or (d) grant an option which or take any
action which pursuant to the terms of any agreement to which
Grantor is a party may result in any transaction described in
clause (a) above of, the Mortgaged Property, or any legal,
beneficial or equitable interest therein, other than any specific
transfers permitted by the Credit Agreement (the foregoing,
collectively or severally,
"Transfer"). For purposes of this Mortgage, but without limiting
the foregoing, (i) the issuance of any equity interest in Grantor
(whether stock, partnership interest or otherwise) not in
accordance with and pursuant to the Credit Agreement, shall be
deemed a Transfer of the Mortgaged Property, (ii) a Transfer of
all or substantially all of the assets of Grantor shall be deemed
a Transfer of the Mortgaged Property, (iii) the execution and
delivery of any documentation relating to a proposed zoning lot
merger or the execution and delivery of any other documentation
effecting or purporting to effect, or the taking or suffering of
any other action effecting or purporting to effect, a transfer of,
or the granting of a right to utilize, any development rights
appurtenant to the Mortgaged Property shall be deemed a Transfer
of the Mortgaged Property, and (iv) any person or legal
representative of Grantor to whom Xxxxxxx's interest in the
Mortgaged Property passes by operation of law, or otherwise, shall
be bound by the provisions of this Mortgage. The provisions of
this Section shall apply to each and every such Transfer of all or
any portion of the Mortgaged Property or any legal or equitable
interest therein, regardless whether or not Mortgagee has
consented to, or waived by its action or inaction its rights
hereunder with respect to any previous Transfer of all or any
portion of the Mortgaged Property or any legal or equitable
interest therein.
SECTION 4.02. Release of Lien. This Mortgage is subject to the
provisions of Section 8.01 of the Credit Agreement, which grants
to Grantor the right, upon certain terms and conditions, to obtain
Mortgagee's consent to release, or cause to be released, from the
liens, security interests, conveyances and assignments evidenced
by this Mortgage, from time to time, all or any portion of the
Mortgaged Property.
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ARTICLE V
Defaults and Remedies
SECTION 5.01. Events of Default. The term "Event of Default", as
used in this Mortgage, shall mean the occurrence of any of the
following events:
(a) if default shall be made in the payment, when and as the same
shall
become due and payable, of any amounts required to be paid under
the Note, hereunder or under any other Loan Document, whether of
principal, interest within five (5) days after the same becomes
due, premium, fee or otherwise, and whether on any stated due
date, upon demand, at maturity or upon acceleration;
(b) if default shall be made in the performance or observance of
any other term, covenant or agreement contained in this Mortgage
or in any other Loan Document; or
(c) if any Event of Default (as defined in the Credit Agreement)
occurs; or
(d) if Grantor abandons the Premises or ceases to do business or
terminates its business for any reason whatsoever; or
(e) if the Mortgaged Property shall be taken, attached or
sequestered on execution or other process of law in any action
against Grantor; or
if Grantor shall fail at any time to obtain, provide, maintain,
keep in force or, within ten (10) days after request therefor,
deliver to Mortgagee the insurance policies required by Section
1.05; or
(g) if any claim of priority (except a claim based upon a
Permitted Encumbrance) to this Mortgage or any other document or
instrument securing the Obligations by title, lien or otherwise
shall be upheld by any court of competent jurisdiction or shall be
consented to by Grantor; or
(h) if Grantor fails to cure any material default under any Lease
within the shorter of thirty (30) days following the giving of
notice of default by the lessor thereunder or the applicable grace
period set forth therein.
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SECTION 5.02. Remedies. Upon the occurrence of any one or more
Events of Default, or any Transfer without the consent of
Mortgagee, Trustee or Mortgagee may, in addition to any rights or
remedies available to it hereunder or under the other Loan
Documents and to the extent permitted by applicable law, take such
action personally or by its agents or attorneys, with or without
entry, and without notice, demand, presentment or protest (each
and all of which are hereby waived), as it deems necessary or
advisable to protect and enforce its rights and remedies against
Grantor and in and to the Mortgaged Property, including the
following actions, each of which may be pursued concurrently or
otherwise, at such time and in such order as Trustee or Mortgagee
may determine, in its sole discretion, without impairing or
otherwise affecting its other rights or remedies:
(a) declare the entire balance of the Obligations to be
immediately due and payable, and upon any such declaration, the
entire unpaid balance of the Obligations shall become and be
immediately due and payable, without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly
waived by Grantor, anything in any other Loan Documents to the
contrary notwithstanding; or
(b) institute a proceeding or proceedings, judicial or otherwise,
for the complete or partial foreclosure of this Mortgage in any
manner provided hereunder or under any applicable provision of
law; or
(c) sell the Mortgaged Property, and all estate, right, title,
interest, claim and demand of Grantor therein, and all rights of
redemption thereof, at one or more sales, as an entirety or in
parcels, with such elements of real and/or personal property, and
at such time and place and upon such terms as it may deem
expedient, or as may be required by applicable law, and in the
event of a sale, by foreclosure or otherwise, of less than all of
the Mortgaged Property, this Mortgage shall continue as a lien and
security interest on the remaining portion of the Mortgaged
Property; or
(d) institute an action, suit or proceeding in equity for the
specific performance of any of the provisions contained in the
Loan Documents; or
(e) apply for the appointment of a receiver, custodian, trustee,
liquidator or conservator of the Mortgaged Property, to be vested
with the fullest powers permitted under applicable law, as a
matter of right and without regard to, or the necessity to
disprove, the adequacy of the security for the Obligations or the
solvency of Grantor or any other person liable for the payment of
the Obligations, and Grantor and each other person so liable
waives or shall be deemed to have waived such necessity and
consents or shall be deemed to have consented to such appointment;
or
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enter upon the Premises, and exclude Grantor and its agents and
servants wholly therefrom, without liability for trespass, damages
or otherwise, and take possession of all books, records and
accounts relating thereto and all other Mortgaged Property, and
Grantor agrees to surrender possession of the Mortgaged Property
and of such books, records and accounts to Trustee or Mortgagee on
demand after the happening of any Event of Default; and having and
holding the same may use, operate, manage, preserve, control and
otherwise deal therewith and conduct the business thereof, either
personally or by its superintendents, managers, agents, servants,
attorneys or receivers, without interference from Grantor; and
upon each such entry and from time to time thereafter may, at the
expense of Grantor and the Mortgaged Property, without
interference by Grantor and as Mortgagee may deem advisable, (i)
insure or reinsure the Premises, (ii) make all necessary or proper
repairs, renewals, replacements, alterations, additions,
betterments and improvements thereto and thereon and (iii) in
every such case in connection with the foregoing have the right to
exercise all rights and powers of Grantor with respect to the
Mortgaged Property, either in Grantor's name or otherwise; or
(g) with or without the entrance upon the Premises, collect,
receive, sue for and recover in its own name all Rents and cash
collateral derived from the Mortgaged Property, and after
deducting therefrom all costs, expenses and liabilities of every
character incurred by Trustee or Mortgagee in collecting the same
and in using, operating, managing, preserving and controlling the
Mortgaged Property, and otherwise in exercising Trustee's or
Mortgagee's rights under Subsection (f) of this Section, including
all amounts necessary to pay Impositions, insurance premiums and
other charges in connection with the Premises, as well as
compensation for the services of Trustee or Mortgagee and their
respective attorneys, agents and employees, to apply the remainder
as provided in Section 5.05; or
(h) release any portion of the Mortgaged Property for such
consideration as Mortgagee may require without, as to the
remainder of the Mortgaged Property, in any way impairing or
affecting the lien or priority of this Mortgage, or improving the
position of any subordinate lienholder with respect thereto,
except to the extent that the Obligations shall have been reduced
by the actual monetary consideration, if any, received by Trustee
or Mortgagee for such release and applied to the Obligations, and
may accept by assignment, pledge or otherwise any other property
in place thereof as Mortgagee may require without being
accountable for so doing to any other lienholder; or
(i) take all actions permitted under the UCC; or
(j) take any other action, or pursue any other right or remedy, as
Trustee or Mortgagee may have under applicable law, and Grantor
does hereby grant the same to Trustee or Mortgagee; or
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(k) to the extent the Mortgaged Property is located in the State
of California, the following language shall apply:
(1) the provisions of clause (h) shall be replaced with the
following language: "deliver to Mortgagee a written declaration of
default and demand for sale, and a written notice of default and
election to cause the Mortgaged Property to be sold, which notice
Trustee or Mortgagee shall cause to be duly filed for record,
(2) the provisions of clause (b) above shall be replaced with the
following language: "institute a judicial proceeding for the
complete foreclosure of the Mortgage under any applicable
provision of law or a non-judicial foreclosure for the complete or
partial foreclosure of this Mortgage under any applicable
provision of law",
(3) the clause "and all rights of redemption thereof shall be
deleted from clause (c) above.
(1) to the extent the Mortgaged Property is located in the State
of Iowa, Grantor hereby agrees that in the event of judicial
foreclosure of this Mortgage, the Mortgagee may, at its sole
option, elect:
(1) pursuant to Iowa Code Section 628.26 as now enacted or
hereafter modified, amended or replaced to reduce the period of
redemption after sale on foreclosure to six (6) months, or
(2) pursuant to Iowa Code Section 628.27 as now enacted or
hereafter modified, amended or replaced to reduce the period of
redemption after sale on foreclosure to sixty (60) days, or
(3) pursuant to Iowa Code Section 628.28 as now enacted or
hereafter modified, amended or replaced or any other Iowa Code
Section to reduce the period of redemption after sale on
foreclosure to such time as may be then applicable and provided by
law, or
(4) pursuant to Iowa Code Section 654.20 as now enacted or
hereafter modified, amended or replaced to foreclose without
redemption.
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In addition, to the extent the Mortgaged Property is located in
the State of Iowa, in the event of foreclosure of this Mortgage,
Grantor hereby agrees that the court may, and requests the court
to, enter a special order directing the clerk of court to enter
and record the judgment contained in the foreclosure decree on the
Note secured by this Mortgage without requiring that the Note be
first filed with the clerk of court for cancellation. Grantor
further agrees, because the Note secured by this Mortgage is also
secured by other mortgages and will be necessary to a foreclosure
of those mortgages, that notwithstanding Iowa Rule of Civil
Procedure 228, as presently enacted or as hereinafter amended or
replaced, the clerk of court may, in the event of foreclosure of
this Mortgage, enter and record the judgment contained in the
foreclosure decree on the Note secured by this Mortgage without
requiring that the Note be first filed with the clerk of court for
cancellation.
In the event that Trustee or Mortgagee shall exercise any of the
rights or remedies set forth in subsections (and (g) of this
Section, Trustee or Mortgagee shall not be deemed to have entered
upon or taken possession of the Mortgaged Property except upon the
exercise of its option to do so, evidenced by its demand and overt
act for such purpose, nor shall it be deemed a beneficiary or
mortgagee in possession by reason of such entry or taking
possession. Neither Trustee nor Mortgagee shall be liable to
account for any action taken pursuant to any such exercise other
than for Rents actually received by Mortgagee, nor liable for any
loss sustained by Grantor resulting from any failure to let the
Premises, or from any other act or omission of Trustee or
Mortgagee except to the extent such loss is caused by the willful
misconduct or bad faith of Trustee or Mortgagee.
SECTION 5.03. Rights Pertaining to Sales. Subject to the
provisions or other requirements of law and except as otherwise
provided herein, the following provisions shall apply to any sale
or sales of all or any portion of the Mortgaged Property under or
by virtue of this Article V, whether made under the power of sale
herein wanted or by virtue of judicial proceedings or of a
judgment or decree of foreclosure and sale:
(a) Trustee or Mortgagee may conduct any number of sales from time
to time. The power of sale set forth in Section 5.02(c) hereof
shall not be exhausted by any one or more such sales as to any
part of the Mortgaged Property which shall not have been sold, nor
by any sale which is not completed or is defective in Mortgagee's
opinion, until the Obligations shall have been paid in full. To
the extent the Mortgaged Property is located in the State of
California, said sale may be as a whole or in part or parcels and
Grantor hereby waives its right to direct the order in which the
Mortgaged Property or any parcel that is part thereof is sold.
(b) Any sale may be postponed or adjourned by public announcement
at the time and place appointed for such sale or for such
postponed or adjourned sale without further notice.
29
(c) After each sale, Mortgagee, Trustee or an officer of any court
empowered to do so shall execute and deliver to the purchaser or
purchasers at such sale a good and sufficient instrument or
instruments granting, conveying, assigning and transferring all
right, title and interest of Grantor in and to the property and
rights sold and shall receive the proceeds of said sale or sales
and apply the same as herein provided. Each of Trustee and
Mortgagee is hereby appointed the true and lawful attorney-in-fact
of Grantor, which appointment is irrevocable and shall be deemed
to be coupled with an interest, in Grantor's name and stead, to
make all necessary conveyances, assignments, transfers and
deliveries of the property and rights so sold, and for that
purpose Trustee and Mortgagee may execute all necessary
instruments of conveyance, assignment, transfer and delivery, and
may substitute one or more persons with like power, Grantor hereby
ratifying and confirming all that said attorney or such substitute
or substitutes shall lawfully do by virtue thereof. Nevertheless,
Grantor, if requested by Trustee or Mortgagee, shall ratify and
confirm any such sale or sales by executing and delivering to
Trustee, Mortgagee or such purchaser or purchasers all such
instruments as may be advisable, in Trustee's or Mortgagee's
judgment, for the purposes as may be designated in such request.
(d) Any and all statements of fact or other recitals made in any
of the instruments referred to in subsection (c) of this Section
5.03 given by Trustee or Mortgagee as to nonpayment of the
Obligations, or as to the occurrence of any Event of Default, or
as to Mortgagee having declared all or any of the Obligations to
be due and payable, or as to the request to sell, or as to notice
of time, place and terms of sale and of the property or rights to
be sold having been duly given, or as to the refusal, failure or
inability to act of Trustee, or as to the appointment of any
substitute or successor trustee, or as to any other act or thing
having been duly done by Grantor, Mortgagee, or by Trustee, shall
be taken as conclusive and binding against all persons as to
evidence of the truth of the facts so stated and recited. Trustee
or Mortgagee may appoint or delegate any one or more persons as
agent to perform any act or acts necessary or incident to any sale
so held, including the posting of notices and the conduct of sale,
but in the name and on behalf of Trustee.
(e) The receipt of Trustee or Mortgagee for the purchase money
paid at any such sale, or the receipt of any other person
authorized to receive the same, shall be sufficient discharge
therefor to any purchaser of any property or rights sold as
aforesaid, and no such purchaser, or its representatives, grantees
or assigns, after paying such purchase price and receiving such
receipt, shall be bound to see to the application of such purchase
price or any part thereof upon or for any trust or purpose of this
Mortgage or, in any manner whatsoever, be answerable for any loss,
misapplication or nonapplication of any such purchase money, or
part thereof, or be bound to inquire as to the authorization,
necessity, expediency or regularity of any such sale.
30
Any such sale or sales shall operate to divest all of the estate,
right, title, interest, claim and demand whatsoever, whether at
law or in equity, of Grantor in and to the properties and rights
so sold, and shall be a perpetual bar both at law and in equity
against Grantor and any and all persons claiming or who may claim
the same, or any part thereof or any interest therein, by, through
or under Grantor to the fullest extent permitted by applicable
law.
(g) Upon any such sale or sales, Mortgagee may bid for and acquire
the Mortgaged Property and, in lieu of paying cash therefor, may
make settlement for the purchase price by crediting against the
Obligations the amount of the bid made therefor, after deducting
therefrom the expenses of the sale, the cost of any enforcement
proceeding hereunder, and any other sums which Trustee or
Mortgagee is authorized to deduct under the terms hereof, to the
extent necessary to satisfy such bid.
(h) In the event that Grantor, or any person claiming by, through
or under Grantor, shall transfer or refuse or fail to surrender
possession of the Mortgaged Property after any sale thereof, then
Grantor, or such person, shall be deemed a tenant at sufferance of
the purchaser at such sale, subject to eviction by means of
forcible entry and unlawful detainer proceedings, or subject to
any other right or remedy available hereunder or under applicable
law.
(i) Upon any such sale, it shall not be necessary for Trustee,
Mortgagee or any public officer acting under execution or order of
court to have present or constructively in its possession any of
the Mortgaged Property.
(j) In the event a foreclosure hereunder shall be commenced by
Trustee or Mortgagee, Trustee or Mortgagee may at any time before
the sale of the Mortgaged Property abandon the sale, and may
institute suit for the collection of the Obligations and for the
foreclosure of this Mortgage, or in the event that Trustee or
Mortgagee should institute a suit for collection of the
Obligations, and for the foreclosure of this Mortgage, Mortgagee
may at any time before the entry of final judgment in said suit
dismiss the same and require Trustee or Mortgagee to sell the
Mortgaged Property in accordance with the provisions of this
Mortgage.
(k) To the extent the Mortgaged Property is located in the State
of California the following provisions shall apply:
(i) Mortgagee shall notify Trustee and shall deposit with Trustee
this Mortgage and the Note and such receipts and evidence of
expenditures made and secured hereby as Trustee may require. Upon
receipt of such notice from
31
Mortgagee, Trustee shall cause to be recorded, published and
delivered to Grantor such notice of default and notice of sale as
then required by law and by this Mortgage. Trustee shall, without
demand on Grantor, after lapse of such time as may then be
required by law and after recordation of such notice of default
and after notice of sale having been given as required by law,
sell the Mortgaged Property at the time and place of sale fixed by
it in said notice of sale, either as a whole, or in separate lots
or parcels or items as Mortgagee shall determine, and in such
order as Mortgagee may determine, at public auction to the highest
bidder for cash in lawful money of the United States payable at
the time of sale.
(ii) Any Person, including, without limitation, Grantor, Trustee
or Mortgagee, may purchase the Mortgaged Property at a sale
provided for in Section 5.03
(iii) Mortgagee may rescind any notice of default provided for in
Section 5.03(b) at any time before Trustee's sale by executing a
notice of rescission and recording the same. The recordation of
such notice shall constitute a cancellation of any prior
declaration of default and demand for sale and of any acceleration
of maturity of Indebtedness affected by any prior declaration or
notice of default. The exercise by Mortgagee of the right of
rescission shall not constitute a waiver of any default then
existing or subsequently occurring, or impair the right of
Mortgagee to execute other declarations of default and demand for
sale, or notices of default and of election to cause the Mortgaged
Property to be sold, nor otherwise affect the Note or this
Mortgage, or any of the rights, obligations or remedies of
Mortgagee or Trustee hereunder.
SECTION 5.04. Expenses. In any proceeding, judicial or otherwise,
to foreclose this Mortgage or enforce any other remedy of Trustee
or Mortgagee under the Loan Documents, there shall be allowed and
included as an addition to and a part of the Obligations in the
decree for sale or other judgment or decree all expenditures and
expenses which may be paid or incurred in connection with the
exercise by Trustee or Mortgagee of any of its rights and remedies
provided or referred to in Section 5.02, or any comparable
provision of any other Loan Document, together with interest
thereon at the rate and as provided in the Credit Agreement, and
the same shall be part of the Obligations and shall be secured by
this Mortgage.
SECTION 5.05. Application of Proceeds. The purchase money,
proceeds or avails of any sale referred to in Section 5.02,
together with any other sums which may be held by Trustee or
Mortgagee hereunder, whether under the provisions of this Article
V or otherwise, shall, except as herein expressly provided to the
contrary, be applied as follows:
32
First: To the payment of the costs and expenses of any such sale,
including compensation to Trustee, Mortgagee, their agents and
counsel, and of any judicial proceeding wherein the same may be
made, and of all expenses, liabilities and advances made or
incurred by Trustee or Mortgagee hereunder, together with interest
thereon as provided herein, and all Impositions and other charges,
except any Impositions or other charges subject to which the
Mortgaged Property shall have been sold.
Second: To the payment in full of the monetary Obligations
(including principal, interest, premium and fees) in such order as
Mortgagee may elect.
Third: To the payment of any other sums secured hereunder or
required to be paid by Grantor pursuant to any provision of the
Loan Documents.
Fourth: To the extent permitted by applicable law, to be set aside
by Trustee or Mortgagee as adequate security in its judgment for
the payment of sums which would have been paid by application
under clauses First through Third above to Trustee or Mortgagee,
arising out of an obligation or liability with respect to which
Grantor has agreed to indemnify Mortgagee, but which sums are not
yet due and payable or liquidated.
Fifth: To the payment of any withholding tax requirements of the
Foreign Investment in Real Property Tax Act of 1980, as amended.
Sixth: To the payment of the surplus, if any, to whomsoever may be
lawfully entitled to receive the same.
To the extent the Mortgaged Property is located in the State of
California, clause Fourth above shall not apply.
SECTION 5.06. Additional Provisions as to Remedies. (a) No delay
or omission by Trustee or Mortgagee to exercise any right or
remedy hereunder upon any default or Event of Default shall impair
such exercise, or be construed to be a waiver of any such default
or Event of Default.
(b) The failure, refusal or waiver (by consent, waiver or
otherwise) of Trustee or Mortgagee to assert any right or remedy
hereunder upon any default or Event of Default or other occurrence
shall not be construed as waiving such right or remedy upon any
other or subsequent default or Event of Default or other
occurrence.
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(c) Neither Trustee nor Mortgagee shall have any obligation to
pursue any rights or remedies it may have under any other
agreement prior to pursuing its rights or remedies hereunder or
under the other Loan Documents.
(d) Acceptance of any payment after the occurrence of any default
or Event of Default shall not be deemed a waiver or a cure of such
default or Event of Default, and acceptance of any payment less
than any amount then due shall be deemed an acceptance on account
only.
(e) In the event that Trustee or Mortgagee shall have proceeded to
enforce any right or remedy hereunder by foreclosure, sale, entry
or otherwise, and such proceeding shall be discontinued, abandoned
or determined adversely for any reason, then Grantor and Mortgagee
shall be restored to their former positions and rights hereunder
with respect to the Mortgaged Property, subject to the lien
hereof.
Each right of Trustee or Mortgagee provided for in this Mortgage
shall be cumulative and shall be in addition to every other right
provided for in this Mortgage or now or hereafter existing at law
or in equity, by statute or otherwise, and the exercise by Trustee
or Mortgagee of any one or more of such rights shall not preclude
the simultaneous or later exercise by Trustee or Mortgagee of any
other such right.
SECTION 5.07. Waiver of Rights and Defenses. To the full extent
Grantor may lawfully do so, Grantor agrees with Mortgagee as
follows:
(a) Grantor will not claim or take the benefit of any statute or
rule of law now or hereafter in force providing for any
appraisement, valuation, stay, extension, moratorium or
redemption, or of any statute of limitations, and Grantor, for
itself and its heirs, devisees, representatives, successors and
assigns, and for any and all persons ever claiming an interest in
the Mortgaged Property (other than Mortgagee and Trustee), hereby
waives and releases all rights of redemption, valuation,
appraisement, notice of intention to mature or declare due the
whole of the Obligations, and all rights to a marshaling of the
assets of Grantor, including the Mortgaged Property, or to a sale
in inverse order of alienation, in the event of foreclosure of the
liens and security interests
created hereunder.
(b) Grantor shall not have or assert and hereby waives any right
under any statute or rule of law pertaining to any of the matters
set forth in subsection (a) of this Section 5.07, to the
administration of estates of decedents or to any other matters
whatsoever to defeat, reduce or affect any of the rights or
remedies of Trustee or
Mortgagee hereunder.
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SECTION 5.08. Exercise by Trustee. Notwithstanding anything herein
to the contrary, Trustee (a) shall not exercise, or waive the
exercise of, any of its rights or remedies hereunder (other than
its right to reimbursement) except upon the request of Mortgagee,
and (b) shall exercise, or waive the exercise of, any or all of
such rights or remedies upon the request of Mortgagee and at the
direction of Mortgagee as to the manner of such exercise or
waiver, provided that Trustee shall have the right to decline to
follow any of such request or direction if Trustee shall be
advised by counsel that the action or proceeding, or manner
thereof, so directed may not lawfully be taken or waived.
ARTICLE VI
Release of Lien
SECTION 6.01. Release of Lien. If(i) all of the Obligations have
been paid in full or (ii) Grantor shall have satisfied all of the
terms and conditions set forth in Section 8.01 of the Credit
Agreement with respect to the Mortgaged Property, then, and only
in such events, all rights and obligations hereunder (except for
the rights and obligations set forth in Section 3.03 and the
indemnities provided in the Loan Documents) shall terminate and
the Mortgaged Property shall become wholly released and cleared of
the liens, security interests, conveyances and assignments
evidenced hereby. In such event Beneficiary shall, at the request
of Grantor, execute and deliver to Grantor, in recordable form,
all such documents as shall be necessary to release the Mortgaged
Property, or a portion thereof, from the liens, security
interests, conveyances and assignments created or evidenced
hereby. Notwithstanding anything in the preceding sentence to the
contrary, Trustee shall so release the Mortgaged Property only
upon the direction of Beneficiary. Any release of the Mortgaged
Property pursuant to Section 8.01 of the Credit Agreement shall be
effective only with respect to the applicable Property.
ARTICLE VII
Additional Provisions
SECTION 7.01. Provisions as to Payments, Advances. To the extent
that any part of the Obligations is used to pay indebtedness
secured by any Permitted Encumbrance or other outstanding lien,
security interest, charge or prior encumbrance against the
Mortgaged Property or to pay in whole or in part the purchase
price therefor, Trustee or Mortgagee shall be subrogated to any
and all rights, security interests and liens held by any owner or
holder of the same, whether or not the same are released. Grantor
agrees that, in consideration of such payment by Trustee or
Mortgagee, effective upon such payment Grantor shall and hereby
does
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waive and release all demands, defenses and causes of action for
offsets and payments with respect to the same.
SECTION 7.02. Separability. If all or any portion of any provision
of this Mortgage or any other Loan Documents shall be held to be
invalid, illegal or unenforceable in any respect or in any
jurisdiction, then such invalidity, illegality or unenforceability
shall not affect any other provision hereof or thereof, and such
provision shall be limited and construed in such jurisdiction as
if such invalid, illegal or unenforceable provision or portion
thereof were not contained herein or therein.
SECTION 7.03. Notices. (a) Any notice, demand, consent, approval,
direction, agreement or other communication (any "Notice")
required or permitted hereunder or under any other documents
evidencing or securing the Note shall be in writing and shall be
validly given if mailed by United States mail, certified mail,
return receipt requested, postage prepaid, addressed as follows to
the person entitled to receive the same:
(1) If to Grantor:
Emeritus Properties III, Inc.
c/o Emeritus Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
and a copy to:
Emeritus Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000 Attention: General Counsel
(2) If to Mortgagee:
Deutsche Bank AG, New York Branch
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 A
Attention: General Counsel
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(3) If to Trustee, to the extent that the Mortgaged Property is
located in the States of California, Idaho, Montana or Nevada at
the address first above written for each Trustee.
Any Notice shall be deemed to have been validly given hereunder
when so mailed. Any person shall have the right to specify, from
time to time, as its address or addresses for purposes of this
Mortgage, any other address or addresses upon giving three (3)
days' notice thereof to each other person then entitled to receive
notices or other instruments hereunder.
(b) For the purposes of California Civil Code Section 3097:
(i) The name and address of the Lender is Deutsche Bank AG, New
York Branch, 00 Xxxx 00"x Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(ii) The name and address of the owner of the Real Property is the
name and address of Grantor in Section 7.03(a).
(iii) The legal description of the Real Property and the street
address, if known, are set forth in Exhibit A attached hereto and
made a part hereof.
SECTION 7.04. Right to Deal. In the event that ownership of the
Mortgaged Property becomes vested in a person other than Grantor,
Trustee and Mortgagee may, without notice to Grantor, deal with
such successor or successors in interest with reference to this
Mortgage or the Obligations in the same manner as with Grantor,
without in any way vitiating or discharging Grantor's liability
hereunder or for the payment of the Obligations or being deemed a
consent to such vesting.
SECTION 7.05. Continuation of Lease. (a) Upon the foreclosure of
the lien created hereby on the Mortgaged Property, as herein
provided, any leases then existing shall not be destroyed or
terminated as a result of such foreclosure unless Mortgagee or any
purchaser at a foreclosure sale shall so elect by notice to the
lessee in question.
(b) If both the lessor's and the lessee's interest under any lease
which constitutes a part of the Premises shall at any time become
vested in any one person, this Mortgage and the lien and security
interest created hereby shall not be destroyed or terminated by
the application of the doctrine of merger and, in such event,
Trustee and Mortgagee shall continue to have and enjoy all of the
rights and privileges of Trustee and Mortgagee hereunder as
to each separate estate.
(c) In the event that Grantor acquires the fee or any other
interest in any portion of the Land that is presently leased to
Grantor, such interest shall, immediately upon such
37
acquisition, become subject to the lien of this Mortgage as fully
and completely, and with the same effect, as though now owned by
Grantor and specifically described herein, without need for the
delivery and/or recording of a supplement to this Mortgage or any
other instrument.
SECTION 7.06. Applicable Law. This Mortgage shall be governed by,
and construed in accordance with, the internal law of the State in
which the Mortgaged Property is located without regard to
principles of conflicts of laws, except that the internal laws of
the State of New York (without regard to principles of conflicts
of laws) shall govern (i) those terms and conditions contained in
the Note and the Credit Agreement which are incorporated by
reference herein and (ii) the resolution of issues arising under
the Note and the Credit Agreement to the extent that such
resolution is necessary to the interpretation of this Mortgage.
SECTION 7.07. Sole Discretion of Trustee and Mortgagee. (a)
Whenever Trustee's or Mortgagee's judgment, consent or approval is
required hereunder for any matter, or either shall have an option
or election hereunder, such judgment, the decision whether or not
to consent to or approve the same or the exercise of such option
or election shall be in the sole discretion of Trustee or
Mortgagee, as the case may be.
(b) Notwithstanding anything contained herein to the contrary, in
the event that Trustee or Mortgagee fails or refuses to grant
consent or approval when required hereunder or under any other
Loan Document for any matter, the parties agree that the remedy of
specific performance shall be the sole remedy of Grantor with
respect to such actions and Trustor hereby waives all claims for
damages with respect thereto, unless a final nonappealable
judgment has been rendered against Mortgagee finding that
Mortgagee had acted in bad faith.
SECTION 7.08. Provisions as to Covenants and Agreements. All of
Grantor's covenants and agreements hereunder shall run with the
land and time is of the essence with respect thereto.
SECTION 7.09. Matters to be in Writing. This Mortgage cannot be
altered, amended, modified, terminated, waived, released or
discharged except in a writing signed by the party against whom
enforcement is sought.
SECTION 7.10. Submission to Jurisdiction. Without limiting the
right of Mortgagee to bring any action or proceeding against the
undersigned or its property arising out of or relating to the
Obligations (an "Action") in the courts of other jurisdictions,
Grantor hereby irrevocably submits to the jurisdiction of the
state court or Federal court in each jurisdiction in which the
Mortgaged Property is located, and Grantor hereby irrevocably
agrees that any Action may be heard and determined in such state
or federal court. Grantor hereby irrevocably waives, to the
fullest extent that it may effectively do so, the defense of an
inconvenient forum to the maintenance of any Action in the
jurisdiction. Grantor hereby irrevocably agrees that the summons
and complaint or any other process in any Action in any
jurisdiction may be served by
38
mailing to any of the addresses set forth herein or by hand
delivery to a person of suitable age and discretion at any such
address. Such service will be complete on the date such process is
so mailed or delivered.
SECTION 7.11. Construction of Provisions. The following rules of
construction shall be applicable for all purposes of this Mortgage
and all documents or instruments supplemental hereto, unless the
context otherwise requires:
(a) All references herein to numbered Articles or Sections or to
lettered Exhibits are references to the Articles and Sections
hereof and the Exhibits annexed to this Mortgage, unless expressly
otherwise designated in context. All Article, Section and Exhibit
captions herein are used for reference only and in no way limit or
describe the scope or intent of, or in any way affect, this
Mortgage.
(b) The terms "include", "including" and similar terms shall be
construed as if followed by the phrase "without being limited to".
(c) The terms "Land", "Leased Land", "Leasehold Estate",
"Improvements" ,
"Equipment", "Mortgaged Property" and "Premises" shall be
construed as if followed by the phrase "or any part thereof'.
(d) The term "Obligations" shall be construed as if followed by
the phrase "or any other sums secured hereby, or any part
thereof'.
(e) Words of masculine, feminine or neuter gender shall mean and
include the correlative words of the other genders, and words
importing the singular number shall mean and include the plural
number, and vice versa.
The term "person" shall include natural persons, firms,
partnerships ,
corporations and any other public and private legal entities.
(g) The term "provisions", when used with respect hereto or to any
other document or instrument, shall be construed as if preceded by
the phrase "terms, covenants, agreements, requirements, conditions
and/or".
(h) The cover page of and all recitals set forth in, and all
Exhibits to, this Mortgage are hereby incorporated in this
Mortgage.
(i) All obligations of Grantor hereunder shall be performed and
satisfied by or on behalf of Grantor at Xxxxxxx's sole cost and
expense.
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(j) The term "lease" shall mean "tenancy, subtenancy, lease or
sublease", the term "lessor" shall mean "landlord, sublandlord,
lessor and sublessor" and the term
"lessee" shall mean "tenant, subtenant, lessee and sublessee".
(k) No inference in favor of or against any party shall be drawn
from the fact that such party has drafted any portion hereof.
(1) The term "Mortgagee and/or Trustee" shall be construed as if
followed by the phrase "as applicable".
SECTION 7.12. Successors and Assigns. The provisions hereof shall
be binding upon Grantor and the heirs, devisees, representatives,
successors and permitted assigns of Grantor, including successors
in interest of Grantor in and to all or any part of the Mortgaged
Property, and shall inure to the benefit of Trustee, Mortgagee,
the holders of the Obligations and their respective heirs,
successors, legal representatives, substitutes and assigns. Where
two or more persons have executed this Mortgage, the obligations
of. such persons shall be joint and several.
SECTION 7.13. Counterparts. This Mortgage may be executed in
counterparts, each of which shall be deemed to be an original, but
all of which shall constitute one and the same agreement.
SECTION 7.14. Agency. Mortgagee may deal with the Mortgaged
Property and may issue, or instruct Trustee to issue, as
applicable, any release to be given hereunder pursuant to Section
4.02 or 6.01 or grant any consent or approval or take any other
action, or instruct Trustee to take any other action, as
applicable, required or permitted hereunder, without reference to
or the approval of the holders of the Obligations and any third
party (including any title insurance company issuing a title
insurance policy, or a commitment to issue a title insurance
policy, in connection with the Mortgaged Property) may
conclusively rely on the due authority of Mortgagee (or Trustee,
if so instructed by Mortgagee) to do any or all of the foregoing.
SECTION 7.15. The Security Agreement. In the event that a valid
and enforceable security interest has been created in any of the
Mortgaged Property under the terms of the Security Agreement (as
defined in the Credit Agreement) and the terms of the Security
Agreement are inconsistent with the terms of this Mortgage, then
with respect to such Mortgaged Property, the terms of the Security
Agreement shall be controlling in the case of Equipment and
proceeds of insurance policies and the terms of this Mortgage
shall be controlling in all other cases.
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SECTION 7.16. Inapplicable Provisions. If any term, covenant or
condition of this Deed of Trust is held to be invalid, illegal or
unenforceable in any respect, this Deed of Trust shall be
construed without such provision.
ARTICLE VIII
Provisions as to Trustee
SECTION 8.01. Trustee's Appointment. Trustee may resign by an
instrument in writing addressed to Mortgagee, or Trustee may be
removed at any time with or without cause by an instrument in
writing executed by Mortgagee. In case of the death, resignation,
removal or disqualification of Trustee or if for any reason
Mortgagee shall deem it desirable to appoint a substitute or
successor Trustee to act instead of Trustee herein named or any
substitute or successor Trustee, then Mortgagee shall have the
right and is hereby authorized and empowered to appoint a
successor Trustee, or a substitute Trustee, without other
formality than appointment and designation in writing executed by
Mortgagee, and the authority hereby conferred shall extend to the
appointment of other successor and substitute Trustees
successively until the Obligations have been paid in full or until
the Mortgaged Property is sold hereunder. Such appointment and
designation by Mortgagee shall be full evidence of the right and
authority to make the same and of all facts therein recited. If
Mortgagee is a corporation or a national banking association and
such appointment is executed in its behalf by an officer of such
corporation or national banking association, such appointment
shall be conclusively presumed to be executed with authority and
shall be valid and sufficient without proof of any action by the
board of directors or any superior officer of the corporation or
national banking association. Upon the making of such appointment
and designation, all of the estate and title of Trustee in the
Mortgaged Property shall vest in the named successor or substitute
Trustee and it shall thereupon succeed to and shall hold, possess
and execute all the rights, powers, privileges, immunities and
duties herein conferred upon Trustee; but, nevertheless, upon the
written request of Mortgagee or of the successor or substitute
Trustee, Trustee ceasing to act shall execute and deliver an
instrument transferring to such successor or substitute Trustee
all of the estate and title in the Mortgaged Property of Trustee
so ceasing to act, together with all the rights, powers,
privileges, immunities and duties herein conferred upon Trustee,
and shall duly assign, transfer and deliver any of the properties
and moneys held by said Xxxxxxx xxxxxxxxx to said successor or
substitute Trustee. All references herein to Trustee shall be
deemed to refer to Trustee (including any successor or substitute
appointed and designated as herein provided) from time to time
acting hereunder. Except as otherwise required by applicable law,
Trustee shall not perform any act or omit to act hereunder unless,
prior to such act or omission, Mortgagee delivers to Trustee
direction to so act or omit to act. Grantor hereby ratifies and
confirms any and all acts which Trustee herein named or its
successor or successors, substitute or substitutes, in this trust,
shall do lawfully by virtue hereof.
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SECTION 8.02. Exculpation. Trustee shall not be liable for any
error of judgment or act done by Trustee in good faith, or be
otherwise responsible or accountable under any circumstances
whatsoever, except for Trustee's gross negligence or willful
misconduct. Trustee shall have the right to rely on any
instrument, document or signature authorizing or supporting any
action taken or proposed to be taken by it hereunder, believed by
it in good faith to be genuine. All moneys 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 moneys (except to the
extent required by law), and Trustee shall be under no liability
for interest on any moneys received by it hereunder.
ARTICLE IX
Notices of Default
SECTION 9.01. Notices of Default. To the extent that the Mortgaged
Property is located in the State of California, Grantor hereby
requests that a copy of any Notice of Default and/or Notice of
Sale be sent to Grantor at Grantor's address set forth in Section
7.03 hereof.
ARTICLE X
Fixture Filing
SECTION 10.01. Fixture Filing. A portion of the Mortgaged Property
is or is to become fixtures upon the Premises. To the extent
permitted by applicable law, Grantor covenants and agrees that the
filing of this Mortgage in the real estate records of the county
in which the Mortgaged Property is located shall also operate from
the time of filing as a fixture filing with respect to all goods
constituting part of the Mortgaged Property which are or are to
become fixtures related to the real estate described herein. For
such purpose, the following information is set forth:
(a) Name and Address of Debtor:
Emeritus Properties In, Inc.
c/o Emeritus Corporation,
0000 Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxxxxx 00000
(b) Name and Address of Secured Party:
Deutsche Bank AG, New York Branch,
00 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
42
(c) This document covers goods which are or are to become
fixtures.
(d) The real property on which the fixtures are or may be located
is described on Exhibit A.
(e) Grantor is the record owner of the real property.
(f) The fixture filing is to be recorded in the records of the
county where the real property is located.
ARTICLE XI
State Specific Clauses
SECTION 11.01. Washington. Grantor hereby represents and
warrants that, to the extent the Mortgaged Property is located in
the State of Washington, no part or portion of the Mortgaged
Property is used principally for agricultural or farming purposes.
SECTION I 1.02. Iowa. Grantor hereby represents and warrants that,
to the extent the Mortgaged Property is located in the State of
Iowa, none of the collateral for the Loan constitutes and none of
the Loan proceeds will be used to purchase:
(a) real property which is a single-family or a two-family
dwelling occupied or to be occupied by the Grantor; or
(b) agricultural products or property used for an agricultural
purpose as defined in Iowa Code Section 535.13; or
(c) agricultural land as defined in Iowa Code Section 9H.1; or
(d) property used for an agricultural purpose as defined in Iowa
Code Section 570.A.1(2).
SECTION 11.03. Idaho. Grantor hereby represents and warrants that,
to the extent the Mortgaged Property is located in the State of
Idaho, the Mortgaged Property consists of forty (40) acres or less
or is situated within an incorporated city.
SECTION 11.04. California. (a) Grantor hereby represents and
warrants that, to the extent the Mortgaged Property is located in
the State of California, no position of the proceeds of the Loan
shall be used by Grantor to finance the purchase or construction
of real
43
property containing four (4) or fewer residential units on which
four (4) or fewer residential units are to be constructed.
This Mortgage covers certain goods which are to become fixtures
related to the Land and constitutes a fixture filing in accordance
with Section 9313 of the California Uniform Commercial Code, with
respect to such goods, executed by Grantor as debtor in favor of
Mortgagee as secured party.
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IN WITNESS WHEREOF, the undersigned has executed this Mortgage the
day first set forth above.
Signed, sealed and delivered in the presence of the following
witnesses:
/s/ Xxxxxxx Xxxxxx
Name:
Address:
/s/ Xxxxx Xxxxxxx
Name:
Address:
PLEASE BE ADVISED THAT ORAL AGREEMENTS OR ORAL
COMMITMENTS TO LOAN MONEY. EXTEND CREDIT OR FORBEAR FROM ENFORCING
REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
EMERITUS PROPERTIES III, Inc.,
a Washington c rporation
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Vice President
Address: 0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
STATE OF WASHINGTON
COUNTY OF KING
ss.
I certify that I know or have satisfactory evidence that Xxxxx
Xxxxx is the person who appeared before me, and said person
acknowledged that said person signed this instrument, on oath
stated that said person was authorized to execute the instrument
and acknowledged it as the Vice President of Emeritus III, Inc., a
Washington corporation, to be the free and voluntary act of such
corporation for the uses and purposes mentioned in the instrument.
Dated this 30th day of June, 1998.
/s/ Xxxxxx Xxx
(Signature of Notary)
Notary public in and for the state of Washington, residing at
Seattle.
My appointment expires 01-05-02
