PREPARED BY:
XXXX X. XXXXXX, III
BAKER, DONELSON, BEARMAN & XXXXXXXX
000 XXXXXXXX XXXXX 0000
XXXXXXXXX, XX 00000
LEASEHOLD MORTGAGE WITH
SECURITY AGREEMENT AND ASSIGNMENT OF RENTS
LOCATION: RAVENNA, PORTAGE COUNTY, OHIO
THIS LEASEHOLD MORTGAGE WITH SECURITY AGREEMENT AND ASSIGNMENT OF RENTS
("Mortgage"), shall be effective as of the first day of May, 2003 by Emeritus
Corporation, a Washington corporation whose address is 0000 Xxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, XX 00000 (hereinafter "Mortgagor"), for the benefit of HR
Acquisition I Corporation, a Maryland corporation whose address is 0000 Xxxx Xxx
Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000 (hereinafter "Mortgagee").
WITNESSETH THAT:
WHEREAS, pursuant to the terms of that Lease Agreement dated as of May 1, 2003
by and between Mortgagee, as Lessor, and Mortgagor, as Lessee (the "Lease
Agreement") Mortgagee agreed to make a loan to Mortgagor in the original
principal amount of Six Hundred Thousand and no/100 Dollars ($600,000); and
WHEREAS, on or about May 1, 2003, Mortgagee made the loan to Mortgagor
contemplated by the terms of the Lease Agreement and Mortgagor executed in favor
of Mortgagee its Term Note in the original principal amount of Six Hundred
Thousand and no/100 Dollars ($600,000) (the "Note"); and
WHEREAS, the Note, if not sooner due and payable in accordance with its terms,
is due and payable in full by April 1, 2013 (the "Maturity Date"), unless
modified, extended or renewed; and
WHEREAS, the Lease Agreement requires that the Mortgagor execute this Mortgage
as security for its obligations under the Note;
NOW, THEREFORE, in consideration of the loan made to the Mortgagor pursuant to
the Lease Agreement, as evidenced by the Note, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Mortgagor by these presents does grant, bargain, sell and convey unto Mortgagee
and Mortgagee's successors and assigns, for the benefit of Mortgagee, the
following:
Mortgagor's leasehold estate created pursuant to the Lease Agreement and all
extensions, renewals, and new leasehold estates hereafter obtained by Mortgagor,
and all options and rights to purchase now or hereafter existing in favor of
Mortgagor, pertaining to those tracts, parcels of land, and lease spaces set out
in Exhibit A attached hereto and incorporated herein by this reference (the
"Land");
TOGETHER with all other right, title and interest Mortgagor may now or hereafter
have in the Land and Premises (as hereinafter defined) including any fee
interest the Mortgagor may now own or hereafter obtain therein (or in any part
thereof);
TOGETHER with all right, title and interest of Mortgagor in all buildings,
structures, and other improvements (the buildings, structures and other
improvements being collectively referred to herein as the "Improvements") now or
hereafter located on the Land or any portion thereof;
TOGETHER WITH all right, title and interest of Mortgagor, now owned or hereafter
acquired, in all easements, rights-of-way and rights (including without
limitation parking and riparian rights) used in connection with the Land or the
Improvements or as a means of access thereto, and all tenements, hereditaments,
and appurtenances thereof and thereto whether now or hereafter existing;
TOGETHER WITH all right, title and interest of Mortgagor, now owned or hereafter
acquired, in and to any land lying within the right-of-way of any street, open
or proposed, relating to or adjoining the Land and the Improvements, and in any
and all sidewalks, parking lots, alleys, strips and gores of land adjacent to
and/or used in connection with the Land and the Improvements;
TOGETHER with all right, title and interest of Mortgagor in all machinery,
apparatus, equipment, fittings, fixtures, and other property of every kind and
nature whatsoever (hereinafter collectively referred to as the "Equipment") now
or hereafter located in, upon or under the Land and the Improvements or any part
thereof and/or used or usable in connection with any present or future operation
of the Land or Improvements, all whether now owned or hereafter acquired by
Mortgagor, and including, but without limiting the generality of the foregoing,
all heating, air-conditioning, plumbing, lighting, water heating, cooking,
refrigerating, incinerating, ventilating and similar equipment, furniture and
furnishings, cash registers, bars, brewing equipment and other trade fixtures
and equipment, freezers, coolers and related equipment, and all building
materials and equipment now or hereafter delivered to the Land and the
Improvements and intended to be installed therein or thereon, and all additions
thereto and replacements thereof;
TOGETHER with all of Mortgagor's interest and rights as lessor in and to all
leases, subleases, warehouse agreements and other storage agreements (written or
oral) now or hereafter affecting the Premises or any part thereof (herein
collectively called the "Leases") and any and all rents, issues, security
deposits, guarantees, proceeds and profits which are now due or may hereafter
become due by reason of the renting, leasing and bailment of the Premises or any
part thereof, and the storage of property on the Premises, whether payable
pursuant to a present or future Lease or otherwise growing out of any occupancy
or use of the Premises (the "Rents") and all other general intangibles and
accounts now or hereafter existing with respect to the Premises;
TOGETHER with all of Mortgagor's documents, instruments, contract rights,
accounts, general intangibles, and other intangible property now or hereafter
existing relating to the Premises including, but not limited to, any and all
construction contracts, development contracts, architectural contracts,
engineering contracts, plans, specifications, drawings, surveys, bonds,
licenses, permits, and other governmental approvals, and also including all
general intangibles and contract rights under all leases now or hereafter in
effect including all rights to return of security deposits and credits and
payments relating to tenant finish improvements;
TOGETHER with, to the extent permitted by the Lease Agreement, all the estates,
interests, rights, titles, other claims or demands, including claims or demands
with respect to the proceeds of, and refunds of premiums on, insurance in effect
with respect thereto, which Mortgagor now has or may hereafter acquire in or
with respect to the Premises, and any and all rights that Mortgagor now has or
hereafter may acquire in awards made for the taking by eminent domain or
condemnation, or by any proceeding or purchase in lieu thereof, of the whole or
any part of the Premises, including any awards resulting from a change of grade
of streets and awards for severance damages; and
TOGETHER with all other proceeds and products of any of the foregoing of any
nature or type.
TO HAVE AND TO HOLD all of Mortgagor's right, title and interest in and to the
aforesaid Land, Improvements, Equipment, Rents, property, property rights, and
other interests (all of which are collectively referred to herein as the
"Premises") to the use and benefit of the Mortgagee and Mortgagee's successors
and assigns.
Mortgagor covenants that it is the lawful leasehold owner of the Premises being
conveyed hereby, has a good right to convey it, and the same is unencumbered,
except for the liens granted in favor of Mortgagee under the terms of the Lease
Agreement. Mortgagor further represents and covenants that as of the date
hereof: (i) the Lease Agreement, a memorandum of which is recorded as Instrument
Number , Office of Recorder of Deeds, Portage County, Ohio is in
full force and effect, (ii) there are no conditions or events that exist or
that, with the passage of time or notice or both, would exist, that would
entitle Mortgagee, in its capacity as the lessor under the Lease Agreement, to
terminate the Lease Agreement and that all rents and other amounts due and
payable under the Lease Agreement have been paid in full to the extent they were
payable before the date of this Mortgage; (iii) neither Mortgagor, in its
capacity as the lessee under the Lease Agreement, nor Mortgagee, in its capacity
as the lessor under the Lease Agreement has commenced any action or given or
received any notice for the purpose of terminating the Lease Agreement; (iv) the
interest of the tenant under the Lease Agreement is vested in the Mortgagor; and
(v) the quiet and peaceful possession of the Premises is vested in the Mortgagor
under the Lease Agreement. Mortgagor further covenants and binds itself, its
heirs, successors, and assigns, to warrant and defend the title to the Premises
to Mortgagee and Mortgagee's successors and assigns forever against the lawful
claims of all persons whomsoever.
THIS CONVEYANCE IS MADE UPON THIS SPECIAL TRUST, that if Mortgagor shall:
(a) Pay the indebtedness, obligations (including, without
limitation, reimbursement obligations relating to letters of credit) and
liabilities of Mortgagor with interest thereon (including, without limitation,
interest that, but for the filing of a petition in bankruptcy with respect to a
borrower, would accrue) now or hereafter evidenced by or outstanding under the
Note, which is incorporated herein by reference, including all future advances
thereunder regardless of class, which such indebtedness, obligations and
liabilities if not sooner due and payable are due and payable in full on the
Maturity Date and any and all modifications, extensions, renewals and
replacements of any of the foregoing;
(b) Perform all obligations of Mortgagor now or hereafter
contained in this Mortgage, the Note and in any other instrument now or
hereafter given to evidence or further secure the payment and performance of any
obligations secured hereby, and any and all modifications, extensions, renewals
and replacements thereof (hereinafter collectively referred to as the "Credit
Documents").
(c) Pay all sums advanced by Mortgagee or Mortgagee to protect the
Premises or this Mortgage, with interest thereon at the Default Rate provided in
the Note (all of the foregoing being collectively referred to herein as the
"Secured Indebtedness"); provided, however, that upon payment in full of the
portion of the Secured Indebtedness required to be paid in accordance with the
terms of the Note, this conveyance shall be cancelled of record at the request
and at the cost of Mortgagor. This conveyance is made to secure the payment and
performance of all of the Secured Indebtedness.
(d) Nothing in this Mortgage or any other Credit Document shall
constitute the agreement by Mortgagee to assume any obligations of Mortgagor
with respect to the Premises including, without limitation, any obligations
under the Lease Agreement, and Mortgagor shall defend, indemnify and hold
Mortgagee harmless against any claims, demands, damages, losses, liabilities,
costs, expenses, or other obligations incurred with respect to the Premises as a
result of this Mortgage or the Note, or any of the transactions described herein
or therein (this covenant to survive the repayment of the Secured Indebtedness,
the termination of this Mortgage, the exercise of any rights hereunder and the
acceptance of any deeds in lieu of foreclosure or similar documents, and shall
continue until the expiration of any applicable periods of limitation with
respect to any of the foregoing matters).
TO PROTECT THE SECURITY OF THIS MORTGAGE, MORTGAGOR HEREBY COVENANTS AND AGREES
UNTO MORTGAGEE AND MORTGAGEE AS FOLLOWS:
Payment of Secured Indebtedness. Mortgagor shall pay and perform when due the
Secured Indebtedness in accordance with the terms of the Note and the other
Credit Documents.
Compliance with Lease Agreement.
Mortgagor shall: (i) pay all rents and other amounts required to be paid by
Mortgagor, as a tenant under and pursuant to the provisions of the Lease
Agreement, as and when those rents and other amounts are payable or within any
applicable cure period provided for in the Lease Agreement; (ii) diligently
perform and observe all of the terms, covenants and conditions of the Lease
Agreement when due or within any applicable cure periods provided for in the
Lease Agreement; and (iii) in the event Mortgagee is not also the lessor under
the Lease Agreement, promptly notify Mortgagee of the giving of any notice by
Mortgagor or the landlord under the Lease Agreement of any default of the other
in the performance or observance of any of the terms, covenants or conditions of
the Lease Agreement and promptly provide Mortgagee a copy of any such notices or
any other requests or other materials at any time provided by the Mortgagor to
such lessor or by such lessor to the Mortgagor. Mortgagor shall not surrender
the leasehold estate created by the Lease Agreement except upon the expiration
of the term provided for therein or terminate or cancel the Lease Agreement
prior to the expiration of the term provided for therein or, at anytime that
Mortgagee is not also the lessor under the Lease Agreement, modify, change,
supplement, alter or amend the Lease Agreement, in any respect, either orally or
in writing, without the consent of Mortgagee, and Mortgagor hereby assigns to
Mortgagee as further security for the payment and performance of the Secured
Indebtedness, the right to exercise on behalf of Mortgagor from and after the
occurrence of an Event of Default hereunder or under any of the other Credit
Documents, all of the rights, privileges and prerogatives of Mortgagor, as
tenant under the Lease Agreement, to surrender the leasehold estate created by
the Lease Agreement or to terminate, cancel, modify, change, supplement, alter,
or amend the Lease Agreement, and any such surrender of the leasehold estate or
termination, cancellation, modification, change, supplement, alteration or
amendment of the Lease Agreement without the prior written consent of Mortgagee
at a time when Mortgagee is not also the lessor under the Lease Agreement shall
be null and void and of no force and effect. At any time that Mortgagee is not
also the lessor under the Lease Agreement, Mortgagor shall not waive any
material default by the lessor under the Lease Agreement without the prior
written consent of Mortgagee. If the Mortgagor shall default in the performance
or observance of any term, covenant or condition in the Lease Agreement and
shall fail to cure such default within any applicable cure period set forth in
the Lease, then without limiting the generality of the other provision of this
Mortgage, and without waiving or releasing Mortgagor from any of its obligations
hereunder, Mortgagee shall have the right, but shall be under no obligation, to
pay any sums and to perform any act or take any action as may be appropriate to
cause all the terms, covenants and conditions of the Lease Agreement on the part
of Mortgagor to be performed or observed to be promptly performed or observed on
behalf of Mortgagor to the end that the rights of Mortgagor in, to and under the
Lease Agreement shall be kept unimpaired and free from default, even if the
existence of such Event of Default or its nature is questioned or denied by
Mortgagor or by any party on behalf of Mortgagor. If Mortgagee shall make any
payment or perform any act or take any action in accordance with the preceding
provisions, then the payment, performance or action shall not remove or waive,
as between Mortgagor and Mortgagee, the Event of Default hereunder, and
Mortgagor shall immediately reimburse Mortgagee for all amounts paid with
interest thereon at the Default Rate provided in the Note, which amount shall be
secured by this Mortgage. Upon request by Mortgagee or as otherwise required, in
the event that Mortgagee is not also the lessor under the Lease Agreement, then
Mortgagor shall provide Mortgagee with receipts and other evidence of payment of
the rents and other sums payable under the Lease Agreement. At any time that
Mortgagee is not also the lessor under the Lease Agreement, Mortgagor will not
subordinate or consent to the subordination of the Lease Agreement to any
mortgage, Mortgage, lease or other interest on or in the landlord's interest in
all or any part of the Premises unless, in each such case, the written consent
of Mortgagee shall have been first had and obtained. Mortgagor shall not
knowingly take any other action which would have a material effect on the terms
of the Lease Agreement or otherwise affect Mortgagor's rights in and to the
Premises.
Mortgagee and any persons authorized by Mortgagee shall have the right to
enter and inspect the Premises on reasonable advance notice and at all
reasonable times and access thereto shall be permitted for that purpose.
Possession of Premises; No Assignments or Liens. Mortgagor shall not sell,
exchange, assign, loan, deliver, lease, transfer, mortgage or otherwise dispose
of or encumber all or any portion of the Premises, other than sales or other
dispositions of the personal property or fixtures located thereat in the
ordinary course of business, assignments of the Lease or any portion thereof or
subletting of the Premises or any portion thereof in accordance with the terms
of the Lease Agreement and encumbrances of the Premises or any portion thereof
permitted by the terms of the Lease Agreement. Without limiting the generality
of the foregoing, Mortgagor agrees not to assign the Lease Agreement or any of
its rights or obligations thereunder or sublet the Premises or any part thereof
without the concurrent payment in full of the portion of the Secured
Indebtedness required to be prepaid upon such assignment in accordance with the
terms of the Note. Mortgagor further agrees not to create, incur, assume or
permit to exist any mortgage, pledge, hypothecation, assignment, security
interest, encumbrance, lien (statutory or otherwise), preference, priority or
charge of any kind on Mortgagor's rights and interests in the Premises or any
part thereof (other than liens allowed pursuant to the Lease Agreement).
Environmental Matters.
Mortgagor shall indemnify and hold Mortgagee and Mortgagee harmless from
and against any and all losses, costs, damages, claims, liabilities and
expenses, including attorneys' fees, incurred by either Mortgagee or Mortgagee
arising out of or relating to (i) the presence as a result of the acts or
omissions of Mortgagor of any Hazardous Materials on the Premises or on any
other real property now or hereafter securing payment of the Secured
Indebtedness and (ii) any violation or alleged violation of Applicable Law
attributable to events occurring from and after Mortgagor's acquisition of any
interest in the Premises (including Mortgagor's leasehold interest or the
exacerbation of prior existing conditions by the acts, omissions or negligence
of Mortgagor). Mortgagor understands and agrees that the indemnity provided
herein shall survive the payment and performance of the Secured Indebtedness,
the termination of this Mortgage, the exercise of any rights hereunder and the
acceptance of any deeds in lieu of foreclosure or similar documents, and shall
continue in full force and effect until the expiration of any applicable periods
of limitation with respect to any loss or liability covered by such
indemnity.
As used in this Mortgage, the term "Hazardous Materials" shall mean all
materials defined as a hazardous or toxic waste or substance under any
Applicable Law, and petroleum, petroleum products, oil and asbestos.
The representations, covenants and indemnities contained in this Section 7
are to be in addition to and not in lieu of any similar representations,
covenants or indemnities contained in any other Credit Document.
Default. Each of the following events shall constitute an "Event of Default"
under this Mortgage:
should Mortgagor fail to pay or perform the Secured Indebtedness or any
part thereof when and as the same shall become due and payable (subject to any
applicable cure periods provided in the Credit Documents);
should any warranty or representation of Mortgagor contained herein or in
any of the other Credit Documents prove untrue in any material aspect; or
should Mortgagor fail to keep, observe, perform, carry out and execute the
covenants, agreements, obligations and conditions set out herein or in any other
Credit Document when due or within any applicable cure period.
Remedies Upon Default; Power of Sale. Upon the occurrence of any Event of
Default, Mortgagee or Mortgagee may declare all Secured Indebtedness to be due
and payable and the same shall thereupon become due any payable without any
presentment, demand, protest or notice of any kind. Thereafter, Mortgagee and
Mortgagee may:
Either in person or by agent, with or without bringing any action or
proceeding, enter upon and take possession of the Premises, or any part thereof,
in its own name, and do any acts which it deems necessary or desirable to
preserve the value, marketability or rentability of the Premises, or part
thereof or interest therein, increase the income therefrom or protect the
security hereof and, with or without taking possession of the Premises, xxx for
or otherwise collect the Rents, including those past due and unpaid. The
entering upon and taking possession of the Premises, the collection of such
Rents, and the application thereof as aforesaid, shall not cure or waive any
Event of Default or invalidate any act done in response to such Event of Default
and, notwithstanding the continuance in possession of the Premises or the
collection, receipt and application of Rents, Mortgagee shall be entitled to
exercise every right provided for in any of the Credit Documents or by law or
equity upon occurrence of any Event of Default, including the right to exercise
the power of sale herein provided.
Proceed to foreclose this leasehold Mortgage by judicial proceedings or
may, at the option of Mortgagee or Mortgagee, proceed to advertise the sale of
the Premises in the way and manner required by law in the State of Ohio for
foreclosure sales under power of sale, giving the time, terms and place of sale,
and dispose of the Premises at public auction in front of the Courthouse of the
County in which the Premises or any part are located, to the highest and best
bidder for cash in hand or for such other consideration as Mortgagee or
Mortgagee may elect to accept. Mortgagee need not personally attend or conduct
such sale and may, at its option, cause the sale to be conducted by an agent or
attorney selected by it. Mortgagee, Mortgagee may bid at such sale. Mortgagee is
hereby authorized to make to the purchaser at such sale all necessary title
papers and place the purchaser in peaceable possession of the Premises.
Mortgagee shall collect the proceeds of such sale, applying such proceeds as
provided in Section 14. Mortgagor agrees that possession of the Premises during
the existence of the Secured Indebtedness by Mortgagor, or any person claiming
under Mortgagor, shall be that of tenant under Mortgagee, and, in case of a
sale, as herein provided, Mortgagor or any person in possession under Mortgagor
shall then become and be tenants holding over, and shall forthwith deliver
possession to the purchaser at such sale, or be summarily dispossessed in
accordance with the provisions of law applicable to tenants holding over. The
power and agency hereby granted are coupled with an interest and are irrevocable
and are in addition to any and all other remedies which Mortgagee or Mortgagee
may have at law or in equity.
Assignment of Leases and Rents. The assignment of Leases and Rents contained in
this Mortgage, shall constitute an absolute assignment of such Leases and Rents
to Mortgagee for the benefit of Mortgagee and to Mortgagee, and Mortgagor hereby
assigns and transfers to Mortgagee and to Mortgagee all of such Leases and Rents
as security for the prompt payment and performance of all of the Secured
Indebtedness. Notwithstanding the assignment of Leases and Rents contained in
this Mortgage, so long as no Event of Default has occurred, Mortgagor shall have
a license (such license to be deemed revoked upon the occurrence of an Event of
Default) to collect, retain and enjoy all Rents (provided such are paid no more
than 30 days in advance), provided that the existence or exercise of any such
right of Mortgagor shall not operate to subordinate the assignment of Leases and
Rents contained in this Mortgage to any subsequent assignment, in whole or in
part, by Mortgagor, and any subsequent assignment by Mortgagor shall be subject
to the rights of Mortgagee and Mortgagee hereunder. The assignment of Leases and
Rents contained in this Mortgage shall not be deemed or construed to constitute
Mortgagee or Mortgagee as a mortgagee in possession nor obligate Mortgagee or
Mortgagee to take any action or to incur any expenses or perform or discharge
any obligation, duty or liability or to permit Mortgagor to enter into any
Leases except in accordance with the terms of this Mortgage.
Uniform Commercial Code. For the purpose of noting the names and addresses of
the debtor and the secured party under the Uniform Commercial Code of the State
of Ohio, it is hereby acknowledged and agreed that the Mortgagor's (debtor's)
name is Emeritus Corporation and the Mortgagee's (secured party's) name is
---------------------
Capstone Capital of Ohio, Inc., and the addresses of the Mortgagor (debtor) and
Mortgagee (secured party) are set forth above. In addition to all other remedies
set forth in this Mortgage, the parties expressly agree that with respect to the
portion of the Premises constituting fixtures and personal property (tangible
and intangible) which are the property of Mortgagor, this Mortgage is hereby
made and declared to be a security agreement in compliance with the provisions
of Uniform Commercial Code as enacted in the State of Ohio, and Mortgagor hereby
grants to Mortgagee a continuing security interest in the Premises as security
for the prompt payment and performance of all of the Secured Indebtedness. Upon
the occurrence of any Event of Default hereunder, in addition to all other
remedies contained in this Mortgage, Mortgagee shall have all remedies available
to a secured party pursuant to the Uniform Commercial Code as enacted in Ohio.
Payment of Costs of Exercising Remedies. Mortgagor covenants and agrees to pay
Mortgagee and Mortgagee all reasonable expenditures and expenses which may be
paid or incurred by or on behalf of Mortgagee or Mortgagee for attorneys' fees,
appraiser's fees, outlays for documentary and expert evidence, stenographers'
charges, publication costs, costs (which may be estimated as to items to be
expanded after entry of the decree) of procuring all such abstracts of title,
title searches and examinations, title insurance policies, certificates of
title, and similar data and assurances with respect to title, environmental
audits and other items as Mortgagee or Mortgagee may deem reasonably necessary
either to prosecute such suit or to evidence to bidders at any sale the true
condition of the title to or the value of the Premises and other reasonable
expenditures and expenses incurred by or on behalf of Mortgagee in connection
with the exercise of any remedy under this Mortgage. All expenditures and
expenses of the nature in this paragraph mentioned, and such expenses and fees
as may be reasonably incurred in the protection of the Premises and the
maintenance of the interest of this Mortgage, including the fees of any attorney
employed by Mortgagee or Mortgagee in any litigation or proceeding affecting
this Mortgage or the Premises, including probate and bankruptcy proceedings, or
in preparations for the commencement or defense of any proceeding or threatened
suit or proceeding, shall be immediately due and payable by Mortgagor, with
interest thereon at the Default Rate provided in the Note and shall be secured
by this Mortgage.
Mortgagor's Waiver of Certain Rights. Mortgagor waives the benefit of all laws
now existing or that hereafter may be enacted providing for (i) any appraisement
before sale of any portion of the Premises, and (ii) in any way extending the
time for the enforcement of the collection under the Note or the debt evidenced
thereby or any other Secured Indebtedness or creating or extending a period of
redemption from any sale made in collecting said Secured Indebtedness. To the
full extent 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 appraisement, valuation, stay, extension
or redemption, and Mortgagor, for Mortgagor, Mortgagor's representatives,
successors and assigns, and for any and all persons ever claiming any interest
in the Premises, to the extent permitted by law, hereby waives and releases all
rights of redemption (including, without limitation, the statutory rights of
redemption and the equity of redemption) homestead, dower, valuation,
appraisement, stay of execution, notice of election to mature or declare due the
whole of the Secured Indebtedness, and marshalling in the event of foreclosure
of the liens hereby created.
Proceeds of Foreclosure. The proceeds of any foreclosure sale of the Premises or
from the exercise of other rights hereunder shall be distributed and applied in
the following order of priority: First, on account of all costs and expenses
incident to the execution of this trust and incident to the foreclosure
proceedings, including all such items as are mentioned in Section 12 hereof;
Second, all other items which under the terms hereof constitute Secured
Indebtedness additional to the principal amount evidenced by the Note or under
any other Secured Indebtedness, with interest thereon as herein provided; Third,
all principal and interest remaining unpaid on the Note and the other Secured
Indebtedness in such manner as Mortgagee may elect in its sole discretion (and
subject to the provisions of the Note); Fourth, any overage to the order of
Mortgagor, its successors or assigns, as their rights may appear or to such
other persons that may lawfully be entitled thereto.
Appointment of Receiver. Mortgagee and Mortgagee in any action to foreclose this
Mortgage, or upon any Event of Default, shall be at liberty to apply for
appointment of a receiver of the Premises. Such appointment may be made without
notice, without regard to the solvency or insolvency of Mortgagor at the time of
application for such receiver and without regard to the then value of the
Premises or whether the same shall be then occupied as a homestead or not, and
Mortgagee may be appointed as such receiver. Such receiver shall have power: (a)
to collect the Rents subject, however, to the rights of the lessor under the
Lease Agreement (in the event Mortgagee is not also the lessor under the Lease
Agreement); (b) to extend or modify any then existing leases (including the
Lease Agreement) and to make new leases, which extensions, modifications and new
leases may provide for terms to expire, or for options to lessees or lessors to
extend or renew terms to expire, beyond the maturity date of the Secured
Indebtedness and beyond the date of the issuance of a deed or deeds to a
purchaser or purchasers at a foreclosure sale; provided, however, that any such
leases, and the options or other such provisions to be contained therein, shall
only be binding upon Mortgagor and all persons whose interests in the Premises
are subject to this Mortgage to the extent that they do not increase or extend
the obligations imposed on Mortgagor under the Lease Agreement at the time of
the appointment of the receiver; and (c) all other powers which may be necessary
or are usual in such cases for the protection, possession, control, management
and operation of the Premises. The court from time to time may authorize the
receiver to apply the net income in its hands in payment in whole or part of:
(i) the Secured Indebtedness, or any tax, special assessment or other lien which
may be or become superior to this Mortgage or of such decree, provided such
application is made prior to foreclosure sale; and (ii) the deficiency in case
of a sale and deficiency.
Rights of Enforcement.
Mortgagee and Mortgagee shall be entitled to enforce payment and
performance of any Secured Indebtedness and to exercise all rights and powers
under this Mortgage or under any other Credit Document or any laws now or
hereafter in force, notwithstanding some or all of the Secured Indebtedness, may
now or hereafter be otherwise secured, whether by deed to secure debt,
mortgage, pledge, lien, assignment or otherwise. Neither the acceptance of this
Mortgage nor its enforcement whether by court action or other powers herein
contained, shall prejudice or in any manner affect the right of Mortgagee or
Mortgagee to realize upon or enforce any other security now or hereafter held by
Mortgagee or Mortgagee, it being agreed that Mortgagee and Mortgagee shall be
entitled to enforce this Mortgage and any other security now or hereafter held
by Mortgagee or Mortgagee in such order and manner as it may in its absolute
discretion determine. No remedy herein conferred upon or reserved to Mortgagee
or Mortgagee is intended to be exclusive of any other remedy herein or by law
provided or permitted, but each shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity. Every power or
remedy given by any of the other Credit Documents to Mortgagee or Mortgagee or
to which it may be otherwise entitled, may be exercised, concurrently or
independently, from time to time and as often as it may be deemed expedient by
Mortgagee and Mortgagee and Mortgagee and Mortgagee may pursue inconsistent
remedies. No delay by Mortgagee or Mortgagee in exercising any right or remedy
hereunder or under any other Credit Document, or otherwise afforded by law,
shall operate as a waiver thereof or preclude the exercise thereof upon the
occurrence of an Event of Default. No failure by Mortgagee or Mortgagee to
insist upon the strict performance by Mortgagor under the Note, this Mortgage or
any other Credit Document shall constitute a waiver of any such covenant or
agreement, and no waiver by Mortgagee or Mortgagee of any Event of Default shall
constitute a waiver of or consent to any subsequent Event of Default. No failure
of Mortgagee or Mortgagee to exercise the option herein granted to accelerate
the maturity of the Secured Indebtedness, nor any forbearance by Mortgagee or
Mortgagee before or after the exercise of such option, nor any withdrawal or
abandonment by Mortgagee or Mortgagee of the exercise of the power of sale
herein granted or any of Mortgagee's or Mortgagee's rights under such power,
shall be construed as a waiver of any option, power or right of Mortgagee or
Mortgagee hereunder.
In case of any sale under this Mortgage by virtue of the exercise of the
power herein granted, or pursuant to any order in any judicial proceedings or
otherwise, at the election of Mortgagee or Mortgagee, the Premises or any part
thereof may be sold in one parcel and as an entirety, or in such parcels, manner
or order as Mortgagee or Mortgagee in its sole discretion may elect, and one or
more exercises of the powers herein granted shall not extinguish or exhaust the
power unless the entire Premises are sold or the Secured Indebtedness paid in
full.
No Merger of Fee and Leasehold Estates; Rejection of Lease Agreement.
So long as any portion of the Secured Indebtedness shall remain unpaid or
unperformed or any obligations of Mortgagor exist in connection therewith, and
unless Mortgagee shall otherwise consent, the fee title to the Premises and the
leasehold estate therein created by the provisions of the Lease Agreement or
other lease shall not merge but shall always be kept separate and distinct,
notwithstanding the union of such estate in Mortgagor, Mortgagee, Mortgagee, or
any other person by purchase, operation of law or otherwise. Mortgagee reserves
the right, at any time, to release portions of the Premises including, but not
limited to, the leasehold estate created by the Lease Agreement, with or without
consideration, at Mortgagee's election, without waiving or affecting any of
its rights hereunder or under any of the other Credit Documents, and any such
release shall not affect Mortgagee's rights in connection with the portion of
the Premises not so released. If Mortgagor should become the owner and holder of
the fee title to the Premises and the Secured Indebtedness related thereto shall
not have been prepaid in accordance with the terms of the Note, the lien of this
Mortgage shall spread to cover Mortgagor's fee title to the Premises and the fee
title shall be deemed to be included in the Premises.
if the Lease Agreement is terminated for any reason in the event of the
rejection or disaffirmance of the Lease Agreement pursuant to the United States
Bankruptcy Code, 11 U.S.C. 101 et seq. ~ as the same may be amended (the
"Code") or any other law affecting creditors' rights: (i) Mortgagor, immediately
after obtaining notice thereof, shall give notice thereof to Mortgagee; (ii)
Mortgagor, without the prior written consent of Mortgagee, shall not elect to
treat the Lease Agreement as terminated pursuant to Section 365(h) of the Code
or any comparable federal or state statute or law, and any election by Mortgagor
made without such consent shall be void; and (iii) this Mortgage and all of the
liens, terms, covenants and conditions of this Mortgage shall extend to and
cover Mortgagor's possessory rights under Section 365(h) of the Code and to any
claim for damages due to the rejection of the Lease Agreement or other
termination of the Lease Agreement. In addition, Mortgagor hereby assigns
irrevocably to Mortgagee Mortgagor's rights to treat the Lease Agreement as
terminated under Section 365(h) of the Code and to offset rents under the Lease
Agreement in the event that any case, proceeding or other action is commenced by
or against the landlord under the Code or any comparable federal or state
statute or law, provided that Mortgagee shall not exercise such rights and shall
permit Mortgagor to exercise such rights with the prior written consent of
Mortgagee, not to be unreasonably withheld or delayed, unless an Event of
Default shall have occurred and be continuing. Mortgagor hereby assigns to
Mortgagee Mortgagor's right to reject the Lease Agreement under Section 365 of
the Code or any comparable federal or state statute or law with respect to any
case, proceeding or other action commenced by or against Mortgagor under the
Code or comparable federal or state statute or law, provided that Mortgagee
shall not exercise such right, and shall permit Mortgagor to exercise such right
with the prior written consent of Mortgagee, not to be unreasonably withheld or
delayed, unless an Event of Default shall have occurred and be continuing.
Mortgagor hereby assigns to Mortgagee, Mortgagor's right to seek an extension of
the 60-day period within which Mortgagor must accept or reject the Lease
Agreement under Section 365 of the Code or any comparable federal or state
statute or law with respect to any case, proceeding or other action commenced by
or against Mortgagor under the Code or comparable federal or state statute or
law, provided the Mortgagee shall not exercise such right, and shall permit
Mortgagor to exercise such right with the prior written consent of Mortgagee,
not to be unreasonably withheld or delayed, unless an Event of Default shall
have occurred and be continuing; and provided, further, that the assignment
provided for herein shall only be effective at such time, if any, as Mortgagee
is not also the lessor under the Lease Agreement. Further, if Mortgagor shall
desire to so reject the Lease Agreement at a time when Mortgagee is not also the
lessor under the Lease Agreement, at the Mortgagee's request, Mortgagor shall
assign its interest in the Lease Agreement to Mortgagee in lieu of rejecting the
Lease Agreement as described above. Mortgagor hereby agrees that if the Lease
Agreement is terminated for any reason in the event of the rejection or
disaffirmance of the Lease Agreement under the Code or any other law affecting
creditor's rights, any property not removed by Mortgagor as permitted or
required by the Lease Agreement shall, at the option of Mortgagee and subject to
any rights thereunder granted to lessor under the Lease Agreement, be deemed
abandoned by Mortgagor, provided that Mortgagee may remove any such property
required to be removed by Mortgagor pursuant to the Lease Agreement, and all
reasonable expenses and costs associated with such removal shall be paid by
Mortgagor within five days of receipt by Mortgagor of an invoice for such
expenses and costs associated with such removal together with interest thereon
until paid at the Default Rate provided in the Note.
Periodic Enforcement. Mortgagee shall have the right from time to time to xxx
for any sums, whether interest, principal or any installment of either or both,
taxes, penalties, or any other sums required to be paid under the terms of this
Mortgage, as the same become due, without regard to whether or not all of the
Secured Indebtedness shall be due on demand, and without prejudice to the right
of Mortgagee thereafter to enforce any appropriate remedy against the Mortgagor,
including an action of foreclosure, or any other action, for a default or
defaults by Mortgagor existing at the time such earlier action was commenced.
Notice. Every provision for notice and demand or request shall be deemed
fulfilled if complied with as set forth in the Note.
Time of the Essence. Time is of the essence of this Mortgage and the other
Credit Documents.
Governing Law. The terms and provisions of this Mortgage shall be governed by
and construed in accordance with the laws of the State of Tennessee (other than
actions with respect to the enforcement of the rights and remedies set forth in
this Mortgage, which shall be governed by the laws of the State in which the
Premises are located notwithstanding any provisions to the contrary contained in
this Mortgage).
Captions; Convenience. The captions or headings at the beginning of each Section
hereof are for the convenience of the parties and are not a part of this
Mortgage.
Further Assurances. Mortgagor shall execute and deliver (and pay the costs of
preparation and recording thereof) to Mortgagee any further instrument or
instruments, including, but not limited to, security deeds, security agreements,
financing statements, assignments and renewal and substitution notes, so as to
reaffirm, to correct and to perfect the evidence of the obligation hereby
secured and the legal security title of Mortgagee for the benefit of Mortgagee
to all or any part of the Premises intended to be hereby conveyed, whether now
conveyed, later substituted for, or acquired subsequent to the date of this
Mortgage and extensions or modifications thereof.
Severability. If this Mortgage is invalid or unenforceable as to any part of the
Secured Indebtedness, or if the interest created hereby is invalid or
unenforceable as to any part of the Premises, the unsecured or partially secured
portion of the debt shall be completely paid prior to the payment of the
remaining and secured or partially secured portion of debt and all payments made
on the debt, whether voluntary or under foreclosure or other enforcement action
or procedure, shall be considered to have been first paid on and applied to the
full payment of that portion of the debt which is not secured or fully secured
by this Mortgage. In any action or proceeding involving bankruptcy, insolvency,
reorganization or other law affecting the rights of creditors generally, if this
Mortgage would otherwise be held or determined to be void, invalid or
unenforceable on account of the amount of the Secured Indebtedness secured
hereby, then notwithstanding any provision hereof to the contrary, the amount of
Secured Indebtedness secured hereby (for purposes of this Mortgage only) shall
be limited to the highest amount which is valid and enforceable as determined in
any such action or proceeding. If any provision of this Mortgage or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent: (i) the validity and enforceability of the
remainder of this Mortgage, and the validity and enforceability of that
provision with respect to other persons and circumstances, shall not be
affected; (ii) such provision, as to such person or circumstance shall be deemed
modified to the minimum extent necessary to make such provision consistent with
applicable law; and (iii) such provision shall be valid, enforceable and
enforced in its modified form against such person or in such circumstance.
Successors and Assigns. This Mortgage shall be binding upon and inures to the
benefit of and shall be enforceable by the successors and assigns of Mortgagor
and Mortgagee; provided that Mortgagor may not assign or transfer any of its
interests or obligations hereunder without the prior written consent of
Mortgagee. Without limiting the generality of the foregoing, Mortgagor expressly
acknowledges that this Mortgage is for the benefit of Mortgagee as the holder of
the Note and to any successor holder of the Note.
Acceptance of Trust. Mortgagee accepts this Trust when this Mortgage is made
public record as provided by law. Except as otherwise provided by law, Mortgagee
is not obligated to notify any party hereto of pending sale under this Mortgage
or of any action or proceeding in which Mortgagor, Mortgagee or Mortgagee shall
be a party, unless brought by Mortgagee. The necessity of Mortgagee herein named
or any successor in trust, making oath or giving bond, is expressly waived. This
Mortgage may be amended by written agreement between Mortgagor and Mortgagee
without joinder by Mortgagee.
Successor Mortgagee. Mortgagor agrees that Mortgagee may, from time to time,
without notice to Mortgagor and with or without cause, substitute a successor or
successors to any Mortgagee named herein or acting hereunder to execute this
Trust. Upon such appointment, and without conveyance to the successor Mortgagee,
the latter shall be vested with all title, powers and duties conferred upon any
Mortgagee herein named or acting hereunder. Each such appointment and
substitution shall be made by written Deed of Appointment executed by Mortgagee
containing reference to this Mortgage and its place of record, which, when duly
filed for record in the proper office of the county or counties in which the
Land is situated, shall be conclusive proof of proper appointment of the
successor Mortgagee.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, this Mortgage has been duly executed and delivered by
Mortgagor as of the date first above written.
MORTGAGOR:
EMERITUS CORPORATION
By:/s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxxxxx
-----------------------
Its: Chief Financial Officer
-------------------------
STATE OF WASHINGTON
COUNTY OF KING
Before me, a Notary Public of the state and county
aforesaid, personally appeared , with whom I am
personally acquainted (or proved to me on the basis of satisfactory evidence),
and who, upon oath, acknowledged himself to be the of
Emeritus Corporation, the within named bargainor, a corporation, and that he, as
such officer, executed the foregoing instrument for the purposes therein
contained, by signing the name of the corporation by himself as such officer.
Notary Public
My Commission Expires:
EXHIBIT "A"
PROPERTY DESCRIPTION
