MORTGAGE
AND SECURITY
AGREEMENT
KNOW ALL PERSONS BY THESE PRESENTS:
that EMERITUS CORPORATION, a Washington
corporation, also d/b/a Xxxxxxx Xxxx
("Mortgagor"), in consideration of Ten and
no/100 Dollars ($10.00) in hand paid and of
the debt hereinafter mentioned, has granted,
sold and conveyed and by these presents does
grant, sell and convey unto BANK UNITED, a
federal savings bank (the "Mortgagee"), and
to its successors WITH MORTGAGE COVENANTS the
Collateral, as defined below.
R E C I T A L S:
A. This conveyance is made to secure
the payment of a debt in the principal sum of
Five Million Five Hundred Thousand and No/100
Dollars ($5,500,000.00) (the "Loan"), which
Loan will be evidenced by a Promissory Note
of even date herewith in the principal amount
of Five Million Five Hundred Thousand and
No/100 Dollars ($5,500,000.00), executed by
the Mortgagor, payable to the order of
Mortgagee in installments with interest
thereon, (said Promissory Note, as the same
may hereafter be renewed, extended or
modified, being herein called the "Note").
B. Mortgagor is the owner of the
property described in Exhibit A attached
hereto.
C. As a condition precedent to making
the Loan, the Mortgagee has required that the
Mortgagor execute this Mortgage and Security
Agreement ("Mortgage") as security for the
Loan and the other Loan Obligations (as
hereinafter defined).
AGREEMENT
NOW, THEREFORE, for and in consideration
of the Loan Obligations, whether now existing
or hereafter arising, and to secure the
prompt payment of same, including future
advances, Mortgagor hereby irrevocably
grants, bargains, sells, conveys, assigns,
transfers, mortgages, pledges and sets over
unto Mortgagee, its successors and assigns,
and grants to Mortgagee a security interest
in, all of the following described land and
interests in land, estates, easements,
rights, improvements, personal property,
fixtures, equipment, furniture, furnishings,
appliances and appurtenances, all whether now
owned or hereafter acquired, and including
replacements, additions, accessions,
substitutions and products thereto (which
property is hereinafter referred to
collectively as the "Collateral"):
(a) The property located in the
Clearwater, Pinellas County, Florida as more
particularly described in Exhibit A attached
hereto and by this reference made a part
hereof (collectively the "Property"); and
(b) All Improvements and
Equipment, all of which are hereby declared
and shall be deemed to be fixtures and
accessions to the Property and a part of the
Property as between the parties hereto and
all persons claiming by, through or under
them, and which shall be deemed to be a
portion of the security for the Loan
Obligations herein described to be secured by
this Mortgage; and
(c) All Appurtenant Rights; and
(d) All Rents; and
(e) All Accounts, General
Intangibles, Instruments, Inventory, Money,
and (to the full extent assignable) Permits;
and
(f) All Proceeds.
TO HAVE AND TO HOLD the Collateral and
all parts thereof unto the Mortgagee, its
successors and assigns forever, subject
however to the terms and conditions herein:
PROVIDED, HOWEVER, that these presents
are upon the condition that, if the Mortgagor
shall pay to the Mortgagee the Loan
Obligations, at the times and in the manner
stipulated herein, in the Note and in the
other Loan Documents (as defined in the Loan
Agreement), all without any deduction or
credit for taxes or other similar charges
paid by the Mortgagor, and shall keep,
perform, and observe all and singular the
covenants and promises herein, in the Note
and in each of the other Loan Documents
expressed to be kept, performed, and
observed, all without fraud or delay, then
this Mortgage, and all the properties,
interests, and rights hereby granted,
bargained, and sold shall cease, determine,
and be void, but shall otherwise remain in
full force and effect.
AND the Mortgagor covenants and agrees
with the Mortgagee and represents and
warrants unto Mortgagee as follows:
ARTICLE I
The following terms will have the
following meanings:
"Accounts" means all accounts (including
accounts receivable) arising from the
Property or any lease relating thereto or
arising thereon.
"Appurtenant Rights" means all
easements, rights-of-way, strips and gores of
land, vaults, streets, ways, alleys,
passages, sewer rights, waters, water
courses, water rights and powers, minerals,
flowers, shrubs, crops, trees, timber and
other emblements now or hereafter appurtenant
to, or used in connection with, or located
on, under or above the Property, or any part
or parcel thereof, and all ground leases,
estates, rights, titles, interests,
privileges, liberties, tenements,
hereditaments and appurtenances, reversions,
and remainders whatsoever, in any way
belonging, relating or appertaining to the
Property or any other Collateral, or any part
thereof.
"Equipment" means fixtures and equipment
owned or leased by Mortgagor and located on,
attached to or used in connection with the
Property or Facility, including, but not
limited to, all beds, linen, televisions,
carpeting, telephones, cash registers,
computers, lamps, glassware, rehabilitation
equipment, and restaurant and kitchen
equipment; provided, however, that with
respect to any items which are leased and not
owned, the Equipment shall include the
leasehold interest only together with any
options to purchase any of said items and any
additional or greater rights with respect to
such items which are hereafter acquired (but
nothing herein shall permit the leasing of
any Equipment except as otherwise expressly
permitted herein or in the Loan Agreement
unless Mortgagee's written consent is first
obtained).
2
"Facility" means the assisted living
facility located at the Property together
with any other general or specialized care
facilities, if any, now or hereafter operated
by or for Mortgagor at the Property.
"General Intangibles" means all general
intangibles and other intangible personal
property arising out of or connected with the
ownership or operation of the Property or the
Facility by or for Mortgagor (other than
Accounts, Rents, Instruments, Inventory,
Money and Permits), including, without limita
tion, things in action, contract rights and
other rights to payment of money, trade names
and good will.
"Improvements" means all buildings,
structures and improvements of every nature
whatsoever now or hereafter situated on the
Property, including, but not limited to, all
gas and electric fixtures, radiators,
heaters, engines and machinery, boilers,
ranges, elevators and motors, plumbing and
heating fixtures, air conditioning equipment,
carpeting and other floor coverings, water
heaters, awnings and storm sashes, cleaning
apparatus, signs, landscaping and parking
areas, which are or shall be attached to
the Property or said buildings, structures or
improvements.
"Instruments" means all instruments,
chattel paper, documents or other writings
obtained from or in connection with the
operation of the Property or the Facility
(including, without limitation, all ledger
sheets, computer records and printouts, data
bases, programs, books of account and files
relating thereto).
"Inventory" means all inventory from
time to time used at the Facility, including,
but not limited to, food, beverages, other
comestibles, soap, paper supplies, medical
supplies, drugs and all other such goods,
wares and merchandise held for sale to or for
consumption or use by guests or residents of
the Property or the Facility, including all
such goods that are returned or repossessed.
"Loan Agreement" means the Loan
Agreement of even date herewith between
Mortgagor and Mortgagee, as the same may be
amended, modified or restated from time to
time.
"Loan Obligations" means the aggregate
of all principal and interest owing from time
to time under the Note, and all expenses,
charges, and other amounts from time to time
owing under the Note, the Loan Agreement,
this Mortgage or any other Loan Documents and
all covenants, agreements and other
obligations from time to time owing to, or
for the benefit of, Mortgagee pursuant to the
Loan Documents. Notwithstanding anything in
this Mortgage to the contrary, this Mortgage
does not secure any indebtedness, obligation
or liability created by or arising from the
Arizona Note (as defined in the Loan
Agreement) or any interest, premiums or other
amounts, if any, thereon.
"Money" means all monies, cash, rights
to deposit or savings accounts or other items
of legal tender obtained from or for use in
connection with the operation of the Facility
by or for Mortgagor.
"Note" has the meaning set forth in the
Recitals to this Mortgage.
3
"Permits" means all licenses, permits,
certificates, approvals, authorizations and
registrations obtained from any governmental
or quasi-governmental authority and used or
useful in connection with the ownership,
operation, use or occupancy of the Property
or the Facility, including, without
limitation, business licenses, state health
department licenses, food service licenses,
licenses to conduct business, certificates of
need and all such other permits, licenses and
rights.
"Permitted Encumbrances" means all
matters set forth in Mortgagee's title
insurance policy number 10-1265-02-0000089
issued by Chicago Title Insurance Company in
connection with the Loan, provided that to
the extent any of the same are listed as
subordinate, such matters are permitted only
so long as they are in fact subordinate to
this Mortgage.
"Proceeds" means all proceeds (whether
cash or noncash, moveable or immoveable,
tangible or intangible), including proceeds
of insurance and condemnation, from the sale,
exchange, transfer, collection, loss, damage,
disposition, substitution or replacement of
any of the Collateral.
"Rents" means all rent and other
payments of whatever nature from time to time
payable pursuant to any lease of the Property
or the Facility, or any part thereof,
including, but not limited to, leases of
individual apartments or units to residents
and leases of retail space or other space at
the Property for businesses such as
newsstands, barbershops, beauty shops,
physicians' offices, pharmacies and specialty
shops.
Singular terms shall include the plural
forms and vice versa, as applicable of the
terms defined.
All references to other documents or
instruments shall be deemed to refer to such
documents or instruments as they may
hereafter be extended, renewed, modified or
amended, and all replacements and
substitutions therefor.
All other capitalized terms not
otherwise defined in this Mortgage shall have
the meanings set forth in the Loan Agreement.
ARTICLE II
COVENANTS, AGREEMENTS, AND
REPRESENTATIONS
OF MORTGAGOR
2.01. Performance of Loan Documents.
Mortgagor will perform, observe, and comply
with all provisions hereof and of each of the
other Loan Documents and duly and punctually
will pay to the Mortgagee the sum of money
expressed in the Note with interest thereon
and all other sums required to be paid by the
Mortgagor pursuant to the provisions of this
Mortgage, all without any deduction or credit
for taxes or other similar charges paid by
the Mortgagor.
2.02. Warranty of Title. The Mortgagor
is lawfully seized of an indefeasible estate
in fee simple in the property hereby
mortgaged and has good and absolute title to
all other Collateral in which a security
interest is herein granted, and Mortgagor has
good right, full power and lawful authority
to sell, convey, mortgage, and grant a
security interest in the same in the manner
and form aforesaid; that, except for
Permitted Encumbrances and the Liens
permitted by the Loan Agreement, the same are
free and clear of all liens,
4
charges, and encumbrances whatsoever,
including, as to the Equipment, conditional
sales contracts, chattel mortgages, security
agreements, financing statements, and
anything of a similar nature, and that
Mortgagor shall and will warrant and forever
defend the title thereto unto the Mortgagee
its successors and assigns, against the
lawful claims of all persons whomsoever.
2.03 Taxes, Liens and Other Charges.
(a) Subject to Section 2.04
hereof, Mortgagor shall pay, on or before the
delinquency date thereof, all taxes, levies,
license fees, permit fees and all other
charges (in each case whether general or
special, ordinary or extraordinary, or
foreseen or unforeseen) of every character
whatsoever (including all penalties and
interest thereon) now or hereafter levied,
assessed, confirmed or imposed on, or in
respect of, or which may be a lien upon the
Collateral, or any part thereof, or any
estate, right or interest therein, or upon
the rents, issues, income or profits thereof,
and shall submit to Mortgagee such evidence
of the due and punctual payment of all such
taxes, assessments and other fees and charges
as may be required by law. Mortgagor shall
have the right before they become delinquent
to contest or object to the amount or
validity of any such tax, assessment, fee or
charge by appropriate legal proceedings, but
this shall not be deemed or construed in any
way as relieving, modifying or extending
Mortgagor's covenant to pay any such tax,
assessment, fee or charge at the time and in
the manner provided herein, unless Mortgagor
has given prior written notice to Mortgagee
of Mortgagor's intent to so contest or
object, and unless (i) Mortgagor shall
demonstrate to Mortgagee's satisfaction that
the legal proceedings shall conclusively
operate to prevent the sale of the
Collateral, or any part thereof, to satisfy
such tax, assessment, fee or charge prior to
final determination of such proceedings; and
(ii) Mortgagor shall diligently pursue such
contest; provided, however, that upon request
Mortgagor shall deposit with Mortgagee all
amounts required by Section 2.04 including
any penalties, interests or charges in
connection with such contested taxes; and
provided further that Mortgagee shall be
entitled to pay in full any and all contested
taxes where a lien has been filed against the
Property in connection with the same.
(b) Mortgagor shall pay, on or
before the due date thereof, all taxes,
assessments, charges, expenses, costs and
fees which may now or hereafter be levied
upon, or assessed or charged against, or
incurred in connection with, the Note, this
Mortgage or any other Loan Documents, except
for Mortgagee's income, franchise or other
taxes levied against Mortgagee (other than
recording fees and taxes assessed with
respect to the recording of this Mortgage).
(c) Mortgagor shall pay, on or
before the due date thereof, all premiums on
policies of insurance covering, affecting or
relating to the Collateral, as required by
the Loan Agreement unless the same is
required to be escrowed with the Mortgagee,
all ground lease rents, if applicable; and
all utility charges with respect to the
Collateral, or which may become a charge or
lien against the Collateral, for gas, electri
city, water and sewer services and the like
furnished to the Collateral, and all other
public or private assessments or charges of a
similar nature affecting the Collateral or
any portion thereof, whether or not the
nonpayment of same may result in a lien
thereon. Mortgagor shall submit to Mortgagee
such evidence of the due and punctual payment
of all such premiums, rentals and other sums
as Mortgagee may reasonably require.
5
(d) Mortgagor shall not suffer any
mechanic's, materialman's, laborer's,
statutory or other lien (except as expressly
permitted by the Loan Agreement) to be
created or remain outstanding against the
Collateral; provided, however, that Mortgagor
may contest any such lien in good faith by
appropriate legal proceedings provided the
lien is bonded off and removed as an
encumbrance upon the Collateral. Mortgagee
has not consented and will not consent to the
performance of any work or the furnishing of
any materials which might be deemed to create
a lien or liens superior to the lien hereof.
(e) In the event of the passage of
any state, federal, municipal or other
governmental law, order, rule or regulation,
subsequent to the date hereof, in any manner
changing or modifying the laws now in force
governing the taxation of mortgages or
security agreements or debts secured thereby
or the manner of collecting such taxes so as
to adversely affect Mortgagee, Mortgagor will
upon request (together with the applicable
invoice, xxxx or notice therefor) pay any
such tax on or before the due date thereof.
If Mortgagor fails to make such prompt
payment or if, in the reasonable opinion of
Mortgagee, any such state, federal,
municipal, or other governmental law, order,
rule or regulation prohibits Mortgagor from
making such payment or would penalize
Mortgagee if Mortgagor makes such payment or
if, in the reasonable opinion of Mortgagee,
the making of such payment might result in
the imposition of interest beyond the maximum
amount permitted by applicable law, then the
entire balance of the Loan Obligations shall,
at the option of Mortgagee, become
immediately due and payable.
(f) The Mortgagor hereby
indemnifies and holds Mortgagee harmless from
any sales or use tax that may be imposed on
the Mortgagee by virtue of Mortgagee's Loan
to Mortgagor.
2.04 Monthly Deposits. Following any
Event of Default, Mortgagor shall deposit
with Mortgagee, on the due date of each
installment under the Note, an amount equal
to one-twelfth (1/12) of the yearly taxes and
assessments and insurance premiums as
estimated by the Mortgagee to be sufficient
to pay such charges; said deposits to be held
and to be used by Mortgagee to pay current
taxes and assessments, insurance premiums and
other charges on the Collateral as the same
accrue and are payable. Payment from said
sums for said purposes shall be made by
Mortgagee and may be made even though such
payments will benefit subsequent owners of
the Collateral. Said deposits shall not be,
nor be deemed to be, trust funds, but may be,
to the extent permitted by applicable law,
commingled with the general funds of
Mortgagee without payment of interest. If
said deposits are insufficient to pay the
taxes and assessments, insurance premiums and
other charges in full as the same become pay
able, Mortgagor will deposit with Mortgagee
such additional sum or sums as may be
required in order for Mortgagee to pay such
taxes and assessments, insurance premiums and
other charges in full as the same become due
and payable. Upon any Event of Default and
acceleration of the maturity date of the
Loan, Mortgagee may, at its option, apply any
money in the fund relating from said deposits
to the payment of the Loan Obligations in
such manner as it may elect.
6
2.05 Condemnation.
The terms and provisions of the Loan
Agreement shall govern in the event that all
or any part of the Collateral shall be
damaged or taken through condemnation (which
term when used in this Mortgage shall include
any damage or taking by any governmental
authority, and any transfer by private
sale in lieu thereof), either temporarily or
permanently. Mortgagor, immediately upon
obtaining knowledge of any institution, or
any proposed, contemplated or threatened
institution of any action or proceeding for
the taking through condemnation of the
Collateral or any part thereof, will notify
Mortgagee. Subject to the terms and
provisions of the Loan Agreement, all
compensation, awards, damages, claims, rights
of action and proceeds in connection with any
condemnation and the right thereto are hereby
assigned by Mortgagor to Mortgagee, and
Mortgagee is authorized, at its option, to
collect and receive all such compensation,
awards or damages and to give proper receipts
and acquittances therefor without any
obligation to question the amount of any such
compensation, awards or damages.
2.06 Care of Collateral.
(a) Mortgagor will keep the
Improvements in good condition and repair,
will not commit or suffer any waste and will
not do or suffer to be done anything which
would or could reasonably be expected to
increase the risk of fire or other hazard to
the Collateral or any other part thereof or
which would or could result in the
cancellation of any insurance policy carried
with respect to the Collateral.
(b) Mortgagor will not remove,
demolish or alter the structural character of
any Improvements without the written consent
of Mortgagee, which such consent shall not be
unreasonably withheld, nor make or permit use
of the Collateral for any purpose other than
that for which the same are now used and such
ancillary purposes related thereto as may be
approved by Mortgagee.
(c) If the Collateral or any part
thereof is damaged by fire or any other
cause, Mortgagor will give immediate written
notice thereof to Mortgagee.
(d) Mortgagee or its
representative is hereby authorized to enter
upon and inspect the Collateral on reasonable
notice (other than in an emergency) during
normal business hours.
(e) Mortgagor will promptly comply
with all present and future laws, ordinances,
rules and regulations of any governmental
authority affecting the Collateral or any
part thereof.
(f) The terms and provisions of
the Loan Agreement shall govern in the event
that (i) all or any part of the Collateral
shall be damaged by fire or other casualty,
or (ii) all or any part of the Collateral
shall be taken or damaged through
condemnation.
7
2.07 Leases; Management Agreements.
Mortgagor shall not, without the prior
written consent and approval of Mortgagee,
enter into any lease or permit any tenancy or
enter into or permit any management
agreement, of or affecting the Collateral,
except as expressly permitted by the Loan
Documents.
2.08 Further Assurances; After-Acquired
Property. At any time, and from time to
time, upon request by Mortgagee, Mortgagor
will make, execute and deliver or cause to be
made, executed and delivered to Mortgagee
and, where appropriate, cause to be recorded
and/or filed and from time to time thereafter
to be rerecorded and/or refiled at such time
and in such offices and places as shall be
deemed desirable by Mortgagee (i) to perfect
and protect the security interest created or
purported to be created hereby; (ii) to
enable the Mortgagee to exercise and enforce
its rights and remedies hereunder in respect
of the Collateral; or (iii) to effect
otherwise the purposes of this Mortgage,
including, without limitation: (A) executing
and filing such financing or continuation
statements, or amendments thereto, as may be
necessary or desirable or that the Mortgagee
may request in order to perfect and preserve
the security interest created by this
Mortgage as a first and prior security
interest upon and security title in and to
all of the Collateral, whether now owned or
hereafter acquired by Mortgagor; (B) if
certificates of title are now or hereafter
issued or outstanding with respect to any of
the Collateral, by immediately causing the
interest of Mortgagee to be properly noted
thereon at Mortgagor's expense; and (C)
furnishing to the Mortgagee from time to time
statements and schedules further identifying
and describing the Collateral and such other
reports in connection with the Collateral as
the Mortgagee may request, all in reasonable
detail. Upon any failure by Mortgagor so to
do, Mortgagee may make, execute, record,
file, re-record and/or refile any and all
such financing statements, continuation
statements, or amendments thereto,
certificates, and documents for and in the
name of Mortgagor, and Mortgagor hereby
irrevocably appoints Mortgagee the agent and
attorney-in-fact of Mortgagor so to do. The
lien of this Mortgage will automatically
attach, without further act, to all after-
acquired property attached to and/or used in
the operation of the Collateral or any part
thereof.
2.09 Indemnity; Expenses. Mortgagor
will pay or reimburse Mortgagee for all
reasonable attorney's fees, costs and
expenses incurred by Mortgagee in any suit,
action, arbitration, trial, appeal,
bankruptcy or other legal proceeding or
dispute of any kind in which Mortgagee is
made a party or appears as party plaintiff or
defendant, affecting the Loan Obligations,
this Mortgage or the interest created herein,
or the Collateral, or any appeal thereof,
including, but not limited to, any
foreclosure action, any condemnation action
involving the Collateral or any action to
protect the security hereof, any bankruptcy
or other insolvency proceeding commenced by
or against the Mortgagor, any lessee of the
Collateral (or any part thereof), or any
guarantor of any of the Loan Obligations but
specifically excluding any action between
Mortgagor and Mortgagee in which Mortgagor is
the prevailing party, and any such amounts
paid by Mortgagee shall be added to the Loan
Obligations and shall be secured by this
Mortgage. Mortgagor will indemnify and hold
Mortgagee harmless from and against all
claims, damages, and expenses, including
reasonable attorney's fees and court costs,
resulting from any action by a third party
against Mortgagee relating to this Mortgage
or the interest created herein, or the Coll
ateral, including, but not limited to, any
action or proceeding claiming loss, damage or
injury to person or property, or any action
or proceeding claiming a violation of any
national, state or local law, rule or
8
regulation, provided Mortgagor shall not be
required to indemnify Mortgagee for matters
directly and solely caused by Mortgagee's
willful misconduct or gross negligence.
Mortgagor acknowledges that it has undertaken
the obligation to pay all intangible taxes,
and documentary taxes and other taxes now or
hereafter due in connection with the Loan
Obligations and the Loan Documents (or the
recording thereof), and Mortgagor agrees to
indemnify and hold Mortgagee harmless from
any intangibles, documentary stamp and other
taxes, and any interest or penalties, which
the Mortgagee may hereafter be required to
pay in connection with the Loan Obligations
or Loan Documents (or the recording thereof).
The agreements of this Section shall
expressly survive satisfaction of this
Mortgage and repayment of the Loan
Obligations.
2.10 Estoppel Affidavits. Mortgagor,
upon ten (10) days prior written notice,
shall furnish the Mortgagee a written state
ment, duly acknowledged, based upon its
records, setting forth the unpaid principal
of, and interest on, the Loan Obligations,
stating whether or not to its knowledge any
offsets or defenses exist against the Loan
Obligations, or any portion thereof, and, if
such offsets or defenses exist, stating in
detail the specific facts relating to each
such offset or defense. Mortgagee, upon ten
(10) days prior written notice, and not more
than once every twelve (12) months, shall
furnish the Mortgagor a written statement,
duly acknowledged, based upon its records,
setting forth the unpaid principal of, and
interest on, the Loan Obligations, and
stating whether or not to its knowledge any
default exists under the Loan Obligations.
2.11 Limit of Validity. If from any
circumstances whatsoever, fulfillment of any
provision of this Mortgage, the Note or any
other Loan Document, at the time performance
of such provision shall be due, shall involve
transcending the limit of validity presently
prescribed by any applicable usury statute or
any other applicable law, with regard to
obligations of like character and amount,
then, ipso facto, the obligation to be
fulfilled shall be reduced to the limit of
such validity, so that in no event shall any
exaction be possible under this Mortgage, the
Note, or any other Loan Document that is in
excess of the current limit of such validity,
but such obligation shall be fulfilled to the
limit of such validity. The provisions of
this Section shall control every other pro
vision of this Mortgage, the Note and any
other Loan Document.
2.12 Compliance with Applicable
Environmental Laws. Mortgagor has entered
into a separate Certificate and
Indemnification Regarding Hazardous
Substances dated of even date herewith and
given in connection with the Note, the
provisions of which are deemed incorporated
herein by this reference.
ARTICLE III
EVENTS OF DEFAULT; REMEDIES
3.01 Events of Default. The terms
"Event of Default" or "Events of Default,"
wherever used in this Mortgage, shall mean
any one or more of the following events:
(a) The occurrence of any Event of
Default (as therein defined) under any other
Loan Documents; or
(b) The sale, transfer, lease
(other than as permitted by the terms
hereof), assignment, or other disposition,
voluntarily or involuntarily, of the
Collateral, or any part thereof or any
interest therein, including a sale or
transfer in lieu of condemnation, or, except
for Permitted Encumbrances, any
9
further encumbrance of the Collateral, unless
expressly permitted by the Loan Agreement or
unless the prior written consent of Mortgagee
is obtained (which consent may be withheld
with or without cause in Mortgagee's
discretion).
3.02 Acceleration of Maturity. If an
Event of Default shall have occurred, then
the entire Loan Obligations shall, at the
option of Mortgagee, immediately become due
and payable without notice or demand, time
being of the essence of this Mortgage, and no
omission on the part of Mortgagee to exercise
such option when entitled to do so shall be
construed as a waiver of such right.
3.03 Right to Enter and Take Possession.
(a) If an Event of Default shall
have occurred and be continuing, Mortgagor,
upon demand of Mortgagee, shall forthwith
surrender to Mortgagee the actual possession
of the Collateral and, if and to the extent
permitted by law, Mortgagee itself, or by
such officers or agents as it may appoint,
may enter and take possession of all or any
part of the Collateral without the
appointment of a receiver or an application
therefor, and may exclude Mortgagor, and its
agents and employees wholly therefrom, and
take possession of the books, papers and
accounts of Mortgagor;
(b) If Mortgagor shall for any
reason fail to surrender or deliver the
Collateral or any part thereof after such
demand by Mortgagee, Mortgagee may obtain a
judgment or decree conferring upon Mortgagee
the right to immediate possession or
requiring Mortgagor to deliver immediate
possession of the Collateral to Mortgagee.
Mortgagor will pay to Mortgagee, upon demand,
all expenses of obtaining such judgment or
decree, including compensation to Mortgagee,
its attorneys and agents, and all such
expenses and compensation shall, until paid,
become part of the Loan Obligations and shall
be secured by this Mortgage;
(c) Upon every such entering upon
or taking of possession, Mortgagee may hold,
store, use, operate, manage and control the
Collateral and conduct the business thereof,
and, from time to time (i) make all necessary
and proper maintenance, repairs, renewals,
replacements, additions, betterments and
improvements thereto and thereon and purchase
or otherwise acquire additional fixtures,
personalty and other property; (ii) insure or
keep the Collateral insured; (iii) manage and
operate the Collateral and exercise all of
the rights and powers of Mortgagor to the
same extent as Mortgagor could in its own
name or otherwise act with respect to the
same; and (iv) enter into any and all agree
ments with respect to the exercise by others
of any of the powers herein granted to
Mortgagee all as Mortgagee from time to time
may determine to be in its best interest.
Mortgagee may collect and receive all the
rents, issues, profits and revenues from the
Collateral, including those past due as well
as those accruing thereafter, and, after
deducting (A) all reasonable expenses of
taking, holding, managing and operating the
Collateral (including reasonable compensation
for the services of all persons employed for
such purposes); (B) the reasonable cost of
all such maintenance, repairs, renewals,
replacements, additions, betterments, improve
ments, purchases and acquisitions; (C) the
reasonable cost of such insurance; (D) such
taxes, assessments and other similar charges
as Mortgagee may at its option pay; (E) other
proper charges upon the Collateral or any
part thereof; and (F) the reasonable compen
sation, expenses and disbursements of the
attorneys and agents of Mortgagee, Mortgagee
shall apply the remainder of the monies and
proceeds so received by Mortgagee, first, to
the payment of accrued interest; second, to
the payment of deposits for taxes
10
and insurance required in this Mortgage and
to other sums required to be paid hereunder;
and third, to the payment of overdue
installments of principal and any other
unpaid Loan Obligations then due. Anything
in this Section to the contrary
notwithstanding, Mortgagee shall not be obli
gated to discharge or perform the duties of a
landlord to any tenant or incur any liability
as a result of any exercise by Mortgagee of
its rights under this Mortgage unless
Mortgagee is in possession and is operating
the Collateral, and Mortgagee shall be liable
to account only for the rents, incomes,
issues and profits actually received by
Mortgagee and for Mortgagee's gross or wilful
misconduct in exercising its rights
hereunder.
(d) If an Event of Default shall
exist, Mortgagee may require that Mortgagor
cause all of its Accounts and Rents to be
paid to Mortgagee directly or to one or more
deposit accounts with Mortgagee. Mortgagor
assigns and grants to Mortgagee a security
interest in, pledge of and right of setoff
against all moneys from time to time held in
such deposit accounts. Mortgagor agrees to
promptly notify all of its account debtors
and tenants to make payments to Mortgagee or
one or more such deposit accounts upon
Mortgagee's request and as designated by
Mortgagee, and Mortgagor agrees to provide
any necessary endorsements to checks, drafts
and other forms of payment so that such
payments will be properly deposited in such
accounts. Mortgagee may require that the
deposit accounts be established so as to
comply with any applicable legal
requirements, if any, applicable to payments
of any accounts receivable. Mortgagee may
cause moneys to be withdrawn from such
deposit accounts and applied to the Loan
Obligations in such order as Mortgagee may
elect, whether or not then due. Mortgagor
appoints Mortgagee as its attorney-in-fact,
which appointment is coupled with an interest
and is irrevocable, to provide any notice,
endorse any check, draft or other payment for
deposit, or take any other action which
Mortgagor agrees to take in this Section 3.03
(d). Mortgagee shall not be liable for
failure to collect any Accounts or Rents, or
to enforce the contracts or leases pursuant
to which such Accounts or Rents are payable,
or, absent gross negligence or wilful
misconduct, for any action or omission on the
part of Mortgagee, its officers, agents and
employees in collecting or enforcing such
Accounts, Rents, contracts or leases.
3.04 Performance by Mortgagee. Upon
the occurrence of an Event of Default in the
payment, performance or observance of any
term, covenant or condition of this Mortgage,
Mortgagee may, at its option, pay, perform or
observe the same, and all payments made or
costs or expenses incurred by Mortgagee in
connection therewith, with interest thereon
at the Default Rate or at the maximum rate
from time to time allowed by applicable law,
whichever is less, shall be secured hereby
and shall be, without demand, immediately
repaid by Mortgagor to Mortgagee. Mortgagee
shall be the sole judge of the necessity for
any such actions and of the amounts to be
paid. Mortgagee is hereby empowered to enter
and to authorize others to enter upon the
Collateral or any part thereof for the
purpose of performing or observing any such
defaulted term, covenant or condition without
thereby becoming liable to Mortgagor or any
person in possession holding under Mortgagor
absent Mortgagee's gross negligence or wilful
misconduct. Notwithstanding anything to the
contrary herein, Mortgagee shall have no
obligation, explicit or implied to pay,
perform, or observe any term, covenant, or
condition.
11
3.05 Receiver. If any Event of Default
shall have occurred and be continuing,
Mortgagee, upon application to a court of
competent jurisdiction, shall be entitled as
a matter of strict right, without regard to
the sufficiency or value of any security for
the Loan Obligations or the solvency of any
party bound for its payment, to the
appointment of a receiver to take possession
of and to operate the Collateral and to
collect and apply the rents, issues, profits
and revenues thereof. Mortgagee agrees to
provide Mortgagor with notice of such
application unless emergency relief is
necessary to prevent further loss and/or
diminution in value to the Property, in which
case no notice need be given to Mortgagor.
The receiver shall have all of the rights and
powers permitted under the laws of the state
wherein the Property is situated. Mortgagor
will pay unto Mortgagee upon demand all
expenses, including receiver's fees,
attorney's fees, costs and agent's
compensation, incurred pursuant to the
provisions of this Section, and upon any
Mortgagor's failure to pay the same, any such
amounts shall be added to the Loan
Obligations and shall be secured by this
Mortgage.
3.06 Mortgagee's Power of Enforcement.
If an Event of Default shall have occurred
and be continuing, the Mortgagee may, either
with or without entry or taking possession as
hereinabove provided or otherwise, proceed by
suit or suits at law or in equity or any
other appropriate proceeding or remedy (a) to
enforce payment of the Note or the
performance of any term thereof or any other
right, (b) to foreclose this Mortgage and to
sell, as an entirety or in separate lots or
parcels, the Collateral, as provided by
applicable Florida law, and (c) to pursue any
other remedy available to it, all as the
Mortgagee shall deem most effectual for such
purposes. The Mortgagee shall take action
either by such proceedings or by the exercise
of its powers with respect to entry or taking
possession, as the Mortgagee may determine.
3.07 Purchase by Mortgagee. Upon any
foreclosure sale, Mortgagee may bid for and
purchase the Collateral and shall be entitled
to apply all or any part of the Loan
Obligations as a credit to the purchase
price.
3.08 Application of Proceeds of Sale.
In the event of a foreclosure or other sale
of all or any portion of the Collateral, the
proceeds of said sale shall be applied,
first, to the expenses of such sale and of
all proceedings in connection therewith,
including reasonable attorney's fees and
expenses (and attorney's fees and expenses
shall become absolutely due and payable
whenever foreclosure is commenced); then to
insurance premiums, liens, assessments, taxes
and charges, including utility charges and
any other amounts advanced by Mortgagee
hereunder, and interest thereon at the
Default Rate or at the maximum rate from time
to time allowed by applicable law, whichever
is less; then to payment of the Loan
Obligations in such order of priority as
Mortgagee shall determine, in its sole
discretion; and finally the remainder, if
any, shall be paid to Mortgagor or to the
person or entity lawfully entitled thereto.
3.09 Mortgagor as Tenant Holding Over.
In the event of any such foreclosure sale,
and if Mortgagor shall remain in possession,
Mortgagor shall be deemed a tenant holding
over and shall forthwith deliver possession
to the purchaser or purchasers at such sale
or be summarily dispossessed according to
provisions of law applicable to tenants
holding over.
12
3.10 Waiver of Appraisement, Valuation,
Etc. Mortgagor agrees, to the full extent
permitted by law, that in case of an Event of
Default hereunder, neither Mortgagor, nor
anyone claiming through or under Mortgagor
will set up, claim or seek to take advantage
of any appraisement, valuation, stay,
extension, exemption or laws now or hereafter
in force, in order to prevent or hinder the
enforcement or foreclosure of this Mortgage,
or the absolute sale of the Collateral, or
the delivery of possession thereof
immediately after such sale to the purchaser
at such sale, and Mortgagor, for itself and
all who may at any time claim through or
under it, hereby waives to the full extent
that it may lawfully so do, the benefit of
all such laws, and any and all right to have
the assets subject to the security interest
of this Mortgage marshaled upon any
foreclosure or sale under the power herein
granted.
3.11 Waiver of Homestead. Mortgagor
hereby waives and renounces all homestead and
exemption rights provided for by the
Constitution and the laws of the United
States and of any state, in and to the
Collateral as against the collection of the
Loan Obligations, or any part thereof.
3.12 Discontinuance of Proceedings. In
case Mortgagee shall have proceeded to
enforce any right, power or remedy under this
Mortgage by foreclosure, entry or otherwise,
and such proceedings shall have been
discontinued or abandoned for any reason, or
shall have been determined adversely to
Mortgagee, then in every such case, Mortgagor
and Mortgagee shall be restored to their
former positions and rights hereunder, and
all rights, powers and remedies of Mortgagee
shall continue as if no such proceedings had
occurred.
3.13 Remedies Not Exclusive. Mortgagee
shall be entitled to enforce payment and
performance of the Loan Obligations and to
exercise all rights and powers under this
Mortgage or under any other of the Loan
Documents or other agreement or under any
laws now or hereafter in force,
notwithstanding that some or all of the Loan
Obligations may now or hereafter be otherwise
secured, whether by mortgages, deeds of
trust, deeds to secure debt, pledges, liens,
assignments or otherwise. Neither the
acceptance of this Mortgage nor its
enforcement shall prejudice or in any manner
affect Mortgagee's right to realize upon or
enforce any other security now or hereafter
held by Mortgagee as security for the
performance of Mortgagor's obligations under
the Loan Documents, it being agreed that
Mortgagee shall be entitled to enforce this
Mortgage and any other security now or
hereafter held by Mortgagee as security for
the performance of Mortgagor's obligations
under the Loan Documents in such order and
manner as it may in its absolute discretion
determine. No right or remedy herein
conferred upon or reserved to Mortgagee is
intended to be exclusive of any other remedy
herein or by law provided or permitted, but
each shall be cumulative and shall be in
addition to every other right and remedy
given hereunder or now or hereafter existing
at law or in equity or by statute. Every
power or remedy given by any of the Loan
Documents to Mortgagee or to which it
otherwise may be entitled, may be exercised
concurrently or independently, from time to
time and as often as may be deemed expedient
by Mortgagee, and it may pursue inconsistent
remedies.
13
3.14 Waiver.
(a) No delay or omission by
Mortgagee or by any holder of the Note to
exercise any right, power or remedy accruing
upon any default or Event of Default shall
exhaust or impair any such right, power or
remedy or shall be construed to be a waiver
of any such default, or acquiescence therein,
and every right, power and remedy given by
this Mortgage to Mortgagee may be exercised
from time to time and as often as may be
deemed expedient by Mortgagee. No consent or
waiver expressed or implied by Mortgagee to
or of any breach or default by Mortgagor in
the performance of the obligations of
Mortgagor hereunder shall be deemed or
construed to be a consent or waiver to or of
any other breach or default in the
performance of the same or any other
obligations of Mortgagor hereunder. Failure
on the part of Mortgagee to complain of any
act or failure to act or failure to declare
an Event of Default, irrespective of how long
such failure continues, shall not constitute
a waiver by Mortgagee of its rights hereunder
or impair any rights, powers or remedies of
Mortgagee hereunder.
(b) No act or omission by
Mortgagee shall release, discharge, modify,
change or otherwise affect the original
liability under the Note, this Mortgage, the
other Loan Documents or any other obligation
of Mortgagor or any subsequent purchaser of
the Collateral or any part thereof hereunder
or thereunder, or any maker, co-signer,
endorser, surety or guarantor, nor preclude
Mortgagee from exercising any right, power or
privilege herein granted or intended to be
granted in the event of any default or Event
of Default then existing or of any subsequent
default or Event of Default, nor alter the
lien of this Mortgage, except as expressly
provided in an instrument or instruments
executed by Mortgagee. Without limiting the
generality of the foregoing, Mortgagee may
(i) grant forbearance or an extension of time
for the payment of all or any portion of the
Loan Obligations; (ii) take other or
additional security for the payment of any of
the Loan Obligations; (iii) waive or fail to
exercise any right granted herein, in the
Note or in other Loan Documents; (iv) release
any part of the Collateral from the security
interest or lien of this Mortgage or
otherwise change any of the terms, covenants,
conditions or agreements of the Note, this
Mortgage or other Loan Documents; (v) consent
to the filing of any map, plat or replat
affecting the Collateral; (vi) consent to the
granting of any easement or other right
affecting the Collateral; (vii) make or
consent to any agreement subordinating the
security title or lien hereof, or (viii) take
or omit to take any action whatsoever with
respect to the Note, this Mortgage, the other
Loan Documents, the Collateral or any
document or instrument evidencing, securing
or in any way related to the Loan
Obligations, all without releasing, discharg
ing, modifying, changing or affecting any
such liability, or precluding Mortgagee from
exercising any such right, power or privilege
or affecting the lien of this Mortgage. In
the event of the sale or transfer by
operation of law or otherwise of all or any
part of the Collateral, Mortgagee, without
notice, is hereby authorized and empowered to
deal with any such vendee or transferee with
reference to the Collateral or the Loan
Obligations, or with reference to any of the
terms, covenants, conditions or agreements
hereof, as fully and to the same extent as it
might deal with the original parties hereto
and without in any way releasing or
discharging any liabilities, obligations or
undertakings of Mortgagor, any guarantor of
the Loan Obligations or others which remains
outstanding after such sale or transfer.
14
(c) Mortgagor waives and
relinquishes any and all rights, whether at
law or equity, to require Mortgagee to
proceed to enforce or exercise any rights,
powers and remedies under the Loan Documents
in any particular manner, in any particular
order, or in any particular state or other
jurisdiction. To the fullest extent that
Mortgagor may do so, Mortgagor agrees that
Mortgagor 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 valuation,
appraisement, stay of execution or extension,
and Mortgagor, and its representatives,
successors and assigns, and for any and all
persons ever claiming any interest in the
Collateral, to the extent permitted by law,
hereby waive and release all rights of
valuation, appraisement, marshalling, stay of
execution, and extension. Mortgagor further
agrees that if any law referred to in this
paragraph and now in force, of which
Mortgagor, or its representatives, successors
or assigns or other person might take
advantage despite this paragraph, shall
hereafter be repealed or cease to be in
force, such law shall not thereafter be
deemed to preclude the application of this
paragraph. Mortgagor expressly waives and
relinquishes any and all rights and remedies
that they may have or be able to assert by
reason of the laws of the state of
jurisdiction pertaining to the rights and
remedies of sureties.
(d) The Mortgagor on behalf of
itself and all other parties claiming under
the Mortgagor hereby waives all claims for
marshalling-of-assets under applicable law.
Mortgagor makes these arrangements,
waivers and relinquishments knowingly and as
a material inducement to Mortgagee in making
the Loan, after consulting with and
considering the advice of independent legal
counsel selected by Mortgagor.
3.15 Suits to Protect the Collateral.
Mortgagee shall have power to institute and
maintain such suits and proceedings as it may
deem expedient (a) to prevent any impairment
of the Collateral by any acts which may be
unlawful or constitute a default or Event of
Default under this Mortgage; (b) to preserve
or protect its interest in the Collateral and
in the rents, issues, profits and revenues
arising therefrom; and (c) to restrain the
enforcement of or compliance with any legisla
tion or other governmental enactment, rule or
order that may be unconstitutional or other
wise invalid, if the enforcement of or
compliance with such enactment, rule or order
would materially impair the security
hereunder or be prejudicial to the interest
of Mortgagee.
3.16 Proofs of Claim. In the case of
any receivership, insolvency, bankruptcy,
reorganization, arrangement, adjustment,
composition or other proceedings affecting
Mortgagor or its their creditors or property,
Mortgagee, to the extent permitted by law,
shall be entitled to file such proofs of
claim and other documents as may be necessary
or advisable in order to have the claims of
Mortgagee allowed in such proceedings for the
entire amount due and payable by Mortgagor
under this Mortgage (subject to the
exculpation of Mortgagor hereinafter
provided) at the date of the institution of
such proceedings and for any additional
amount which may become due and payable by
Mortgagor hereunder after such date.
15
3.17 Non-Liability of Mortgagee. The
Mortgagee shall not be liable for any error
of judgment or act done by Mortgagee in good
faith, or be otherwise responsible or
accountable to Mortgagor under any
circumstances whatsoever absent Mortgagee's
gross negligence or wilful misconduct, nor
shall Mortgagee be personally liable, in case
of entry by it or anyone entering by virtue
of the powers herein granted upon the
Property, for debts contracted or liability
or damages incurred in the management or
operation of the Property, or otherwise
absent Mortgagee's gross negligence or wilful
misconduct. The Mortgagee shall have the
right to rely on any instrument, document or
signature authorizing or supporting any
action taken or proposed to be taken by the
Mortgagee hereunder, believed by the
Mortgagee in good faith to be genuine.
Mortgagee shall be entitled to reimbursement
for actual, reasonable expenses incurred by
it in the performance of its duties hereunder
and to reasonable compensation for such of
its services hereunder as shall be rendered.
Mortgagor will, from time to time, pay the
compensation due to Mortgagee hereunder and
reimburse Mortgagee for, and save it harmless
from and against, any and all liability and
expenses which may be incurred by Mortgagee
in the enforcement of its rights hereunder.
ARTICLE IV
SECURITY AGREEMENT; MISCELLANEOUS
4.01 Security Agreement. This Mortgage
creates a lien on and a security interest in
that part of the Collateral which constitutes
personal property under any applicable
Uniform Commercial Code, and shall constitute
a security agreement under the applicable
Uniform Commercial Code or other law
applicable to the creation of liens on
personal property between Mortgagor and
Mortgagee. This Mortgage shall constitute a
financing statement under the applicable
Uniform Commercial Code with Mortgagor as the
"debtor" and Mortgagee as the "secured
party". If an Event of Default occurs, the
Mortgagee shall have all rights and remedies
of a secured party under the applicable
Uniform Commercial Code.
4.02 Assembly of Collateral. Upon the
occurrence of an Event of Default, the
Mortgagor shall assemble, if requested by the
Mortgagee, at its expense, all of the
personal property Collateral and the
documents evidencing such personal property
Collateral and the books and records
applicable thereto and make them available to
the Mortgagee at a place to be designated by
the Mortgagee.
4.03 Successors and Assigns. This
Mortgage shall inure to the benefit of and be
binding upon Mortgagor, Mortgagee and their
respective heirs, executors, legal
representatives, successors, successors-in-
title, and assigns. Whenever a reference is
made in this Mortgage to "Mortgagor",
"Mortgagee" or "Mortgagee" such reference
shall be deemed to include a reference to the
heirs, executors, legal representatives,
successors, successors-in-title and assigns
of Mortgagor or Mortgagee, as the case may
be, but shall not imply any permission to
make or permit any transfer which is
otherwise prohibited.
16
4.04 Terminology. All personal
pronouns used in this Mortgage, whether used
in the masculine, feminine or neuter gender,
shall include all other genders; the singular
shall include the plural, and vice versa.
Titles and Articles are for convenience only
and neither limit nor amplify the provisions
of this Mortgage, and all references herein
to Articles, Sections or subparagraphs shall
refer to the corresponding Articles, Sections
or subparagraphs of this Mortgage unless
specific reference is made to Articles,
Sections or subparagraphs of another document
or instrument.
4.05 Severability; Complete Agreement.
If any provisions of this Mortgage or the
application thereof to any person or
circumstance shall be invalid or
unenforceable to any extent, the remainder of
this Mortgage and the application of such
provisions to other persons or circumstances
shall not be affected thereby and shall be
enforced to the greatest extent permitted by
law. This Mortgage, the Note and the other
Loan Documents constitute the full and
complete agreement of the parties and
supersede all prior negotiations, correspon
dence, and memoranda relating to the subject
matter hereof, and this Mortgage may not be
amended except by a writing signed by the
parties hereto.
4.06 Applicable Law. This Mortgage
shall be governed by and construed in
accordance with laws of the State of Texas
and the applicable laws of the United States
of America without regard to choice of law
principles. This Mortgage has been entered
into in Xxxxxx County, Texas, and it shall be
performable for all purposes in Xxxxxx
County, Texas. Courts within the State of
Florida shall have jurisdiction to enforce
arbitration awards entered pursuant to
Section 4.12 hereof and to enforce security
interests in the Collateral located within
the State of Florida. Subject to Section 4.12
hereof, courts within the State of Texas
shall have jurisdiction over any and all
disputes between Mortgagor and Mortgagee,
whether in law or equity, including, but not
limited to, any and all disputes arising out
of or relating to this Mortgage or any of the
other Loan Documents; and venue in any such
dispute whether in federal or state court
shall be laid in Xxxxxx County, Texas.
Notwithstanding the foregoing, the laws of
the State of Florida shall govern the
perfection of any lien or security interest
in collateral granted hereunder and the
foreclosure or execution upon any lien or
security interest in such collateral. If,
for any reason or to any extent any word,
term, provision, or clause of this Mortgage
or any of the other Loan Documents, or its
application to any person or situation, shall
be found by a court or other adjudicating
authority to be invalid or unenforceable, the
remaining words, terms, provisions or clauses
shall be enforced, and the affected word,
term, clause or provision shall be applied,
to the fullest extent permitted by law.
4.07 Limitation of Interest. It is the
intent of Mortgagor and Mortgagee in the
execution of this Mortgage and all other Loan
Documents to contract in strict compliance
with the usury laws governing the Loan
evidenced by the Note. In furtherance
thereof, Mortgagee and Mortgagor stipulate
and agree that none of the terms and
provisions contained in the Loan Documents
shall ever be construed to create a contract
for the use, forbearance, or detention of
money requiring payment of interest at a rate
in excess of the maximum interest rate
permitted to be charged by the laws governing
the Loan. Mortgagor or any guarantor,
endorser or other party now or hereafter
becoming liable for the payment of the Loan
or other amounts due to Mortgagee shall never
be liable for unearned interest on the Loan
or other amounts due to Mortgagee and shall
never be required to pay interest on the Loan
or other amounts due to Mortgagee at a rate
in excess of the maximum interest that may be
lawfully charged under the laws governing the
Loan, and the provisions of
17
this paragraph shall control over all other
provisions of the Note and any other
instrument executed in connection herewith
which may be in apparent conflict herewith.
In the event any holder of the Note shall
collect monies that are deemed to constitute
interest and that would otherwise increase
the effective interest rate on the Loan or
other amounts due to Mortgagee to a rate in
excess of that permitted to be charged by the
laws governing the Loan, all such sums deemed
to constitute interest in excess of the legal
rate shall be applied to the unpaid principal
balance of the Note (without penalty or
premium) and if in excess of such balance,
shall be immediately returned to the
Mortgagor upon such determination.
4.08 Notices, etc. All notices and
other communications provided for hereunder
shall be in writing and be given in
accordance with the provisions of the Loan
Agreement. All notices to Mortgagor shall be
sent care of Mortgagor at Mortgagor's address
therein and shall be deemed received when
sent in accordance with such provisions.
4.09 Replacement of Note. Upon receipt
of evidence reasonably satisfactory to
Mortgagor of the loss, theft, destruction or
mutilation of the Note, and in the case of
any such loss, theft or destruction, upon
delivery of an indemnity agreement reasonably
satisfactory to Mortgagor or, in the case of
any such mutilation, upon surrender and
cancellation of such Note, Mortgagor at
Mortgagee's expense will execute and deliver,
in lieu thereof, a replacement note,
identical in form and substance to such Note
and dated as of the date of such Note, and
upon such execution and delivery all
references in this Mortgage to the Note shall
be deemed to include and refer to such
replacement note.
4.10 Assignment. This Mortgage is
assignable by Mortgagee and any assignment
hereof by Mortgagee shall operate to vest in
the assignee all rights and powers herein con
ferred upon and granted to Mortgagee.
4.11 Time of the Essence. Time is of
the essence with respect to each and every
covenant, agreement and obligation of
Mortgagor under this Mortgage, the Note and
all other Loan Documents.
4.12 Arbitration.
(a) To the maximum extent not
prohibited by law, any controversy, dispute
or claim arising out of, in connection with,
or relating to the Loan Obligations, this
Mortgage or any of the other Loan Documents
or any transaction provided for therein,
including but not limited to, any claim based
on or arising from an alleged tort or an
alleged breach of any agreement contained in
this Mortgage or any of the other Loan
Documents, shall, at the request of any party
to the Loan Obligations, this Mortgage or any
of the other Loan Documents (either before,
concurrently with or after the commencement
of judicial proceedings), be settled by
arbitration pursuant to Title 9 of the United
States Code, which the parties hereto
acknowledge and agree applies to the
transaction involved herein, and in
accordance with the Commercial Arbitration
Rules of the American Arbitration Association
(the "AAA"). If Title 9 of the United States
Code is inapplicable to any such claim,
dispute or controversy for any reason, such
arbitration shall be conducted in accordance
with the Commercial Arbitration Rules of the
AAA. In any such arbitration proceeding: (i)
all statutes of limitations which would
otherwise be applicable shall apply; and (ii)
the proceeding shall be conducted in Houston,
Texas, by a single arbitrator, if the amount
in controversy is $1 million or less, or by a
panel of
18
three arbitrators if the amount in
controversy is over $1 million. All
arbitrators shall be selected by the process
of appointment from a panel pursuant to
Section 13 of the AAA Commercial Arbitration
Rules and each arbitrator will have AAA-
acknowledged expertise in the appropriate
subject matter. Any award rendered in any
such arbitration proceeding shall be final
and binding, and judgment upon any such award
may be entered in any court having
jurisdiction.
(b) If any party to this Mortgage
or any other Loan Documents files a
proceeding in any court to resolve any such
controversy, dispute or claim, such action
shall not constitute a waiver of the right of
such party or a bar to the right of any other
party to seek arbitration under the
provisions of this Section of that or any
other claim, dispute or controversy, and the
court shall, upon motion of any party brought
within sixty (60) days after the initiation
of such proceeding, direct that such
controversy, dispute or claim be arbitrated
in accordance with this Section.
(c) Notwithstanding any of the
foregoing, the parties hereto agree that no
arbitrator or panel of arbitrators shall
possess or have the power to (i) assess
punitive damages, (ii) dissolve, rescind or
reform (except that the arbitrator may
construe ambiguous terms) the Loan
Obligations, this Mortgage or any of the
other Loan Documents, (iii) enter judgment on
the debt, (iv) exercise equitable powers or
issue or enter any equitable remedies or (v)
allow discovery of attorney/client privileged
information. The Commercial Arbitration
Rules of the AAA are hereby modified to this
extent for the purposes of arbitration of any
dispute, controversy or claim arising out of,
or in connection with, or relating to the
Loan Obligations, this Mortgage or any of the
other Loan Documents. The parties further
agree to waive, each to each other, any
claims for punitive damages, and agree that
neither an arbitrator nor any court shall
have the power to assess punitive damages.
(d) No provision of, or the
exercise of any rights under, this Section
shall limit or impair the right of any party
to this Mortgage or the other the Loan
Documents before, during or after any
arbitration proceeding to: (i) exercise self-
help remedies such as setoff or repossession;
(ii) foreclose (judicially, nonjudicially, or
otherwise) any lien on or security interest
in any real or personal property collateral;
or (iii) obtain emergency relief from a court
of competent jurisdiction to prevent the
dissipation, damage, destruction, transfer,
hypothecation, pledging or concealment of
assets or of collateral securing any
indebtedness, obligation or guaranty
referenced in the Loan Documents. Such
emergency relief may be in the nature of, but
is not limited to: prejudgment attachments,
garnishments, sequestrations, appointments of
receivers or other emergency injunctive
relief to preserve the status quo.
(e) In the event arbitration is
prohibited by law with respect hereto, any
actions or proceedings with respect to the
Note, the Loan Obligations, the Loan
Agreement, this Mortgage or the other Loan
Documents may be instituted in the courts of
the State of Texas, the United States
District Court for the Southern District of
Texas, or elsewhere to the extent that
jurisdiction shall exist apart from the
provisions of this Section, as the Mortgagee
may elect, and by execution and delivery of
this Mortgage, the Mortgagor irrevocably and
unconditionally submits to the nonexclusive
jurisdiction (both subject matter and
personal) of each such court, and irrevocably
and unconditionally waives (i) any objection
the Mortgagor may now or hereafter have to
the laying of venue in any of such courts,
and (ii) any claim that any action or
proceeding brought in any of such courts has
been
19
brought in an inconvenient forum. Court
proceedings may be instituted in the courts
of the State of Florida and the United States
District Court for the Middle District of
Florida for the limited purposes of the
foreclosure or execution upon any lien or
security interest in the collateral granted
hereunder, as Mortgagee may elect.
4.13 Future Advances. Upon request by
Mortgagor, Mortgagee, at Mortgagee's option
within twenty (20) years from the date of
this Mortgage, may make future advances to
Mortgagor. Such future advances, if any be
made, with interest thereon, shall be secured
by this Mortgage when evidenced by the Note
or by promissory notes stating that said
notes are secured hereby. At no time shall
the principal amount of the indebtedness
secured by this Mortgage, not including sums
advanced in accordance herewith to protect
the security of this Mortgage and interest on
any such sums, exceed the sum of Five Million
Five Hundred Thousand and No/100 Dollars
($5,500,000.00).
20
IN WITNESS WHEREOF, the Mortgagor and
Mortgagee have caused this Mortgage to be
properly executed as of the __ day of
December, 1996.
MORTGAGOR
EMERITUS
CORPORATION,
a Washington
corporation
WITNESSES:
___________________ By:
_____________________________
Name: Name:
Its:
___________________
Name:
STATE OF _____________ )
):ss:
COUNTY OF _____________ )
The foregoing instrument was
acknowledged before me this ____ day of
December, 1996, by ______________________, as
a/the ____________ of EMERITUS CORPORATION,
a Washington corporation, on behalf of said
corporation. He/she is personally known to me
or produced __________________ as
identification.
_____________________________
Print
Name:__________________
Notary Public
My Commission
Expires:
21
