hcri\emeritus-ml\deed of trust\DeedTrust-Amend - 2 - 9/29/03
hcri\emeritus-ml\deed of trust\DeedTrust-Amend 9/29/03
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
AND THIS INSTRUMENT PREPARED BY:
XXXXXX X. XXXX, ESQ.
XXXXXXXX, LOOP & XXXXXXXX, LLP
1000 XXXXXXX
TOLEDO, OHIO 43624-1573
AMENDED AND RESTATED LEASEHOLD MORTGAGE/DEED OF TRUST, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS,
FINANCING STATEMENT AND FIXTURE FILING
THIS AMENDED AND RESTATED LEASEHOLD MORTGAGE/DEED OF TRUST, SECURITY
AGREEMENT, ASSIGNMENT OF LEASES AND RENTS, FINANCING STATEMENT AND FIXTURE
FILING ("Deed of Trust") is made and entered into effective as the 30th day of
September, 2003 (the "Effective Date") by:
- EMERITUS CORPORATION, a corporation organized under the laws of the State
of Washington ("Trustor"), having its chief executive office at 0000 Xxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000;
- Commonwealth Land Title Insurance Company, as Trustee, the trustee
hereunder to the extent this Deed of Trust operates as a deed of trust for the
Fairfield, California property and the Paso Xxxxxx, California property
("California Trustee"), having an address at 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000;
- Mid South Title Co. as Trustee, the trustee hereunder to the extent this
Deed of Trust operates as a deed of trust for the Hattiesburg, Mississippi
property ("Mississippi Trustee"), having an address at 000 Xxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxx 00000;
- Lawyers Title of Arizona, Inc., the trustee hereunder to the extent this
Deed of Trust operates as a deed of trust for the Flagstaff, Arizona property
and the Phoenix, Arizona property ("Arizona Trustee"), having an address at 0000
X. Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000;
- Transnation Title & Escrow, Inc., the trustee hereunder to the extent this
Deed of Trust operates as a deed of trust for the Chubbuck, Idaho property, the
Coeur D'Alene, Idaho property and the Pocatello, Idaho property ("Idaho
Trustee"), having an address at Suite 000, 0000 Xxxx Xxxxx Xxxxxx, Xxxxx, Xxxxx
00000;
- Xxxxxx Xxxxx, the trustee hereunder to the extent this Deed of Trust
operates as a deed of trust for the Hagerstown, Maryland property ("Maryland
Trustee"), having an address at 00 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxx 00000;
- AmeriTitle, the trustee hereunder to the extent this Deed of Trust
operates as a deed of trust for the Ontario, Oregon property ("Oregon Trustee"),
having an address at 00 X.X. Third Avenue, Ontario, , Oregon 97914;
- Xxxxxxx Xxxxxxxxx, the trustee hereunder to the extent this Deed of Trust
operates as a deed of trust for the Lubbock, Texas property ("Texas Trustee"),
having an address at Xxxxx 0000, 0000 Xxxxxxx Xxxx, Xxxxxx, Xxxxx 00000;
- Lawyers Title Realty Services, Inc., the trustee hereunder to the extent
this Deed of Trust operates as a deed of trust for the Staunton, Virginia
property ("Virginia Trustee"), having an address at 000 Xxxxxxx Xxxxxx Xxxxxxx,
Xxxxxxx Xxx, Xxxxxxxx, Xxxxxxxx 00000; and
- Transnation Title Insurance Company, the trustee hereunder to the extent
this Deed of Trust operates as a deed of trust for the Bellingham, Washington
property, the Federal Way, Washington property and the Moses Lake, Washington
property ("Washington Trustee"), having an address at Everett Mutual Tower,
Suite 1121, Everett, Washington 98201; (the California Trustee, the Mississippi
Trustee, the Arizona Trustee, the Idaho Trustee, the Maryland Trustee, the
Oregon Trustee, the Texas Trustee, the Virginia Trustee and the Washington
Trustee are, individually and collectively, referred to as "Trustee"),
in favor of
- HEALTH CARE REIT, INC., a corporation organized under the laws of the
State of Delaware ("Beneficiary"), having its principal office at One SeaGate,
Suite 1500, P.O. Box 1475, Toledo, Ohio 43603-1475.
Effective April 1, 2002, Trustor executed a certain Leasehold
Mortgage/Deed of Trust, Security Agreement, Assignment of Leases and Rents,
Financing Statement and Fixture Filing ("Original Deed of Trust") in favor of
Lender, which Original Deed of Trust was filed as follows:
- Instrument No. 2002-0042032 filed with the Office of the County Recorder
of Xxxxxx County, California on April 3, 2002;
- Instrument No. 2002027545 filed with the Office of the County Recorder of
San Xxxx Obispo County, California April 3, 2002;
- Instrument No. 2002R11684 filed with the Office of the County Recorder of
Champaign County, Illinois April 5, 2002; and
- Instrument No. 72563 filed with the Office of the County Recorder of
Xxxxxxx County, Mississippi April 3, 2002 in Book 1207, page 445.
The parties hereto desire to amend and restate the Original Deed of Trust as set
forth herein.
If the Real Property to be encumbered by this instrument is located in
the State of Illinois, State of New York, State of Florida, State of South
Carolina or the Commonwealth of Massachusetts, notwithstanding anything
contained herein to the contrary, this instrument is a Mortgage and [i] all
references to Deed of Trust shall mean Mortgage, other than with respect to
Massachusetts, and with respect to the Real Property situated in Massachusetts,
this instrument is granted by Trustor with MORTGAGE COVENANTS and upon the
STATUTORY CONDITION for any breach of which the Beneficiary shall have the
STATUTORY POWER OF SALE; [ii] all references to Trustor shall mean Mortgagor;
[iii] all references to Beneficiary shall mean Mortgagee; [iv] all references to
Trustee shall mean Beneficiary; [v] all language creating a trust means a direct
grant to Beneficiary and not in trust; and [vi] all references to power of sale
or other non-judicial sale are hereby deleted.
If the Real Property to be encumbered by this instrument is located in
the State of California, Mississippi, Arizona, Idaho, Maryland, Oregon, Texas,
Washington or Virginia, all of the references to Beneficiary will be deemed to
be references to Beneficiary or the respective Trustee, his successors and
assigns, where applicable.
New York Lien Law. In compliance with 13 of the New York State Lien
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Law, the Trustor will receive advances secured by this Mortgage and will hold
the right to receive such advances as a trust fund to be applied first for the
purpose of paying the costs of improvement of any Facility located in the State
of New York, and the Trustor will apply the same first to payment of the cost of
such improvement before using any part of the total of same for any other
purpose.
Beneficiary may, at any time, without giving notice to the original or
any successor Trustee, or to Trustor, and without regard to the willingness of
inability of any such Trustee to execute this instrument, appoint another person
or succession of persons to act as trustee, and such appointee in the execution
of this instrument shall have all of the powers vested in and obligations
imposed upon Trustee. Should Beneficiary be a corporation, then any officer may
make such appointment.
A. Trustor is the owner of a leasehold interest in the Real Property
(defined below) pursuant to an Amended and Restated Master Lease Agreement
between Health Care REIT, Inc., HCRI Mississippi Properties, Inc., HCRI
Massachusetts Properties Trust II and HCRI Texas Properties, Ltd. (collectively,
"Landlord") and Trustor, as tenant, dated as of September 30, 2003 ("Master
Lease"). Trustor intends to operate, directly or through its subsidiaries,
health care facilities, as described on Exhibit A, attached hereto and made a
part hereof, at the Real Property (collectively, the "Facility"). The Master
Lease is evidenced with respect to each Facility by the recording of a
Memorandum of Lease recorded with the respective county recorders office.
B. As of the Effective Date, Beneficiary extended a loan in the amount of
$25,800,000.00 ("Loan") to Trustor, which Loan is the consolidation of a certain
$6,800,000 loan made by Beneficiary to Trustor on April 1, 2002, a certain
$4,400,000 loan made by Beneficiary to Trustor on August 28, 2003, a certain
$3,100,000 loan made by Beneficiary to Trustor on August 28, 2003 and an
additional loan advance of $11,500,000 made as of the date hereof. In order for
Beneficiary to consolidate and extend the Loan to Trustor, Beneficiary requires
that Trustor enter into this Deed of Trust to xxxxx x xxxx on Trustor's
leasehold interest and all government authorizations and personal property used
in the operation of the Facility and owned by Trustor.
TRUSTOR HEREBY GRANTS, TRANSFERS, CONVEYS, BARGAINS, SELLS AND ASSIGNS
TO TRUSTEE, IN TRUST, WITH POWER OF SALE, for the benefit and security of
Beneficiary, under and subject to the terms and conditions hereinafter set
forth:
In consideration of the loan advances described in Article 2 made or
to be made by Beneficiary to Trustor and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Trustor has
executed and delivered this Deed of Trust and by these presents does mortgage,
grant, transfer and convey to Beneficiary and to its successors and assigns, or,
if the real property is located in California, Mississippi, Arizona, Idaho,
Maryland, Oregon, Texas, Washington or Virginia, to the respective Trustee, his
successors and assigns, with power of sale forever all of Trustor's right,
title, and interest to and under the following property which Trustor now owns
or may hereafter acquire ("Property"):
1. The leasehold estate of Trustor arising under the Master Lease in the
real property described on Exhibit B attached hereto ("Real Property"),which
Real Property in the State of Idaho is located on a parcel of land of 40 acres
or less or within the boundaries of an incorporated city and which Real Property
in the State of Washington is not used principally for agricultural or
farming purposes, including without limiting the completeness of the foregoing
grant Trustor's interest in the following:
(a) all tenements, hereditaments, and easements, rights of way, licenses,
rights, privileges, and appurtenances pertaining to the Real Property presently
owned or hereafter acquired by Trustor, including, without limitation,
easements, rights of way, streets, ways, alleys, gores, or strips of land,
whether or not adjoining the Real Property;
(b) all buildings and any other improvements ("Improvements") now or
hereafter erected or placed upon the Real Property and all fixtures ("Fixtures")
of every kind and nature whatsoever now or hereafter affixed to the Real
Property or Improvements (without limiting the generality of what may be a
Fixture, all heating, ventilating, air conditioning, air cooling, lighting,
incinerating, plumbing, cleaning, communications and power equipment, screens,
storm doors, storm windows, shades, awnings, floor coverings, and carpeting,
shall be deemed to be Fixtures and to be a part of the Real Property, whether or
not physically attached to the Real Property); and
(c) all rents, income, issues, profits, royalties, and other benefits
derived or to be derived from the Real Property, Improvements, and Fixtures (all
of which are called "Rents") and all of Trustor's interest in any lease,
sublease license or other agreement pursuant to which any Rents are payable and
the Master Lease (all of which are called "Leases").
2. All the right, title, interest, claims, or demands, including, without
limitation, claims to the proceeds of any insurance which Trustor now has or may
hereafter acquire with respect to any Property and all awards made for the
taking of the whole or any part of the Property by eminent domain or by any
proceeding or the proceeds of any purchase or transfer in lieu thereof,
including, without limitation, any awards resulting from a change of grade or
streets or for severance damages.
3. The Real Property, if ever acquired by Trustor, and all real property
hereafter acquired by Trustor which is made a part of the lot(s) or parcel(s)
which presently constitute(s) the Real Property on the tax maps of the county
auditor for so long as such after-acquired real property shall be a part of such
lot(s) or parcel(s) (Trustor shall execute and deliver to Beneficiary such
instruments as Beneficiary may require to confirm the lien of this Deed of Trust
on the Real Property or the additional property covered by this clause. This
clause is intended to insure that the lien of this Deed of Trust shall always
encumber one or more complete lots or parcels on the tax maps in the office of
the auditor of the county in which the Real Property is located so that the
ability to transfer the Real Property under Article 6 shall not be defeated or
hindered by any alteration of the lot(s) or parcel(s) which presently
constitute(s) the Real Property on such tax maps.)
AND Trustor grants to Beneficiary a security interest in and to Trustor's right,
title and interest in the following described property:
4. All machinery, furniture, equipment, trade fixtures, appliances,
inventory and all other goods (as "equipment," "inventory" and "goods" are
defined for purposes of Article 9 ("Article 9") of the Uniform Commercial Code
as adopted in the State where the Real Property is located ("State")) and any
leasehold interest of Trustor in any of the foregoing, now or hereafter located
in or on or used or usable in connection with the Real Property, Improvements,
or Fixtures and replacements, additions, and accessions thereto, including,
without limitation, those items which are to become fixtures or which are
building supplies and materials to be incorporated into an Improvement or
Fixture.
5. All accounts, general intangibles, instruments, documents, and chattel
paper [as "accounts", "contract rights", "general intangibles", "instruments",
"documents", and "chattel paper", are defined for purposes of Article 9] now or
hereafter arising in connection with the business located in or on or used or
usable in connection with the Real Property, Improvements, or Fixtures, and
replacements, additions, and accessions thereto.
6. All franchises, permits, licenses, operating rights, certifications,
approvals, consents, authorizations and other general intangibles regarding the
use, occupancy or operation of the Improvements, or any part thereof, including,
without limitation, certificates of need, state health care facility
licenses, and Medicare and Medicaid provider agreements, to the extent permitted
by law.
7. Unless expressly prohibited by the terms thereof, all contracts,
agreements, contract rights and materials relating to the design, construction,
renovation, operation and management of the Improvements, management agreements,
plans, specifications, drawings, blueprints, models, mock-ups, brochures,
flyers, advertising and promotional materials and mailing lists.
8. All ledger sheets, files, records, computer programs, tapes, other
electronic data processing materials, and other documentation relating to the
preceding listed property or otherwise used or usable in connection with the
Real Property and Improvements.
9. The products and proceeds of the preceding listed property, including,
without limitation, cash and non-cash proceeds, proceeds of proceeds, and
insurance proceeds.
TO HAVE AND TO HOLD the same with all of the rights, privileges and
appurtenances thereto belonging unto Beneficiary, its successors and assigns or,
if the real property is located in California, Mississippi, Arizona, Idaho,
Maryland, Oregon, Texas, Washington or Virginia, to the respective Trustee, his
successors and assigns, forever in accordance with the terms and conditions set
forth herein.
ARTICLE 1: WARRANTIES
1.1 Trustor covenants with Beneficiary and its successors and assigns that:
the Master Lease is in all respects valid and in full force and effect, Trustor
is not in default under the terms and provisions thereof, that Trustor has no
knowledge of, nor has received any notice from the Landlord of any default under
the Master Lease, no controversy exists involving any claim of default under the
Master Lease; Trustor holds an unencumbered leasehold interest in the Property;
to the best of Trustor's knowledge the Property is free from all mortgages,
liens, charges, claims, security interests, pledges, collateral assignments,
leases, attachments, levies, encroachments, rights of way, restrictions,
assessments, and all other encumbrances and title matters of every kind or
nature whatsoever, except for the exceptions listed on Exhibit C attached hereto
and liens permitted or granted under the terms of the Master Lease (the
"Permitted Exceptions"); with the consent of the Landlord under the Master
Lease, which consent has been granted as of the date hereof, Trustor has good
right to mortgage, sell and convey the same.
ARTICLE 2: PURPOSES
2.1 Secured Obligations. This Deed of Trust secures performance of the
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following obligations (the "Secured Obligations") of Trustor:
2.1.1 Payment of Credit Extended. The payment of the indebtedness of
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Trustor to Beneficiary in the original principal amount of $25,800,000.00 plus
interest on the unpaid balance thereof, which indebtedness is evidenced by an
Amended and Restated Note ("Note") made by Trustor and delivered to Beneficiary
on this date, and any extensions, modifications, substitutions or renewals of
the indebtedness or Note, and which is due and payable on the Maturity Date set
forth in the Note, which shall be no later than June 30, 2007.
2.1.2 Obligations Under Loan Documents. The performance of all obligations
---------------------------------
of Trustor under the Loan Agreement (defined in 2.6), the Note, this Deed of
Trust and all other documents executed by Trustor in connection therewith, any
extensions, modifications or renewals thereof, and any documents executed in
substitution therefor (collectively, the "Loan Documents").
2.1.3 Advances to Protect Property. The payment of unpaid balances of all
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advances made by Beneficiary for the payment of taxes, assessments, insurance
premiums, or costs incurred for the protection of the Property.
2.1.4 Future Advances. The payment of any unpaid balances of loan advances
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which Beneficiary may make or may be obligated to make under this Deed of Trust
or the Loan Agreement at any time after this Deed of Trust is delivered to the
recorder in the County in which the Real Property is located for record to the
extent that the total unpaid loan indebtedness, exclusive of interest thereon,
does not exceed the maximum amount of $25,800,000.00 which may be outstanding at
any time and from time to time.
2.1.5 Other Future Advances. With respect to items of Property in which no
----------------------
interest arises under real estate law and with respect to all items of Property
which are or are to become Fixtures as defined for purposes of Article 9, the
repayment of all advances made and value extended hereafter by Beneficiary to or
---
on behalf of Trustor, whether or not made or extended pursuant to an existing
commitment provided said amount shall not exceed $25,800,000.00.
2.1.6 [Reserved]
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2.1.7 Trustor's Obligations. As used herein, "Trustor's Obligations" means,
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collectively, all of the Secured Obligations required to be paid or performed by
Trustor.
2.2 Combination of Instruments. This Deed of Trust combines a real estate
----------------------------
mortgage, an assignment of rents and leases, a security agreement, a fixture
filing, and a financing statement into one document and shall be construed
accordingly.
2.3 Open-End Mortgage. For all items of the Property in which an interest
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arises under real estate law, this is an open-end mortgage which secures payment
of future advances.
2.4 Security Agreement. For all Fixtures and all items of Property in which
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no interest arises under real estate law, this Deed of Trust is also a security
agreement under Article 9. To the extent that this Deed of Trust is a security
agreement, it secures all future advances made and value hereafter extended to
or on behalf of Trustor.
2.5 Financing Statement and Fixture Filing. This Deed of Trust, a carbon
-----------------------------------------
copy, a photographic copy, or other reproduction of it or a financing statement
is sufficient as a financing statement and may be filed as such. As a financing
statement, this Deed of Trust covers items of collateral which are or which may
become fixtures in addition to personal property. If this Deed of Trust or any
reproduction of it is filed as a financing statement: Trustor is the debtor;
Beneficiary is the secured party; an address of Beneficiary from which
information concerning the security interest may be obtained is Beneficiary's
address set forth at the beginning; and a mailing address of Trustor is
Trustor's address at the beginning.
2.6 Loan Agreement. This Deed of Trust is subject to a certain Xxxxxxx and
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Restated Loan Agreement ("Loan Agreement") executed by Trustor and Beneficiary
on even date. The Loan Agreement sets forth, among other things, the terms and
conditions under which Beneficiary is obligated to advance up to the full amount
of the Note and may make non-obligatory advances, all of which are secured by
this Deed of Trust. The Loan Agreement is hereby incorporated herein and made a
part hereof as though fully rewritten herein including the defined terms. No
defenses, offsets, or counterclaims available to Trustor arising out of the Loan
Agreement or Note shall be valid or effective against any transferee of this
Deed of Trust or the Note or its successors or assigns after this Deed of Trust
and the Note are collaterally assigned by Beneficiary to one or more transferees
who are providing financing to Beneficiary, and Trustor hereby expressly waives
all such defenses, offsets, or counterclaims to that extent. A copy of the Loan
Agreement is maintained at the offices of Beneficiary and may be inspected by
interested persons.
2.7 Interpretation. This Deed of Trust form is and shall be construed
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accordingly to reflect the fact that the credit giving rise to the Secured
Obligations would not have been extended by Beneficiary but for the security
provided by this Deed of Trust. Where the sense requires it, the singular may
be read as the plural or the reverse and any gender may be read as any other
gender.
ARTICLE 3: COVENANTS
3.1 Obligations. Trustor shall pay and perform all of Trustor's Secured
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Obligations when due and required.
3.2 Impositions.
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3.2.1 Except as otherwise set forth in the Master Lease, Trustor shall pay,
not later than one day prior to the date such Impositions become delinquent, all
real estate taxes, personal property taxes, general and special assessments,
water and sewer rents and charges, license fees, all charges which may be
imposed for the use of vaults, chutes, areas and other space beyond the lot line
and abutting the public sidewalks in front of or adjoining the Property, and all
other governmental levies and charges (collectively, the "Impositions") of every
kind and nature whatsoever, general and special, ordinary and extraordinary,
foreseen and unforeseen, which shall be assessed, levied, confirmed, imposed or
become a lien upon or against the Property or any part thereof, or which shall
become due and payable with respect thereto, unless contested in good faith as
permitted by the Loan Agreement. Trustor shall deliver to Beneficiary [i] not
more than five days after the delinquency date of each Imposition, a copy of the
invoice for such Imposition and the check delivered for payment thereof; and
[ii] not more than 30 days after the delinquency date of each Imposition, a copy
of the official receipt evidencing such payment or other proof of payment
satisfactory to Beneficiary. If any law of any government having jurisdiction
over the Property is enacted after this date [i] deducting from the value of
land for the purpose of taxation any lien thereon; [ii] imposing upon
Beneficiary the payment of the whole or any part of the Imposition which is
required to be paid by Trustor hereunder; or [iii] changing in any way laws
relating to the taxation of deeds of trust or debts secured by deeds of trust or
mortgage interests in the Property, or the manner of collection of taxes, in any
such case, so as to affect this Deed of Trust or the Secured Obligations, then
Trustor, upon 30 days' notice from Beneficiary, shall pay such Imposition or
reimburse Beneficiary therefor.
3.2.2 Trustor shall pay, or reimburse Beneficiary for, all sales taxes,
intangible taxes, mortgage taxes, gross receipts taxes, documentary stamp taxes,
mortgage assignment taxes, transfer taxes and similar taxes imposed on
Beneficiary relating to the Secured Obligations, Note, this Deed of Trust, or
the indebtedness secured by this Deed of Trust. At the direction of
Beneficiary, Trustor shall pay or reimburse Beneficiary for such taxes 30 days
after Beneficiary gives notice to Trustor.
3.3 Insurance.
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3.3.1 Except as otherwise set forth in the Master Lease, Trustor shall
maintain in full force and effect an extended coverage "Special Form" policy
("Policy") of insurance in a nonreporting form insuring against physical loss or
damage to the Improvements and personal property, including but not limited to
risk of loss from fire and other hazards, collapse, transit coverage, vandalism,
malicious mischief, theft, earthquake (if Property is in earthquake zone 1 or 2)
and sinkholes (if usually recommended in the area of the Property). The Policy
shall be in the amount of the full replacement value of the Improvements and
personal property and shall contain a deductible amount acceptable to
Beneficiary. Beneficiary shall be named as mortgagee and loss payee under a
standard non-contributing lender's loss payable clause.
3.3.2 The Policy shall include the following coverage:
[i] A stipulated value endorsement or agreed amount endorsement and
endorsements for contingent liability for operations of building laws,
demolition costs, and increased cost of construction.
[ii] If applicable, loss or damage by explosion of steam boilers, pressure
vessels, or similar apparatus, now or hereafter installed on the Property, in
commercially reasonable amounts acceptable to Beneficiary.
[iii] Consequential loss of rents and income coverage insuring against all
"Special Form" risk of physical loss or damage with limits and deductible
amounts acceptable to Beneficiary covering risk of loss during the first nine
months of reconstruction, and containing an endorsement for extended period of
indemnity of at least six months, and shall be written with a stipulated amount
coverage if available at a reasonable premium.
[iv] Loss or damage caused by the breakage of plate glass in commercially
reasonable amounts acceptable to Beneficiary.
[v] Effective when the Facility commences operations, loss or damage
commonly covered by blanket crime insurance including employee dishonesty, loss
of money orders or paper currency, depositor's forgery, and loss of property of
patients accepted by Trustor for safekeeping, in commercially reasonable amounts
acceptable to Beneficiary.
3.3.3 If the Property is located, in whole or in part, in a federally
designated 100-year flood plain area, Trustor shall maintain in full force and
effect flood insurance for the Improvements in an amount equal to the lesser of
[i] the full replacement value of the Improvements; or [ii] the maximum amount
of insurance available for the Improvements under all federal and private flood
insurance programs.
3.3.4 In connection with any construction on the Property, Trustor shall
maintain in full force and effect a builder's completed value risk policy
("Builder's Risk Policy") of insurance in a nonreporting form insuring against
all "Special Form" risk of physical loss or damage to the Improvements,
including but not limited to, risk of loss from fire and other hazards,
collapse, transit coverage, vandalism, malicious mischief, theft, earthquake (if
property is in earthquake zone 1 or 2) and sinkholes (if usually recommended in
the area of the Property). The Builder's Risk Policy shall include endorsements
providing coverage for building materials and supplies and temporary premises.
The Builder's Risk Policy shall be in the amount of the full replacement value
of the Improvements and shall contain a deductible amount acceptable to
Beneficiary. Beneficiary shall be named under a standard noncontributing
lender's loss payee clause. The Builder's Risk Policy shall include an
endorsement permitting initial occupancy.
3.3.5 Trustor shall maintain in full force and effect liability insurance
against the following:
[i] Claims for personal injury or property damage commonly covered by
commercial general liability insurance with endorsements for incidental
malpractice, blanket contractual, personal injury, owner's protective liability,
voluntary medical payments, products and completed operations, broad form
property damage, and extended bodily injury, with a combined single limit of not
less than $5,000,000.00 per occurrence for bodily injury, death and property
damage.
[ii] Claims for personal injury and property damage commonly covered by
commercial automobile liability insurance, covering all owned and non-owned
automobiles, with a combined single limit of not less than $5,000,000.00 per
occurrence for bodily injury, death and property damage.
[iii] Claims commonly covered by worker's compensation insurance for all
persons employed by Trustor on the Property. Such worker's compensation
insurance shall be in accordance with the requirements of all applicable local,
state, and federal law.
3.3.6 Trustor shall comply with the following insurance requirements
throughout the term of the loan:
[i] The form and substance of all policies shall be subject to the approval
of Beneficiary, which approval will not be unreasonably withheld.
[ii] The carriers of all policies shall have a Best's Rating of "A" or
better and a Best's Financial Category of IX or larger and shall be authorized
to do insurance business in the State.
[iii] Trustor shall be the "named insured" and Beneficiary shall be the
"additional insured" on each liability policy.
[iv] Trustor shall deliver to Beneficiary policies or other satisfactory
evidence showing the required coverages and endorsements. The policies of
insurance shall provide that no cancellation, reduction in amount or material
change in coverage shall be effective until at least 30 days after written
notice to Beneficiary.
[v] Trustor shall notify Beneficiary of any loss or damage to the Property
which is or may be covered by any insurance immediately after the occurrence
thereof. Trustor shall promptly adjust and compromise any insurance claims and,
if Trustor fails (in Beneficiary's good faith judgment) to promptly adjust
and compromise such claims, Beneficiary shall have the right, but not the
obligation, on behalf of Trustor, to adjust and compromise any claims under such
insurance, collect and receive the proceeds thereof and execute and deliver all
proofs of loss, receipts, vouchers and releases in connection with such claims.
Except as provided herein, Trustor shall not adjust or compromise any claims
under such insurance, or collect and receive the proceeds thereof, without the
written consent of Beneficiary. Beneficiary is hereby irrevocably appointed
attorney-in-fact for Trustor for such purposes, and Trustor shall, upon request
of Beneficiary, execute any proofs of loss, vouchers and releases in connection
with such claims.
[vi] Trustor may carry the insurance required hereunder under a blanket
policy of insurance, provided that the coverage afforded Beneficiary will not be
reduced or diminished or otherwise be different from that which would exist
under a separate policy meeting all of the requirements of this Deed of Trust.
[vii] Trustor shall not take out separate insurance concurrent in form or
contributing in the event of loss with that required in this section or increase
the amounts of any then existing policy by securing an additional policy or
policies unless all parties having an insurable interest in the subject matter
or the insurance, including Beneficiary, are included therein as an additional
insured and the losses payable under said insurance in the same manner as losses
are payable under this Agreement. Trustor shall immediately notify Beneficiary
of the taking out of any such separate insurance or the increasing of any of the
amounts of the then existing insurance by securing an additional policy or
additional policies.
[viii] Trustor acknowledges that Beneficiary may collaterally assign the
loan as security for any loan or loans to Beneficiary. Trustor shall, within
seven days after a request from Beneficiary, deliver to Beneficiary certificates
of insurance naming any such lender as an additional insured.
[ix] Trustor hereby assigns to Beneficiary all unearned premiums as further
security for the Secured Obligations and the transfer of title to the Property
by any means, including, without limitation, sale pursuant to any remedy
permitted by this Deed of Trust, shall constitute an assignment to Beneficiary
or other purchaser of all right, title, and interest of Trustor in and to
proceeds from such policy attributable to loss or damage occurring prior to the
transfer of title to the Property.
[x] At least 30 days prior to the expiration of each insurance policy,
Trustor shall deliver to Beneficiary a certificate showing renewal of such
policy and payment of the annual premium therefor and a current Certificate of
Compliance (in the form delivered at the time of Closing) completed and signed
by Trustor's insurance agent.
3.4 Funds for Impositions and Insurance. Except as otherwise set forth in
-------------------------------------
the Master Lease:
3.4.1 After an Event of Default, Trustor shall pay to Beneficiary a sum
(called "Funds") equal to one-twelfth of the yearly payments for Impositions and
insurance on the Property, as may be reasonably estimated by Beneficiary,
together with the monthly payments to be made under the Note. The Funds paid to
Beneficiary shall be used to make the specified payments and as additional
security for the Secured Obligations.
3.4.2 The Funds shall be deposited by Beneficiary with an institution the
deposits or accounts of which are insured or guaranteed by federal or state
agency, and shall not be deemed to be funds held in trust, and may be held with
the general funds of such depository. The funds shall be placed in an
interest-bearing account. All interest thereon shall be considered "Funds".
3.4.3 If the amount of the Funds held by Beneficiary together with future
monthly installments of Funds payable prior to the due dates of the Impositions
and the insurance on the Property shall not be sufficient to make payments as
they fall due, Trustor shall pay to Beneficiary the amount necessary to pay the
deficiency within 10 days after the date from which Beneficiary gives notice
requesting payment thereof.
3.4.4 Upon performance in full of the Secured Obligations, Beneficiary shall
promptly refund to Trustor any Funds held by Beneficiary.
3.4.5 If the Property is sold or acquired by Beneficiary, Beneficiary shall
apply any Funds then held by Beneficiary as a credit against the Secured
Obligations.
3.4.6 Beneficiary has the right to make payments for which it is holding
Funds, and at its election, to make other payments required to be made by
Trustor.
3.5 Application of Payments. All payments and proceeds of sale received by
------------------------
Beneficiary under this Deed of Trust shall be credited as set forth in the Note.
3.6 Charges and Liens. Except to the extent Trustor makes payments therefor
-----------------
under 3.4 and except for items being contested in good faith in compliance with
the requirements of the Master Lease, Trustor shall promptly pay before
delinquent taxes, assessments, levies, and any other charges which have or may
become a lien on any of the Property.
3.7 Preservation of Property. Trustor shall keep the Property in good
--------------------------
repair, and shall neither commit waste nor permit impairment or deterioration of
the Property.
3.8 Protection of Security. If Trustor fails to perform Trustor's
------------------------
agreements under this Deed of Trust or if any action or proceeding is commenced
-
which materially affects Beneficiary's interest in the Property, including,
without limitation, any proceeding concerning eminent domain, insolvency or
enforcement of any ordinance, legislation, or regulation, then Beneficiary is
authorized to make such appearances, disburse such sums, and take such action
that Beneficiary reasonably determines is necessary or desirable to protect the
Property and Beneficiary's interest therein, including, without limitation, the
disbursement of sums for payment of reasonable attorneys' fees, taxes,
assessments, insurance premiums, costs incurred for the protection of the
Property, and the entry upon the Property to make repairs.
3.9 Inspection. After reasonable notice to Trustor, Beneficiary or any
----------
person authorized by Beneficiary may enter upon and inspect any of the Real
Property at all reasonable times.
3.10 Eminent Domain. If the Real Property or any part thereof becomes the
---------------
subject of any proceeding ("Condemnation") for the taking of property or any
conveyance in lieu thereof, the following provisions shall apply.
3.10.1 Notice of Condemnation. Trustor shall give written notice of the
------------------------
Condemnation to Beneficiary within one business day after Trustor is notified of
the Condemnation. Within 15 days after Trustor is notified of the Condemnation,
Trustor shall provide the following information to Beneficiary: [i] the date of
the Condemnation; [ii] the nature of the Condemnation; [iii] a description of
the portion of the Real Property affected by the Condemnation; [iv] a
preliminary estimate of the cost to repair, rebuild, restore or replace the Real
Property; [v] a preliminary estimate of the schedule to complete the repair,
rebuilding, restoration or replacement of the Real Property; and [vi] a
description of the anticipated settlement amount and the expected settlement
date. Within five days after request from Beneficiary, Trustor will provide
Beneficiary with copies of all correspondence relating to the Condemnation and
any other information reasonably requested by Beneficiary.
3.10.2 Proceeds. Trustor shall pay or cause to be paid to Beneficiary so
--------
much of the award or compensation resulting therefrom ("Proceeds") as is
attributable to the Real Property, up to the outstanding amount of Trustor's
Obligations, and Trustor hereby directs such payments to be made directly to
Beneficiary and hereby assigns to Beneficiary Trustor's rights thereto.
Beneficiary may apply all or any part of the Proceeds, after deducting all costs
and expenses (regardless of the nature thereof and whether incurred with or
without suit, including, without limitation, reasonable attorneys' fees)
incurred by Beneficiary in connection with the Proceeds, either to the payment
of Trustor's Obligations or to the restoration of the Real Property upon such
conditions as Beneficiary may require. Notwithstanding the foregoing, if the
amount of Proceeds does not exceed $250,000.00 and there is no existing uncured
Event of Default hereunder, Trustor shall have the right to require that the
Proceeds be applied to the restoration of the Real Property which shall be upon
such conditions as Beneficiary may require.
3.10.3 Intervention by Beneficiary. Beneficiary is hereby authorized, but
-----------------------------
not required, to intervene at any time in any such proceedings, settlement
thereof, or conveyance in lieu thereof, to prosecute or to settle any such
proceedings or conveyance; and to collect the Proceeds resulting therefrom; all
on behalf of and in the name of Trustor and Beneficiary and according to
Beneficiary's sole discretion.
3.10.4 Defense by Trustor. If Beneficiary does not do so under 3.10.3,
--------------------
Trustor shall defend, protect, and uphold the value of the Real Property and
Beneficiary's rights to receive any portion of the Proceeds attributable to the
value of the Real Property; however, Trustor shall consult with Beneficiary
throughout such proceedings and prior settlement thereof or any conveyance in
lieu thereof and abide by Beneficiary's directions concerning such proceedings,
settlement, or conveyance.
3.10.5 Trustor's Obligations. Trustor's obligation to make payment on
----------------------
Trustor's Obligations shall not xxxxx pending any repair or restoration of the
Real Property due to the Condemnation. In addition, Trustor shall reimburse
Beneficiary, within 10 days after demand, for all costs, expenses, and fees
(including architect and engineer fees) incurred by Beneficiary in connection
with any repair or restoration of the Real Property due to the Condemnation.
3.10.6 Condemnation Proceeds Not Trust Funds. Notwithstanding anything in
---------------------------------------
this Deed of Trust or at law or equity to the contrary, none of the Proceeds
paid to Beneficiary shall be deemed trust funds, and Beneficiary shall be
entitled to dispose of such proceeds as provided in this 3.10. Trustor
expressly assumes all risk of loss, including a decrease in the use, enjoyment,
or value, of the Real Property from any Condemnation.
3.11 Other Mortgages and Liens.
----------------------------
3.11.1 Prior Mortgages. If any of the Property is subject or becomes
----------------
subject to a lien prior to the lien of this Deed of Trust, the following
provisions shall apply:
[i] Trustor shall pay when due all amounts required to be paid under any
obligation secured by a prior lien and shall otherwise perform all of the
obligations of Trustor hereunder.
[ii] Trustor shall not request, accept, or permit payment to Trustor of any
loan amount or disbursement the repayment of which is secured by any prior
mortgage without prior express written consent from Beneficiary.
[iii] Trustor shall be in compliance with 3.3 and 3.4 if Trustor pays the
Impositions and maintains the insurance coverage required under any prior
mortgage to which Beneficiary has expressly consented.
[iv] A default in any prior mortgage shall be a default under this Deed of
Trust.
[v] Beneficiary may cure any defaults of Trustor under any prior mortgage or
pay, in whole or in part, any prior lien, and, to the extent of such
payments, Beneficiary shall be subrogated to the rights and lien of the prior
lien; however, any prior lien rights to which Beneficiary may become subrogated
shall not merge with the lien of this Deed of Trust.
3.11.2 No Merger of Liens. Beneficiary may at any time during the term of
--------------------
this Deed of Trust hold more than one lien against the Property or any part
thereof. All such liens held by Beneficiary shall remain separate and distinct
from each other and each shall retain its individual priority and shall not
merge with any other lien held by Beneficiary, unless and until Beneficiary
executes and records an instrument expressly merging any such liens. If a
default in this Deed of Trust occurs, Beneficiary may foreclose upon any lien
against the Property held by it in such order and at such times as Beneficiary
may elect. If Beneficiary acquires title to the Property other than through
foreclosure of this Deed of Trust, the lien of this Deed of Trust shall continue
and shall not merge with Beneficiary's title to the Property or interest in the
Master Lease.
3.11.3 Subordination. (a) The lien of this Deed of Trust will be
-------------
subordinate to a mortgage on the Beneficiary's fee simple interest in the Real
Property only to the extent that [i] the mortgagee of such fee mortgage is an
Institutional Lender, as defined below, or the mortgage is a Purchase Money
Mortgage, as defined below, [ii] the fee mortgagee has delivered a
non-disturbance agreement in favor of Trustor and Beneficiary in a form
acceptable to them, and [iii] such fee mortgage shall be subject to the rights
of Lender with respect to the decision to restore the Facility after a casualty
and the use of insurance proceeds and condemnation awards as set forth in
3.10.2 and 3.13.2. For purposes hereof, "Institutional Lender" means a
commercial bank, savings bank, insurance company, real estate investment trust,
pension fund or any other commercial lending institution with assets of not less
than $100,000,000, organized under the laws of the United States or any state
thereof and "Purchase Money Mortgage" means any mortgage given as security in
connection with the purchase of the Property or any membership interest in
Landlord, or both.
(b) This Deed of Trust is executed upon condition that (unless this
condition is released or waived by Landlord or its successors in interest by an
instrument in writing) no purchaser or transferee of the Master Lease at any
foreclosure sale, or other transfer in lieu of foreclosure, shall, as a result
of such sale or transfer, acquire any right, title, or interest in or to the
leasehold estate in which a lien is hereby created, unless Landlord shall be
given notice of such sale or transfer of the Master Lease, and the effective
date of such sale or transfer of the Master Lease, the instrument used to effect
such sale or transfer shall be promptly recorded, a duplicate original or
certified copy thereof together with the recording data shall be served upon
Landlord within 10 days after the return thereof from the office of recording
and such instrument otherwise complies with 3.11.3(d).
(c) This Deed of Trust and all rights hereunder (except with respect to
payment and use of insurance proceeds and condemnation awards to restore the
improvements after casualty or condemnation) are and shall be subject and
subordinate to the lien of any fee mortgage held by an Institutional Lender or
any Purchase Money Mortgage to which the Master Lease is or may be subordinate
on the express condition, however, that the holder of the fee mortgage and
Landlord shall have complied with all requirements of the Master Lease with
respect to such subordination. The holder hereof shall, within 30 days after
receipt of a request therefor, at any time, execute, acknowledge, and deliver to
Landlord, at the expense of Trustor but without expense to Landlord, any
instrument that may be necessary or proper to confirm the subordination of this
instrument and certain rights hereunder (subject to the limitations and
conditions set forth above) to the lien of any such fee mortgage and any
renewal, modification, consolidation, replacement, or extension thereof, or of
any future mortgage, and, if the holder hereof shall fail at any time to
execute, acknowledge, and deliver any such subordination instrument within 30
days after receipt of the request therefor, Landlord, in addition to any other
remedies available to it in consequence thereof, may execute, acknowledge, and
deliver the same as the attorney-in-fact of the holder thereof and in his name,
place, and xxxxx, and the holder hereof appoints Landlord such attorney-in-fact
for that purpose subject to the limitations and conditions set forth above and
in the Master Lease. Such appointment is irrevocable as coupled with an
interest.
(d) This Deed of Trust is executed and delivered upon the condition that
no party shall acquire any interest in the Master Lease in which a lien is
hereby granted unless: [i] the provisions of 3.11.3(b) have been complied
with; [ii] the instrument transferring such interest obligates such party to
perform and observe the covenants and conditions in the Master Lease required to
be performed by Trustor; [iii] such instrument is executed by such party in the
manner required to entitle a deed to recordation; and [iv] before such party
shall take possession of the leased property an executed copy of such transfer
and assumption shall be delivered to Landlord. If this Deed of Trust shall be
held by an Institutional Lender (as defined in the Master Lease) and such
Institutional Lender shall acquire Trustor's interest in the Master Lease as a
result of a sale under this Deed of Trust pursuant to a judgment of foreclosure
and sale, or through any transfer in lieu of foreclosure, or through settlement
of or arising out of any pending or contemplated foreclosure action, such
Institutional Lender shall have the privilege of transferring its interest in
the Master Lease to a nominee or a wholly owned subsidiary corporation without
the prior consent of Landlord, provided, however, such transferee shall comply
with [i], [ii], [iii] and [iv]above, and such Institutional Lender shall be
relieved of any further liability under the Master Lease from and after such
transfer. Such Institutional Lender or the nominee or wholly owned subsidiary
corporation to which it may have transferred the Master Lease, or any other
Institutional Lender which may at any time acquire the Master Lease, shall be
relieved of any further liability under the Master Lease from and after a
transfer by it of the Master Lease.
3.11.4 No Consent. Nothing in this 3.11 shall be construed to mean that
-----------
Beneficiary consents to any lien prior to the lien of this Deed of Trust.
Beneficiary consents only to the Permitted Exceptions.
3.12 Advances and Default Rate. Any payment made by Beneficiary that
----------------------------
Beneficiary has the right to make under any term of this Deed of Trust (except
for payments from Funds for which Funds have been deposited by Trustor) and
expenses incurred and payments made by Beneficiary in taking action authorized
by this Deed of Trust shall be indebtedness of Trustor secured by this Deed of
Trust, shall be payable upon demand, shall bear interest at the Default Rate (as
defined in the Note) from the date of disbursement, and shall be deemed advances
under subsections 2.1.3, 2.1.4 and 2.1.5.
3.13 Damage, Destruction and Rebuilding. The following provisions shall
-------------------------------------
apply except as otherwise set forth in the Master Lease:
3.13.1 Notice of Casualty. If the Real Property shall be destroyed, in
--------------------
whole or in part, or damaged by fire, flood, windstorm or other casualty the
cost of repair of which exceeds $100,000.00 (a "Casualty"), Trustor shall give
written notice thereof to Beneficiary within three business days after the
occurrence of the Casualty. Within 15 days after the occurrence of the Casualty
or as soon thereafter as such information is reasonably available, Trustor shall
provide the following information to Beneficiary: [i] the date of the Casualty;
[ii] the nature of the Casualty; [iii] a description of the damage or
destruction caused by the Casualty including the type of property damaged and
the area of the Improvements damaged; [iv] a preliminary estimate of the cost to
repair, rebuild, restore or replace the property or the Improvements; [v] a
preliminary estimate of the schedule to complete the repair, rebuilding,
restoration or replacement of the property or the Improvements; [vi] a
description of the anticipated property insurance claim including the name of
the insurer, the insurance coverage limits, the deductible amount, the expected
settlement amount, and the expected settlement date; and [vii] a description of
the business interruption claim including the name of the insurer, the insurance
coverage limits, the deductible amount, the expected settlement amount, and the
expected settlement date. Within five business days after request from
Beneficiary, Trustor will provide Beneficiary with copies of all correspondence
to the insurer and any other information reasonably requested by Beneficiary.
3.13.2 Application of Insurance Proceeds. Beneficiary may elect either to
-----------------------------------
[i] require the Trustor to rebuild or repair the property or the Improvements
according to plans and specifications approved in writing by Beneficiary and
upon such conditions as Beneficiary may reasonably require; or [ii] apply the
net proceeds of insurance against the Trustor's Obligations to be credited as
set forth in the Note. Notwithstanding the foregoing, if the amount of
insurance proceeds does not exceed $250,000.00 and there is no existing uncured
Event of Default hereunder, Trustor shall have the right to require that the
proceeds be applied to the restoration of the property or the Improvements which
shall be upon such conditions as Beneficiary may require. All net proceeds of
insurance policies resulting from claims for casualty to the Real Property,
Improvements or any element thereof shall be paid to and held by Beneficiary
subject to the provisions of this Deed of Trust.
3.13.3 Repair. In the event Beneficiary elects to have the property or the
------
Improvements rebuilt or repaired [i] the Trustor shall promptly repair or
rebuild the property or the Improvements in a good and workmanlike manner, in
compliance with all laws and regulations, and in accordance with plans and
specifications, construction budget and construction schedule approved by
Beneficiary; and [ii] Beneficiary shall apply so much of the net proceeds of
such insurance as may be necessary to pay or reimburse the costs of such repair
or rebuilding, either on completion thereof or as the work progresses.
3.13.4 Insufficient Proceeds. If the proceeds of any insurance settlement
----------------------
are not sufficient to pay the costs of such repair, rebuilding or restoration in
full, Trustor shall deposit with Beneficiary at Beneficiary's option, and within
10 days of Beneficiary's request, an amount sufficient in Beneficiary's judgment
to complete such repair, rebuilding or restoration. Trustor shall not, by
reason of the deposit or payment, be entitled to any reimbursement from
Beneficiary or diminution in or postponement of the payments to Beneficiary on
the Note.
3.13.5 No Abatement; Expenses. Trustor's obligation to make payments on
------------------------
Trustor's Obligations shall not xxxxx pending the repairs or rebuilding of the
property or the Improvements. Trustor shall pay the costs, expenses and fees of
any architect or engineer employed by Beneficiary to review any plans and
specifications and to supervise and approve the repairs or rebuilding of the
property or the Improvements.
3.13.6 Not Trust Funds. Notwithstanding anything herein or at law or equity
---------------
to the contrary, none of the insurance proceeds paid to Beneficiary as herein
provided shall be deemed trust funds, and Beneficiary shall be entitled to
dispose of such proceeds as provided in this 3.13. Trustor expressly assumes
all risk of loss, including a decrease in the use, enjoyment or value, of the
Project from any casualty whatsoever, whether or not insurable or insured
against.
ARTICLE 4: TRANSFER OF THE PROPERTY; ASSUMPTION
4.1 Trustor's Successors. This Deed of Trust shall be binding upon
---------------------
Trustor's successors and assigns and shall be binding upon and inure to the
benefit of Beneficiary and its successors and assigns; however, Trustor may
neither assign Trustor's rights under this Deed of Trust nor delegate Trustor's
duties under this Deed of Trust without the express written consent of
Beneficiary.
4.2 No Transfer. Trustor shall not sell, lease, xxxxx x xxxx on or security
-----------
interest in, or otherwise transfer or encumber all or any part of the Property
or any legal or equitable interests therein without the prior written consent of
Beneficiary, except for transfers made in connection with Permitted Liens (as
defined in the Loan Agreement) or transfers made in accordance with the terms of
the Master Lease, if any.
4.3 No Release of Trustor. No sale, transfer, or encumbrance of the
------------------------
Property or of Trustor's rights under this Deed of Trust and the Note and no
delegation of Trustor's obligations under this Deed of Trust or any other
Trustor's Obligations shall release Trustor from liability for any Trustor's
Obligations unless: [i] Beneficiary and such transferee or delegee agree in
writing that such transferee or delegee is satisfactory to Beneficiary and that
such transferee or delegee shall perform Trustor's Obligations and pay such
interest thereon as Beneficiary may request, and [ii] Beneficiary delivers to
Trustor a written release.
ARTICLE 5: LEASES AND RENTS
5.1 Assignment of Rents. Trustor hereby authorizes Beneficiary or
---------------------
Beneficiary's agents to collect the Rents and hereby directs each tenant of the
-
Property to pay the Rents to Beneficiary or Beneficiary's agents; provided,
however, that prior to the occurrence and continuance of an Event of Default
under this Deed of Trust, Trustor shall collect and receive all Rents as trustee
for the benefit of Beneficiary and Trustor, shall apply the Rents so collected
to the amount then due and payable under this Deed of Trust with a balance, so
long as no Event of Default has occurred and is continuing, to the account of
Trustor, it being intended by Trustor and Beneficiary that this assignment of
Rents constitutes an absolute assignment and not an assignment for additional
security only. Upon the occurrence of an Event of Default and during the
continuance and without the necessity of Beneficiary entering upon and taking
and maintaining full control of the Property in person, by agent or by a
receiver, Beneficiary shall immediately be entitled to possession of all Rents
as the same become due and payable, including but not limited to, Rents then due
and unpaid, and all such Rents shall immediately upon delivery be held by
Trustor as trustee for the benefit of Beneficiary only. Trustor agrees that
after an Event of Default has occurred, each tenant of the Property shall pay
such Rents to Beneficiary or Beneficiary's agent on Beneficiary's written demand
to each tenant therefor, delivered to each tenant personally or by mail, without
any liability on the part of said tenant to inquire further as to the existence
of a default by Trustor. Trustor hereby covenants that Trustor has not executed
any prior assignment of Rents, that Trustor has not performed, and will not
perform any acts which would prevent Beneficiary from exercising its rights
under this section. Trustor covenants that Trustor will not hereafter collect
or accept payment of any Rents more than one month prior to the due dates of
such Rents nor (excepting payment of arrears) in an amount referable to a period
exceeding one month. Trustor further covenants that Trustor will execute and
deliver to Beneficiary such further assignments of Rents as Beneficiary may from
time to time request.
5.2 Compliance with Leases. Trustor shall comply with all Leases and shall
-----------------------
notify Beneficiary if Trustor is unable to do so or determines that it will be
unable to do so for any significant terms. Beneficiary may do whatever it
determines is necessary to insure that all Leases continue in effect whenever
Beneficiary determines that Trustor is or may be unable to perform any
significant term of the Leases.
5.3 Modification of Leases. Trustor shall not materially amend, modify or
------------------------
cancel the Master Lease nor significantly change the terms of any other Lease
and shall not materially reduce any rent (other than rent payable by Trustor
under the Master Lease) without the prior written consent of Beneficiary.
Without limiting the foregoing, if a petition in bankruptcy is filed by or
against Landlord and the Master Lease is rejected by Landlord pursuant to such
bankruptcy proceeding, Trustor shall have no right to treat the Master Lease as
terminated pursuant to such rejection without the prior written consent of
Xxxxxx.
5.4 No Delegation of Trustor's Duties and Indemnity. Trustor does not
-----------------------------------------------------
hereby delegate to Beneficiary Trustor's duties under the Leases and Beneficiary
shall not be obligated to discharge such duties. Trustor shall indemnify
Beneficiary and hold it harmless from all claims, regardless of merit, in any
way arising out of the Leases and the assignment to Beneficiary of the Leases
and Rents and any expenses related to such claims, including, without
limitation, reasonable attorneys' fees. Trustor shall reimburse Beneficiary for
any claims paid or reasonable expenses incurred by Beneficiary which fall within
the preceding indemnity immediately upon demand.
5.5 Subordination of Leases. All Leases and the rights of tenants
-------------------------
thereunder shall be subordinate to the lien of this Deed of Trust and to all
-
terms, conditions and provisions hereof, and to any renewal, consolidation,
extension, modification or replacement hereof, and every Lease shall provide for
such subordination therein.
5.6 Attornment. The tenant of any Lease shall attorn to anyone, including
----------
Beneficiary, who acquires the lessor's interest in the Lease and the Property
("Purchaser"), whether by foreclosure sale or otherwise. The tenant's
attornment shall be effective immediately upon the Purchaser's succession to the
lessor's interest and the Lease shall continue in effect between Purchaser as
lessor and the tenant without any further act of Purchaser, Beneficiary or the
tenant. Purchaser shall have no liability for any act, omission or obligation
of the previous lessor. Except as otherwise set forth in the Master Lease,
every Lease shall provide for such attornment therein.
5.7 Notice of Lease Default. If at any time Trustor receives notice of a
--------------------------
default, breach, termination or claim of eviction (actual or constructive) from
Landlord under the Master Lease or from any tenant under any other Lease,
Trustor shall deliver a copy of such notice to Lender within two business days
after Trustor's receipt of such notice; provided, however, this 5.7 shall not
apply at any time that Lender and Landlord are the same party.
ARTICLE 6: DEFAULT, ACCELERATION AND REMEDIES
6.1 Event of Default. The occurrence of any Event of Default under the Loan
----------------
Agreement shall constitute an Event of Default under this Deed of Trust.
6.2 Rights and Remedies Upon Default. Whenever any Event of Default occurs,
--------------------------------
Beneficiary may at Beneficiary's option, and by or through Trustee (where
appropriate), by Beneficiary itself or otherwise, take any one or more of the
following remedial steps concurrently or successively in addition to any other
remedies under the Loan Documents, at law or in equity, to the extent permitted
by applicable law.
6.2.1 The Secured Obligations shall be immediately due and payable, without
presentment of any kind, demand, notice of dishonor, protest, notice of default,
notice of intention to accelerate maturity, notice of acceleration of maturity
or other notice of any kind, all of which Trustor hereby waives.
6.2.2 Beneficiary may enter and take possession of the Real Property without
terminating this Deed of Trust, and complete construction of the Improvements
(or any part thereof) and perform the obligations of Trustor under the Loan
Documents.
6.2.3 To the extent permitted by law and in accordance with all applicable
law, Beneficiary may exercise its power of sale.
6.2.4 Beneficiary (or Trustee where appropriate) may foreclose this Deed of
Trust or accept delivery of a deed in lieu of foreclosure. In any foreclosure
or sale, Beneficiary shall be under no obligation either to marshal any assets
of the Trustor or to marshal any portions of the Property.
6.2.5 Beneficiary may sue Trustor directly to collect any monies then due
and may take any action at law or equity (including bringing an action for a
mandatory injunction, restraining order or specific performance) to enforce
performance of Trustor's Obligations.
6.2.6 For any security in which no interest arises under real estate law,
Beneficiary may exercise its rights as a secured party under Article 9. Trustor
agrees that a commercially reasonable manner of disposition of the Property
subject to security interests under Article 9 shall include, without limitation
and at the option of Beneficiary, the sale of the Property in whole or in part,
concurrently with the foreclosure sale of the Property in accordance with the
provisions of this Deed of Trust.
6.2.7 Beneficiary may terminate its obligation to disburse loan proceeds.
6.2.8 Beneficiary may, and is hereby authorized by Trustor, at any time or
from time to time, to the fullest extent permitted by law, without advance
notice to Trustor (any such notice being expressly waived by Trustor) to set-off
and apply any and all sums held by Beneficiary, any indebtedness of Beneficiary
to Trustor, any and all claims by Trustor against Beneficiary, against any
obligations of Trustor hereunder, and against claims by Beneficiary against
Trustor, whether or not such obligations or claims of Trustor are matured and
whether or not Beneficiary has exercised any other remedies hereunder.
6.2.9 In any action or proceeding to foreclose this Deed of Trust, or upon
actual or threatened waste to any part of the Property, Beneficiary may apply,
without notice to Trustor, for the appointment of a receiver ("Receiver") of the
business conducted by Trustor on the Real Property. Unless prohibited by law,
such appointment may be made either before or after sale, without notice,
without regard to the solvency or insolvency of Trustor at the time of
application for such Receiver and without regard to the then value of the
Property, and Beneficiary may be appointed as Receiver. The Receiver shall have
the power to collect the rents, issues and profits of the business conducted by
Trustor on the Real Property during the pendency of the foreclosure and, in case
of a sale and deficiency during the full statutory period of redemption, whether
there be redemption or not, as well as during any future times, if any, when
Trustor, except for the intervention of such Receiver, would be entitled to
collect such rents, issues and profits, and all other powers which may be
necessary or are usual in such cases for the protection, possession, control,
management and operation of the business conducted by Trustor on the Real
Property during the whole of said proceeding. All sums of money received by the
Receiver from such rents and income, after deducting therefrom the reasonable
charges and expenses paid or incurred in connection with the collection and
disbursement thereof, shall be applied to the payment of the Secured Obligations
or applied to remedy any default hereunder as Beneficiary may direct. Trustor,
if requested to do so, will consent to the appointment of any such Receiver as
aforesaid.
6.2.10 Beneficiary may obtain control over and collect all accounts,
contract rights, instruments, documents, or chattel paper of Trustor now owned
or existing or hereafter arising or acquired (the "Receivables") and apply the
proceeds of the collections to satisfaction of the Secured Obligations unless
prohibited by law. Trustor appoints Beneficiary or its designee as attorney for
Trustor with powers [i] to receive, to indorse, to sign and/or to deliver, in
Trustor's name or Beneficiary's name, any and all checks, drafts, and other
instruments for the payment of money relating to the Receivables, and to waive
demand, presentment, notice of dishonor, protest, and any other notice with
respect to any such instrument; [ii] to sign Trustor's name on any invoice or
bill of lading relating to any Receivable, drafts against account debtors,
assignments and verifications of Receivables, and notices to account debtors;
[iii] to send verifications of Receivables to any account debtor; and [iv] to do
all other acts and things necessary to carry out this Deed of Trust.
Beneficiary shall not be liable for any omissions, commis-sions, errors of
judgment, or mistakes in fact or law made in the exercise of any such powers.
At Beneficiary's option, Trustor shall [i] provide Beneficiary a full accounting
of all amounts received on account of Receivables with such frequency and in
such form as Beneficiary may require, either with or without applying all
collections on Receivables in payment of Trustor's Obligations secured hereby or
[ii] deliver to Beneficiary on the day of receipt all such collections in the
form received and duly indorsed by Trustor. At Beneficiary's request, Trustor
shall institute any action or enter into any settlement determined by
Beneficiary to be necessary to obtain recovery or redress from any account
debtor in default of Receivables. Beneficiary may give notice of its security
interest in the Receivables to any or all account debtors with instructions to
make all payments on Receivables directly to Beneficiary, thereby terminating
Trustor's authority to collect Receivables. After terminating Trustor's
authority to enforce or collect Receivables, Beneficiary shall have the right to
take possession of any or all Receivables and records thereof and is hereby
authorized to do so, and only Beneficiary shall have the right to collect and
enforce the Receivables. Prior to the occurrence of an Event of Default, at
Trustor's cost and expense, but on behalf of Beneficiary and for Beneficiary's
account, Trustor shall collect or otherwise enforce all amounts unpaid on
Receivables and hold all such collections in trust for Beneficiary, but Trustor
may commingle such collections with Trustor's own funds, until Trustor's
authority to do so has been terminated, which may be done only after an Event of
Default. Notwithstanding any other provision hereof, Beneficiary does not
assume any of Trustor's obligations under any Receivable, and Beneficiary shall
not be responsible in any way for the performance of any of the terms and
conditions thereof by Trustor.
6.2.11 Beneficiary may take any other action which Beneficiary is entitled
to take under any law, equity, or the Loan Documents.
6.2.12 Beneficiary may, at its option, but without any obligation so to do,
and without waiving or releasing Trustor from any of the agreements and
covenants in the Loan Documents, pay any sum or perform any act or take such
action as Beneficiary may deem necessary or desirable in order to protect the
lien of this Deed of Trust, the Property or otherwise in the sole discretion of
Beneficiary. Trustor hereby grants to Beneficiary, and agrees that Beneficiary
shall have, after the occurrence of one or more Events of Default, the absolute
and immediate right to enter in and upon the Real Property or any part thereof
to such extent and as often as Beneficiary, in its sole discretion, deems
necessary or desirable for such purpose. Beneficiary may pay and expend such
sums of money as it may, in its sole discretion, deem necessary for the purposes
stated herein. Trustor hereby agrees to pay to Beneficiary, on demand, all such
sums so paid or expended by Beneficiary, together with interest thereon from the
date of each such payment or expenditure at the default rate specified in the
Note.
If the Property is located in Illinois, the following provision shall apply:
COLLATERAL PROTECTION ACT NOTICE. UNLESS MORTGAGOR PROVIDES MORTGAGEE WITH
EVIDENCE OF THE INSURANCE REQUIRED BY THIS DEED OF TRUST OR ANY OTHER LOAN
DOCUMENT, MORTGAGEE MAY PURCHASE INSURANCE AT MORTGAGOR'S EXPENSE TO PROTECT
MORTGAGEE'S INTEREST IN THE REAL PROPERTY OR ANY OTHER COLLATERAL FOR THE
INDEBTEDNESS SECURED HEREBY. THIS INSURANCE MAY, BUT NEED NOT, PROTECT
XXXXXXXXX'S INTERESTS. THE COVERAGE MORTGAGEE PURCHASES MAY NOT PAY ANY CLAIM
THAT XXXXXXXXX MAKES OR ANY CLAIM THAT IS MADE AGAINST MORTGAGOR IN CONNECTION
WITH THE REAL PROPERTY OR ANY OTHER COLLATERAL FOR THE INDEBTEDNESS SECURED
HEREBY. XXXXXXXXX XXX LATER CANCEL ANY INSURANCE PURCHASED BY MORTGAGEE, BUT
ONLY AFTER PROVIDING MORTGAGEE WITH EVIDENCE THAT XXXXXXXXX HAS OBTAINED
INSURANCE AS REQUIRED UNDER THIS DEED OF TRUST OR ANY OTHER LOAN DOCUMENT. IF
MORTGAGEE PURCHASES INSURANCE FOR THE REAL PROPERTY OR ANY OTHER COLLATERAL FOR
THE INDEBTEDNESS SECURED HEREBY, MORTGAGOR SHALL BE RESPONSIBLE FOR THE COSTS OF
THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT MORTGAGEE MAY
LAWFULLY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE
EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF
THE INSURANCE MAY BE ADDED TO THE INDEBTEDNESS SECURED HEREBY. THE COSTS OF THE
INSURANCE MAY BE MORE THAN THE COST OF INSURANCE THAT MORTGAGOR MAY BE ABLE TO
OBTAIN ON ITS OWN.
If the Real Property to be encumbered is located in the State of Texas, the
following provision shall be applicable, in lieu of 6.2.3 and 6.3.5:
TRUSTEE IS HEREBY AUTHORIZED, UPON THE REQUEST OF BENEFICIARY, TO SELL THE
PROPERTY, OR ANY PART THEREOF, AT PUBLIC AUCTION TO THE HIGHEST BIDDER FOR CASH,
WITH OR WITHOUT HAVING TAKEN POSSESSION OF SAME. ANY SUCH SALE (INCLUDING
NOTICE HEREOF) SHALL COMPLY WITH THE APPLICABLE REQUIREMENTS, AT THE TIME OF THE
SALE, OF 51.002 OF THE TEXAS PROPERTY CODE OR, IF AND TO THE EXTENT SUCH
STATUTE IS NOT THEN IN FORCE, WITH THE APPLICABLE REQUIREMENTS, AT THE TIME OF
THE SALE, OF THE SUCCESSOR STATUTE OR STATUTES, IF ANY, GOVERNING SALES OF TEXAS
REAL PROPERTY UNDER POWERS OF SALE CONFERRED BY DEEDS OF TRUST. AT ANY JUDICIAL
OR OTHER SALE OF THE PROPERTY, THE PURCHASE PRICE PAID FOR THE PROPERTY BY
BENEFICIARY OR ANY OTHER PURCHASER SHALL BE CONCLUSIVE EVIDENCE OF THE FAIR
MARKET VALUE OF THE PROPERTY AND BENEFICIARY SHALL HAVE AN ABSOLUTE RIGHT TO
OBTAIN A DEFICIENCY JUDGMENT OF ALL AMOUNTS DUE UNDER THE SECURED OBLIGATIONS IN
EXCESS OF THE AMOUNT OF SUCH PURCHASE PRICE. TRUSTOR WAIVES THE RIGHT TO
CONTEST THE FAIR MARKET VALUE OF THE PROPERTY UNDER ANY APPLICABLE LAW, THROUGH
APPRAISALS OR OTHERWISE.
If the Real Property to be encumbered is located in the State of Washington, the
following provision shall be applicable, in lieu of 6.2.3 and 6.3.5:
"If an Event of Default occurs and the Beneficiary so requests, Trustee shall
sell the Property in accordance with the Deed of Trust Act of the State of
Washington (Chapter 61.24 RCW as existing now or amended hereafter) at public
auction to the highest bidder. Any person except Trustee may bid at the
Trustee's sale. Trustee shall apply the proceeds of the sale as follows: (i) to
the expenses of the sale, including Trustee's fees and attorney fees, (ii) to
all the indebtedness evidenced by the Note and all other indebtedness secured by
this Deed of Trust or any other loan document, (iii) the surplus, if any, shall
be distributed in accordance with the Deed of Trust Act. Trustee shall deliver
to the purchaser at the sale its deed, without warranty, which shall convey to
the purchaser the interest in the Property which Trustor had or had the power to
convey at the time of its execution of this Deed of Trust and such as it may
have acquired thereafter. Trustee's deed shall recite the facts showing that the
sale was conducted in compliance with all the requirements of the law and this
Deed of Trust, which recital shall be prima facie evidence of such compliance
and conclusive evidence thereof in favor of bona fide purchasers and
encumbrancers for value. The power of sale conferred by this Deed of Trust and
by the Deed of Trust Act of the State of Washington is not an exclusive remedy,
and when not exercised Beneficiary may foreclose this Deed of Trust as a
mortgage."
6.3 Sale of Property. The following provisions apply to any sale of the
------------------
Property pursuant to this Article 6 or pursuant to any judicial proceeding.
6.3.1 Receipt Sufficient Discharge for Purchaser. The receipt of the court
-------------------------------------------
officer or other person conducting any such sale for the purchase money paid at
any such sale shall be sufficient discharge thereof to any purchaser of the
Property, or any part thereof, sold as aforesaid. No such purchaser or his
representatives, grantees or assigns, after paying such purchase money and
receiving such receipt, shall be bound to see to the application of such
purchase money upon or for purpose of this Deed of Trust, or shall be answerable
in any matter whatsoever for any loss, misapplication or non-application of any
such purchase money or any part thereof, nor shall any such purchaser be bound
to inquire as to the necessity or expediency of any such sale.
6.3.2 Beneficiary's Purchase of Property. Beneficiary or any holder of the
-----------------------------------
Note may bid for and purchase the Property being sold, and upon compliance with
the terms of sale, Beneficiary or any holder of the Note may hold, retain,
possess and dispose of such Property in its own absolute right without further
accountability.
6.3.3 Application of Proceeds of Sale. Unless Beneficiary elects otherwise,
-------------------------------
the purchase money or proceeds of any such sale shall be applied: first, to all
charges, expenses and fees payable by Trustor under the Loan Documents,
including all attorney's fees, Receiver's fees and other costs and expenses
incurred by Beneficiary, with interest thereon at the default rate specified in
the Note; second, to all unpaid interest accrued on any of the Secured
Obligations; third, to the principal amount outstanding of the Secured
Obligations; and the balance, if any, to Trustor.
6.3.4 No Defense; Waiver. Failure to join or to provide notice to tenants
--------------------
under any Leases as defendants in any foreclosure action or suit shall not [i]
constitute a defense to such foreclosure; [ii] preclude Beneficiary from
obtaining a deficiency judgment or otherwise reduce or diminish the amount of
any such judgment in any manner whatsoever; or [iii] give rise to any claims by
Trustor, or any person claiming through or under Trustor, against Beneficiary.
Upon the request of Beneficiary and to the extent permitted by applicable law
and not prohibited by applicable law, Trustor shall execute and file with the
clerk of the court a legally sufficient waiver of any statutory waiting period
with respect to the execution of a judgment obtained by Beneficiary in
connection with any foreclosure proceedings. The obligations of Trustor to so
execute and file such waiver shall survive the termination of this Deed of
Trust.
6.3.5 Value of Property. At any judicial or other sale of the Property, the
-----------------
purchase price paid for the Property by Beneficiary or any other purchaser shall
be conclusive evidence of the fair market value of the Property and Beneficiary
shall have an absolute right to obtain a deficiency judgment of all amounts due
under the Secured Obligations in excess of the amount of such purchase price.
Trustor waives the right to contest the fair market value of the Property under
any applicable law, through appraisals or otherwise.
ARTICLE 7: MISCELLANEOUS
7.1 Advances by Beneficiary. At any time and from time to time during the
-------------------------
term of this Deed of Trust, Beneficiary may incur and/or pay and/or advance
costs or expenses: [i] incurred or advanced by Beneficiary which Beneficiary is
authorized or has the right (but not necessarily the obligation) to incur or may
incur under any term of any Loan Document or any law; [ii] of whatever nature
incurred or advanced by Beneficiary in exercising any right or remedy provided
by any term of any Loan Document or in taking any action which Beneficiary is
authorized to take by any term of any Loan Document; [iii] required to be paid
by Trustor by any term of any Loan Document, but which Trustor fails to pay upon
demand; or [iv] any and all costs and expenses from which Trustor is required to
hold Beneficiary harmless by any term of any Loan Document, but from which
Trustor fails to hold Beneficiary harmless. Any reasonable costs, expenses, or
advances incurred or paid by Beneficiary shall become part of the loan and, upon
demand, shall be paid to Beneficiary together with interest thereon at the
default rate specified in the Note from the date of disbursement by Beneficiary.
Payment of such costs, expenses, or advances shall be secured by this Deed of
Trust.
7.2 Power of Attorney. Except as otherwise set forth in the Master Lease,
-------------------
Trustor hereby irrevocably and unconditionally appoints Beneficiary, or
Beneficiary's authorized officer, agent, employee or designee, as Trustor's true
and lawful attorney-in-fact, to act for Trustor in Trustor's name, place, and
stead, to execute, deliver and file [i] all applications and any and all other
necessary documents and instruments in order to convey the Property in fee
simple to any purchaser upon foreclosure sale of the Property (except if the
real property is located in California, Mississippi, Arizona, Idaho, Maryland,
Oregon, Texas, Washington or Virginia, Trustor appoints only the respective
Trustee, his successors and assigns, to convey the Property in fee simple to any
purchaser upon a foreclosure sale of the Property), to effect the issuance,
transfer, reinstatement, renewal and/or extension of any and all certificates of
need, licenses, and other governmental authorizations issued to Trustor in
connection with Trustor's operation of the Property to permit any transferee to
operate the Property under such governmental authorizations; [ii] financing
statements and continuation statements with such filing offices as Beneficiary
deems necessary or desirable to further evidence and perfect Beneficiary's
security interest in the personal property collateral granted pursuant to this
Deed of Trust Instrument; and [iii] to do any and all other acts incidental to
any of the foregoing. Trustor irrevocably and unconditionally grants to
Beneficiary as its attorney-in-fact full power and authority to do and perform
every act necessary and proper to be done in the exercise of any of the
foregoing powers as fully as Trustor might or could do if personally present or
acting, with full power of substitution, hereby ratifying and confirming all
that said attorney shall lawfully do or cause to be done by virtue hereof. This
power of attorney is coupled with an interest and is irrevocable prior to the
full performance of Trustor's Obligations. Except in the case of an emergency,
Beneficiary shall give Trustor three business days prior written notice before
acting on behalf of Trustor pursuant to this power of attorney.
7.3 Attorney's Fees and Expenses. Trustor shall pay all reasonable costs
-------------------------------
and expenses incurred by Beneficiary in administering the Secured Obligations
and all collateral for the Secured Obligations, enforcing or preserving
Beneficiary's rights under the Note, Loan Agreement, this Deed of Trust, any
guaranty of Trustor's Obligations, and all other Loan Documents, and in all
matters of collection, whether or not an Event of Default has actually occurred
or has been declared and thereafter cured, including but not limited to, [i] the
fees, expenses, and costs of any litigation, receivership, administrative,
bankruptcy, insolvency or other similar proceeding; [ii] attorney and paralegal
fees and disbursements; [iii] the expenses of Beneficiary and its employees,
agents, attorneys, and witnesses in preparing for litigation, administrative,
bankruptcy, insolvency or other proceedings and for lodging, travel and
attendance at meetings, hearings, depositions, and trials in connection
therewith; [iv] court costs; and [v] consulting and witness fees and expenses
incurred by Beneficiary in connection with any such proceedings. All such
costs, charges and fees as incurred shall be deemed to be secured by this Deed
of Trust and collectible out of the proceeds of this Deed of Trust in any manner
permitted by law or by this Deed of Trust.
7.4 Construction of Rights and Remedies and Waiver of Notice and Consent.
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7.4.1 The provisions of this part 7.4 shall apply to all rights and
remedies provided by this Deed of Trust or any Loan Document or by law or
equity.
7.4.2 Waiver of Notices and Consent to Remedies. Unless otherwise expressly
------------------------------------------
provided herein or in the other Loan Documents, any right or remedy may be
pursued without notice to or further consent of Trustor, both of which Trustor
waives.
7.4.3 Each right or remedy under the Loan Documents is distinct from but
cumulative to each other right or remedy and may be exercised independently of,
concurrently with, or successively to any other rights and remedies.
7.4.4 No extension of time for or modification of amortization of the loan
shall release the liability or bar the availability of any right or remedy
against Trustor or any successor in interest, and Beneficiary shall not be
required to commence proceedings against Trustor or any successor or to extend
time for payment or otherwise to modify amortization of the loan secured by this
Deed of Trust by reason of any demand by Trustor or any successor.
7.4.5 Beneficiary has the right to proceed at its election against all
security or against any item or items of such security from time to time, and no
action against any item or items of security shall bar subsequent actions
against any item or items of security.
7.4.6 No forbearance in exercising any right or remedy shall operate as a
waiver thereof; no forbearance in exercising any right or remedy on any one or
more occasion shall operate as a waiver thereof on any further occasion; and no
single or partial exercise of any right or remedy shall preclude any other
exercise thereof or the exercise of any other right or remedy.
7.4.7 Failure by Beneficiary to insist upon the strict performance of any of
the covenants and agreements herein set forth or to exercise any rights or
remedies upon default by Trustor hereunder shall not be considered or taken as a
waiver or relinquishment for the future of the right to insist upon and to
enforce by mandamus or other appropriate legal or equitable remedy strict
compliance by Trustor with all of the covenants and conditions hereof, or of the
rights to exercise any such rights or remedies, if such default by Trustor is
continued or repeated, or of the right to recover possession of the Property by
reason thereof. To the extent permitted by law, any two or more of such rights
or remedies may be exercised at the same time.
7.4.8 If any covenant or agreement contained in any Loan Document is
breached by Trustor and thereafter waived by Beneficiary, such waiver shall be
limited to the particular breach so waived and shall not be deemed to waive any
other breach hereunder. No waiver shall be binding unless it is in writing and
signed by Beneficiary. No course of dealing between Beneficiary and Trustor,
nor any delay or omission on the part of Beneficiary in exercising any rights
under any of the Loan Documents, shall operate as a waiver.
7.4.9 Pursuant to this Deed of Trust, Trustor has granted to Beneficiary a
security interest in the personal property and Fixtures comprising a part of the
Property to further secure the Secured Obligations. Trustor hereby authorizes
Beneficiary to file financing and continuation statements with respect to such
collateral (including Fixtures) in which Trustor has an interest, without the
signature of Trustor whenever lawful, and upon request, Trustor shall promptly
execute financing and continuation statements in form satisfactory to
Beneficiary to perfect and maintain perfected Beneficiary's security interest in
such collateral, and shall pay all filing fees in connection therewith. If
Trustor fails to execute any such statement pursuant to Beneficiary's request,
Beneficiary may execute such statement as Trustor's attorney-in-fact pursuant to
the power of attorney made by Trustor under 7.2 hereof. In the event of the
occurrence of one or more Events of Default, Beneficiary, pursuant to the
applicable provision of Article 9, shall have the option of proceeding as to
both real and personal property in accordance with its rights and remedies in
respect of the Property, in which event the default provisions of Article 9
shall not apply. The parties agree that in the event Beneficiary elects to
proceed with respect to collateral constituting personal property or Fixtures
separately from the other Property, the giving of five days' notice by
Beneficiary, sent by an overnight mail service, postage prepaid, to Trustor at
its address referred to in the introductory paragraph herein, designating the
place and time of any public sale or the time after which any private sale or
other intended disposition of such collateral is to be made, shall be deemed to
be reasonable notice thereof and Trustor waives any other notice with respect
thereto.
7.4.10 Trustor and any other person now or hereafter obligated for the
payment or performance of all or any part of the Note shall not be released from
paying and performing under the Note, and the lien of this Deed of Trust shall
not be affected by reason of [i] the failure of Beneficiary to comply with any
request of Trustor (or of any other person so obligated), to take action to
foreclose this Deed of Trust or otherwise enforce any of the provisions of this
Deed of Trust or of any of the Secured Obligations, or [ii] the release,
regardless of consideration, of the obligations of any person liable for payment
or performance of the Note, or any part thereof, or [iii] any agreement or
stipulation extending the time of payment or modifying the terms of the Note,
and in the event of such agreement or stipulation, Trustor and all such other
persons shall continue to be liable under such documents, as amended by such
agreement or stipulation, unless expressly released and discharged in writing by
Beneficiary.
7.4.11 Trustor, for itself and its successors and assigns, hereby
irrevocably waives and releases, to the extent permitted by law, and whether now
or hereafter in force, [i] the benefit of any and all valuation and appraisement
laws, [ii] any right of redemption after the date of any sale of the Property
upon foreclosure, whether statutory or otherwise, in respect of the Property,
[iii] any applicable homestead or dower laws, [iv] all exemption laws whatsoever
and all moratoriums, extensions or stay laws or rules, or orders of court in the
nature of any one or more of them, and [v] if the Real Property encumbered by
this instrument is located in Mississippi, the provisions of Mississippi Code of
1972, as amended, 89-1-55.
7.4.12 Nothing contained in any of the Loan Documents shall constitute any
consent or request by Beneficiary, express or implied, for the performance of
any labor or services or the furnishing of any materials or other property in
respect of the Property or any part thereof, or be construed to permit the
making of any claim against Beneficiary in respect of labor or services or the
furnishing of any materials or other property or any claim that any lien based
on the performance of such labor or services or the furnishing of any such
materials or other property is prior to the lien of this Deed of Trust.
7.5 Notices. All notices, demands, requests, and consents (hereinafter
-------
"notices") given pursuant to the terms of this Deed of Trust shall be in
writing, shall be addressed to the addresses set forth in the introductory
paragraph of this Deed of Trust and shall be served by [i] personal delivery;
[ii] United States mail, postage prepaid; or [iii] nationally recognized
overnight courier. All notices shall be deemed to be given upon the earlier of
actual receipt or three days after mailing or one business day after deposit
with the overnight courier. Any notices meeting the requirements of this
section shall be effective, regardless of whether or not actually received.
Beneficiary and Trustor may change their notice address at any time by giving
the other party written notice of such change.
7.6 Amendment. This Deed of Trust may only be amended by a writing signed
---------
by Beneficiary and Trustor. All references to this Deed of Trust, whether in
this Deed of Trust or in any other document or instrument, shall be deemed to
incorporate all amendments, modifications and renewals of this Deed of Trust
made after the Effective Date.
7.7 Waivers Relating to Financing.
--------------------------------
7.7.1 Trustor [i] acknowledges that Beneficiary would not have extended to
Trustor the credit giving rise to Secured Obligations (the "Credit") and will
not continue to extend Credit to Trustor but for this Deed of Trust; [ii]
warrants that Trustor has given this Deed of Trust to induce Beneficiary to
extend and to continue to extend Credit to Trustor; [iii] agrees that
Beneficiary may rely on this Deed of Trust in extending future Credit to
Trustor; [iv] warrants that Trustor has received good and valuable consideration
for this Deed of Trust; [v] waives acceptance of this Deed of Trust; [vi]
warrants that Trustor has not given this Deed of Trust in reliance upon the
existence of any other security for or guaranty of the Secured Obligations or
anyone liable for performing the Secured Obligations (collectively the
"Security"); [vii] acknowledges receipt of notice of all Credit extended before
this date; [viii] waives notice of any Credit extended after this date; and [ix]
waives protest and any other notice of failure to pay any Credit or to perform
any agreement relating to any Credit or security for or guaranty of the Secured
Obligations.
7.7.2 Trustor [i] warrants that Trustor has not relied on any information
about the Security, any mortgagor, or the Credit provided directly or indirectly
by Beneficiary; [ii] warrants that Trustor is familiar with the Security; [iii]
warrants that Trustor has had ample opportunity to investigate the Security, and
the effect that the Credit will have; [iv] warrants that Trustor has been
provided all information concerning the Security that Trustor has requested; [v]
warrants that Trustor has had adequate opportunity to seek and evaluate
professional advice concerning the Security, and this Deed of Trust from
advisors of Trustor's choosing, including financial and legal advice; [vi]
agrees that Trustor shall not rely on any information provided by Beneficiary
about the Security, including any other mortgagor; [vii] shall continue to
investigate and evaluate the Security independently throughout the term of this
Deed of Trust; and [viii] acknowledges that Beneficiary has no obligation to
provide Trustor any information about the Security.
7.7.3 Without notice to or consent of Trustor, Beneficiary may do or refrain
from doing anything affecting any Credit or any Security including the
following: [i] granting or not granting any indulgences to anyone liable for
payment of any Credit or any Security; [ii] failing to get or to perfect any
Security; [iii] failing to get an enforceable agreement to repay any Credit;
[iv] releasing any Security or anyone or any property from liability for payment
of any Credit; [v] changing any agreement relating to any Credit or any
Security; [vi] extending the time for payment of any Credit including extending
the time beyond the term of the notes or other documents evidencing the Secured
Obligations; or [vii] delaying in enforcing or failing to enforce any rights to
payment of any Credit or rights against any Security.
7.7.4 Trustor's obligations under this Deed of Trust shall not be affected
by [i] any default in any document concerning any Secured Obligations or
Security when accepted by Beneficiary or arising anytime thereafter; [ii] the
unenforceability of or defect in any Security or document relating to any
Secured Obligations; [iii] any decline in the value of any Security; or, [iv]
the death, incompetence, insolvency, dissolution, liquidation, or winding up of
affairs of Trustor, or anyone liable for any Security or any Secured Obligations
or the start of insolvency proceedings by or against any such person or entity.
7.7.5 WAIVER OF SURETY'S DEFENSES. TRUSTOR WAIVES ALL SURETYSHIP AND OTHER
----------------------------
SIMILAR DEFENSES.
ARTICLE 8: INTERPRETATION
8.1 Captions. The captions and headings contained in this Deed of Trust are
--------
for convenient reference only and are not to be used to interpret or define the
provisions hereof.
8.2 Severability. If any provision of this Deed of Trust or the application
------------
thereof to any party or circumstance shall, to any extent, be adjudged to be
invalid or unenforceable, the remainder of this Deed of Trust and the
application of any such provision to other parties or circumstances shall not be
affected thereby, and each provision of this Deed of Trust shall be valid and
enforceable to the fullest extent permitted by law.
8.3 Governing Law. This Deed of Trust and the rights and obligations of the
-------------
parties hereunder shall be governed by and construed and interpreted in
accordance with the laws of the state where the Real Property is located.
8.4 Survival. All agreements, representations, and warranties contained in
--------
this Deed of Trust shall survive the execution and delivery of this Deed of
Trust, and shall be deemed to be effective continuously throughout the term of
this Deed of Trust Instrument.
ARTICLE 9: CONSTRUCTION
9.1 No Liability for Beneficiary. Trustor hereby acknowledges and agrees
-------------------------------
that the undertaking of Beneficiary under this Deed of Trust is limited as
follows:
(a) Beneficiary is not and will not be in any way the agent for or trustee
of Trustor. Beneficiary does not intend to act in any way for or on behalf of
Trustor in disbursing the proceeds under the Loan Agreement. Beneficiary's
purpose in making the requirements set forth herein and in the Loan Agreement is
to protect the validity and priority of this Deed of Trust and the value of
its security.
(b) This Deed of Trust is not to be construed by Trustor or anyone
furnishing labor, materials, or any other work or product for improving the
Property as an agreement by Beneficiary to assure that anyone will be paid for
furnishing such labor, materials, or any other work or product. Trustor is and
shall be solely responsible for such payments.
9.2 Conflict with Master Xxxxx. For so long as Emeritus Corporation is the
---------------------------
tenant under the Master Lease, if there is any conflict between the terms and
conditions set forth herein and the Master Lease, the terms of the Master Lease
shall govern.
NOW, THEREFORE, if Trustor shall pay Trustor's Obligations in full and
shall fully comply with this Deed of Trust, then this Deed of Trust and the
estate hereby granted shall cease, and Beneficiary shall thereupon release this
Deed of Trust at the cost and expense of Trustor (all claims for statutory
penalties, in case of Beneficiary's failure to release, being hereby waived);
otherwise, this Deed of Trust shall remain in full force and effect.
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hcri\emeritus-ml\deed of trust\DeedTrust-Amend S-1 9/29/03
WAIVER OF APPRAISAL RIGHTS. THE LAWS OF SOUTH CAROLINA PROVIDE THAT IN ANY REAL
---------------------------
ESTATE FORECLOSURE PROCEEDING A DEFENDANT AGAINST WHOM A PERSONAL JUDGMENT IS
TAKEN OR ASKED MAY WITHIN 30 DAYS AFTER THE SALE OF THE MORTGAGED PROPERTY APPLY
TO THE COURT FOR AN ORDER OF APPRAISAL. THE STATUTORY APPRAISAL VALUE APPROVED
BY THE COURT WOULD BE SUBSTITUTED FOR THE HIGH BID AND MAY DECREASE THE AMOUNT
OF ANY DEFICIENCY OWING IN CONNECTION WITH THE TRANSACTION. THE UNDERSIGNED
HEREBY WAIVES AND RELINQUISHES THE STATUTORY APPRAISAL RIGHTS WHICH MEANS THE
HIGH BID AT THE JUDICIAL FORECLOSURE SALE WILL BE APPLIED TO THE DEBT REGARDLESS
OF ANY APPRAISED VALUE OF THE PROPERTY.
IN WITNESS WHEREOF, this Deed of Trust has been duly executed as of
(but not necessarily on) the Effective Date.
Signed and acknowledged in the present of: EMERITUS CORPORATION
Signature By: Xxxxxxx X. Xxxxxxx
Print Name
Title: Director of Real Estate Finance
Signature
Print Name
STATE OF WASHINGTON )
) SS:
COUNTY OF KING )
The foregoing instrument was executed and acknowledged before me this
___ day of September, 2003 by _________________________, the
_________________________ of Emeritus Corporation, a Washington corporation, on
behalf of the corporation.
Notary Public
My Commission Expires: [SEAL]
hcri\emeritus-ml\deed of trust\DeedTrust-Amend 9/29/03
EXHIBIT A: FACILITY INFORMATION
FACILITY NAME STREET ADDRESS FACILITY TYPE (PER LICENSE)
LICENSED OPERATOR COUNTY BEDS/UNITS
----------------- ------ ----------
NorthBay at Rancho Xxxxxx
(to be renamed Loyalton at Rancho Xxxxxx)
("Fairfield Facility") 0000 Xxxxxx Xxxxx Xxxxxx Residential Care
Facility for the Elderly
Fairfield, CA 94533 250 licensed beds
Fairfield Retirement Center, LLC County: Xxxxxx 172 units
----------------------------------- --------------- ----------
Creston Village
("Paso Xxxxxx Facility") 0000 Xxxxxxx Xxxx Residential Care Facility for
the Elderly/Dementia
Paso Xxxxxx, CA 93446 115 licensed beds
TDC/Emeritus Paso Xxxxxx Associates County: San Louis Obispo 100 units
------------------------------------ ------------------------- ---------
Canterbury Ridge
("Urbana Facility") 0000 Xxxx Xxxxx Xxxx
Xxxxxx, XX 00000 Retirement
Emeritus Corporation County: Champaign 89 units
--------------------- ------------------ ---------
Loyalton of Hattiesburg
("Hattiesburg Facility") 000 Xxx Xxxxx Xxxxxx Institution for the Aged
or Infirmed
Hattiesburg, MS 39402 83 licensed beds
Emeritus Corporation County: Xxxxxxx 82 units
--------------------- ---------------- ---------
Loyalton of Flagstaff
("Flagstaff Facility") 0000 X. Xxxxxxxxx Xxxxxxx Xxxx. Assisted Living
Flagstaff, AZ 86001 67 beds
Emeritus Corporation County: Coconino 61 units
--------------------- ----------------- ---------
Loyalton of Phoenix
("Phoenix Facility") 0000 Xxxxxxxxx Xxx. Assisted Living
Phoenix, AZ 85032 101 beds
Emeritus Corporation County: Maricopa 101 units
--------------------- ----------------- ----------
Park Club of Brandon
("Xxxxxxx Xxxxxxxx") 000 X. Xxxxx Xxx. Assisted Living
Brandon, FL 33511 100 beds
Emeritus Corporation County: Hillsborough 87 units
--------------------- --------------------- ---------
Park Club of Fort Xxxxx
("Fort Xxxxx Facility") 1896 Park Xxxxxxx Dr. Assisted Living
Fort Xxxxx, FL 33907 116 beds
Emeritus Corporation County: Xxx 74 units
--------------------- ------------ ---------
Park Club of Oakbridge
("Lakeland Facility") 0000 Xxxxxxxxx Xxxx. East Assisted Living
Lakeland, FL 33803 110 beds
Emeritus Corporation County: Polk 87 units
--------------------- ------------- ---------
Colonial Park Club
("Sarasota Facility") 0000 Xxx Xxxxx Xx. Assisted Living
Sarasota, FL 34231 110 beds
Emeritus Corporation County: Sarasota 86 units
--------------------- ----------------- ---------
Ridgewind
("Chubbuck Facility") 0000 Xxxxxxxxx Xx. Assisted Living
Chubbuck, ID 83202 109 beds
Emeritus Corporation County: Bannock 79 units
--------------------- ---------------- ---------
Loyalton of Coeur D'Alene
("Coeur D'Alene Facility") 205 X. Xxxxx Assisted Living
Coeur D'Alene, ID 83815 96 beds
Emeritus Corporation County: Kootenai 50 units
--------------------- ----------------- ---------
Highland Hills
Pocatello Facility") 1501 Baldy Assisted Living
Pocatello, ID 83201 57 beds
Emeritus Corporation County: Bannock 47 units
--------------------- ---------------- ---------
Loyalton of Hagerstown
"Hagerstown Facility") 00000 Xxxxxxxx Xxx Assisted Living
Hagerstown, MD 21742 110 beds
Emeritus Corporation County: Washington 100 units
--------------------- ------------------- ----------
Pines of Tewksbury
"Tewksbury Facility") 0000 Xxxx Xx. Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000 69 beds
Emeritus Corporation County: Middlesex 49 units
--------------------- ------------------ ---------
Loyalton of Lakewood
"Lakewood Facility") 000 Xxxxxxxxxxxx Xx. Enriched Housing Program
Lakewood, NY 14750 100 beds
Emeritus Corporation County: Chautauqua 78 units
--------------------- ------------------- ---------
Meadowbrook
("Ontario Facility") 0000 Xxxxxxxxx 0xx Xxx. Assisted Living
Ontario, OR 97914 82 beds
Emeritus Corporation County: Malheur 53 units
--------------------- ---------------- ---------
Anderson Place
Assisted Living
("Anderson Facility") 000 Xxxxxxx Xx. 127 beds
Anderson, SC 29621 84 units
Emeritus Corporation County: Xxxxxxxx 75 independent cottages
--------------------- ----------------- -------------------------
Elmbrook Estates
("Lubbock Facility") 0000 00xx Xx. Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000 100 beds
Emeritus Corporation County: Lubbock 80 units
--------------------- ---------------- ---------
Loyalton of Staunton
("Staunton Facility") 0000 Xxxxxxxxx Xxxx Assisted Living
Staunton, VA 24401 144 beds
Emeritus Corporation County: Augusta 101 units
--------------------- ---------------- ----------
Fairhaven Estates
("Bellingham Facility") 0000 Xxx Xxxxxxxxx Xxxx. Boarding Home
Bellingham, WA 98225 60 beds
Emeritus Corporation County: Whatcom 50 units
--------------------- ---------------- ---------
Evergreen Lodge
("Federal Way Facility") 00000 00xx Xxxxxx Xxxxx Xxxxxxxx Xxxx
Xxxxxxx Xxx, XX 00000 105 beds
Emeritus Corporation County: King 98 units
--------------------- ------------- ---------
Hearthstone Inn
("Moses Lake Facility") 000 X. Xxxxxxx Xxx Boarding Home
Moses Lake, WA 98837 92 beds
Emeritus Corporation County: Grant 83 units
--------------------- -------------- ---------
EXHIBIT B: LEGAL DESCRIPTION
EXHIBIT C: PERMITTED EXCEPTIONS
1.
[GRAPHIC OMITED]
[GRAPHIC OMITED]
