DEED OF TRUST, ASSIGNMENT OF
RENTS,
SECURITY AGREEMENT AND FINANCING STATEMENT
(Construction Loan)
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY
AGREEMENT AND FINANCING STATEMENT ("Deed of
Trust") is made this 30th day of January,
1997, between EMERITUS PROPERTIES II, INC., whose
address is ▇▇▇▇,▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to
as "Borrower" or "Grantor"), and ALLIANCE TITLE &
ESCROW CORP., whose address is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, as "Trusteen, and RMI
CAPITAL MANAGEMENT CO., whose address is ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as "Beneficiary" or "Lender." THIS
DEED OF TRUST IS INTENDED ALSO TO BE A FIXTURE
FILING AND IS TO BE INDEXED NOT ONLY AS A MORTGAGE
BUT ALSO AS A FIXTURE FILING IN THE REAL ESTATE
RECORDS.
WITNESSETH:
THAT WHEREAS, the Borrower is justly indebted
unto Lender in the aggregate sum of Five Million
Eighty Thousand Eighty-Two and 39/100 Dollars
($5,080,082.39) or so much thereof as may have
been disbursed, as evidenced by the Promissory
Note of even date herewith (hereinafter sometimes
referred to as the "Note"), which Note is payable
at the office of the Lender or at such other place
as the legal holder or holders thereof may
designate in writing, with interest thereon and
payable as provided in said Note. If not sooner
paid, the final payment of principal and interest
on said Note shall be due thirty-six months from
the date hereof and which shall be the Maturity
Date of this Deed of Trust..
AND WHEREAS, the Borrower is the owner in fee
simple of the property (the "Property") situate in
the County of Nez Perce and State of Idaho as
specifically described in Exhibit A-l attached
hereto and by this reference incorporated herein.
AND WHEREAS, the Borrower is desirous of
securing the payment of the principal and interest
of said Note in whosoever hands said Note may be.
NOW, THEREFORE, the said Grantor, in consideration
of the premises, and for the purpose aforesaid,
does hereby grant, bargain, sell and convey unto
the Trustee, in trust forever with power of sale
with right of entry and possession, the Property
situate in the County of Nez Perce and State of
Idaho, as more specifically described on Exhibit
A-l attached and by this reference incorporated
herein and subject to the Permitted Encumbrances
(defined below), which, with the property
hereinafter described, is referred to herein as
the "Mortgaged Property."
TOGETHER WITH AND INCLUDING:
(1) All right, title and interest which
Grantor now has or may hereafter acquire in and to
the Property and in and to all improvements,
tenements, easements, hereditaments and
appurtenances thereunto belonging.
(2) All right, title and interest, if any, of
Grantor, in and to the land lying within any
street or roadway adjoining the Property; and all
right, title and interest of Grantor in any
vacated or hereafter vacated street or alley
adjoining the Property; and all right, title and
interest, if any, of Grantor in and to any strips
and gores adjoining the Property.
(3) All and singular the passages, waters,
water rights, water courses, riparian rights,
other rights, liberties and privileges thereof or
in any way now or hereafter appertaining to the
Property, including homestead and any other claim
at law or in equity, as well as any afteracquired
title, franchise or license, and the reversion and
reversions and remainder and remainders thereof.
(4) All right, title and interest of Grantor
in and to any and all contracts and subcontracts
for the construction and supplying and furnishing
of materials and equipment for use on the
Property.
(5) All leases, rents, issues, proceeds and
profits accruing and to accrue from said Property,
including but not limited to amounts payable under
residential occupancy agreements, whether deemed
rents or accounts.
(6) All plans and specifications for the
improvements now or hereafter constructed on the
Property; all contracts and subcontracts relating
to the Property, all deposits (including forfeited
tenant's security deposits), funds, accounts,
contract rights, including management agreements
for the Property; instruments, documents, general
intangibles (including trademarks, service marks,
trade name and symbols used in connection
therewith), contracts of sale relating to any of
the Mortgaged Property (consent to same not
granted or to be implied hereby), and notes or
chattel paper arising from the sale, exchange or
trar sfer (provided any such transaction is
consented to by Lender as required by this Deed of
Trust) of any of the Mortgaged Property; all
permits, licenses, franchises, certificates, and
other rights and privileges obtained in connection
with any of the Mortgaged Property; the books and
records pertaining to the Property; all proceeds
arising from or by virtue of the sale, lease or
other disposition of all or any part of the
Mortgaged Property (consent to same not granted or
to be implied hereby).
(7) All proceeds or sums payable in lieu of
or as compensation for the loss of or damage to
any of the Mortgaged Property, and all rights in
and to all pertinent present and future fire
and/or hazard insurance policies insuring the
Mortgaged Property; all awards made by any public
body or decreed by any Court of competent
jurisdiction for a taking or for degradation of
value in any eminent domain proceeding of the
Mortgaged Property or any part thereof.
(8) All buildings, structures, open parking
areas and improvements of every kind and
description now or hereafter erected or placed on
the Property and all materials intended for
construction, reconstruction, alteration and
repairs of such improvements now or hereafter
erected thereon including, but not limited to,
lumber, plaster, cement, shingles, roofing,
plumbing, fixtures, pipe, lath, wallboard,
cabinets, nails, sinks, toilets, furnaces,
heaters, brick, tile, water heaters, screens,
window frames, glass, doors, flooring, paint,
lighting fixtures and unattached refrigerating,
cooking, heating and ventilating appliances and
equipment, all of which materials shall be deemed
to be included within the said Property
immediately upon the delivery thereof to the
Property.
(9) All machinery, apparatus, equipment,
fittings, fixtures, goods and other articles of
personal property now or hereafter owned by
Grantor and attached to or contained in and used
in connection with any present or future operation
of the Property, including, but not limited to,
all furniture, gas ranges, mechanical equipment,
tools, refrigerators, swimming pool equipment,
recreational equipment, awnings, shades, screens,
equipment and other furnishings and all plumbing,
heating, air conditioning, lighting, cooking,
laundry, ventilating, refrigerating, incinerating,
and sprinkling equipment and fixtures and
appurtenances thereto; and the property, if any,
described in Exhibit A-2, attached hereto and
incorporated by this reference; and all renewals
or replacements thereof or articles in
substitution therefor, whether or not the same are
or shall be attached to said building or buildings
in any manner.
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(10) All inventory used in the operation of
the Property.
(11) (a) All of Grantor's rights to further
encumber the Property by debt, except for such
encumbrance, which, by its actual terms and
specifically expressed intent, shall be and at all
times remain subject and subordinate to any
tenancies thereafter created. Grantor hereby
represents as a special inducement to the Lender
to make this loan, that as of the date hereof
there are no encumbrances to secure debt junior to
this Deed of Trust and covenants that there are to
be none as of the date when this Deed of Trust
becomes of record, except in either case
encumbrances having the prior written approval of
the Lender herein; and
(b) All of Grantor's rights to enter into any
lease agreement which would create a tenancy that
is or may become subordinate in any respect to any
mortgage or deed of trust encumbering the Property
other than this Deed of Trust.
(12) All other interest of every kind and
character which Debtor now has or at any time
hereafter acquires in and to the Mortgaged
Property and all property which is used or useful
in connection therewith, including rights of
ingress and egress, easements, licenses, and all
reversionary rights or interests of Debtor with
respect to the Mortgaged Property, together with
all additions, accessions, accessories, and the
proceeds thereof.
It is specifically understood that the
enumeration of any specific articles of property
shall in no wise exclude or be held to exclude any
items of property not specifically mentioned. All
of the land, estate and property
hereinabove-described, real, personal and mixed,
whether affixed or annexed or not, and all rights
hereby conveyed and mortgaged are intended to be
as a unit and are hereby understood and agreed and
declared to be appropriated to the use of the real
estate, and shall for the purposes of this Deed of
Trust be deemed to be real estate and conveyed and
mortgaged hereby. The real estate conveyed by this
Deed of Trust is located within an incorporated
city or village or does not exceed 20 acres.
TO HAVE AND TO HOLD IN TRUST NEVERTHELESS,
that in case of an Event of Default defined below,
the Lender or the legal holder of the indebtedness
secured hereby may declare a violation of any of
the covenants herein contained and elect to demand
foreclosure sale. Trustee shall sell the Property
in accordance with the laws of the State of Idaho
and the Uniform Commercial Code of the State of
Idaho, where applicable, at public or private sale
as allowed by law 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: (1) to the expense of the sale,
including a reasonable Trustee's fee and
attorney's fee; (2) to the obligations secured by
this Deed of Trust; and (3) the surplus, if any,
shall be distributed in accordance with the laws
of Idaho. Trustee shall deliver to the purchaser
at the sale a Trustee's deed, without warranty,
which shall convey to the purchaser such interest
in the Property which Grantor had or had the power
to convey at the time of the execution of this
Deed of Trust, and such interest as Trustee may
have acquired thereafter. The Trustee's deed shall
recite the facts showing that the sale was
conducted in compliance with all requirements of
law and of 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
laws of Idaho is not an exclusive remedy and when
not exercised, Beneficiary may foreclose this Deed
of Trust under the laws of Idaho as a mortgage and
in that event, obtain a deficiency to the extent
allowed by law. At any time Beneficiary may
appoint in writing a successor trustee, or
discharge and appoint a new Trustee in the place
of any Trustee named herein, and upon the
recording of such appointment in the records of
the county in which this Deed of Trust is
recorded, the successor Trustee shall be vested
with all powers of the Original Trustee, Grantor
agrees
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to surrender possession of the Property to the
Purchaser at the aforesaid sale on or before the
tenth day following the sale, in the event such
possession has not previously been delivered.
And the said Grantor, for itself and for its
successors and assigns, covenants and agrees to
and with the said Trustee, that at the time of the
ensealing of and delivery of these presents, (1)
it is well seized of the Mortgaged Property in fee
simple, and has good right, full power and lawful
authority to grant, bargain, sell and convey the
same in the manner and form as aforesaid; thereby
fully and absolutely waiving and releasing all
rights and claims it may have in or to said lands,
tenements and property as a Homestead Exemption,
or other exemption, under and by virtue of any act
of the Idaho Legislature, now existing or which
may hereafter be passed in relation thereto; and
that the same are free and clear of all liens and
encumbrances whatever, except the lien of general
taxes not yet due and payable and the Permitted
Encumbrances set forth on Exhibit A-3, and (2) it
will warrant and forever defend the
above-bargained Mortgaged Property in the quiet
and peaceable possession of the said Trustee, his
successors and assigns against all and every
person or persons lawfully claiming or to claim
the whole or any part thereof.
IT IS FURTHER UNDERSTOOD AND AGREED THAT:
MAINTENANCE, REPAIR AND RESTORATION OF
IMPROVEMENTS, PAYMENT OF PRIOR LIENS, ETC
1. Borrower shall pay each item of
indebtedness secured by this Deed of Trust when
due according to the terms hereof or of the Note
and shall (a) promptly repair, restore or rebuild
any buildings or improvements now or hereafter on
the Property which may become damaged or be
destroyed subject to casualty/condemnation clauses
in this Deed of Trust; (b) keep the Property in
good condition and repair, without waste, and free
from mechanics' liens or claims for lien not
expressly subordinated to the lien hereof; (c) pay
when due any indebtedness which may be secured by
a lien or charge on the Property superior to the
lien hereof, and upon request exhibit satisfactory
evidence of the discharge of such prior lien to
Lender; (d) pay when due all utility charges which
are incurred for the benefit of the Property or
which may become a charge or lien against the
Property for energy, fuel, gas, electricity, water
or sewer services furnished to the Property and
all other assessments or charges of a similar
nature, whether public or private, affecting the
Property, or any portion thereof, whether or not
such assessments or charges are liens thereon; (e)
complete within a reasonable time, any building or
buildings now or at any time in process of
erection upon the Property; (f) comply with all
requirements of law, municipal ordinances, or
restrictions of record with respect to the
Property and the use thereof; (g) operate the
Property as a first class assisted and independent
living facility; (h) make no material alterations
to the Property or any of the buildings,
improvements, fixtures, apparatus, machinery and
equipment now or hereafter erected or located upon
said Property, except as required by law or
municipal ordinance, without Lender's written
consent; (I) suffer or permit no change in the
general nature of the occupancy of the Property,
without Lender's written consent; (j) initiate or
acquiesce in no zoning reclassification without
Lender's written consent; (k) not make any
purchase or conditional sale, lease or agreement
under which title is reserved in the vendor of any
such fixtures, apparatus, machinery, equipment or
personal property to be placed in or upon any of
the buildings or improvements on the Property; and
(1) not voluntarily create or otherwise permit to
be created or filed against the Mortgaged
Property, any other Deed of Trust or any mortgage
lien or other lien or liens or statements of lien,
inferior or superior to this Deed of Trust,
without the prior written consent of Lender.
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PAYMENT OF TAXES
2. Grantor shall pay before any penalty
attaches all general taxes, and shall pay special
taxes, special assessments, water charges, sewer
service charges, and other charges against the
Property when due and payable, and shall furnish
to Lender receipts evidencing payment of same
within thirty (30) days following their respective
due dates. To prevent default hereunder, Grantor
shall pay in full under protest, or provide an
indemnity bond or other security reasonably
satisfactory to Lender and in the manner provided
by statute, as to any tax or assessment which
Grantor may desire to contest.
TAX DEPOSITS
3. Following an Event of Default, Grantor
shall deposit monthly with Lender or at such place
as Lender may from time to time designate, a sum
equal to one-twelfth of the last total annual
taxes on the Property (unless said taxes were
based upon assessments which excluded the current
improvements or any portions thereof, in which
event the amount of such deposits shall be based
upon the Lender's reasonable estimate as to the
total amount of taxes to be levied and assessed).
Borrower, concurrently with the payment of the
first deposit under this paragraph, will also
deposit with Lender an amount based upon the taxes
and assessments so ascertainable or so estimated
by the Lender, as the case may be, for taxes and
assessments on the Property, on an accrual basis
for the period from March 1, succeeding the year
for which all taxes and assessments have been
paid, to and including the date of the first
deposit in this paragraph hereinabove mentioned.
Such deposits are to be held without any allowance
of interest and are to be used for the payment of
taxes and assessments (general and special) on the
Property next due and payable when they become
due. If the funds so deposited are insufficient to
pay any such taxes and assessments (general and
special) for any year when the same shall become
due and payable, the Grantor shall, within ten
(10) days after receipt of demand therefor,
deposit such additional funds as may be necessary
to pay such taxes and assessments (general and
special) in full.
INSURANCE
4. Borrower shall keep all buildings and
improvements now or hereafter situated on the
Property insured against loss or damage by fire,
lightning and risks customarily covered by
standard extended coverage endorsement. The
insurance policies shall include a standard
extended coverage endorsement, a vandalism and
malicious mischief endorsement or an all perils
endorsement, all in amounts not less than the full
replacement costs of all improvements including
the cost of debris removal, but excluding
foundations and footings. Unless modified by
Lender in writing, Borrower shall also provide:
Comprehensive General Public Liability Insurance
in limits satisfactory to Lender; if there are
pressure fired vessels within the Property, Broad
Form Boiler and Machinery Insurance on all
equipment and objects customarily covered by such
insurance and providing for full repair and
replacement cost coverage; Rent and Rental Value
Insurance in the sum of (a) rental for a full year
period, (b) real estate taxes, special assessments
and utility charges and (c) the premiums for all
insurance required to be paid whether by the
Lessor or by the tenants under each lease of the
Property; during the making of any alterations or
improvements to the Property, (a) owner's
contingent liability covering claims not covered
by the general comprehensive insurance referred to
above, and (b) Worker's Compensation Insurance
covering all persons engaged in making such
alterations or improvements; if the Property is in
a "flood plain area" as defined by the Federal
Insurance Administration pursuant to the Federal
Flood Disaster Protection Act of 1973, then
Federal Flood Insurance in the maximum obtainable
amount up to the loan amount; and such other
coverage as may reasonably be required by Lender.
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All policies for such insurance to be
furnished hereunder shall be in forms, companies
and amounts satisfactory to Lender, with first
mortgagee clauses and loss payable clauses
attached to all policies in favor of and in form
satisfactory to Lender, including a provision
requiring that the coverage evidenced thereby
shall not be terminated or materially modified
without ten (10) days' prior written notice to the
Lender and shall contain endorsements that no act
or negligence of the insured or any occupant, and
no occupancy or use of the property for purposes
more hazardous than permitted by the terms of the
policy will affect the validity or enforceability
of such insurance as against Lender; shall be in
full force and effect on the date hereof. Said
insurance policies shall be written in amounts
aufficient to prevent Borrower from becoming a
co-insurer under the applicable policies. Borrower
shall deliver all said policies, including
additional and renewal policies, to Lender, and,
in the case of insurance about to expire, shall
deliver renewal policies not less than ten (10)
days prior to their respective dates of
expiration.
INSURANCE DEPOSITS
5. Following an Event of Default, Grantor
shall deposit monthly with Lender or at such place
as Lender may from time to time designate,
aufficient funds, as estimated by Lender in its
sole discretion, to permit payment of annual
insurance premiums on the Property next due and
payable when they become due. Concurrently with
the payment of the first deposit under this
paragraph, Borrower shall also deposit an amount
equal to one-twelfth (1/12th) of the next maturing
annual insurance premiums for each month that has
elapsed since the last date to which such premiums
were paid. Such deposits are to be held without
any allowance of interest and are to be used for
the payment of insurance premiums on the Property
when they become due and payable. Grantor shall,
within ten (10) days after receipt of demand
therefor, deposit such additional funds as are
necessary to make up any deficiencies in amounts
necessary to pay such premiums when due.
LENDER'S INTEREST IN AND USE OF DEPOSITS
6. Following an Event of Default, the Lender
may at its option, without being required to do
so, apply any moneys at the time on deposit
pursuant to paragraphs entitled "Tax Deposits" and
"Insurance Deposits" hereof, as any one or more of
the same may be applicable, on any of Grantor's
obligations herein or in the Note contained, in
such order and manner as Lender may elect. When
the indebtedness secured hereby has been fully
paid, any remaining deposits shall be paid to
Borrower or to the then owner or owners of the
Property. Such deposits are hereby pledged as
additional security for the Note and shall be held
in trust to be irrevocably applied for the
purposes for which made hereunder and shall not be
subject to the direction or control of the
Grantor; provided, however, that prior to an Event
of Default, Lender agrees to apply the deposits or
any portion thereof to the payment of taxes or
insurance premiums so long as Grantor shall have
requested in writing the application of such funds
to the payment of the particular charge for which
they were deposited, accompanied by the bills for
such charge.
In the event of a sale or foreclosure of this
Deed of Trust or deed in lieu of foreclosure or
other transfer of title to the Property in
extinguishment, in whole or in part, of the
indebtedness secured hereby, all right, title and
interest of Grantor in and to all policies of
insurance on the Property, including any right to
unearned premiums, are hereby assigned to and
shall inure to the benefit of Lender or purchaser
of the Property. Grantor shall not take out
separate insurance concurrent in form or
contributing in the event of loss with that
required to be maintained hereunder unless Lender
is included thereon under a standard mortgage
clause acceptable to Lender. Grantor shall
immediately notify Lender whenever any such
separate insurance is taken out and shall promptly
deliver to Lender the policy or policies of such
insurance.
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PAYMENT OF NOTE
7. Borrower shall promptly and punctually pay
all principal and interest, as the rate thereof
may be adjusted as provided in the Note (together
with any legal, title insurance or other expenses
incurred by Lender in connection with such rate
adjustment), prepayment charge, and all other sums
to become due in respect to the Note, according to
the true intent and meaning thereof.
ADJUSTMENT OF LOSSES WITH INSURER AND APPLICATION
OF PROCEEDS OF INSURANCE
8. In case of loss which exceeds $100,000 as
determined by Lender's insurance consultant, the
Lender, or after foreclosure, the holder of the
certificate or certificates of purchase, is hereby
authorized either (a) to settle and adjust any
claim under such insurance policies with the
consent of Grantor not to be unreasonably
withheld, or (b) to allow Grantor to agree with
the insurance company or companies on the amount
to be paid upon the loss. In either case, Lender
is authorized to collect and receipt for any such
insurance money. Such insurance proceeds shall be
held by the Lender and used to reimburse Grantor
for the cost of rebuilding or restoration of
buildings or improvements on the Property. Such
proceeds shall be made available, from time to
time, upon the Lender being furnished with
satisfactory evidence of the estimated cost of
completion thereof and with such architect's
certificates, waivers of lien, contractors' sworn
statements and other evidence of costs and of
payments as the Lender may reasonably require and
approve. No payment made prior to the final
completion of the work shall exceed ninety percent
(90%) of the value of the work performed, from
time to time. At all times, the undisbursed
balance of said proceeds remaining in the hands of
the Lender shall be at least aufficient to pay for
the cost of completion of the work free and clear
of liens, or Grantor shall have provided Lender
with reasonable evidence that it has arranged for
aufficient funds to pay the difference.
Notwithstanding the foregoing, in case of
loss after foreclosure proceedings have been
instituted, or loss which occurs during the last
three months prior to the maturity date of the
Note, Lender is authorized to collect and receipt
for any such insurance money. Said insurance
proceeds may, at the option of Lender, either be
applied in reduction of the indebtedness secured
hereby in the inverse order of maturity, whether
due or not, or be held by the Lender and used to
rebuild or restore the buildings or improvements
located on the Property and the balance, if any,
shall be paid to the Borrower, or if applicable,
to the owner of the equity of redemption if he
shall then be entitled to the same. In case of a
judicial foreclosure of this Deed of Trust, the
Court in its decree may provide that the
mortgagee's clause attached to each of said
insurance policies may be canceled and that the
decree creditor may cause a new loss clause to be
attached to each of said policies making the loss
thereunder payable to said decree creditor; and
any such foreclosure decree may further provide
that in case of one or more redemptions under said
decree, pursuant to the statute in such case made
and provided, then and in every such case, each
successive redemptor may cause the preceding loss
clause attached to each insurance policy to be
canceled and a new loss clause to be attached
thereto, making the loss thereunder payable to
such redemptor. In the event of foreclosure sale,
Lender is hereby authorized, without the consent
of Grantor, to assign any and all insurance
policies to the purchaser at the sale, or to take
such other steps as Lender may deem advisable, to
cause the interest of such purchaser to be
protected by any of the said insurance policies.
In the case of a casualty which does not
occur during the last three months prior to the
maturity date of the Note and which results in a
loss which is $100,000 or less as determined by
Lender's insurance consultant, then the Grantor is
authorized to settle and
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adjust the claim under the insurance policies,
such proceeds may be paid directly to Grantor and
Grantor covenants and agrees to use such proceeds
solely for the repair or restoration of buildings
and improvements on the Property.
OBSERVANCE OF LEASE ASSIGNMENT
9. In the event Borrower, as additional
security for the payment of the indebtedness
described in and secured by this Deed of Trust,
has sold, transferred and assigned to Lender, its
successors and assigns, any interest of Borrower
in any Lease or Leases demising all or a portion
of the Property together with the rents secured
thereby, Borrower expressly covenants and agrees
that if Borrower, as Lessor under said Lease or
Leases so assigned, fails to faithfully perform
and fulfill any term, covenant, condition or
provision in said Lease or Leases, or any of them,
on its part to be performed or furfilled, at the
times and in the manner in said Lease or Leases
provided, resulting in or making possible
forfeiture or termination of any such Lease,
without the written consent of Lender, or if
Borrower suffers or permits to occur any breach or
default under the provisions of any Assignment of
Lessor's Interest in any Lease or Leases of the
Property given as additional security for the
payment of the indebtedness secured hereby, or if
Borrower fails to fully protect, insure, preserve
and cause continued performance or furfillment of
the terms, covenants or provisions in said Lease
or Leases required to be performed or furfilled by
the Lessee or any of the Lessees therein or if the
Borrower, without Lender's prior agreement,
permits or approves an assignment by Lessee of
said Lease or Leases, upon becoming an Event of
Default under such assignment, then in any such
event, at the option of Lender, or of the then
holder of the Note secured hereby, such breach or
default shall constitute an Event of Default
hereunder.
In the event the Grantor, as the Lessor in
said Lease or Leases, shall neglect or refuse to
perform, observe and keep all of the covenants,
provisions and agreements contained in said Lease
or Leases, the Lender may, but shall not be
obligated to, perform and comply with any such
Lease covenants, agreements and provisions, in
which event all costs and expenses incurred by
Lender in complying with such covenants,
agreements and provisions, shall become a part of
the principal indebtedness secured by this Deed of
Trust and recoverable as such in all respects.
COVENANTS WITH RESPECT TO LEASE
10. Intentionally omitted.
EFFECT OF EXTENSIONS OF TIME
11. If the payment of the Note or any part
thereof be extended or varied or if any part of
the security be released, all persons now or at
any time hereafter liable therefor, or interested
in the Property, shall be held to assent to such
extension, variation or release, and their
liability and the lien and all provisions hereof
shall continue in full force, the right of
recourse against all such persons being expressly
reserved by the Lender, notwithstanding such
extension, variation or release.
EFFECT OF CHANGES IN LAWS REGARDING TAXATION
12. In the event of the enactment after this
date of any law of the United States or of the
state in which the Property is located deducting
from the value of land for the purpose of the
taxation of any lien thereon, or imposing upon the
Lender the payment of the whole or any part of the
taxes or assessments or charges or liens herein
required to be paid by Grantor, or changing the
laws relating to the taxation of deeds of trust or
mortgages or debts secured by deeds of trust or
mortgages or the Lender's interest in the
8
Property, or the manner of collection of taxes, so
as to affect materially and adversely this Deed of
Trust or the Lender's interest in the Mortgaged
Property, or the debt secured hereby or the holder
thereof, then, and in any event, the Grantor, upon
demand by the Lender, shall pay such taxes or
assessments, or reimburse the Lender therefor;
provided, however, that if in the opinion of
counsel for the Lender (a) it might be unlawful to
require Grantor to make such payment or (b) the
making of such payment might result in the
imposition of interest beyond the maximum amount
permitted by law, then and in such event, the
Lender may elect, by notice in writing given to
the Grantor, to declare all of the indebtedness
secured hereby to be and become due and payable
sixty (60) days from the giving of such notice.
Notwithstanding the foregoing, it is understood
and agreed that Borrower shall not be obligated to
pay any portion of Lender's federal, state, or
municipal income tax or any franchise, estate,
inheritance, excess profits or similar tax levied
on Lender or the obligations secured hereby.
LENDER'S PERFORMANCE OF DEFAULTED ACTS
13. Lender may, but need not, make full or
partial payments of principal, interest and other
charges due on prior encumbrances, if any, and
purchase, discharge, compromise or settle any tax
lien or other lien or title or claim thereof;
redeem from any tax sale or forfeiture affecting
the Property or contest any tax or assessment; pay
any premium on insurance required to be carried
hereunder; or advance funds for the protection of
the Property, or for the purpose of curing any
default hereunder. All moneys paid for any of the
purposes herein authorized and all expenses paid
or incurred in connection therewith, including
reasonable attorneys' fees, and any other moneys
advanced by Lender to protect the Property and the
lien hereof, shall be so much additional
indebtedness secured hereby, and shall become
immediately due and payable without notice and
with interest thereon at the Default Rate, as more
particularly defined in the Note. Inaction of
Lender shall never be considered as a waiver of
any right accruing to it on account of any default
on the part of Grantor.
LENDER'S RELIANCE ON TAX BILLS, ETC,
14. Lender in making any payment hereby
authorized: (a) relating to taxes and assessments,
may do so according to any ▇▇▇▇, statement or
estimate procured from the appropriate public
office without inquiry into the accuracy of such
▇▇▇▇, statement or estimate or into the validity
of any tax, assessment, lien or title or claim
thereof; or (b) for the purchase, discharge,
compromise or settlement of any other prior lien,
may do so only upon reasonable inquiry as to the
validity, priority, or amount of any claim for
lien which may be asserted and following 10 days'
prior notice to Grantor.
ACCELERATION OF INDEBTEDNESS IN CASE OF DEFAULT
15. The occurrence of any of the following
shall constitute an Event of Default: (a) Grantor
shall fail to pay the Note when due, or any
installment due in accordance with the terms
thereof, either of principal or interest or any
other monetary obligations due and owing under
this Deed of Trust or any other document securing
the Note and such monetary default is not cured
within 10 days after notice thereof; or (b)
Grantor shall sell, transfer or convey all or any
part of the Mortgaged Property or any interest
therein (except the sale of inventory in the
ordinary course of business) without complying
with the provisions of the section entitled "Sale
of Property or Change in Borrower Entity;" in the
case of real estate, or without complying with
subsection (5) below in the case of other personal
property except as further limited by Grantor's
reserved rights in Section 40; or (c) any
non-monetary default shall be made in the due
observance or performance of any other covenants,
agreements or conditions hereinbefore or
hereinafter contained, required to be kept or
performed or observed by
9
the Grantor, and if curable, not cured by Grantor
within the specific cure period, if any, stated
herein, or if none shall remain uncured for a
period of fifteen (15) days after the date of
written notice thereof from Lender to Grantor. In
the event that such failure, refusal or neglect,
is susceptible of cure but is not cured within
said fifteen (15) days, so long as Grantor is
diligently and continuously pursuing such cure,
Lender shall permit Grantor an additional thirty
(30) days to effectuate such cure; provided, that
prior to Completion of Improvements, such
additional thirty (30) days shall not apply where
such failure, refusal or neglect results, in
Lender's reasonable determination, in a matter
which is of an emergency nature.
Upon the occurrence of an Event of Default,
the whole of said principal sum hereby secured
shall, at once, at the option of the Lender,
become immediately due and payable, together with
accrued interest thereon. In addition to the
aforedescribed events of default, the term "Event
of Default" shall also mean any one or more of the
following events:
(1) The Borrower or any guarantor of the
Borrower's obligations hereunder shall generally
not pay its debts as they become due or shall
admit in writing its inability to pay its debts,
or shall make a general assignment for the benefit
of creditors; or
(2) The Borrower or any such guarantor shall
commence any case, proceeding or other action
seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or
its debts under any law relating to bankruptcy,
insolvency,
reorganization or relief of debtors, or seeking
appointment of a receiver, trustee, custodian or
other similar official for it or for all or any
substantial part of its property; or
(3) The Borrower or any such guarantor shall
take any action to authorize any of the actions
set forth above in paragraphs (1) or (2); or
(4) A third party shall bring any case,
proceeding or other action against the Borrower or
any guarantor of the Borrower's obligations
hereunder, seeking to have an order for relief
entered against it as debtor, or seeking
reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or
its debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors,
or seeking appointment of a receiver, trustee,
custodian or other similar official for it or for
all or any substantial part of its property, and
such case, proceeding or other action (I) results
in the entry of an order for relief against it
which is not fully stayed within 14 business days
after the entry thereof or (ii) remains
undismissed for a period of 60 days after its
commencement.
(5) Grantor shall sell, lease, convey or in
any manner transfer any of the personal property
which is part of the Mortgaged Property without
replacing the property with new or substantially
the same property.
SALE OF PROPERTY OR CHANGE IN BORROWER ENTITY
16. As an inducement to Lender to make the
loan evidenced by the Note which this Deed of
Trust secures, Borrower covenants and agrees that
during the term of the loan, title to the
Borrower's interest in the Property shall be
vested solely in Borrower. If at any time during
the term all or any part of the Borrower's
interest in said real estate or any interest
therein (except residential occupancy agreements
in the ordinary course of business on forms
approved by Lender or Leases of less than 10% of
the total rentable floor area of the
improvements), without the prior written consent
of Lender, shall be
10
conveyed or transferred or is further encumbered
(whether voluntary or by operation of law or
otherwise), the indebtedness secured hereby shall,
at the option of Lender, become immediately due
and payable.
If Borrower or its permitted successor is a
partnership, a change in a general partner shall
be considered a change of ownership for purposes
of this paragraph. If Borrower or its permitted
successor is a corporation, a change in the
aggregate stock ownership affecting more that 50%
of the ownership interest shall be considered a
change of ownership for purposes of this
paragraph. If Borrower or its permitted successor
is a limited liability company, a change in
manager or change in the aggregate membership
affecting more than 50% of the ownership interest
shall be considered a change in ownership for
purposes of this paragraph. Notwithstanding the
foregoing, Borrower may convey all of the
Mortgaged Property to a successor entity or
assignee in which Emeritus Corporation and/or
▇▇▇▇▇▇ ▇. ▇▇▇▇ hold more than 50% of the total
ownership interest ("Permitted Assignee") and so
long as the Permitted Assignee agrees to assume
the Note and obligations hereunder and, if the
transfer occurs after Completion of Improvements,
so long as the Permitted Assignee has a license to
own and operate the facility located at the
Property.
Lender agrees not to withhold its consent to
a change in ownership if the new owner or owners
have a satisfactory credit standing, qualified
management ability to operate the Property in
Lender's sole judgment as a prudent lender and all
required licenses and permits from applicable
govemmental agencies. Notwithstanding the
foregoing, Lender may withhold consent to a change
in ownership if the principals (or baneficiaries)
of such new owner are undisclosed or unavailable
for service of process within the United States.
Borrower shall give Lender 30 days' prior written
notice of any proposed transaction which requires
Lender's consent and shall furnish to Lender such
information as Lender may reasonably require.
Consent to any one transaction shall not be deemed
to be consent to any other.
Upon a sale, conveyance or transfer of the
Property requiring Lender's consent, Lender may:
(a) charge Borrower a fee for processing a request
for approval, (b) require the payment of
reasonable attomeys' fees in connection with such
transfer, (c) require the express assumption of
payment of the Note and performance of the
obligations by the new owner or owners without the
release of Grantor from liability for such Note
and obligations), (d) require the execution of
Assumption Agreements, Modification Agreements,
Supplemental Security Documents and Financing
Statements satisfactory in form and substance to
Lender, and (e) require endorsements (to the
extent available under applicable law) to any
existing mortgage title insurance policies
insuring Lender's liens and security interests
covering the Property.
FORECLOSURE; EXPENSE OF LITIGATION
17. Upon an Event of Default, Lender shall
have the right to foreclose the lien hereof. If
foreclosure be made by the Trustee, a reasonable
attorneys' fee for services in the supervision of
said foreclosure proceedings shall be allowed by
the Trustee as part of the foreclosure costs. If
foreclosure be made through the Court, a
reasonable attorneys' fee shal1 be allowed as part
of the foreclosure costs. In the event of
foreclosure of the lien hereof, whether through
the Trustee or through the Court, there shall be
allowed and included as additional indebtedness
all reasonable expenditures and expenses which may
be paid or incurred by or on behalf of Lender for
attorneys' fees, appraisers' fees, outlays for
documentary and expert evidence, stenographers'
charges, publication costs, and costs (which may
be estimated as to items to be expended after
foreclosure sale or entry of the decree) of
procuring all such abstracts of title, title
searches and examinations, title
11
insurance policies, and similar data and
assurances with respect to title as Lender may
deem reasonably necessary either to prosecute such
suit or to evidence to bidders at any sale which
may be had pursuant to such decree the true
condition of the title to or the value of the
Property. All expenditures and expenses of the
nature in this
paragraph mentioned, and such expenses and fees as
may be incurred in the protection of the Mortgaged
Property, and the maintenance of the lien of this
Deed of Trust, and charges permitted by law,
including the reasonable fees of any attorney
employed by Lender in any litigation or proceeding
affecting this Deed of Trust, the Note or the
Mortgaged Property, including probate, bankruptcy
proceedings, proceedings to obtain a receiver, or
in preparation for the commencement or defense of
any proceeding or threatened suit or proceeding,
shall be immediately due and payable by Borrower,
with interest thereon at the Default Rate, as more
particularly defined in the Note and shall be
secured by this Deed of Trust.
HAZARDOUS WASTE
18. Grantor shall keep and maintain the
Property in compliance with, and shall not cause
or permit the Property to be in violation of any
federal, state or local laws, ordinances, or
regulations relating to industrial hygiene or to
the environmental conditions on, under or about
the Property including, but not limited to, soil
and ground water conditions. Grantor shall not
use, generate, manufacture, store or dispose of
on, under or about the Property or transport to or
from the Property any flammable explosives,
radioactive materials, hazardous wastes, toxic
substances or related materials, including,
without limitation, any substances defined as or
included in the definition of "hazardous
substances," "hazardous wastes," or "toxic
substances" under any applicable federal or state
laws or regulations, excepting from the term
Hawrdous Substance materials and/or substances
used in the normal course of business provided
said materials an/or substances are kept in
approved containers, at or within approved
locations, and in accordance with all applicable
laws, rules and regulations and, if applicable,
that all appropriate licenses are obtained
(collectively referred to hereinafter as
"Hazardous Materials").
Grantor shall immediately advise Lender in
writing of (1) any and all enforcement, cleanup,
removal or other governmental or regulatory
actions instituted, completed or threatened
pursuant to any applicable federal, state or local
laws, ordinances, or regulations relating to any
Hq7nrdous Materials affecting the Property
("Hazardous Materials Laws"); (ii) all claims made
or threatened by any third party against Grantor
or the Property relating to damage, contribution,
cost recovery compensation, loss or injury
resulting from any Hn7nrdous Materials (the
matters set forth in clauses (I) and (ii) above
are hereinafter referred to as "Hazardous
Materials Claims"); and (iii) Grantor's discovery
of any occurrence or condition on any real
property adjoining or in the vicinity of the
Property that would cause the Property to be
subject to any restrictions on the ownership,
occupancy, transferability or use of the Property
under any Hazardous Materials Laws.
Lender shall have the right to join and
participate in, as a party if it so elects, any
legal proceedings or actions initiated in
connection with any Hazardous Materials Claims and
to have its reasonable aKorneys' fees in
connection therewith paid by Grantor. Grantor
shall be solely responsible for, and shall
indemnify and hold harmless Lender, its directors,
officers, employees, agents, successors and
assigns (the "Indemnified Parties") from and
against, any loss, damage, cost, expense or
liability directly or indirectly arising out of or
attributable to the use, generation, storage,
release, threatened release, discharge, disposal,
or presence of Hazardous Materials on, under or
about the Property, including, without limitation:
(a) all foreseeable consequential damages; (b) the
costs of any required or necessary repair, cleanup
or detoxification of
12
the Property; and the preparation and
implementation of any closure, remedial or other
required plans; and (c) all reasonable costs and
expenses incurred by Lender in connection with
clauses (a) and (b), including but not limited to
reasonable attorneys' fees; but not including
(a)-(c) to the extent arising out of the
negligence or willful misconduct of the
Indemnified Parties.
Without Lender's prior written consent, which
shall not be unreasonably withheld, Grantor shall
not take any remedial action in response to the
presence of any Hazardous Materials on, under, or
about the Property, nor enter into any settlement
agreement, consent decree, or other compromise in
respect to any Hazardous Material Claims, which
remedial action, settlement, consent or compromise
might, in Lender's reasonable judgment, impair the
value of the Lender's security hereunder;
provided, however, that Lender's prior consent
shall not be necessary in the event that the
presence of Hazardous Materials on, under, or
about the Property either poses an immediate
threat to the health, safety or welfare of any
individual or is of such a nature that an
immediate remedial response is necessary and it is
not possible to obtain Lender's consent before
taking such action, provided that in such event
Grantor shall notify Lender as soon as practicable
of any action so taken. Lender agrees not to
withhold its consent, where such consent is
required hereunder, if either (I) a particular
remedial action is ordered by a court of competent
jurisdiction, or (ii) Grantor establishes to the
reasonable satisfaction of Lender that there is no
reasonable alternative to such remedial action
which would result in less impairment of Lender's
security hereunder.
APPOINTMENT OF RECEIVER
19. In addition to any other rights and
powers conferred on the Lender hereunder, upon an
Event of Default Lender shall have the right to
apply for the appointment of a receiver of rents
and profits of any part or the whole of the above
Property, ex parte and without notice, and the
Lender shall be entitled, as a matter of right,
without regard to the value of the Property as
security for the amount due or to the solvency of
the Borrower or any other party or parties liable
for the payment of such amount, to the appointment
of such a receiver of rents and profits with power
to lease the Property, or such part thereof as may
not then be under lease, and with such other
powers as may be deemed necessary, who, after
deducting all proper charges and expenses
attending the execution of his trust as receiver,
including the fees of the receiver, and attorney's
fees of the receiver's attorney, shall apply the
residue of the said rents and profits to the
payment and satisfaction of the amount remaining
secured hereby, or to any deficiency which may
exist after applying the proceeds of the sale of
said Property to the payment of the amount due,
including interest and the costs of any reasonable
attorneys' fees for the foreclosure and sale in
such order of priority as Lender shall elect.
ASSIGNMENT OF RENTS AND LEASES
20. To further secure the indebtedness
secured hereby, Grantor does hereby sell, assign
and transfer unto the Lender all rents, issues and
profits now due and which may hereafter become due
under or by virtue of any lease, whether written
or verbal, or any letting of, or of any agreement
for the use or occupancy of the Mortgaged Property
or any part thereof, and all benefits and
advantages to be derived therefrom, which may have
been heretofore or may be hereafter made or agreed
to or which may be made or agreed to by the Lender
under the powers herein granted, it being the
intention hereby to establish an absolute transfer
and assignment of all such avails, rents, issues
and profits unto the Lender, and the Grantor does
hereby appoint irrevocably the Lender its true and
lawful attorney in its name and stead (with or
without taking possession of the Property as
provided in the paragraph entitled "Lender's Right
of Possession In Case of Default") following an
Event of Default to rent, lease or let all or any
portion of the Mortgaged
13
Property to any party or parties at such rental
and upon such terms as said Lender shall, in its
discretion, determine, and to collect all of said
avails, rents, issues and profits arising from or
accruing at any time hereafter, and all now due or
that may hereafter become due under each and every
of the leases and agreements, written or verbal,
or other tenancy agreements existing, or which may
hereafter exist on the Mortgaged Property, with
the same rights and powers and subject to the same
immunities, exoneration of liability and rights of
recourse and indemnity as the Lender would have
upon taking possession pursuant to the provisions
of the paragraph entitled "Lender's Right of
Possession In Case of Default" hereof.
Grantor represents and agrees that no rent
has been or will be paid by any person in
possession of any portion of the Property for more
than one installment in advance, and that the
payment of none of the rents to accrue for any
portion of the Property has been or will be
waived, released, reduced, discounted or otherwise
discharged or compromised by the Grantor. The
Grantor waives any rights of setoff against any
person in possession of any portion of the
Mortgaged Property. If any lease provides for the
abatement of the rent during repair of the
Property demised thereunder by reason of fire or
other casualty, the Grantor shall furnish to the
Lender rental insurance, the policies to be in
amount and form and written by such insurance
companies as shall be satisfactory to the Lender.
Grantor agrees that it will not assign any of the
rents or profits of the Mortgaged Property, except
to a purchaser or grantee of the Mortgaged
Property, and then only upon condition that said
grantee agrees, in writing, to assume and pay the
debt secured hereby.
Nothing herein contained shall be construed
as constituting the Lender a mortgagee in
possession in the absence of the taking of actual
possession of the Mortgaged Property by the
Lender. In the exercise of the powers herein
granted to the Lender, no liability shall be
asserted or enforced against the Lender, all such
liability being expressly waived and released by
Grantor.
The Grantor further agrees to further assign
and transfer to the Lender all future leases upon
all or any part of the Mortgaged Property and to
execute and deliver, at the request of the Lender,
all such further assurances and assignments in the
Mortgaged Property as the Lender shall from time
to time require.
Although it is the intention of the parties
that the assignment contained in this paragraph
entitled "Assignment of Rents and Leases" shall be
a present assignment, it is expressly understood
and agreed, anything herein contained to the
contrary notwithstanding, that the Lender shall
not exercise any of the rights or powers conferred
upon it by this paragraph until and unless an
Event of Default occurs. Until an Event of Default
occurs, Lender grants to Grantor a revocable
license to collect rental and occupancy charges.
LENDER'S RIGHT OF POSSESSION IN CASE OF DEFAULT
21. In any case in which under the provision
of this Deed of Trust, the Lender has a right to
institute foreclosure proceedings, whether before
or after the whole principal sum secured hereby is
declared to be immediately due as aforesaid, or
whether before or after the institution of legal
proceedings to foreclose the lien hereof or before
or after sale thereunder, forthwith upon demand of
Lender, Grantor shall surrender to Lender and
Lender shall be entitled to take actual possession
of the Property or any part thereof personally, or
by its agents or attorneys, as for condition
broken, and Lender in its discretion may, with or
without force and with or without process of law,
enter upon and take and maintain possession of all
or any part of the Mortgaged Property, together
with all documents, books, records, papers and
accounts of the Grantor or then owners of
14
the Mortgaged Property relating thereto, and may
exclude the Grantor, its agents or servants,
wholly therefrom and may, as attorney-in-fact or
agent of the Grantor, or in its own name as Lender
and under the powers herein granted, hold,
operate, manage and control the Mortgaged Property
and conduct the business, if any, thereof, either
personally or by its agents, and with full power
to use such measures, legal or equitable, as in
its discretion or in the discretion of its
successors or assigns may be deemed proper or
necessary to enforce the payment or security of
the avails, rents, issues, and profits of the
Mortgaged Property, including actions for the
recovery of rent, actions in forcible detainer and
actions in distress for rent, hereby granting full
power and authority to exercise each and every of
the rights, privileges and powers herein granted
at any and all times hereafter, without notice to
the Grantor, and with full power to cancel or
terminate any lease or sublease for any cause or
on any ground which would entitle Grantor to
cancel the same, to elect to disaffirm any lease
or sublease made subsequent to this mortgage or
subordinated to the lien hereof, to make all
necessary or proper repairs, betterments and
improvements to the Mortgaged Property as to it
may seem judicious, insure and reinsure the same
and all risks incidental to Lender's possession,
operation and management thereof and to receive
all of such avails, rents, issues and profits.
The Lender shall not be obligated to perform
or discharge, nor does it hereby undertake to
perform or discharge, any obligation, duty or
liability under any leases, and the Grantor shall
and does hereby agree to indemnify and hold the
Lender harmless of and from any and all liability,
loss or damage which it may or might incur under
said leases or under or by reason of the
assignment thereof and of and from any and all
claims and demands whatsoever which may be
asserted against it by reason of any alleged
obligations or undertakings on its part to perform
or discharge any of the terms, covenants or
agreements contained in said leases. Should the
Lender incur any such liability, loss or damage,
under said leases or under or by reason of the
assignment thereof, or in the defense of any
claims or demands (except claims arising out of
Lender's negligence or willful misconduct), the
amount thereof, including costs, expenses and
reasonable attorneys' fees shall be secured
hereby, and the Borrower shall reimburse the
Lender therefor immediately upon demand.
APPLICATION OF INCOME RECEIVED BY LENDER
22. The Lender in the exercise of the rights
and powers hereinabove conferred upon it by the
paragraphs entitled "Assignment of Rents and
Leases" and "Lender's Right of Possession in Case
of Default" hereof shall have full power to use
and apply the avails, rents, issues and profits of
the Mortgaged Property to the payment of or on
account of the following, in such order as Lender
may determine:
(a) To the payment of the operating expenses
of the Mortgaged Property, including cost of
management and leasing thereof (which shall
include reasonable compensation to the Lender and
its agent or agents, if management be delegated to
an agent or agents, and shall also include lease
commissions and other compensation and expenses of
seeking and procuring tenants and entering into
leases), established claims for damages, if any,
and premiums on insurance hereinabove authorized;
(b) To the payment of taxes, special
assessments or insurance premiums now due or which
may hereafter become due on the Mortgaged
Property;
(c) To the payment of all repairs,
decorating, renewals, replacements, alterations,
additions, betterments, and improvements
reasonably necessary for the continued operation
of the Mortgaged Property;
(d) To the payment of any indebtedness
secured hereby or any deficiency which may result
from any foreclosure sale.
15
LENDER'S RIGHT OF INSPECTION
23. Lender or its duly appointed agent shall
have the right to inspect the Mortgaged Property
at all reasonable times and access thereto shall
be permitted for that purpose.
SECURITY DEPOSITS
24. If any security deposit or advance
payments received from tenants in lieu of security
deposits are received by Borrower, said security
deposits shall be kept and maintained in a
separate bank account and upon request of Borrower
by Lender, Borrower shall verify the bank account
and bank number and sign such documentation as may
reasonably be required by Lender in order to
obtain confirmation of the bank account. Upon
Lender's request, Lender shall be named on the
bank account and no funds shall be withdrawn
therefrom without the prior written consent of the
Lender, except payment of security deposits to
tenants entitled thereto. Failure to comply with
the provisions herein shall be deemed an Event of
Default hereunder.
CONDEMNATION
25. Grantor hereby assigns, transfers and
sets over unto Lender the entire proceeds of any
award or any claim for damages for any of the
Mortgaged Property taken or damaged under the
power of eminent domain or by condemnation. If the
payment of award proceeds occurs during the last
three months prior to the maturity date of the
Note, then Lender may elect to apply the proceeds
of the award upon or in reduction of the
indebtedness secured hereby, whether due or not,
or to require Grantor to restore or rebuild, in
which event the proceeds shall be held by Lender
and used to reimburse Grantor for the cost of
rebuilding or restoring of buildings or
improvements on the Property, in accordance with
plans and specifications to be submitted to and
approved by Lender. If the award proceeds exceed
$100,000 and are paid prior to the last three
months of the term of the Note, then the proceeds
shall be held by Lender and used to reimburse
Grantor for the cost of rebuilding or restoring
buildings and improvements on the Property. In the
event that the award proceeds are $100,000 or less
and are not paid during the last three months
prior to the maturity date of the Note, then such
proceeds may be paid directly to Grantor, and
Grantor covenants and agrees to use such proceeds
solely for the restoration and replacement of
buildings and improvements on the Property.
If the Grantor is obligated to restore or
replace the damaged or destroyed building or
improvements under the terms of any lease or
leases which are or may be prior to the lien of
this Oeed of Trust and if such taking does not
result in cancellation or termination of such
lease, the award shall be used to reimburse
Grantor for the cost of the rebuilding or
restoring of buildings or improvements on the
Property, provided Grantor has not been in default
under this Deed of Trust. In the event Grantor is
required or authorized, either by Lender's
election as aforesaid or by virtue of any such
lease, to rebuild or restore, the proceeds of the
award shall be paid out in the same manner as is
provided in the paragraph entitled "Adjustment of
Losses With Insurer and Application of Proceeds of
Insurance" hereof for the payment of insurance
proceeds toward the cost of rebuilding or
restoration. If the amount of such award is
insufficient to cover the cost of rebuilding or
restoration, Grantor shall pay such cost in excess
of the award, before being entitled to
reimbursement out of the award. Any surplus which
may remain out of said award after payment of such
cost of rebuilding or restoration shall, at the
option of Lender, be applied on account of the
indebtedness secured hereby.
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GIVING NOTICE
26. Any notice which Grantor or Lender may
desire or be required to give to the other party
shall be in writing, and the mailing thereof by
certified mail addressed to the Grantor or to the
Lender at the address stated above, or at such
place as either party hereto may by notice in
writing designate as a place for service of
notice, shall constitute service of notice
hereunder and shall be deemed delivered three
business days after its deposit in the United
States mail, postage prepaid or one business day
after its deposit with a national overnight air
courier, prepaid.
WAIVER OF RIGHTS
27. As to any action brought by Lender prior
to any foreclosure sale by the Trustee held
pursuant to this l}eed of Trust, Grantor hereby
waives the right to any notice and to any hearing
other than as provided herein and by the statutes
and rules of Civil Procedure of the State of Idaho
now in existence. Grantor shall not and will not
apply for nor avail itself of any appraisement,
valuation, stay, extension or exemption laws, or
any so-called "Moratorium Laws", now existing or
hereafter enacted, in order to prevent or hinder
the enforcement or foreclosure of this mortgage,
and hereby waives the benefit of such laws.
Grantor for itself and for all who may claim
through or under it waives (a) the right to trial
by jury on any issues between Grantor and Lender
and to any issues pertaining to the Note, this
Deed of Trust or any other document securing the
Note and as to matters pertaining to the acts of
the Holder of the Note prior to the date hereof;
and (b) any and all right to have the property and
estates comprising the Mortgaged Property
marshalled upon any foreclosure of the lien hereof
and agrees that any court having jurisdiction to
foreclose such lien may order the property sold as
an entirety.
MANAGEMENT
28. So long as any part of the Note secured
hereby remains unpaid, the Grantor will provide
and maintain good and efficient management of the
Mortgaged Property satisfactory to Lender.
FINANCIAL STATEMENTS
29. Borrower covenants and agrees to furnish
Lender, within one hundred twenty (120) days after
the close of each fiscal year of Borrower, an
annual operating statement setting forth in such
detail as Lender may reasonably require, the
income and expenses derived from and attributable
to the Mortgaged Property during the preceding
year, certified by Borrower.
APPROVAL OF CONSTRUCTION PLANS FOR PROPERTY AND
CONTIGUOUS LAND
30. Grantor covenants and agrees that there
shall be no construction on the Property or on any
adjoining land at any time owned or controlled by
the Borrower, or any related business entities,
unless complete plans and specifications for same
shall have first been approved by the Lender as,
in its judgment, entailing no prejudice to the
loan secured hereby.
PARKING REQUIREMENTS
31. Grantor covenants and agrees to maintain
at all times aufficient parking spaces to comply
with the parking requirements of all tenant
leases, zoning and other regulations affecting the
Property.
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SECURITY AGREEMENT AND FINANCING STATEMENT UNDER
UNIFORM COMMERCIAL CODE
32. To the extent any property covered by
this Deed of Trust consists of rights in action or
personal property covered by the Uniform
Commercial Code, this Deed of Trust constitutes a
security agreement and financing statement as
defined in the Idaho Uniform Commercial Code.
Grantor hereby grants to Lender a security
interest in all of the Mortgaged Property
described in this Deed of Trust. This Deed of
Trust shall be self-operative with respect to such
property, but Grantor agrees to execute and
deliver on demand a security agreement, financing
statement or other instrument as Lender may
request to impose the lien hereof more
specifically upon any of such property and to pay
the recording and/or filing fees associated
therewith. The remedies for any violation of the
covenants, terms and conditions of the agreements
herein contained shall be (I) as prescribed
herein, or (ii) by general law, or (iii) as to
such part of the security which is covered by the
Uniform Commercial Code by the specific statutory
consequences now or hereafter enacted and
specified in said Uniform Commercial Code, all at
Lender's sole election. Grantor and Lender agree
that nothing herein contained shall be construed
as in anywise derogating from or impairing this
declaration and hereby stated intention of the
parties hereto, that everything used in connection
with the production of income from the Property
and/or adapted for the use therein and/or which is
described or reflected in this Deed of Trust is,
and at all times and for all purposes and in all
proceedings, both legal or equitable, shall be
regarded as part of the real estate irrespective
of whether (I) any such item is physically
attached to the improvements, (ii) serial numbers
are used for the better identification of certain
equipment items capable of being thus identified
in a recital contained therein or in any list
filed with the Lender, (iii) any such item is
referred to or reflected in any Financing
Statement filed at any time. Similarly, the
mention in any Financing Statement of (1) the
rights in or the proceeds of any fire and/or
hazard insurance policy, or (2) any award in
eminent domain proceedings for a taking or for
loss of value, or (3) the Grantor's interest as
lessor in any present or future lease or rights to
income growing out of the use and/or occupancy of
the Property, whether pursuant to lease or
otherwise shall never be construed as in anywise
altering any of the rights of Lender as determined
by this instrument or impugning the priority of
Lender's lien granted hereby or by any other
recorded document, but such mention in said
Financing Statement is declared to be for the
protection of Lender in the event any Court shall
at any time hold with respect to (1), (2) and (3)
that notice of Lender's priority of interest to be
effective against a particular class of person,
including, but not limited to, the Federal
Government, must be filed in the Commercial Code
Records. For purposes of treating this Deed of
Trust as a security agreement and financing
statement, Lender shall be deemed to be the
Secured Party and Grantor shall be deemed to be
the Debtor.
THIS IS A CONSTRUCTION MORTGAGE UNDER THE
UNIFORM COMMERCIAL CODE, GIVEN TO SECURE AN
OBLIGATION INCURRED FOR THE CONSTRUCTION OF AN
IMPROVEMENT OF LAND, INCLUDING THE ACQUISITION
COST OF THE LAND.
GOVERNING LAW
33. This Deed of Trust has been executed and
delivered in the State of Idaho and is to be
construed and enforced according to and governed
by the Laws of the State of Idaho.
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DISBURSEMENT OF LOAN PROCEEDS OR CONSTRUCTION OF
IMPROVENLENTS
34. The proceeds of the loan secured hereby
are to be disbursed by Lender to Borrower in
accordance with the provisions contained in the
Construction Loan Agreement. The Construction Loan
Agreement is fully incorporated in this Deed of
Trust by reference. The occurrence of any Event of
Default under said Construction Loan Agreement
shall constitute a default under this Deed of
Trust entitling Lender to all of the rights and
remedies conferred upon the Lender by the terms of
this Deed of Trust as in the case of any other
Event of Default. If, following an Event of
Default, Lender completes the construction of
improvements, then all moneys so expended shall be
so much additional indebtedness secured by this
Deed of Trust, and any moneys expended in excess
of the face amount of the Note shall be payable on
demand, with interest thereon at the Default Rate,
as more particularly described in the Note secured
hereby.
BINDING ON SUCCESSORS AND ASSIGNS
35. This Deed of Trust and all provisions
hereof, shall extend to and be binding upon
Grantor and/or the Borrower and all persons
claiming under or through Grantor or Borrower, and
the words "Grantor" or "Borrower" when used herein
shall include all such persons and all persons
liable for the payment of the indebtedness or any
part thereof, whether or not such persons shall
have executed the Note or this Deed of Trust. The
word "Lender" when used herein shall include the
successors and assigns of the Lender named herein,
and the holder or holders, from time to time, of
the Note secured hereby.
CAPTIONS
36. The captions and headings of various
paragraphs of this mortgage are for convenience
only and are not to be construed as defining or
limiting, in any way, the scope or intent of the
provisions hereof.
REMEDIES CUMULATIVE.
37. No remedy herein conferred upon or
reserved to the Trustee or Beneficiary is intended
to be exclusive of any other remedy provided
hereby or by law or provided or allowed by the
Promissory Note or any other loan agreements, but
each shall be cumulative and shall be in addition
to every other remedy given hereunder or existing
at law or in equity. Every power or remedy given
by this Deed of Trust to Trustee or Beneficiary,
or to which either of them may be otherwise
entitled, may be exercised from time to time and
as often as may be deemed expedient by Trustee or
Beneficiary.
RELEASES, EXTENSION, RECONVEVANCES; TRUSTEE FEES.
38. Without affecting the liability of any
person, including Grantor, for the payment of any
indebtedness secured hereby or the lien of this
Deed of Trust on the remainder of the Mortgaged
Property for the full amount of any indebtedness
unpaid, Beneficiary and Trustee are respectively
empowered as follows:
Beneficiary may from time to time and without
notice:
(a) Release any person liable for payment of
any of the indebtedness;
(b) Extend the time or otherwise alter the
terms of payment of any of
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the indebtedness; or
(c) Alter, substitute or release any
property securing the indebtedness.
Trustee may at any time and from time to
time, upon the written request of
Beneficiary:
(a) Consent to the making of any map or plat
of the Property;
(b) Join in granting any easement or creating
any restriction thereon;
(c) Join in any subordination or other
agreement affecting this Deed of
Trust or lien or charge thereof; or
(d) Reconvey, without warranty, all or any
part of the Mortgaged
Property.
Trustee shall be entitled to reasonable
compensation for all services rendered or expenses
incurred in the administration or execution of the
trust hereby created, and Grantor hereby agrees to
pay same.
SEVERABILITY.
39. If any of the provisions hereof shall be
determined to contravene or be invalid under the
laws of the State of Idaho, such contravention or
invalidity shall not invalidate any other
provisions of this Deed of Trust, but it shall be
construed as if not containing the particular
provision or provisions held to be invalid, and
all rights and obligations of the parties shall be
construed and enforced accordingly.
SPECIAL PROVISIONS CONCERNING PERSONAL PROPERTY.
40. Notwithstanding any terms of this Deed of
Trust to the contrary, Grantor reserves the right
to lease, finance, substitute and replace personal
property and to sell inventory in the ordinary
course of business without consent from Lender. In
addition, Grantor may permit its personal property
to be subject to equipment financing and security
interests in connection therewith. None of
Grantor's reserved rights described in this
Section 40 shall constitute an Event of Default.
IN WITNESS WHEREOF, the Grantor has caused
these presents to be executed the day and year
first above written.
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EMERITUS PROPERTIES II, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------------
Its: President
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 30th day of January, 1997, before me
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ personally appeared ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇ known or identified to me (or proved
to me on the oath of __________) to be the
president, or vice president, or secretary or
assistant secretary, of the coproration that
executed the instrument or the person who executed
the instrument on behalf of said corporation, and
acknowledged to me that such corporation executed
the same.
Witness my hand and official seal.
My commission expires: 3-30-99
[SEAL]
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Notary Public
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