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SECURITY AGREEMENT
Dated as of December 2, 1998
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, but solely as the Owner Trustee under
the Sunrise Trust 1998-1
and
NATIONSBANK, N.A.,
as the Agent for the Lenders and the Holders
and accepted and agreed to by
SUNRISE MIDWEST LEASING, L.L.C.
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TABLE OF CONTENTS
1. Definitions..........................................................................................2
2. Grant of Security Interest...........................................................................3
3. Payment of Obligations...............................................................................5
4. Other Covenants......................................................................................6
5. Default; Remedies....................................................................................6
6. Remedies Not Exclusive...............................................................................7
7. Performance by the Agent of the Borrower's Obligations...............................................7
8. Duty of the Agent....................................................................................7
9. Powers Coupled with an Interest......................................................................8
10. Execution of Financing Statements....................................................................8
11. Security Agreement Under Uniform Commercial Code.....................................................8
12. Authority of the Agent...............................................................................9
13. Notices..............................................................................................9
14. Severability.........................................................................................9
15. Amendment in Writing; No Waivers; Cumulative Remedies................................................9
16. Section Headings....................................................................................10
17. Successors and Assigns..............................................................................10
18. The Borrower's Waiver of Rights.....................................................................10
19. GOVERNING LAW.......................................................................................11
20. Obligations Are Without Recourse....................................................................11
21. Partial Release; Full Release.......................................................................11
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22. Miscellaneous.......................................................................................11
23. Conflicts with Participation Agreement..............................................................12
24. LESSEE AS A PARTY...................................................................................12
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SECURITY AGREEMENT
This SECURITY AGREEMENT, dated as of December 2, 1998 (as amended,
modified, extended, supplemented, restated and/or replaced from time to time,
this "Security Agreement"), is made between FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association, not individually, but solely as
Owner Trustee under the Sunrise Trust 1998-1 (the "Borrower"), and NATIONSBANK,
N.A., a national banking association ("Bank"), as agent for (a) the Lenders
(hereinafter defined) under the Credit Agreement dated as of December 2, 1998
(as amended, modified, extended, supplemented, restated and/or replaced from
time to time, the "Credit Agreement") by and among the Borrower, the lending
institutions from time to time parties thereto (the "Lenders") and Bank as the
agent for the Lenders and (b) the holders of the certificates issued pursuant to
the Trust Agreement dated as of December 2, 1998 (as amended, modified,
extended, supplemented, restated and/or replaced from time to time, the "Trust
Agreement") among the holders from time to time parties thereto (the "Holders")
and the Borrower, in its individual capacity thereunder and in its capacity as
Owner Trustee thereunder. The Lenders and the Holders, together with their
successors and permitted assigns, are collectively referred to hereinafter as
the "Secured Parties." Bank, in its capacity as agent for the Secured Parties is
referred to hereinafter as the "Agent", and this Security Agreement is accepted
and agreed to by SUNRISE MIDWEST LEASING, L.L.C., a Virginia limited liability
company.
Preliminary Statement
Pursuant to the Credit Agreement, the Lenders have severally agreed to
make Loans to the Borrower in an aggregate amount not to exceed $45,590,000 upon
the terms and subject to the conditions set forth therein, to be evidenced by
the Notes issued by the Borrower under the Credit Agreement. Pursuant to the
Trust Agreement, the Holders have agreed to purchase the ownership interests of
the Trust created thereby in an aggregate amount not to exceed $1,410,000 upon
the terms and subject to the conditions set forth therein, to be evidenced by
the Certificates issued by the Borrower under the Trust Agreement. The Borrower
is, or shall be upon the date of the initial Advance with respect to each
Property, the legal and beneficial owner of such Property (except the Borrower
may have a ground leasehold interest in certain Properties pursuant to one (1)
or more Ground Leases).
It is a condition, among others, to the obligation of the Lenders to
make their respective Loans to the Borrower under the Credit Agreement and the
Holders to make their respective Holder Advances under the Trust Agreement that
the Borrower shall have executed and delivered this Security Agreement to the
Agent, for the benefit of the Lenders and the Holders.
NOW, THEREFORE, in consideration of the premises and to induce the
Lenders to make their respective Loans under the Credit Agreement and to induce
the Holders to make their respective Holder Advances under the Trust Agreement,
the Borrower hereby agrees with the Agent, for the benefit of the Lenders and
the Holders, as follows:
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1. DEFINITIONS.
(a) As used herein, the following terms shall have the
following respective meanings:
"Accounts" shall mean all "accounts," as such term is defined
in the Uniform Commercial Code, now owned or hereafter acquired by the
Borrower, including without limitation (i) all accounts receivable,
other receivables, book debts and other forms of obligations now owned
or hereafter received or acquired by or belonging or owing to the
Borrower, whether arising out of goods sold or leased or services
rendered by it or from any other transaction (including without
limitation any such obligations which may be characterized as an
account under the Uniform Commercial Code), (ii) all of the Borrower's
rights in, to and under all purchase orders or receipts now owned or
hereafter acquired by it for goods or services, (iii) all of the
Borrower's rights to any goods represented by any of the foregoing
(including without limitation unpaid sellers' rights of rescission,
replevin, reclamation and stoppage in transit and rights to returned,
reclaimed or repossessed goods), (iv) all monies due or to become due
to the Borrower under all purchase orders and contracts for the sale or
lease of goods or the performance of services or both by the Borrower
(whether or not yet earned by performance on the part of the Borrower)
now or hereafter in existence, including without limitation the right
to receive the proceeds of said purchase orders and contracts, and (v)
all collateral security and guarantees of any kind, now or hereafter in
existence, given by any Person with respect to any of the foregoing.
"Chattel Paper" shall mean any and all "chattel paper," as
such term is defined in the Uniform Commercial Code, now owned or
hereafter acquired by the Borrower, wherever located.
"Documents" shall mean any and all "documents", as such term
is defined in the Uniform Commercial Code, now owned or hereafter
acquired by the Borrower, wherever located, including without
limitation each xxxx of lading, dock warrant, dock receipt, warehouse
receipt or order for the delivery of goods, and also any other document
which in the regular course of business or financing is treated as
adequately evidencing that the person in possession of it is entitled
to receive, hold and dispose of the document and the goods it covers.
"General Intangibles" shall mean any and all "general
intangibles," as such term is defined in the Uniform Commercial Code,
now owned or hereafter acquired by the Borrower, including without
limitation all contracts, undertakings, or agreements in or under which
the Borrower may now or hereafter have any right (other than any right
evidenced by Chattel Paper, Documents or Instruments), title or
interest, including without limitation any agreements relating to the
terms of payment or the terms of performance of any Account.
"Holders" shall have the meaning specified in the first
paragraph of this Security Agreement.
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"Instruments" shall mean any and all "instruments", as such
term is defined in the Uniform Commercial Code, now owned or hereafter
acquired by the Borrower, wherever located, including without
limitation all certificated securities, all certificates of deposit,
and all notes and other, without limitation, evidences of indebtedness,
other than instruments that constitute, or are a part of a group of
writings that constitute, Chattel Paper.
"Investment Property" shall mean any and all "investment
property," as such term is defined in the Uniform Commercial Code, now
owned or hereafter acquired by the Borrower, wherever located.
"Lenders" shall have the meaning specified in the first
paragraph of this Security Agreement.
"Lessee" shall mean Sunrise Midwest Leasing, L.L.C., a
Virginia limited liability company, its successors, permitted assigns
and permitted transferees.
"Obligations" shall mean any and all obligations now existing
or hereafter arising under the Credit Agreement, the Notes, the Trust
Agreement, the Certificates and/or any other Operative Agreement.
(b) Capitalized terms used but not otherwise defined in this
Security Agreement shall have the respective meanings specified in the
Credit Agreement or Appendix A to the Participation Agreement dated as
of December 2, 1998 (as amended, modified, extended, supplemented,
restated and/or replaced from time to time in accordance with the
applicable provisions thereof, the "Participation Agreement") among
Lessee, Sunrise Assisted Living, Inc., as guarantor, the Borrower, the
Holders, the Lenders and the Bank, as agent for the Lenders and
respecting the Security Documents, as the agent for the Lenders and the
Holders, to the extent of their interests.
(c) The rules of usage set forth in Appendix A to the
Participation Agreement shall apply to this Agreement.
2. GRANT OF SECURITY INTEREST.
To secure payment of all the amounts advanced under the Credit
Agreement in connection with the Notes, all the amounts advanced or contributed
under the Trust Agreement in connection with the Certificates and all other
amounts now or hereafter owing to the Lenders, the Holders or the Agent
thereunder or under any other Operative Agreement, THE BORROWER HEREBY CONVEYS,
GRANTS, ASSIGNS, TRANSFERS, HYPOTHECATES, MORTGAGES AND SETS OVER TO THE AGENT
FOR THE BENEFIT OF THE SECURED PARTIES, A FIRST PRIORITY SECURITY INTEREST IN
AND LIEN ON THE TRUST ESTATE, WHETHER NOW EXISTING OR HEREAFTER ACQUIRED
INCLUDING WITHOUT LIMITATION THE FOLLOWING:
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(a) all right, title and interest of the Borrower in and to
the Operative Agreements now existing or hereafter acquired by the
Borrower (including without limitation all rights to payment and
indemnity rights of the Borrower under the Participation Agreement)
(all of the foregoing in this paragraph (a) being referred to as the
"Rights in Operative Agreements");
(b) all right, title and interest of the Borrower in and to
all of the Equipment;
(c) all right, title and interest of the Borrower in and to
all of the Fixtures;
(d) all the estate, right, title, claim or demand whatsoever
of the Borrower, in possession or expectancy, in and to each Property,
Fixture or Equipment or any part thereof;
(e) all right, title and interest of the Borrower in and to
all substitutes, modifications and replacements of, and all additions,
accessions and improvements to, the Fixtures and Equipment,
subsequently acquired or leased by the Borrower or constructed,
assembled or placed by the Borrower on any Property, immediately upon
such acquisition, lease, construction, assembling or placement, and in
each such case, without any further conveyance, assignment or other act
by the Borrower;
(f) all right, title and interest of the Borrower in, to and
under books and records relating to or used in connection with the
operation of one (1) or more Properties or any part thereof; all rights
of the Borrower to the payment of money and all property; and all
rights in and to any causes of action or choses in action now or
hereafter existing in favor of the Borrower and all rights to any
recoveries therefrom;
(g) all right, title and interest of the Borrower in and to
all unearned premiums under insurance policies now held or subsequently
obtained by the Lessee relating to one (1) or more Properties and the
Borrower's interest in and to all proceeds of any insurance policies
maintained by or for the benefit of the Borrower, including without
limitation any right to collect and receive such proceeds; and all
awards and other compensation, including without limitation the
interest payable thereon and any right to collect and receive the same,
made to the present or any subsequent owner of any Property for the
taking by eminent domain, condemnation or otherwise, of all or any part
of any Property or any easement or other right therein;
(h) all right, title and interest of the Borrower in and to
(i) all consents, licenses, certificates and other governmental
approvals relating to construction,
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completion, use or operation of any Property or any part thereof and
(ii) all Plans and Specifications relating to any Property;
(i) all right, title and interest of the Borrower in and to
all Rent and all other rents, payments, purchase prices, receipts,
revenues, issues and profits payable under the Lease or pursuant to any
other lease with respect to any Property;
(j) all right, title and interest of the Borrower in and to
all Instruments and Documents;
(k) all right, title and interest of the Borrower in and to
all General Intangibles;
(l) all right, title and interest of the Borrower in and to
all Chattel Paper (including without limitation all rights under the
Lease) and each Ground Lease;
(m) all right, title and interest of the Borrower in and to
all money, cash or cash equivalent and bank accounts;
(n) all right, title and interest of the Borrower in and to
all Accounts;
(o) all right, title and interest of the Borrower in and to
all proceeds of letters of credit issued in favor of the Borrower in
connection with any Property; and
(p) all right, title and interest of the Borrower in and to
all proceeds, both cash and noncash, of any of the foregoing.
(All of the foregoing property and rights and interests now owned or
held or subsequently acquired by the Borrower and described in the foregoing
clauses (a) through (p) are collectively referred to as the "Trust Property").
TO HAVE AND TO HOLD the Trust Property and the rights and privileges
hereby granted unto the Agent (for the benefit of the Lenders and the Holders)
its successors and assigns for the uses and purposes set forth, until all of the
obligations owing to the Lenders, the Holders or the Agent under the Operative
Agreements are paid in full; provided, that EXCLUDED from the Trust Property at
all times and in all respects shall be all Excepted Payments.
3. PAYMENT OF OBLIGATIONS.
The Borrower shall pay all Obligations in accordance with the terms of
the Credit Agreement, the Notes, the Trust Agreement, the Certificates and the
other Operative Agreements
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and perform each term to be performed by it under the Credit Agreement, the
Notes, the Trust Agreement, the Certificates and the other Operative Agreements.
4. OTHER COVENANTS.
At any time and from time to time, upon the written request of the
Agent, and at the expense of the Borrower (with funds provided by the Lessee for
such purpose), the Borrower will promptly and duly execute and deliver such
further instruments and documents and take such further actions as the Agent
reasonably may request for the purposes of obtaining or preserving the full
benefits of this Security Agreement and of the rights and powers granted by this
Security Agreement.
5. DEFAULT; REMEDIES.
(a) If a Credit Agreement Event of Default has occurred and is
continuing:
(i) the Agent, in addition to all other remedies
available at law or in equity, shall have the right forthwith
to enter upon any Property (or any other place where any
component of any Property is located at such time) without
charge, and take possession of all or any portion of the Trust
Property, and to re-let the Trust Property and receive the
rents, issues and profits thereof, to make repairs and to
apply said rentals and profits, after payment of all necessary
or proper charges and expenses, on account of the amounts
hereby secured (subject to the Excepted Payments); and
(ii) the Agent, shall, as a matter of right, be
entitled to the appointment of a receiver for the Trust
Property, and the Borrower hereby consents to such appointment
and waives notice of any application therefor.
(b) If a Credit Agreement Event of Default has occurred and is
continuing, the Agent may proceed by an action at law, suit in equity
or other appropriate proceeding, to protect and enforce its rights,
whether for the foreclosure of the Lien of this Security Agreement, or
for the specific performance of any agreement contained herein or for
an injunction against the violation of any of the terms hereof. The
proceeds of any sale of any of the Trust Property shall be applied
pursuant to Section 8.7 of the Participation Agreement. In addition,
the Agent may proceed under Section 11 hereof.
(c) The Borrower hereby waives the benefit of all
appraisement, valuation, stay, extension and redemption laws now or
hereafter in force and all rights of marshalling in the event of any
sale of the Trust Property or any portion thereof or interest therein.
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6. REMEDIES NOT EXCLUSIVE.
The Agent shall be entitled to enforce payment of the indebtedness and
performance of the Obligations and to exercise all rights and powers under this
Security Agreement or under any of the other Operative Agreements or other
agreements or any laws now or hereafter in force, notwithstanding some or all of
the Obligations may now or hereafter be otherwise secured, whether by deed of
trust, mortgage, security agreement, pledge, Lien, assignment or otherwise.
Neither the acceptance of this Security Agreement nor its enforcement, shall
prejudice or in any manner affect the Agent's right to realize upon or enforce
any other security now or hereafter held by the Agent, it being agreed that the
Agent shall be entitled to enforce this Security Agreement and any other
security now or hereafter held by the Agent in such order and manner as the
Agent may determine in its absolute discretion. No remedy conferred hereunder or
under any other Operative Agreement upon or reserved to the Agent is intended to
be exclusive of any other remedy herein or therein or by law provided or
permitted, but each shall be cumulative and shall be in addition to every other
remedy given hereunder or thereunder or now or hereafter existing at law or in
equity or by statute. Every power or remedy given by any of the Operative
Agreements to the Agent or to which it may otherwise be entitled, may be
exercised, concurrently or independently, from time to time and as often as may
be deemed expedient by the Agent. In no event shall the Agent, in the exercise
of the remedies provided in this Security Agreement (including without
limitation in connection with the assignment of Rents to the Agent, or the
appointment of a receiver and the entry of such receiver onto all or any part of
the Land), be deemed a "mortgagee in possession" or a "pledgee in possession",
and the Agent shall not in any way be made liable for any act, either of
commission or omission, in connection with the exercise of such remedies.
7. PERFORMANCE BY THE AGENT OF THE BORROWER'S OBLIGATIONS.
If the Borrower fails to perform or comply with any of its agreements
contained herein the Agent, at its option, but without any obligation so to do,
may perform or comply, or otherwise cause performance or compliance, with such
agreement. The expenses of the Agent incurred in connection with actions
undertaken as provided in this Section 7, together with interest thereon at a
rate per annum equal to the Overdue Rate, from the date of payment by the Agent
to the date reimbursed by the Borrower, shall be payable by the Borrower (with
funds provided by the Lessee for such purpose) to the Agent on demand and
constitutes part of the Obligations secured hereby.
8. DUTY OF THE AGENT.
The Agent's sole duty with respect to the custody, safekeeping and
physical preservation of any Trust Property in its possession, under Section
9-207 of the Uniform Commercial Code or otherwise, shall be to deal with it in
the same manner as the Agent deals with similar property for its own account.
Neither the Agent, any Lender, any Holder nor any of their respective directors,
officers, employees, shareholders, partners or agents shall be liable for
failure to demand, collect or realize upon any of the Trust Property or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Trust Property upon the request of the Borrower or
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any other Person or to take any other action whatsoever with regard to the Trust
Property or any part thereof.
9. POWERS COUPLED WITH AN INTEREST.
All powers, authorizations and agencies contained in this Security
Agreement are coupled with an interest and are irrevocable until this Security
Agreement is terminated and the Liens created hereby are released.
10. EXECUTION OF FINANCING STATEMENTS.
Pursuant to Section 9-402 of the Uniform Commercial Code, the Borrower
authorizes the Agent at the expense of the Borrower (such amounts to be paid
with funds provided by the Lessee for such purpose) to file financing statements
with respect to the Trust Property under this Security Agreement without the
signature of the Borrower in such form and in such filing offices as the Agent
reasonably determines appropriate to perfect the security interests of the Agent
under this Security Agreement. A carbon, photographic or other reproduction of
this Security Agreement shall be sufficient as a financing statement for filing
in any jurisdiction. For purposes of such financing statement, the Borrower
shall be deemed to be the debtor, and the Agent shall be deemed to be the
secured party. The address of the Borrower is 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx
Xxxx, Xxxx 00000, Attention: Xxx X. Xxxxx, Vice President, and the address of
the Agent is NationsBank, N.A., 00 Xxxxx Xxxxxx, XX0-000-00-00, Xxxxxxxxx,
Xxxxxxxx 21202-1499, Attention: Xxxxxx Xxxx.
11. SECURITY AGREEMENT UNDER UNIFORM COMMERCIAL CODE.
(a) It is the intention of the parties hereto that this
Security Agreement as it relates to matters of the grant, perfection
and priority of security interests the subject hereof, shall constitute
a security agreement within the meaning of the Uniform Commercial Code
of the States in which the Trust Property is located. If a Credit
Agreement Event of Default shall occur, then in addition to having any
other right or remedy available at law or in equity, the Agent may
proceed under the applicable Uniform Commercial Code and exercise such
rights and remedies as may be provided to a secured party by such
Uniform Commercial Code with respect to all or any portion of the Trust
Property which is personal property (including without limitation
taking possession of and selling such property). If the Agent shall
elect to proceed under the Uniform Commercial Code, then fifteen (15)
days' notice of sale of the personal property shall be deemed
reasonable notice and the reasonable expenses of retaking, holding,
preparing for sale, selling and the like incurred by the Agent shall
include, but not be limited to, attorneys' fees and legal expenses. At
the Agent's request, the Borrower shall assemble such personal property
and make it available to the Agent at a place designated by the Agent
which is reasonably convenient to both parties.
(b) The Borrower, upon request by the Agent from time to time,
shall execute, acknowledge and deliver to the Agent one (1) or more
separate security agreements, in
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form satisfactory to the Agent, covering all or any part of the Trust
Property and will further execute, acknowledge and deliver, or cause to
be executed, acknowledged and delivered, any financing statement,
affidavit, continuation statement or certificate or other document as
the Agent may request in order to perfect, preserve, maintain, continue
or extend the security interest under, and the priority of the Liens
granted by, this Security Agreement and such security instrument. The
Borrower further agrees to pay to the Agent (with funds provided by the
Lessee for such purpose) on demand all costs and expenses incurred by
the Agent in connection with the preparation, execution, recording,
filing and re-filing of any such document and all reasonable costs and
expenses of any record searches for financing statements the Agent
shall reasonably require. The filing of any financing or continuation
statements in the records relating to personal property or chattels
shall not be construed as in any way impairing the right of the Agent
to proceed against any property encumbered by this Security Agreement.
12. AUTHORITY OF THE AGENT.
The Borrower acknowledges that the rights and responsibilities of the
Agent under this Security Agreement with respect to any action taken by the
Agent or the exercise or non-exercise by the Agent of any option, voting right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Security Agreement shall be governed by the Credit Agreement
and Section 8.6 of the Participation Agreement and by such other agreements with
respect thereto as may exist from time to time (until such time as all amounts
due and owing to the Secured Parties and the Agent under the Operative
Agreements have been paid in full), but the Agent shall be conclusively presumed
to be acting as agent for the Secured Parties with full and valid authority so
to act or refrain from acting, and the Borrower shall be under no obligation, or
entitlement, to make any inquiry respecting such authority.
13. NOTICES.
All notices required or permitted to be given under this Security
Agreement shall be in writing and delivered as provided in Section 12.2 of the
Participation Agreement.
14. SEVERABILITY.
Any provision of this Security Agreement which is prohibited or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof.
15. AMENDMENT IN WRITING; NO WAIVERS; CUMULATIVE REMEDIES.
(a) None of the terms or provisions of this Security Agreement
may be waived, amended, supplemented or otherwise modified except in
accordance with the terms of Section 12.4 of the Participation
Agreement.
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(b) No failure to exercise, nor any delay in exercising, on
the part of the Agent, any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of any
right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Agent of any right or remedy hereunder on
any one (1) occasion shall not be construed as a bar to any right or
remedy which the Agent would otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
16. SECTION HEADINGS.
The section headings used in this Security Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
17. SUCCESSORS AND ASSIGNS.
This Security Agreement shall be binding upon the successors of the
Borrower, and the Borrower shall not assign any of its rights or obligations
hereunder or with respect to any of the Trust Property without the prior written
consent of the Agent. This Security Agreement shall inure to the benefit of the
Agent, the Lenders, the Holders and their respective successors and assigns, in
accordance with their respective interest herein.
18. THE BORROWER'S WAIVER OF RIGHTS.
Except as otherwise set forth herein, to the fullest extent permitted
by law, the Borrower waives the benefit of all laws now existing or that may
subsequently be enacted providing for (a) any appraisement before sale of any
portion of the Trust Property, (b) any extension of the time for the enforcement
of the collection of the indebtedness or the creation or extension of a period
of redemption from any sale made in collecting such debt and (c) exemption of
any portion of the Trust Property from attachment, levy or sale under execution
or exemption from civil process. Except as otherwise set forth herein, to the
fullest extent the Borrower may do so, the Borrower agrees that the Borrower
will not at any time insist upon, plead, claim or take the benefit or advantage
of any law now or hereafter in force providing for any appraisement, valuation,
stay, exemption, extension or redemption, or requiring foreclosure of this
Security Agreement before exercising any other remedy granted hereunder and the
Borrower, for the Borrower and its successors and assigns, and for any and all
Persons ever claiming any interest in the Trust Property, to the extent
permitted by law, hereby waives and releases all rights of redemption,
valuation, appraisement, stay of execution, notice of election to mature or
declare due the whole of the Obligations and marshalling in the event of
foreclosure of the Liens hereby created.
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19. GOVERNING LAW.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 11(a) HEREOF, THIS
SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED, INTERPRETED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF VIRGINIA.
20. OBLIGATIONS ARE WITHOUT RECOURSE.
The provisions of the Participation Agreement relating to limitations
on liability are hereby incorporated by reference herein, Mutatis Mutandis.
21. PARTIAL RELEASE; FULL RELEASE.
The Agent may release for such consideration as it may require any
portion of the Trust Property without (as to the remainder of the Trust
Property) in any way impairing or affecting the Lien, security interest and
priority herein provided for the Agent compared to any other Lien holder or
secured party. Further, the Agent shall execute and deliver to the Borrower such
documents and instruments as may be required to release the Lien and security
interest created by this Security Agreement with respect to the Properties as
provided in Section 8.8 of the Participation Agreement or to grant the easements
and permit the other matters provided for in Section 8.5 of the Participation
Agreement.
22. MISCELLANEOUS.
(a) This Security Agreement is one (1) of the documents which
create Liens and security interests that secure payment and performance
of the Obligations. The Agent, at its election, may commence or
consolidate in a single action all proceedings to realize upon all such
Liens and security interests. The Borrower hereby waives (i) any
objections to the commencement or continuation of an action to
foreclose the Lien of this Security Agreement or exercise of any other
remedies hereunder based on any action being prosecuted or any judgment
entered with respect to the Obligations or any Liens or security
interests that secure payment and performance of the Obligations and
(ii) any objections to the commencement of, continuation of, or entry
of a judgment in any such other action based on any action or judgment
connected to this Security Agreement. In case of a foreclosure sale,
the Trust Property may be sold, at the Agent's election, in one (1)
parcel or in more than one (1) parcel and the Agent is specifically
empowered (without being required to do so, and in its sole and
absolute discretion) to cause successive sales of portions of the Trust
Property to be held.
(b) This Security Agreement may not be amended, waived,
discharged or terminated except in accordance with Section 12.4 of the
Participation Agreement. Upon the prior written consent of the Majority
Secured Parties and unless such matter is a Unanimous Vote Matter, the
Agent may release any portion of the Trust Property or any other
security, and grant such extensions and indulgences in relation to the
Obligations
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secured hereby without in any manner affecting the priority of the Lien
hereof on any part of the Trust Property.
(c) THE PROVISIONS OF THE PARTICIPATION AGREEMENT RELATING TO
SUBMISSION TO JURISDICTION AND VENUE ARE HEREBY INCORPORATED BY
REFERENCE HEREIN, MUTATIS MUTANDIS.
23. CONFLICTS WITH PARTICIPATION AGREEMENT.
Notwithstanding any other provision hereof, in the event of any
conflict between the terms of this Security Agreement and the Participation
Agreement, the terms of the Participation Agreement shall govern.
24. LESSEE AS A PARTY.
LESSEE HAS EXECUTED THIS SECURITY AGREEMENT FOR THE PURPOSE OF
SUBJECTING TO THE SECURITY INTERESTS GRANTED HEREUNDER ALL OF ITS RIGHT, TITLE,
ESTATE AND INTEREST, IF ANY, IN AND TO THE TRUST PROPERTY TO SECURE ALL
OBLIGATIONS OF ALL CREDIT PARTIES UNDER THE OPERATIVE AGREEMENTS. ACCORDINGLY,
LESSEE HEREBY GRANTS TO THE AGENT (FOR THE BENEFIT OF THE LENDERS AND THE
HOLDERS) A SECURITY INTEREST IN AND TO ALL OF ITS RIGHT, TITLE, ESTATE AND
INTEREST, IF ANY, IN AND TO THE TRUST PROPERTY (TO THE EXTENT LESSEE HAS ANY
RIGHT, TITLE OR INTEREST THEREIN AND WITHOUT REGARD TO ANY LANGUAGE IN SECTION 2
OR THE DEFINITION OF "TRUST PROPERTY' OR ANY DEFINITION OF ANY ITEM CONSTITUTING
THE TRUST PROPERTY WHICH OTHERWISE WOULD LIMIT THE TRUST PROPERTY TO THE RIGHT,
TITLE AND INTEREST OF THE BORROWER THEREIN) TO SECURE ALL OBLIGATIONS OF ALL
CREDIT PARTIES UNDER THE OPERATIVE AGREEMENTS. LESSEE ACKNOWLEDGES AND AGREES
THAT, UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, THE AGENT SHALL HAVE THE RIGHT
TO EXERCISE ANY OR ALL OF ITS REMEDIES HEREUNDER AS AGAINST ANY SUCH RIGHT,
TITLE, ESTATE OR INTEREST OF LESSEE IN OR TO THE TRUST PROPERTY.
[SIGNATURE PAGE FOLLOWS]
12
16
IN WITNESS WHEREOF, each of the undersigned have caused the Security
Agreement to be duly executed and delivered as of the date first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but solely as the
Owner Trustee under the Sunrise Trust 1998-1
By: /s/ XXX X. XXXXX
----------------------------------------
Name: Xxx X. Xxxxx
--------------------------------------
Title: Vice President
-------------------------------------
NATIONSBANK, N.A., as the Agent for the
Lenders and the Holders
By: /s/ XXXXXX X. XXXX
----------------------------------------
Name: Xxxxxx X. Xxxx
--------------------------------------
Title: Senior Vice President
-------------------------------------
Accepted and Agreed to:
SUNRISE MIDWEST LEASING, L.L.C.
by Sunrise Assisted Living, Inc.,
as Sole Member
By: /s/ XXXXX X. XXXX
----------------------------------------
Name: Xxxxx X. Xxxx
--------------------------------------
Title: Senior Vice President
-------------------------------------
