RECORDING REQUESTED BY AND WHEN RECORDED RETURN
TO:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇ ▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
DEED OF TRUST, SECURITY AGREEMENT, FINANCING
STATEMENT ASSIGNMENT OF RESIDENT
AGREEMENTS AND RENTS
(Security For Construction And Mini-Permanent
Loan)
Grantor (Borrower): Emeritus Properties III, Inc.
Grantee (Lender): Ocwen Federal Bank FSB
Grantee (Trustee): Chicago Title Insurance Company
Legal Description (abbreviated): Lot l, Columbia
Pacific Management Building Site Plan, 9507190625;
Additional legal on Exhibit A
Assessor's Tax Parcel ID#6021650010
THIS DOCUMENT TO BE RECORDED BOTH AS
A DEED OF TRUST AND FIXTURE FILING
THIS DOCUMENT SECURES OBLIGATIONS WHICH
CONTAIN
PROVISIONS FOR A VARIABLE RATE OF
INTEREST
THIS DEED OF TRUST, SECURITY AGREEMENT,
FINANCING STATEMENT AND ASSIGNMENT OF RESIDENT
AGREEMENTS AND RENTS (this "Deed of Trust") is
made as of the 30th day of January,1997, by and
between EMERITUS PROPERTIES III, INC., a
Washington corporation whose address is ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Grantor"), CHICAGO TITLE INSURANCE COMPANY, a
Missouri corporation, whose address is ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, as Trustee ("Trustee") and
OCWEN FEDERAL BANK FSB, a federally chartered
savings bank whose address is ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Secretary ("Beneficiary").
Terms which are used in this Deed of Trust
and not otherwise defined herein shall have the
meanings described to such terms in Article I
below.
RECITALS
THIS DEED OF TRUST CONSTITUTES A FIXTURE
FILING UNDER SECTIONS 9-313 AND 9-402 OF THE
UNIFORM COMMERCIAL CODE AS ADOPTED BY THE STATE OF
WASHINGTON TO THE EXTENT THE GOODS ARE FIXTURES
UNDER THE LAWS OF THE STATE OF WASHINGTON, THE
FIXTURES ARE OR ARE TO BECOME FIXTURES ON THE REAL
PROPERTY LOCATED IN THE COUNTY OF ▇▇▇▇▇▇, STATE OF
WASHINGTON, MORE PARTICULARLY DESCRIBED ON EXHIBIT
A ATTACHED HERETO. THE NAME
OF THE RECORD OWNER OF THE REAL PROPERTY IS
GRANTOR
Of even date herewith, Grantor, as ▇▇▇▇▇▇▇▇,
and Beneficiary, as Lender, have entered into a
Loan Agreement (the "LOAN AGREEMENT") pursuant to
which Beneficiary has agreed to make a loan (the
"LOAN") to Grantor in the original principal sum
of Six Million Four Hundred Sixty-Five Thousand
and No/100 Dollars ($6,465,000) upon the terms and
conditions set forth therein. The Loan is
evidenced by a Promissory Note (the "NOTE") in the
original principal amount of the Loan executed by
Grantor and payable to the order of Beneficiary.
As security for the Loan, and as partial
consideration therefor, ▇▇▇▇▇▇▇ has agreed to
execute and deliver this Deed of Trust as one of
the Loan Documents described in the Loan
Agreement.
NOW, THEREFORE, in consideration of the
making of the Loan and other good and valuable
consideration, the receipt, adequacy and
sufficiency of which are hereby conclusively
acknowledged, to secure the Loan and the other
Indebtedness, Grantor has granted, mortgaged,
bargained, sold, alienated, enfeoffed, released,
conveyed and confirmed, and by these presents does
▇▇▇▇▇, mortgage, bargain, sell, alienate,
enfeoffed release, convey and confirm unto the
Trustee, in trust, WITH POWER OF SALE, in fee
simple, all that land situated in ▇▇▇▇▇▇ County,
Washington, and more particularly described on
Exhibit A attached hereto and made a part hereof
for all purposes (the "LAND"), together with the
buildings and improvements erected or to be
erected thereon, including but not limited to all
appurtenant parking areas, driveways, roadways,
walkways and landscaped areas (the
"IMPROVEMENTS");
TOGETHER with all the walks, fences,
shrubbery, driveways, fixtures, equipment,
machinery, apparatus, fittings, building materials
and other articles of personal property of every
kind and nature whatsoever, now or hereafter
ordered for eventual delivery to the Land (whether
or not delivered thereto), and all such as are now
or hereafter located in or upon any interest or
estate in the Land or any part thereof and used or
usable in connection with any present or future
operation of the Land now owned or hereafter
acquired by Grantor, including, without limiting
the generality of the foregoing, all heating,
lighting, laundry, clothes washing, clothes
drying, incinerating and power equipment, engines,
boilers, pipes, tanks, motors, conduits,
switchboards, plumbing, lifting, cleaning, fire-
prevention, fire-extinguishing, refrigerating,
ventilating, and communications apparatus,
telephones and office equipment, television sets,
radio systems, recording systems, computer
equipment, copiers, chairs, desks, tables, sofas,
air-cooling and air-conditioning apparatus,
elevators, escalators, shades, awnings, draperies,
curtains, curtain rods, mirrors, paneling, fans,
furniture, furnishings, beds ,
mattresses, linens, bedding, towels, wheel chairs,
walkers, canes, medical equipment and supplies,
vans and other transportation equipment,
carpeting, linoleum and other floor coverings,
screens, storm doors and windows, stoves, dishes,
glasses, silverware and other kitchen and
restaurant equipment and supplies, gas and
electric ranges, refrigerators, garbage disposals,
sump pumps, dishwashers, bath tubs, water heaters,
water closets, sinks, attached cabinets,
partitions, ducts and compressors, landscaping,
swimming pool, lawn and garden equipment, security
systems and including all materials and equipment
installed or to be installed or used or usable in
the construction, reconstruction, alteration,
repair and operation of the building or buildings
or appurtenant facilities erected or to be erected
in or upon the Land; it being understood that all
of the
2
aforesaid shall be deemed to be fixtures and part
of the Land, but whether or not of the nature of
fixtures they shall be deemed and shall constitute
part of the security for the Indebtedness and
shall be covered by this Deed of Trust excluding,
however, only personal property owned by any
resident actually occupying all or part of the
premises. Except as otherwise expressly allowed
pursuant to this Deed of Trust, disposition of any
of the aforesaid or of any interest therein is
prohibited; however, if any disposition is made in
violation hereof, Beneficiary shall have a
security interest in the proceeds therefrom to the
fullest extent permitted by the laws of the State
of Washington; and
TOGETHER with all and singular the. rights, rights-of wa
y
,
s
t
r
i
p
s
a
n
d
g
o
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e
s
of land, streets, alleys, ways, passages, sewer
rights, water, water courses, water rights and
powers, air rights and development rights,
mineral, oil and gas rights, easements, tenements,
privileges, advantages, accessions, hereditaments
and appurtenances belonging or in any way
appearing to the Land and other property described
herein, and the reversions and remainders,
earnings, revenues, rents, royalties, issues and
profits thereof and including any right, title,
interest or estate hereafter acquired by Grantor
in the Land and other property described herein,
and all land lying in the bed of any street, road
or avenue, opened or proposed, in front of or
adjoining the Mortgaged Property (hereinafter
defined) to the center line thereof and all the
estates, rights, titles, interests, dower and
rights of dower, curtesy and rights of curtesy,
properly, possession, claim and demand whatsoever
both at law and in equity, of Grantor of, in and
to the Mortgaged Property and every part and
parcel thereof, with the appurtenances thereto;
and
TOGETHER with all the right, title and
interest (but not the obligations) of Grantor,
present and future, in and to all present and
future accounts, contract rights (including all
rights of Grantor set forth in the Loan
Agreement), general intangibles, chattel paper,
Documents and instruments including but not
limited to licenses, construction contracts,
management contracts, service contracts, utility
contracts, options, Permits, public works
agreements, architectural and engineering
agreements, all architectural, engineering and
similar plans, specifications, drawings, reports,
surveys, plats, permits, bonds, deposits and
payments thereunder, relating or appertaining to
the Land and other property described herein and
its development, occupancy and use; provided,
however, that nothing herein shall be construed to
grant Trustee or Beneficiary any right, title, or
interest in or to any such items, to the extent
such grant would be in violation of any applicable
Governmental Requirement; and
TOGETHER with any right to payment of the
rental for the use or occupancy (transient or
otherwise) of rooms or other space, including,
without limitation, any residential unit or bed,
any hotel or motel rooms, meeting, banquet,
restaurant, parking, health or health service,
medical, recreational or spa facilities, or for
goods sold or leased or for services rendered,
whether or not yet earned by performance, arising
from the operation of the Improvements or any
other facility on the Land, including, without
limitation, ( 1 ) all accounts arising from the
operation of the Improvements and all proceeds
thereof (whether cash or noncash, movable or
immovable, tangible or intangible) received upon
the sale, exchange, transfer, collection or other
disposition or substitution thereof, and (2) all
rights to payment from any consumer credit/charge
card organization or entity, including, without
limitation, payments arising from the use of the
American Express Card, Visa Card, ▇▇▇▇▇ ▇▇▇▇▇▇▇
Card, Master Card, Diner's Club, or any other
credit card, including those now existing or
hereafter created or any substitutions therefor
and all proceeds thereof (whether cash or non-cash
3
moveable Or immovable, tangible or intangible)
received upon the sale, exchange, transfer,
collection, or other disposition or substitution
thereof; provided however, that nothing herein
shall be construed to grant Trustee or Beneficiary
any right, title, or interest in or to any such
items, to the extent such grant would be in
violation of any applicable Governmental
requirement; and
TOGETHER with all of the rents, royalties,
revenues, income, proceeds, profits and other
benefits paid or payable by parties to the
Resident Agreements for using, leasing, licensing,
possessing, occupying, operating from, residing
in, selling or otherwise enjoying the Land, the
improvements, and other property securing the
Indebtedness, or any portion thereof; provided,
however, that nothing herein shall be construed to
grant Trustee or Beneficiary any right, title, or
interest in or to any such items, to the extent
such grant would be in violation of any applicable
Governmental Requirement; and
TOGETHER with aI1 of ▇▇▇▇▇▇▇'s right, title
and interest in and to any and all judgments,
awards of damages (including but not limited to
severance and consequential damages), payments,
proceeds, settlements or other compensation
(collectively, the "AWARDS") heretofore or
hereafter made, including interest thereof and the
right to receive the same, as a result of, in
connection with, or in lieu of (a) any taking of
the Mortgaged Property or any part thereof by the
exercise of the power of condemnation or eminent
domain, or the police power; (b) any change or
alteration of the grade of any street or (c) any
other injury or decrease in the value of the
Mortgaged Property or any part thereof (including
but not limited to destruction or decrease in
value by fire or other casualty), a11 of which
Awards, rights thereto and shares therein are
hereby assigned to Beneficiary, who is hereby
authorized to collect and receive the proceeds
thereof and to give property receipts and
acquittances therefor and to apply, at its option,
the net proceeds thereof, after deducting expenses
of collection as a credit upon any portion, as
selected by Beneficiary, of the Indebtedness
secured hereby; and
TOGETHER with all of ▇▇▇▇▇▇▇'s right, title
and interest in and to any and all payments,
proceeds, settlements or other compensation
heretofore or hereafter made, including any
interest thereon, and the. right to receive the
same from any and all insurance policies covering
the Property or any portion thereof, or any of the
other property described herein; and
TOGETHER with the interest of Grantor in any
cash escrow fund and in any and all funds,
securities, instruments, Documents and other
property which are at any time paid to, deposited
with, under the control of, or in the possession
of Beneficiary, or any of its agents, branches,
affiliates, correspondents or others acting on its
behalf, which rights shall be in addition to any
right of set-off or right of lien that Beneficiary
may otherwise enjoy under applicable law,
regardless of whether the same arose out of or
relates in any way, whether directly or
indirectly, to the Mortgaged Property; and
TOGETHER with the interest of Grantor in and
to any and all funds created or established and
held by Beneficiary pursuant to any indenture of
trust or similar instrument authorizing the
issuance of bonds or notes for the purpose of
financing the Project; and
4
TOGETHER with all inventory, including raw
materials, components, work-in progress, finished
merchandise and packing and shipping materials
owned by Grantor and located on the Mortgaged
Property; and
TOGETHER with all proceeds, products,
returns, additions, accessions and substitutions
of and to any or all of the above; and
TOGETHER with all of the records and books of
account now or hereafter maintained by or on
behalf of Grantor in connection with the Project;
and
TOGETHER with all names now or hereafter used
in connection with the Project and the goodwill
associated therewith.
The Land, the Improvements and all of the
property, rights, privileges and franchises
referenced hereinabove and/or granted herein by
Grantor to Beneficiary, together with the
proceeds, products, replacements, additions,
substitutions, renewals and accessions of or to
any and all of the foregoing, are collectively
referred to herein as the "MORTGAGED PROPERTY."
TO HAVE AND TO HOLD all and singular the
Mortgaged Property unto the Trustee, its
successors and assigns forever; PROVIDED, HOWEVER,
that these presents are upon the condition that if
Grantor shall pay and fully perform the Loan,
including, without limitation, all sums,
including, without limitation, the principal,
interest and Additional Interest payable in
respect to the Note, Loan Agreement and Loan
Documents and all amounts and any other promissory
note or evidence of indebtedness secured by this
Deed of Trust, at the times and in the manner
stipulated therein and herein, all without any
deduction or credit for taxes or other similar
charges paid by Grantor, and shall keep, perform
and observe all and singular the terms,
conditions, covenants and provisions in the Note,
Loan Agreement and Loan Documents, and any
renewal, extension consolidation or modification
thereof and in this Deed of Trust expressed to be
kept, performed and observed by and on the part of
Grantor, all without fraud or delay, then the
Trustee shall, upon receipt of the written request
of ▇▇▇▇▇▇ and at the expense of Grantor, release
and discharge this Deed of Trust of record and
shall transfer and deliver up to Grantor any
property at the time subject to this Deed of Trust
which may be then in its possession, provided the
Trustee hereunder shall be entitled to a
reasonable fee for the release and reconveyance of
such property.
This Deed of Trust does not secure any funded
or unfunded commitment to any governmental agency
to pay for the construction or maintenance of any
sidewalks, roads, traffic controls, storm or
sanitary sewer lines, landscaping or other
improvements to or in the vicinity of the
Mortgaged Property or any extension fees or other
sums due in connection therewith if and to the
extent such commitment is or becomes secured by a
separate deed of trust.
5
ARTICLE I
DEFINITIONS
When used in this Deed of Trust, the
following terms shall have the respective meanings
assigned to them or if no definition is set forth
herein, then the meanings assigned to such terms
in the Loan Agreement:
"ACCREDITATION BODY" shall have the meaning
ascribed to such term in the Operating Agreement.
"AFFILIATE" shall have the meaning ascribed
to such term in the Operating Agreement.
"ASSIGNMENT OF LICENSES AND PERMITS" shall
mean the Assignment of Licenses and Permits dated
of even date herewith executed by ▇▇▇▇▇▇▇ and
delivered to Beneficiary, as the same may be
amended from time to time.
"ASSIGNMENT OF RENTS AND LEASES" shall mean
the Assignment of Rents and Leases dated of even
date herewith executed by ▇▇▇▇▇▇▇ and delivered to
Beneficiary, as the same may be amended from time
to time.
"ASSISTED LIVING FACILITY " shall have the
meaning ascribed to such term in the Loan
Agreement.
"BORROWING GROUP" shall mean collectively,
Grantor, Guarantor, any Person which is an
Affiliate of Grantor or Guarantor or any Manager
which is an Affiliate of Grantor or Guarantor.
"BUSINESS DAYS" shall mean any day other than
a Saturday or Sunday or any day which is a legal
holiday in Florida or any day on which banking
institutions are authorized or are required by law
or other governmental action to close.
"COLLATERAL" shall mean the Mortgaged
Property and all additional property covered by
any Security Agreement or any of the other Loan
Documents and identified as collateral or security
for the Loan.
"CONTRACTS" shall mean all agreements
(including, without limitation, Provider
Agreements and Resident Agreements), contracts
(including without limitation, construction
contracts, subcontracts, and architects'
contracts), contract rights, warranties and
representations, franchises, and records and books
of account benefiting, relating to or affecting
the Project or the ownership, construction,
development, maintenance, management, repair, use,
occupancy, possession, or operation thereof, or
the operation of any programs or services in
conjunction with the Project and all renewals,
replacements and substitutions therefor, now or
hereafter issued by or entered into with any
Governmental Authority, Accreditation Body or
Third Party Payor or maintained or used in
conjunction with the Project by any member of the
Borrowing Group or entered into in conjunction
with the Project by any member of the Borrowing
Group with any other Person.
6
"DEFAULT RATE" shall mean the rate of
interest set forth in the Note as the applicable
interest rate after the occurrence of an Event of
Default or after the Maturity Date.
"ENVIRONMENTAL LAWS" shall mean any
Governmental Requirement applicable to Grantor or
to the Mortgaged Property relating to industrial
hygiene or to environmental or unsafe conditions,
including but not limited to, those relating to
the generation manufacture, storage, handling,
transportation, disposal, release, emission or
discharge of Substances, those in connection with
the construction, fuel supply, power generation
and transmission, waste disposal or any other
operations or processes relating to the Mortgaged
Property, and those relating to the atmosphere,
soil, surface and ground water, wetlands, stream
sediments and vegetation on, under, in or about
the Mortgaged Property. Environmental Laws also
shall include, but not be limited to, the Model
Toxics Control Act, as adopted in the State of
Washington and amended from time to time, the
Comprehensive Environmental Response, Compensation
and Liability Act, the Emergency Planning and
Community Right-to-Know Act of 1986, the Hazardous
Materials Transportation Act, the Resource
Conservation and Recovery Act the Solid Waste
Disposal Act, the Clean Water Act, the Clean Air
Act, the Toxic Substance Control Act, the Safe
Drinking Water Act and the Occupational Safety and
Health Act, and all regulations adopted in respect
to the foregoing laws.
"ENVIRONMENTAL REPORT" shall mean the Phase I
Environmental Report dated October 3, 1996,
prepared by ▇▇▇▇▇▇▇ Consultants, Inc. with respect
to the Land.
"GOVERNMENTAL AUTHORITY" shall mean the
United States, the state, the county, the city, or
any other political subdivision in which the
Mortgaged Property is located, and any other
political subdivision, agency or instrumentality
exercising jurisdiction over Grantor, Guarantor,
the Project, or if the context requires, any
Design Professional, the General Contractor, any
subcontractor, the Developer, or the Manager under
the Management Contract.
"GOVERNMENTAL REQUIREMENTS" shall mean shall
mean all laws, statutes, ordinances, bylaws,
codes, rules, regulations, restrictions, orders,
writs, injunctions, judgments or decrees
(including, without limitation, all applicable
building, health code, zoning, subdivision and
other land use and health-care licensing statutes,
ordinances, by-laws, codes, rules and
regulations), whether now or hereafter enacted,
promulgated or issued by any Governmental
Authority, Accreditation Body or Third Party
Payor, applicable at any time and from time to
time to Beneficiary, any member of the Borrowing
Group (to the extent applicable to the Project or
the Loan), the Project or if the context requires,
any Design Professional, the General Contractor,
any subcontractor, the Developer or the Manager
under the Management Contract, or the ownership,
construction, development, maintenance,
management, repair, use, occupancy, possession or
operation of the Project, or the operation of any
programs or services in connection with the
Project, including, without limitation, any of the
foregoing which may (i) require repairs,
modifications or alterations in or to the Project,
(ii) in any way affect (adversely or otherwise)
the use and enjoyment of the Project, or (iii)
require the assessment, monitoring, clean-up,
containment, removal, remediation or other
treatment of any Substances on, under or from the
Project. Without limiting the foregoing, the term
Governmental Requirements includes all Permits and
Contracts issued or entered into by any
Governmental Authority, any Accreditation Body
and/or
7
any Third Party Payor and the requirements of
Chapter 18.20 of the Revised Code of Washington.
"HIGHEST LAWFUL RATE" shall have the meaning
ascribed to such term in Section 5.8 hereof.
"INDEBTEDNESS" shall mean the Loan, all
liabilities and obligations of Grantor, Guarantor
and other Persons owing to Lender under the Loan
Documents and all other amounts which by the terms
of this Deed of Trust or the Loan Documents are
secured by this Deed of Trust.
"INTENDED USE" shall mean the use of the
Land, Improvements and other Mortgaged Property as
an assisted living facility and such ancillary
uses as are permitted by law and may be necessary
in connection therewith or incidental thereto.
"LOAN DOCUMENTS" shall mean the Loan
Application, the Loan Agreement, the Note, this
Deed of Trust, the Assignment of Licenses and
Permits, the Assignment of Rents and Leases, the
Conditional Assignment of Management Contract, the
Operating Agreement, the Security Agreements, the
Guaranties, the Loan Disbursing Agreement,
Borrowers Counsel's Opinion, each Consent of
Design Professional, each Consent of Contractor,
and all other Documents, instruments and
agreements now existing or hereafter entered into
by Grantor or any Guarantor with or for the
benefit of Beneficiary in relation to the Loan, as
the same may be amended from time to time,
including all Documents evidencing the authority
and capacity of Grantor and Guarantor to
consummate the transactions contemplated by the
Loan Agreement.
"MEDICAID" shall have the meaning ascribed to
such term in the Operating Agreement.
"MEDICARE" shall have the meaning ascribed to
such term in the Operating Agreement.
"OPERATING AGREEMENT" shall mean that certain
Washington Assisted Living Facilities Operating
and Licensing Agreement dated of even date
herewith executed by ▇▇▇▇▇▇▇ and Beneficiary.
"PERMITS" shall mean collectively, all
permits, licenses, approvals, variances,
permissive uses, accreditations, certificates,
certifications, consents, .agreements, contracts,
contract rights, franchises, interim licenses,
permits and other authorizations of every nature
whatsoever required by, or issued under,
applicable Governmental Requirements benefiting,
relating or affecting the Project or the
construction development, maintenance, management,
use or operation thereof or the operation of any
programs or services in conjunction with the
Project and all renewals, replacements and
substitutions therefor, now or hereafter required
or issued by any Governmental Authority,
Accreditation Body or Third Party Payor, or
maintained or used in conjunction with the Project
by any member of the Borrowing Group, or entered
into in conjunction with the Project by any member
of the Borrowing Group with any Person.
8
"PERMITTED ENCUMBRANCES" shall mean (i) the
liens and security interests of Beneficiary
arising under this Deed of Trust and the other
Loan Documents; (ii) such matters as are expressly
stated as exceptions to title in any Title
Insurance Policy accepted by Beneficiary; (iii)
liens for taxes, assessments, or Governmental
charges or levies not yet due and payable, or
being contested in good faith by appropriate
proceedings promptly initiated and diligently
conducted, provided that a reserve or other
appropriate provision as may be required by GAAP
shall have been made therefor and no foreclosure,
distraint, sale or other similar proceedings shall
have been commenced and any additional
requirements with respect thereto imposed by the
Loan Documents have been satisfied; (iv) Resident
Agreements on a form previously approved by
Beneficiary and other residency agreements that
are acceptable to Beneficiary; and (v) such other
matters affecting the Mortgaged Property as
Beneficiary may accept in writing from time to
time in Beneficiary's sole discretion.
"PERSON" shall mean any individual, sole
proprietorship, partnership, joint venture, trust,
unincorporated organization, association,
corporation, institution, entity, party or
government (whether territorial, national,
federal, state, county, city, municipal or
otherwise, including, without limitation, any
instrumentality, division, agency, body or
department thereof).
"PROJECT" shall mean the acquisition of the
Land and the development, construction and
operation of a one hundred (100) unit Assisted
Living Facility thereon, including assisted living
residences and related amenities including
activity lounges, dining facilities, a library and
a ▇▇▇▇▇▇/beauty salon. All references to the term
Project shall be deemed to include the Mortgaged
Property.
"PROVIDER AGREEMENT" shall have the meaning
ascribed to such term in the Operating Agreement.
"RESIDENT AGREEMENTS" shall mean all
contracts, agreements and consents executed by or
on behalf of any resident or other Person seeking
services at the Project, including without
limitation assignments of benefits and guarantees.
Resident Agreements shall include all agreements
pursuant to which Persons are granted the right to
reside or remain in the Project for any period of
time.
"SUBSTANCES" shall mean all substances which
are regulated by Environmental Laws or other
Governmental Requirements as to use, generation,
collection, storage, treatment or disposal and
include, without limitation, petroleum and
petroleum products (excluding a small quantity of
gasoline used in maintenance equipment on the
Mortgaged Property), flammable explosives,
radioactive materials (excluding radioactive
materials in smoke detectors), polychlorinated
biphenyl, asbestos in any form that is or could
become friable, hazardous waste , toxic or
hazardous substances or other related materials
whether in the form of chemical, element
compound, solution mixture or otherwise, including
but not limited to, those materials defined as
"hazardous substances," "extremely hazardous
substances," "hazardous chemicals," "toxic waste"
"toxic materials," "hazardous materials," "toxic
substances," "toxic chemicals," "air pollutants,"
"toxic pollutants," "hazardous wastes," "extremely
hazardous waste," or "restricted hazardous waste"
by Environmental Laws.
9
"THIRD PARTY PAYORS" shall have the meaning
ascribed to such term in the Operating Agreement.
ARTICLE II
COVENANTS, AGREEMENTS, REPRESENTATIONS
AND WARRANTIES OF GRANTOR
2.1 TITLE TO MORTGAGED PROPERTY. Grantor
represents and warrants to Beneficiary that at the
time of the execution and delivery of this Deed of
Trust it has good title to all of the Mortgaged
Property described in the granting clauses of this
Grantor as being presently granted, assigned,
conveyed and transferred hereunder. Grantor hereby
warrants generally and shall defend the title to
the Mortgaged Property, and every part thereof,
whether now owned or hereafter acquired, unto
Trustee, its successors and assigns, against all
claims and demands by any Person whatsoever,
subject only to the Permitted Encumbrances.
Grantor covenants that Grantor shall comply with
all the terms, covenants and conditions of all
agreements and instruments, recorded and
unrecorded, affecting the Mortgaged Property,
including all Permitted Encumbrances.
2.2 GRANTOR.
2.2.1 SINGLE ASSET ENTITY. Grantor shall
own only the Mortgaged Property as its sole asset
and shall not own or operate any other real or
personal property other than the Mortgaged
Property, shall not operate or conduct any
business other than the operation of the Mortgaged
Property, and shall not incur any liability or
obligation other than those incurred in connection
with the ownership and operation of the Mortgaged
Property.
2.2.2 NO OTHER NAME. Grantor has never
used any other name (including a trade name) other
than the name set forth in the first paragraph of
this Deed of Trust, and Grantor has not changed
its identity or partnership or corporate
structure, as applicable, so as to make the use of
Grantors name as set forth in the first paragraph
of this Deed of Trust in a filed financing
statement materially misleading.
2.3 FURTHER ASSURANCES.
2.3.1 ASSURANCES. At any and all times
Grantor shall furnish and record all and every
such further assurances as may be requisite or as
Beneficiary shall reasonably require for the
better assuring and confirming unto Trustee and/or
Beneficiary of the estate and property hereby
granted, assigned, conveyed or transferred, or
intended so to be whether now owned or hereafter
acquired, and Grantor shall bear all expenses,
charges and taxes in connection therewith.
2.3.2 AMENDMENTS TO FINANCIAL
STATEMENTS. If, at any time, any of the
information contained in any financing statement
filed in connection with the security interests
created by this Deed of Trust, including without
limitation, the description of the Collateral,
shall change in any manner so as to cause such
financing statement to become misleading in any
material respect or to impair the perfection of
the security interests intended to be created by
this Deed of Trust, then Grantor shall
10
immediately advise Beneficiary of such change and,
upon Beneficiary's request, Grantor shall promptly
prepare any amendments to any affected financing
statement necessary in order to protect and
continue the perfection of the security interest
intended to be created thereby, and will obtain
the signatures of the debtor and secured party to
such amendment, and file the same in all offices
where such amendment is required to be filed in
order to protect and continue the perfection of
the security interest intended to be created
thereby. Grantor shall prepare, have executed and
file (and hereby irrevocably constitutes and
appoints Beneficiary as its attorney-in-fact to
prepare, execute and file) any amendments to the
financing statements filed with respect to the
security interests created by this Deed of Trust
in such form as Beneficiary may require in order
to continue the perfection of such security
interests. Grantor shall pay all costs and
expenses incurred in connection with the
performance of its obligations set forth in this
Section.
2.4 CHANGE IN TAX LAW. In the event of the
passage of any law after the date of this Deed of
Trust, which law changes in any way the laws for
the taxation of mortgages, deeds of trust or debts
secured by mortgages or deeds of trust, or the
manner of collection of any such taxation so as to
affect this Deed of Trust, Beneficiary may give
thirty (30) days' written notice to Grantor
requiring the payment of the Indebtedness secured
hereby. If such notice be given, the Indebtedness
secured hereby shall become due and payable at the
expiration of said thirty (30) days; provided
however, that such requirement of payment shall be
ineffective if Grantor is permitted by law to pay
the whole of such tax in addition to all other
payments required hereunder, without any penalty
or charge thereby accruing to Beneficiary, and if
Grantor expressly assumes in writing the
obligation to pay to Beneficiary an amount equal
to, and in fact pays the amount of, such tax to
Beneficiary prior to the date upon which such tax
is due and payable by Beneficiary.
2.5 MAINTENANCE AND CONTINUED OWNERSHIP OF
MORTGAGED PROPERTY.
2.5.1 REPAIR. Grantor (a) shall repair,
restore, replace or rebuild any part of the
Mortgaged Property that is damaged or destroyed by
casualty or the remainder of the Mortgaged
Property after a taking by eminent domain
proceedings whether or not covered by insurance or
award; (b) shall keep the Mortgaged Property in
good order, condition and repair, and shall not
commit, permit or suffer any waste thereof; (c)
shall make all needful and commercially reasonable
renewals, replacements and additions of and to the
same and shall permit Beneficiary or its designee
to enter upon and inspect the Mortgaged Property
at any time or times; (d) shall not alter or tear
down the Improvements on or to be made on the Land
or change them nor permit them to be torn down or
changed, without the written consent of
Beneficiary; and (e) shall not make or permit
residents, tenants or others to make any
improvements to or on the Mortgaged Property,
without the written consent of Beneficiary.
2.5.2 NO IMPAIRMENT. Grantor shall not
suffer any act to be done or any conditions to
exist on the Mortgaged Property or any part
thereof or any thing or article to be brought
thereon (a) which may cause structural injury to
the Improvements; or (b) which would cause the
value or usefulness of the Mortgaged Property or
any part thereof to diminish (ordinary wear and
tear excepted); or (c) which may be dangerous,
unless safeguarded as required by law; or (d)
which may in fact or in law, constitute a
nuisance, public or private; or (e) which may void
or make voidable any insurance then
11
in force or required by the terms of the Operating
Agreement and other Loan Documents to be in force.
2.5.3 COMPLIANCE WITH GOVERNMENTAL
REQUIREMENTS. Grantor shall observe and comply
with all conditions and requirements necessary to
obtain preserve and extend any and all Permits and
shall promptly and faithfully comply with and obey
all other Governmental Requirements with respect
to the Mortgaged Property; provided, however,
nothing herein or in any of the other Loan
Documents shall be construed to require Grantor to
participate in or, if at any time during the term
of the Loan Grantor elects to participate in, to
continue to participate Medicare or Medicaid.
2.5.4 NO TRANSFER. It is understood and
agreed by ▇▇▇▇▇▇▇ that as part of the inducement
of Beneficiary to make the Loan, Beneficiary has
relied upon the creditworthiness and the
reliability and reputation of Grantor. Grantor
shall not sell, abandon, cease to own, lease
(except as authorized herein), assign, transfer,
or dispose of the Mortgaged Properly or any
interest therein or portion thereof (except as
authorized herein) nor permit the sale,
assignment, or transfer of any shares or
partnership interests, as applicable, in Grantor,
without the prior written consent of Beneficiary
other than in the ordinary course of the operation
of the Project for its Intended Use. Any such
sale, conveyance, transfer, pledge, lease or
encumbrance made without Beneficiary's prior
written consent shall constitute an Event of
Default hereunder. Beneficiary's consent may be
withheld in its absolute and sole discretion, or
it may be conditioned upon a number of actions to
be determined in Beneficiary's sole discretion,
including but not limited to a determination of
the transferee's creditworthiness, the payment of
any assumption fee and associated costs and
expenses, and a modification of the Note, this
Deed of Trust, the Loan Agreement or the other
Loan Documents, and any and all terms and
provisions thereof. A contract to deed or an
agreement for deed or an assignment of beneficial
interest in any trust shall constitute a transfer
pursuant to the provisions of this Section. If any
Person should obtain any interest in all or any
part of the Mortgaged Property (without implying
Beneficiary's consent or acquiescence to such
acquisition, which consent is hereby expressly
denied), whether pursuant to execution or
enforcement of any lien, security interest or
other right, equal or subordinate to this Deed of
Trust or the lien and security interests hereof,
such event shall be deemed to be a transfer by
Grantor and unless expressly authorized herein or
approved hereunder, shall be an Event of Default
under this Deed of Trust.
2.6 ENCUMBRANCES.
2.6.1 NO FURTHER ENCUMBRANCES. Grantor
shall keep the Mortgaged Property free from all
liens, claims, and other encumbrances of every
kind except the Permitted Encumbrances and such
other encumbrances as are approved in writing by
Beneficiary. In the event Beneficiary consents to
an encumbrance on the Property, a default under
the terms of any document creating such an
encumbrance shall be an Event of Default
hereunder.
2.6.2 NO TITLE RETENTION. Grantor shall
not, without the prior written permission of
Beneficiary, place any personal property upon the
Mortgaged Property or any part thereof or attach
any fixture that is subject to a title retention
agreement, security agreement, or other
encumbrance, whether said lien or interest is
prior to the legal operation and effect of this
Deed of Trust or subsequent thereto, nor
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shall Grantor place or permit to be placed any
personal property upon the Mortgaged Property or
any part thereof, other than the personal property
of Grantor, of any resident or tenant actually
occupying all or part of the Mortgaged Property
pursuant to a binding Resident Agreement, or of
the Manager pursuant to the Management Contract. .
2.7 RESIDENT AGREEMENTS.
2.7.1 COMPLIANCE WITH RESIDENT
AGREEMENTS. Grantor shall carry out or cause to be
carried out all of the agreements and covenants of
owner or landlord under the Resident Agreements
and not further encumber, assign or permit further
encumbrance or assignment of the owner's or
landlord's interest in such agreements. No
Resident Agreement shall include any space, or
grant to any resident any right or interest in any
area outside of the limits of the Mortgaged
Property and no Resident Agreement shall obligate
the owner or landlord thereunder to provide
services outside of the Mortgaged Property, except
as otherwise agreed by Beneficiary, which approval
may be evidenced by Beneficiary's approval of a
form of Resident Agreement as provided in the Loan
Agreement. Upon demand of Beneficiary, Grantor
shall furnish Beneficiary with an executed copy of
each Resident Agreement immediately upon its
execution. All Resident Agreements shall be
written on the standard form accepted by
Beneficiary, with only such changes as Beneficiary
shall have approved in writing or pursuant to
agreements otherwise approved by Beneficiary.
2.7.2 ASSIGNMENT OF RESIDENT AGREEMENTS.
Grantor hereby assigns and transfers to
Beneficiary all Resident Agreements, subleases,
rents, issues and profits of the Mortgaged
Property. Grantor hereby irrevocable appoints
Beneficiary its true and lawful attorney-in-fact,
at the option of Beneficiary, at any time and from
time to time, to demand, receive and enforce
payment, give receipts, releases and
satisfactions, and to sue, in the name of Grantor
or Beneficiary, for all such rents, issues and
profits. Grantor, however, shall have the right to
collect such rents, issues and profits (but not
more than one (1) month in advance) prior to or at
any time there is not an Event of Default under
this Deed of Trust. The assignment of Resident
Agreements, subleases, rents, issues and profits
of the Mortgaged Property in this Section is
intended to operate as an absolute assignment, not
merely the passing of a security interest, to the
fullest extend permissible by Washington law. If
required by Beneficiary, Grantor will specifically
assign to Beneficiary all such Resident Agreements
whether now existing or hereafter created.
2.7.3 COLLECTION UPON DEFAULT.
Beneficiary may, upon any Event of Default under
this Deed or Trust, and at any time thereafter
without notice unless such Event of Default has
been cured to Beneficiary's satisfaction and
Beneficiary has not elected to exercise its
remedies in accordance with Article IV hereof, and
either in person, by agent or by a receiver
appointed by the court, and without regard to the
adequacy of any security for the Indebtedness
hereby secured, enter upon and take possession of
the Mortgaged Property, or any part thereof. Upon
any Event of Default, Beneficiary may, in its own
name, sue for or otherwise collect such rents,
issues, and profits, including those past due and
unpaid, and apply same less costs and expenses of
operation and collection, including litigation
expenses, court costs, costs of suit, cost of an
abstract of title and other title evidence and
attorneys' fees, and paralegal charges, including
all appellate proceedings and disbursements, upon
any Indebtedness secured hereby and in such order
as Beneficiary may determine. The collection of
such rents,
13
issues and profits or the entering upon and taking
possession of the Mortgaged Property, or
application thereof as aforesaid, shall not cure
or waive any default or notice of default
hereunder or invalidate any act done in response
to such default or pursuant to such notice of
default, or otherwise invalidate, impair, nullify,
waive or extinguish the rights and protections
afforded Beneficiary under the other provisions of
this Deed of Trust or the provisions of any of the
other Loan Documents. Furthermore, upon the
occurrence of an Event of Default, Beneficiary may
apply for a court order requiring Grantor to
deposit all rents in the court registry. Grantor
hereby consents to entry of such an order upon the
sworn ex parte motion of Beneficiary that an Event
of Default has occurred hereunder.
2.7.4 MODIFICATION OF RESIDENT
AGREEMENTS. Other than may be reasonably necessary
in the ordinary course of Grantor's business or as
required by applicable Governmental Requirements,
Grantor will not modify, surrender, or terminate,
either orally or in writing, any Resident
Agreement now existing or hereafter created upon
the Mortgaged Property, nor will Grantor permit an
assignment or sublease thereof without the express
prior written consent of Beneficiary, which
consent shall not be unreasonably withheld.
2.7.5 ASSIGNMENT OF BANKRUPT AWARDS.
Grantor hereby assigns to Beneficiary any award
made hereafter to Grantor in any bankruptcy,
insolvency or reorganization proceeding (whether
federal or state) involving any of the residents
of the Project and all payments by any tenant in
lieu of rent pursuant to or as a result of such
proceedings.
2.7.6 LIMITATION OF LIABILITY UNDER
RESIDENT AGREEMENTS. Beneficiary shall not be
obligated to perform or discharge any obligation
or duty to be performed or discharged by Grantor
under any Resident Agreement; and Grantor hereby
agrees to indemnify Beneficiary for and to save
Beneficiary harmless from, any and all liability
arising from any Resident Agreement, or this
assignment thereof, except liability resulting
solely from the gross negligence, willful
misconduct or fraud of Beneficiary or
Beneficiary's officers, directors, employees or
duly authorized agents, and this assignment shall
not place the responsibility for the control,
care, management or repair of the Mortgaged
Properly upon Beneficiary, nor make Beneficiary
liable for any negligence in the management,
operation, upkeep, repair or control of the
Mortgaged Property resulting in loss or injury or
death to any tenant, agent, guest, or stranger.
2.8 CONTRACTS.
2.8.1 COMPLIANCE WITH CONTRACTS.
Grantor shall carry out or cause to be carried out
all of its agreements and covenants under and
relating to all Contracts and not permit a lien or
other encumbrance superior to such Contracts other
than this Deed of Trust and the Permitted
Encumbrances. Upon demand of Beneficiary, Grantor
shall furnish Beneficiary an executed copy of each
Contract immediately upon its execution.
2.8.2 ASSIGNMENT OF CONTRACTS. Grantor
hereby assigns and transfers to Beneficiary all
Contracts and all rents, issues, profits and other
revenues generated from such Contracts. Grantor
hereby irrevocably appoints Beneficiary its true
and lawful attorney-in-fact, at the option of
Beneficiary, at any time and from time to
14
time, to demand, receive and enforce payment, give
receipts, releases and satisfactions, and to sue,
in the name of Grantor or Beneficiary, for or
under all such Contracts. Grantor, however, shall
have the right to collect such issues and profits
prior to or at any time there is not an Event of
Default under this Deed of Trust. The assignment
of Contracts, rents, issues and profits of the
Mortgaged Property in this Section is intended to
operate as an absolute assignment, not merely the
passing of a security interest, to the fullest
extent permissible by Washington law. If required
by Beneficiary, Grantor will specifically assign
to Beneficiary all Contracts whether now existing
or hereafter created.
2.8.3 COLLECTION UPON DEFAULT.
Beneficiary may, upon any Event of Default under
this Deed of Trust, and at any time thereafter
without notice unless such Event of Default has
been cured to Beneficiary's satisfaction and
Beneficiary has not elected to exercise its
remedies in accordance with Article IV hereof in
its own name, sue for or otherwise collect all
revenues generated by all Contracts ("Revenues"),
including those past due and unpaid, and apply
same less costs and expenses of operation and
collection, including litigation expenses, court
costs, costs of suit, cost of an abstract of title
and other title evidence and attorneys' fees, and
paralegal charges, including all appellate
proceedings and disbursements, upon any
Indebtedness secured hereby and in such order as
Beneficiary may determine. The collection of such
Revenues or application thereof as aforesaid,
shall not cure or waive any default or notice of
default hereunder or invalidate any act done in
response to such default or pursuant to such
notice of default, or otherwise invalidate,
impair, nullify, waive or extinguish the rights
and protections afforded Beneficiary under
Washington law. Furthermore, upon the occurrence
of an Event of Default, Beneficiary may apply for
a court order requiring Grantor to deposit all
Revenues in the court registry. Grantor hereby
consents to entry of such an order upon the sworn
ex parte motion of Beneficiary that an Event of
Default has occurred hereunder.
2.8.4 LIMITATION OF LIABILITY UNDER
CONTRACTS. Beneficiary shall not be obligated to
perform or discharge any obligation or duty to be
performed or discharged by Grantor under any
Contract and Grantor hereby agrees to indemnify
Beneficiary for and to save Beneficiary harmless
from, any and all liability arising from any
Contract, or this assignment thereof, except
liability resulting solely from the gross
negligence, willful misconduct or fraud of
Beneficiary or Beneficiary's officers, directors,
employees or duly authorized agents, and this
assignment shall not place the responsibility for
the control, care, management or repair of the
Mortgaged Property upon Beneficiary nor make
Beneficiary liable for any negligence in the
management, operation upkeep, repair or control of
the Mortgaged Property resulting in loss or injury
or death to any resident, tenant, agent, guest, or
stranger.
2.9 ENVIRONMENTAL MATTERS.
2.9.1 NO SUBSTANCES PRESENT. Grantor
hereby represents and warrants to Beneficiary
that, to the best of its knowledge, after a
physical inspection of the Mortgaged Property and
all appropriate investigation except as disclosed
in the Environmental Report, (a) there are not now
and have never been any Substances located on or
near the Mortgaged Property other than those being
used in compliance with all applicable
Environmental Laws, and (b) the Mortgaged Properly
is not now being used nor has it ever been used in
the past for any activities involving the use,
generation, collection, storage, treatment, or
disposal of any Substances. Grantor will not place
or
15
permit to be placed any Substances on or near the
Mortgaged Property except for those Substances
that (i) are typically used in connection with the
maintenance and operation of an Assisted Living
Facility, provided the same are in appropriate
quantities to ensure compliance with all
applicable Environmental Laws and other
Governmental Requirements, (ii) are stored, used,
and disposed of properly, or (iii) are approved in
writing by Beneficiary.
2.9.2 ACTING UPON PRESENCE OF
SUBSTANCES. Grantor hereby covenants and agrees
that, if at any time (a) Substances are spilled,
emitted, disposed, or leaked on, in, or under the
Mortgaged Property in any amount in excess of that
permitted under applicable Environmental Laws, or
(b) it is determined that there are Substances
located on, in, or under the Mortgaged Property
other than those of which Beneficiary has approved
in writing or which are permitted to be used on
the Mortgaged Property without Beneficiary's
written approval pursuant to subsection 2.9.1 of
this Section, Grantor shall immediately notify
Beneficiary and any Governmental Authorities or
private Persons required by law to be notified,
and shall, within thirty (30) days thereafter or
sooner if required by Beneficiary or any
Governmental Authority, take or cause to be taken,
at Grantor's sole expense, such action as may be
required by Beneficiary or any Governmental
Authority. If Grantor shall fail to take such
action, Beneficiary may make advances or payments
towards performance or satisfaction of the same
but shall be under no obligation so to do; and all
sums so advanced or paid, including all sums
advanced or paid in connection with any
investigation or judicial or administrative
proceeding relating thereto, including, without
limitation, reasonable attorneys' fees, expert
fees, fines, or other penalty payments, shall be
at once repayable by Grantor and shall bear
interest at the Default Rate, from the date
advanced or paid by Beneficiary until the date
paid by Grantor to Beneficiary, and all sums so
advanced or paid, with interest as aforesaid,
shall become a part of the Indebtedness secured
hereby. Notwithstanding the foregoing, nothing
contained herein shall be construed to prevent
Grantor from seeking reimbursement for, or other
compensation for, the existence of any Substances
on, in, or under the Mortgaged Property from any
Person responsible therefor, provided ▇▇▇▇▇▇▇'s
obligations to Beneficiary hereunder shall not be
conditioned or dependent upon any such
reimbursement or compensation.
2.9.3 ENVIRONMENTAL AUDITS. Grantor,
promptly upon the written request of Beneficiary
from time to time, shall provide Beneficiary, at
Grantor's expense, from time to time with an
environmental site assessment or environmental
audit report, or an update of such an assessment
or report, all in scope, form, and content
satisfactory to Beneficiary.
2.9.4 ENVIRONMENTAL NOTICES. Grantor
shall furnish to Beneficiary duplicate copies of
all correspondence, notices, or reports it
receives from any Governmental Authority or any
other Person regarding environmental matters or
Substances at or near the Mortgaged Properly,
immediately upon ▇▇▇▇▇▇▇'s receipt thereof.
2.9.5 CONDITION OF PROPERTY. Grantor
hereby represents and warrants that, to the best
of its knowledge, after a physical inspection of
the Mortgaged Property and all appropriate
investigation except as disclosed in the
Environmental Report and on the Survey, there are
no ▇▇▇▇▇ or septic tanks on the Mortgaged Property
serving any other property; no ▇▇▇▇▇ or septic
tanks on other property serving the
16
Mortgaged Property; no burial grounds,
archeological sites, or habitats of endangered or
threatened species on the Mortgaged Property; and
that no part of the Mortgaged Property is subject
to tidal waters; has been designated as wetlands
by any Governmental Authority; or is located in a
special flood hazard area.
2.9.6 ENVIRONMENTAL INDEMNITY.
2.9.6.1 Grantor shall at all times
indemnify and hold harmless Beneficiary and
Trustee against and from any and all claims,
suits, actions, debts, damages, costs, losses,
obligations, judgments, charges, and expenses, of
any nature whatsoever suffered or incurred by
Beneficiary or Trustee, whether as beneficiary or
trustee of this Deed of Trust, as Beneficiary in
possession, or as successor-in-interest to Grantor
by foreclosure deed or deed in lieu of
foreclosure, under or on account of the
Environmental Laws or any similar laws or
regulations, including the assertion of any lien
thereunder, with respect to:
(a) any discharge of
Substances, the threat of a discharge of
any Substances, or the presence of any
Substances affecting the Mortgaged
Property whether or not the same
originates or emanates from the Mortgaged
Property or any contiguous real estate
including any loss of value of the
Mortgaged Property as a result of any of
the foregoing;
(b) any costs of removal or
remedial action incurred by any state
or the United States Government or any
costs incurred by any other person or
damages from injury to, destruction of,
or loss of natural resources, including
reasonable costs of assessing such
injury, destruction or loss incurred
pursuant to any Environmental Laws;
(c) liability for personal
injury or property damage arising under
any statutory or common law tort theory,
including, without limitation damages
assessed for the maintenance of a public
or private nuisance or for the carrying
on of an abnormally dangerous activity
at or near the Mortgaged Property;
and/or
(d) any other environmental
matter affecting the Property within the
jurisdiction of the Environmental
Protection Agency or any other
Governmental Authority.
2.9.6.2 Grantor's obligations under
this Section shall arise upon the discovery of the
presence of any Substance, whether or not the
Environmental Protection Agency or any other
Governmental Authority has taken or threatened any
action in connection with the presence of any
Substances.
2.9.7 CONTROLLING AGREEMENT. Grantor
acknowledges that Beneficiary has agreed to make
the Loan in reliance upon ▇▇▇▇▇▇▇'s
representations, warranties and covenants in this
Section 2.9. Grantor further acknowledges that in
addition to the representations, warranties and
covenants contained in this Section 2.9, Grantor
has made additional representations, warranties
and covenants with respect to
17
Substances and Environmental Laws in the
Environmental Indemnity Agreement dated of even
date herewith by and among Grantor, Emeritus and
Beneficiary, and that such additional
representations, warranties and covenants are
intended to be in addition to, and not in lieu of
the representations, warranties and covenants set
forth herein. Moreover, although Grantor and
Beneficiary intend for all such representations,
warranties and covenants regarding Substances and
Environmental Laws to be read together and to be
consistent, to the extent of any inconsistencies
between the representations, warranties and
covenants set forth in this Deed of Trust
regarding Substances and Environmental Laws and
those set forth in the Environmental Indemnity
Agreement, the representations, warranties and
covenants set forth in the Environmental Indemnity
Agreement shall govern All of the representations,
warranties, covenants and indemnities of this
Section 2.9 shall survive the repayment of the
Note and/or the release of the operation and
effect of this Deed of Trust and shall survive the
transfer of any or all right, title and interest
in and to the Mortgaged Property by Grantor to any
party, whether or not affiliated with Grantor.
2.10 ADDITIONAL ADVANCES. If Grantor shall
fail to perform any of the covenants or satisfy
any of the conditions contained herein,
Beneficiary may make advances or payments towards
performance or satisfaction of the same but shall
be under no obligation so to do; and all sums so
advanced or paid shall be at once repayable by
Grantor and shall bear interest at the Default
Rate from the date advanced until the date paid,
and all sums so advanced or paid, with interest as
aforesaid, shall become a part of the Indebtedness
secured hereby; but no such advance or payment
shall relieve Grantor from any default or Event of
Default hereunder. If Grantor shall fail to
perform any of the covenants or satisfy any of the
conditions contained herein, Beneficiary may use
any funds of Grantor, including any funds held as
Tax Deposits or Insurance Deposits under the
Operating Agreement, towards performance or
satisfaction of the same but shall be under no
obligation so to do; and no such use of funds
shall relieve Grantor from any default hereunder,
including the obligation to make sufficient Tax
Deposits and Insurance Deposits as required by the
Operating Agreement.
2.11 CONDEMNATION AWARDS. Should the
Mortgaged Property or any part thereof or interest
therein be taken or damaged by reason of any
public use or improvement or by condemnation or
eminent domain proceedings or in any other manner,
or should the grade of any street be altered as a
result of condemnation or eminent domain
proceedings or otherwise, all or such part of any
award or proceeds derived therefrom as Beneficiary
in its sole discretion may determine in writing
shall be paid to Beneficiary and applied to the
payment of the Indebtedness secured hereby (in
such manner or combination thereof including
inverse order of maturity of installments of
principal, if any, as Beneficiary may, iii its
sole discretion, elect) and all such proceeds are
hereby assigned to Beneficiary; provided however,
should Beneficiary notify Grantor that Grantor is
obligated to repair or replace any portion of the
Mortgaged Property damaged or taken in such
condemnation proceeding, Beneficiary shall make
the proceeds of such condemnation actually
received by Beneficiary available to Grantor for
such purposes. Any such condemnation proceeds
shall be advanced to Grantor in accordance with
the provisions of the Loan Agreement governing
Advances, following receipt and approval by
Beneficiary of such plans, specifications,
construction contracts, contractors, suppliers and
similar matters as Beneficiary deems reasonably
necessary to ensure that the necessary repair and
replacement is completed in accordance with the
requirements of the Loan Documents and that
sufficient funds are available for such purpose.
18
2.12 COSTS OF DEFENDING AND ENFORCING LIEN.
Grantor shall pay all costs, charges and expenses,
including appraisals, title examinations, and
reasonable attorney's fees, which Beneficiary may
incur in defending or enforcing the validity or
priority of the legal operation and effect of this
Deed of Trust, or-any term, covenant or condition
hereof, or in collecting any sum secured hereby,
or in protecting the security of Beneficiary,
including without limitation being a party in any
condemnation, bankruptcy or administrative
proceedings, or, if an Event of Default shall
occur, in administering and executing the trust
hereby created and performing its powers,
privileges and duties hereunder. Beneficiary may
make advances or payments for such purposes but
all advances or payments made by Beneficiary for
such purposes shall be repayable immediately by
Grantor and shall bear interest at the Default
Rate from the date the same shall become due and
payable until the date paid, and any such sum or
sums with interest as aforesaid shall become a
part of the indebtedness secured hereby; but no
such advance or payment shall relieve Grantor from
any default hereunder.
2. 13 MODIFICATION OF TERMS; NO NOVATION.
Beneficiary may at any time, and from time to
time, extend the time for payment of the
Indebtedness secured hereby, or any part thereof,
or interest thereon, and waive, modify or amend
any of the terms, covenants or conditions in the
Note, in this Deed of Trust or in any other paper
or document executed in connection with the Loan,
in whole or in part, either at the request of
Grantor or of any person having an interest in the
Mortgaged Properly, accept one or more notes in
replacement or substitution of the Note, consent
to the release of all or any part of the Mortgaged
Property from the legal operation and effect of
this Deed of Trust, take or release other
security, release any party primarily or
secondarily liable on the Note or hereunder or on
such other security, grant extensions, renewals or
indulgences therein or herein, apply to the
payment of the principal and interest and premium,
if any, of the Indebtedness secured hereby any
part or all of the proceeds obtained by sale or
otherwise as provided herein without resort or
regard to other security, or resort to any one or
more of the securities or remedies which
Beneficiary may have and which in its absolute
discretion it may pursue for the payment of all or
any part of the Indebtedness secured hereby, in
such order and in such manner as it may determine,
all without in any way releasing Grantor or any
party secondarily liable from any of the terms,
covenants or conditions of the Note, this Deed of
Trust, or other paper or document executed in
connection with the Loan, or relieving the
unreleased Mortgaged Property from the legal
operation and effect of this Deed of Trust for all
amounts owing under the Note and this Deed of
Trust. Beneficiary and ▇▇▇▇▇▇▇ recognize and agree
that the provisions of this Deed of Trust, the
Note, and the other Loan Documents may be modified
by agreement between Beneficiary and Grantor or
their successors or assigns at any time before or
after default (which modification may involve
increasing the rate of interest in the Note,
agreeing that other charges should be paid, or
modifying any other provision in any such
instruments). Beneficiary may extend the time of
payment, may agree to alter the terms of payment
of the Indebtedness and may grant partial releases
of any portion of the property included herein. No
such modification by Beneficiary and Grantor nor
any such action by Beneficiary referred to above
shall be a substitution or novation of the
original Indebtedness or instruments evidencing or
securing the same, but shall be considered a
possible occurrence within the original
contemplation of the parties.
19
2.14 GOVERNMENTAL ACTION ADVERSELY AFFECTING
MORTGAGED PROPERTY. Grantor agrees that in the
event of the enactment of any law or ordinance,
the promulgation of any zoning or other
Governmental regulation, or the rendition of any
judicial decree restricting or affecting the use
of the Mortgaged Property or rezoning the area
wherein the same shall be situate which
Beneficiary reasonably believes adversely affects
the Mortgaged Property or the ability of Grantor
to maintain and operate the Project for its
Intended Use, Beneficiary may, upon at least sixty
(60) days' written notice to Grantor, require
payment of the Indebtedness secured hereby at such
time as may be stipulated in such notice, and the
whole of the Indebtedness secured hereby, shall
thereupon become due and payable.
2.15 USE OF MORTGAGED PROPERTY. Grantor shall
at all times operate the Mortgaged Property for is
Intended Use in accordance with the requirements
of the Operating Agreement.
ARTICLE III
EVENTS OF DEFAULT
The occurrence of one of more of the
following events (herein called an "Event of
Default") all constitute and be an Event of
Default:
(a) Any sale, lease, exchange, assignment,
conveyance, transfer of possession or other
transfer or disposition of the Mortgaged Property
or any portion thereof or interest therein other
than as expressly permitted in the Loan Documents
or in the ordinary course of the operation of the
Project for its Intended Use, regardless of
whether such sale, lease or other disposition
shall diminish the value of the security for the
Indebtedness, increase the likelihood of the
occurrence of some other Event of Default,
increase the likelihood that Beneficiary will have
to resort to any security for payment of the
Indebtedness or add or remove the liability of any
Person for payment or performance of the
Indebtedness; or
(b) If title of Grantor to any or all of the
Mortgaged Property or the status of this Deed of
Trust as a first and prior lien and security
interest on the Mortgaged Property shall be
challenged or endangered by any Person whatsoever,
and Grantor shall fail to cure the same upon
demand by Beneficiary; or
(c) The occurrence of an event of default
(regardless of how such default may be defined or
described) under the Note or any of the other Loan
Documents and the expiration of any cure period
expressly provided with respect thereto.
20
ARTICLE IV
REMEDIES
4.1 ACCELERATION. If one or more of the
Events of Default shall occur, Beneficiary may, at
its option, declare the entire unpaid principal
amount of the Note rif not already due and
payable) to be due and payable immediately, by
delivery to Trustee of written declaration of
default and demand for sale and written notice of
default and of election to cause the Mortgaged
Property to be sold, which notice Trustee shall
cause to be duly filed for record. Beneficiary
shall also deposit with the Trustee this Deed of
Trust, the Note and all documents evidencing the
expenditures secured hereby. If Beneficiary
exercises Beneficiary's option to declare the
entire unpaid principal amount of the Note to be
due and payable, Grantor covenants to pay
immediately the full amount of the Indebtedness
secured hereby even though foreclosure or other
court proceedings to collect the Indebtedness have
not been commenced. Acceleration of maturity, once
declared by Beneficiary, may at the option of
Beneficiary, be rescinded by written
acknowledgment to that effect by Beneficiary, but
the tender and acceptance of partial payments
alone shall not rescind or affect in any way such
acceleration of maturity.
4.2 POSSESSION OF MORTGAGED PROPERTY. If
one or more of the Events of Default shall occur,
Grantor shall, upon demand, forthwith surrender
the actual possession, and, to the extent
permitted by law, Beneficiary, by such officers or
agents as it may appoint, may enter and take
possession of the Mortgaged Property and may
exclude Grantor, its agents and servants, wholly
therefrom, and having and holding the same, may
use, operate, manage and control the Mortgaged
Property or any part thereof, and upon every such
entry Beneficiary, at the expense of Grantor and
of the Mortgaged Property, from time to time may
make all necessary or proper repairs, renewals,
replacements and useful or required alterations,
additions, betterments and improvements to and
upon the Property as to it may seem judicious and
pay all costs and expenses of so taking, holding
and managing the same, including reasonable
compensation to its employees and other agents
(including, without limitation, attorneys fees and
management and rental commissions) and any taxes,
assessments and other charges prior to the legal
operation and effect of this Deed of Trust which
Beneficiary may deem it wise or desirable to pay,
and in such case Beneficiary shall have the right
to manage the Mortgaged Property and to carry on
the business and exercise all rights and powers of
Grantor, either in the name of Grantor, or
otherwise, as Beneficiary shall deem advisable;
and Beneficiary shall be entitled to collect and
receive all rents thereof and therefrom. The
taking of possession and collection of rents by
Beneficiary shall not be construed to be an
affirmation of any Resident Agreement or
acceptance of attornment with respect to any
Resident Agreement covering all or any portion of
the Mortgaged Property. After deducting the
expenses of operating the Mortgaged Properly and
of conducting the business thereof, and of all
repairs, maintenance, renewals, replacements,
alterations, additions, betterments, improvements
and all payments which it may be required or may
elect to make for taxes or other proper charges on
the Mortgaged Property, or any part thereof as
well as just and reasonable compensation for all
its employees and other agents (including, without
limitation, attorney's fees and management and
rental commissions) engaged and employed, the
moneys arising as aforesaid shall be applied to
the Indebtedness secured hereby. Whenever all that
is due upon the principal of and interest on the
Note and under any of the terms of this Deed of
Trust shall have been paid and all defaults made
good,
21
Beneficiary shall surrender possession to Grantor.
The same right of entry, however, shall exist if
any subsequent Event of Default shall occur.
4.3 APPOINTMENT OF A RECEIVER. Until one or
more of the Events of Default shall occur (but not
thereafter), Grantor shall have possession of the
Mortgaged Property and shall have the right to use
and enjoy the same and to receive the rents
thereof and therefrom. If one or more of the
Events of Default shall occur, and without the
requirement of any other showing, Beneficiary
shall be entitled as a matter of right and to the
extent permitted by law, without notice to
Grantor, and without regard to the adequacy of the
security, to the immediate appointment of a
receiver of the Mortgaged Property in an ex parte
proceeding with all such other powers as the court
or courts making such appointment shall confer to
take charge of, manage, preserve, protect,
complete construction of and operate the Mortgaged
Property and any business or businesses located
thereon; to collect rents, issues, profits and
income therefrom from whatever source derived; to
make all necessary and needed repairs to the
Mortgaged Property; to pay all taxes and
assessments against the Mortgaged Property and
insurance premiums for insurance thereon and
thereupon, it being hereby expressly covenanted
and agreed that the court shall forthwith appoint
such receiver with the usual powers and duties in
like cases; and such appointment shall be made by
the court as a matter of strict right to the
Beneficiary, and without reference to the adequacy
or inadequacy of the value of the Mortgaged
Property, or to the solvency or insolvency of
Grantor and after payment of the expense of the
receivership, including reasonable attorney's fees
to Beneficiary's attorney, and after compensation
to the receiver for management and completion of
the Mortgaged Property, to apply the net proceeds
derived therefrom in reduction of the Indebtedness
secured hereby or in such other manner as such
court shall direct. All expenses, fees and
compensation incurred pursuant to a receivership
approved by such court shall be secured by the
lien of this Deed of Trust until paid. Grantor
hereby specifically waives the right to object to
the appointment of a receiver as aforesaid and
hereby consents that such appointment shall be
made as an admitted equity and as a matter of
absolute right to the Beneficiary and that the
same may be done without notice to Grantor or any
other defendant to such suit and without the
requirement of any other showing and without
regard to the adequacy of the security. Grantor
shall deliver to the receiver appointed pursuant
to the provisions of this Section, or to
Beneficiary in the event of entry pursuant to the
terms of the preceding Section, all original
records, books, bank accounts, Resident Agreement,
agreements, security deposits of the residents and
all other materials relating to the operation of
the Mortgaged Property except those, if any, which
Grantor is required to maintain as confidential or
in its possession pursuant to applicable
Governmental Requirements.
4.4 POSSESSION AND DISPOSITION OF PERSONAL
PROPERTY.
4.4.1 ASSEMBLY OF MORTGAGED PROPERTY. If
one or more of the Events of Default shall occur,
Beneficiary may at its discretion require Grantor
to assemble such items of the Mortgaged Property
as may be designated by Beneficiary and make them
available to Beneficiary at a place reasonably
convenient to both parties to be designated by
Beneficiary. Upon the occurrence of an Event of
Default under this Deed of Trust, Beneficiary
shall have the right to take possession of such
items of the Mortgaged Property as Beneficiary may
elect except those, if any, which Grantor is
required to maintain as confidential or in its
possession pursuant to applicable Governmental
Requirements. In taking possession Beneficiary may
proceed without
22
judicial process if this can be done without
breach of the peace. Beneficiary shall have the
further right to remove such items of the
Mortgaged Property as it may choose to any
location or locations selected by Beneficiary
except those, if any, which Grantor is required to
maintain as confidential or in its possession
pursuant to applicable Governmental Requirements,
and Grantor shall pay the costs of such removal
and for the storage and protection of such items
immediately upon demand therefor.
4.4.2 SECURITY AGREEMENT This Deed of
Trust shall be construed as a security agreement
and financing statement under the Uniform
Commercial Code as adopted and in force, from time
to time, in the State of Washington, and shall be
operative and effective as such in addition to,
and not in substitution for, any other security
agreement executed by Grantor in connection with
the transaction secured hereby. This Deed of Trust
further constitutes a fixture filing under
Sections 62A9-313 and 62A9-402(6) of the
Washington Uniform Commercial Code, as amended or
recodified from time to time; provided, however
that the execution and/or filing hereof does not
imply that the items of personal property included
in the Mortgaged Property are or are to become
fixtures. The filling hereof as a fixture filing
is intended to protect the parties from
unwarranted assertions by third Persons. Grantor
agrees to and shall, upon the request of
Beneficiary, execute and deliver to Beneficiary,
in form satisfactory to Beneficiary, such
"financing statements," descriptions of property
and such further assurances as Beneficiary, in its
sole discretion, may, from time to time, consider
necessary to create, perfect and preserve the lien
and encumbrance hereof and the security interest
granted herein upon and both the real properly,
the Improvements, and all rights and interest of
Grantor in the Mortgaged Property described
herein. Beneficiary, at the expense of Grantor,
may cause such statements, descriptions and
assurances, and this Deed of Trust to be recorded
and re-recorded, filed and re-filed, at such times
and in such places as may be required or permitted
by law to so create, perfect and preserve the lien
and encumbrance hereof and the security interest
granted herein upon and in all of said Mortgaged
Property. With respect to such Mortgaged Property,
the Beneficiary is a "secured party" and the
Grantor is a "debtor" under the Washington Uniform
Commercial Code with its address being as set
forth in this Deed of Trust. If Beneficiary elects
to proceed under the Washington Uniform Commercial
Code to dispose of some of the Mortgaged Property,
Beneficiary shall give Grantor notice by certified
mail, postage prepaid, return receipt requested,
of the time and place of any public sale of any of
such property, or of the time after which any
private sale or other intended disposition thereof
is to be made by sending notice to Grantor at
least five (5) Business Days before the time of
the sale or other disposition which provisions for
notice Grantor and Beneficiary agree are
reasonable; provided, however, that nothing herein
shall preclude Beneficiary from proceeding as to
all the Mortgaged Property to the maximum extent
permitted by applicable Washington law in
accordance with the rights and remedies of
Beneficiary in respect of the real property.
Notwithstanding any release of any or all of the
property included in the Mortgaged Property which
is deemed "real property", any proceedings to
foreclose this Deed of Trust, or its satisfaction
of record, the terms hereof shall survive as a
security agreement with respect to the security
interest created hereby and referred to above
until the repayment or satisfaction in full of the
obligations of Grantor as are now or hereafter
evidenced by the Note and Loan Agreement.
23
4.5 FORECLOSURE SALE.
4.5.1 If one or more of the Events of
Default shall occur, Beneficiary may request that
Trustee sell the Mortgaged Property in accordance
with the Deed of Trust Act of the State of
Washington (RCW Chapter 61.24 as existing now, or
hereafter amended) and the Uniform Commercial Code
of the State of Washington where applicable, at
public auction to the highest bidder for cash at
such time and at such place as are statutorily
prescribed. Grantor acknowledges that there is no
right to an extension of the trustee's sale on
"equitable" or other grounds, and that
Beneficiary's remedies under this Deed of Trust
shall not be affected or impaired by the exercise
of any right of setoff or to collect and apply
rents, profits, insurance proceeds or condemnation
awards. Any person except Trustee may bid at a
Trustee's sale. The Trustee is not obligated to
notify any party hereto of pending sale under any
other deed of trust or of any action or proceeding
in which Grantor, Trustee or Beneficiary shall be
a party, unless such action or proceeding is
brought by the Trustee. If the Mortgaged Property
consists of several known lots or parcels,
Beneficiary may designate the order in which such
parcels shall be sold or offered for sale.
4.5.2 Trustee may postpone sale of all
or any portion of the Mortgaged Property by public
announcement at such time and place of sale, and
from time to time thereafter may postpone such
sale by public announcement at the time fixed by
the preceding postponement.
4.5.3. Without declaring the entire
unpaid principal balance due, Beneficiary may
foreclose only as to the sum past due without
injury to this Deed of Trust or the displacement
or impairment of the remainder of the lien thereof
and at such foreclosure sale the Mortgaged
Property shall be sold subject to all remaining
items of Indebtedness and Beneficiary may again
foreclose in the same manner as often as there may
be any sum past due.
4.5.4 Beneficiary shall have the right
to judicially foreclose this Deed of Trust as a
mortgage. If this Deed of Trust is foreclosed by
judicial procedure, Beneficiary will be entitled
to a judgment which wil1 provide that if the
foreclosure sale proceeds are insufficient to
satisfy the judgment, execution may issue for any
amount by which the unpaid balance of the
obligations secured by this Deed of Trust exceeds
the net sale proceeds payable to Beneficiary,
subject to any limitations with respect thereto
set forth in the Note. In the event Grantor
remains in possession of the Mortgaged Properly
after the Mortgaged Property is sold as provided
above or Beneficiary otherwise becomes entitled to
possession of the Mortgaged Property upon default
of Grantor, Grantor shall become a tenant at will
of Beneficiary or the purchaser of the Mortgaged
Property and shall pay a reasonable rental for use
of the Mortgaged Property while in Grantor's
possession. The purchaser at any foreclosure sale
may (but shall be under no obligation to), during
any redemption period, make such repairs and
alterations to the improvements as may be
appropriate for the proper operation, care,
preservation, and protection thereof pay any taxes
and assessments due during such period; insure the
improvements on the Mortgaged Property against
loss by casualty and itself against liability
arising from its ownership and use of the
Mortgaged Property; and pay liens not extinguished
by the foreclosure and any other amounts relating
to the Mortgaged Property to the extent due during
such redemption period, and all of such expenses
and payments, together with interest thereon from
the date so paid to reimbursement at the rate
provided for any other
24
redemption amounts, shall be included in the
amount required to be paid by any person to redeem
the Mortgaged Property.
4.5.5 Beneficiary may exercise all other
remedies available, whether at law or equity, in
such order as Beneficiary may elect. All such
other rights and remedies available to Beneficiary
with respect to this Deed of Trust shall be
cumulative and may be pursued concurrently or
successively. The failure or omission on the part
of Beneficiary to exercise the option for
acceleration of maturity and/or foreclosure
following any default, as aforesaid, or to timely
exercise any other option, right, or remedy
conferred upon the Beneficiary herein, or the
acceptance by Beneficiary of partial payments
hereunder, shall not constitute a waiver of any
such default or the right to exercise any such
option, but such operation shall remain
continuously in force.
4.5.6 Beneficiary may bid and become
the purchaser at any sale under this Deed of
Trust. If Beneficiary is the purchaser at any such
sale, Beneficiary may apply the outstanding
Indebtedness against all or any portion of the
purchase price, including the deposit.
ARTICLE V
MISCELLANEOUS
5.1 TRUSTEE.
5.1.1 ACTIONS OF TRUSTEE. The Trustee
shall be protected in acting upon any notice,
request, consent, demand, statement, note or other
paper or document believed by it to be genuine and
to have been signed by the party or parties
purporting to sign the same. The Trustee shall not
be liable for any error of judgment, nor for any
act done or step taken or omitted, nor for any
mistake of law or fact, nor for anything which it
may do or refrain from doing in good faith nor
generally shall a Trustee have any accountability
hereunder except for its own individual willful
default.
5.1.2 RETENTION OF MONIES. All monies
received by Trustee shall, until used or applied
as herein provided, be held in trust for the
purposes for which they were received, but need
not be segregated in any manner from any other
monies (except to the extent required by law) and
Trustee shall have no liability for interest on
any monies received by it hereunder.
5.1.3 TRUSTEE AS ATTORNEY. The Trustee
may act hereunder and may sell and convey the
Mortgaged Property as herein provided although the
Trustee has been, may now be or may hereafter be,
an attorney or agent of Beneficiary, in respect of
any matter or business whatsoever.
5.1.4 SUCCESSOR TRUSTEE. Trustee may
resign by giving of notice of such resignation in
writing to Beneficiary. If Trustee shall die,
resign or become disqualified from acting in the
execution of this trust or shall fail or refuse to
exercise the same when required by Beneficiary so
to do or if for any reason and without cause
Beneficiary shall prefer to appoint a substitute
trustee to act instead of the original Trustee
named herein, or any prior successor or substitute
trustee, Beneficiary shall have full power to
appoint a substitute trustee and, if preferred,
several substitute trustees in
25
succession who shall succeed to all the estates,
rights, powers and duties of the aforenamed
Trustee.
5.1. 5 SUCCESSION INSTRUMENTS. Any new
Trustee appointed pursuant to any of the
provisions hereof shall, without any further act,
deed or conveyance, become vested with all the
estates, property, title, rights, powers,
privileges, discretions, trusts, duties and
obligations of its predecessor or predecessors in
the trust hereunder with like effect as if
originally named as Trustee hereunder but
nevertheless, upon the written request of
Beneficiary or its successor trustee, the Trustee
ceasing to aa shall execute and deliver an
instrument transferring to such successor trustee,
upon the trust herein expressed, all the estates,
properties, rights, powers and trusts of the
Trustee so ceasing to act, and shall duly assign,
transfer and deliver any of the property and
monies held by the 'Trustee to the successor
trustee so appointed in its or his place.
5.1.6 PERFORMANCE OF DUTIES BY AGENT.
Trustee may authorize one or more parties to act
on its behalf to perform the ministerial functions
required of Trustee hereunder, including, without
limitation, the transmittal and posting of any
notices.
5.2 ASSIGNMENT OF BANK ACCOUNTS. Upon the
occurrence of an Event of Default under this Deed
of Trust any funds on deposit with Beneficiary in
the name of Grantor, and any securities and
property given unto or left in the possession of
the Beneficiary by Grantor, whether as collateral
security or held in escrow or otherwise, are
hereby assigned to Beneficiary, shall be held by
it as additional security for the Loan and may be
applied to the payment of any sums due it under
the terms of the Note or the other Loan Documents.
5.3 FUTURE ADVANCES. This Deed of Trust is
given to secure not only the existing Indebtedness
of the Grantor to the Beneficiary evidenced by the
Loan Documents secured hereby, but also such
future advances, plus interest thereon, together
with any disbursements made by Beneficiary for
payment of taxes, insurance or other liens on the
Mortgaged Property, together with interest on such
disbursements at the maximum rate permitted under
Washington law, which advances shall be secured
hereby to the same extent as if such future
advances were made on this date. The total amount
of Indebtedness secured hereby may increase or
decrease from time to time. This Deed of Trust
shall also secure any sums due pursuant to the
Loan Documents as a charge, fee or premium
expressly provided for in the Loan Documents in
the event of acceleration of any monetary
obligations due to a default therein or a
prepayment thereof. The provisions of this Section
shall not be construed to imply any obligation on
Beneficiary to make any future advances, it being
the intention of the parties that any future
advances shall be solely at the discretion and
option of Beneficiary (except as may be otherwise
expressly provided in the Loan Agreement). Any
reference to monetary obligations in this Deed of
Trust shall be construed to reference any future
advances made pursuant to this Section. .
5.4 SUBROGATION. This Deed of Trust, as
additional security, is hereby subrogated to the
lien or liens and to the rights of the owners and
holders thereof of each and every mortgage, lien
or other encumbrance on the Mortgaged Property, or
any part thereof, or any claim or demand which is
paid or satisfied, in whole or in part, out of the
proceeds of the Indebtedness secured hereby and
the respective liens of said mortgages,
26
liens and other encumbrances and claims and
demands shall pass to and be held by Beneficiary
as additional security for the Indebtedness to
Beneficiary to the same extent that they would
have been preserved and would have been passed to
and been held by Beneficiary had they each been
duly and regularly assigned, transferred, set over
and delivered to Beneficiary by separate deed of
assignment, notwithstanding the fact the same may
be or may have been satisfied and canceled of
record, it being the intention of the parties
hereto that the same will be satisfied and
canceled of record at or about the time they are
paid or satisfied out of the proceeds of the Loan.
5.5 NOTICES. No notice or other
communication shall be deemed given unless sent in
the manner, and to the persons, specified in this
Section at the addresses or telecopy numbers (or
at such other address or telecopy number for a
party as will be specified by like notice), set
forth in this Section 5.6. All notices and other
communications hereunder shall be in writing and
shall be deemed given (a) upon receipt if
delivered personally or if deposited with the
United States Postal Service as registered or
certified mail, return receipt requested, (b) at
noon on the first Business Day after dispatch if
sent by reputable overnight courier capable of
providing evidence of delivery, or (c) upon the
completion of transmission (which is confirmed
telephonically by the receiving party) if
transmitted by telecopy or other means of
facsimile which provides immediate or near
immediate transmission to compatible equipment in
the possession of the recipient.
If to Grantor: Emeritus Properties In, Inc.
c/o Emeritus Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopy or Facsimile Number: (206)
301-4500
Confirmation Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: The ▇▇▇▇▇▇▇▇▇ Group
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Telecopy or Facsimile Number: (206)
623-1138
Confirmation Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to Beneficiary: Ocwen Federal Bank FSB
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation Number: (▇▇▇) ▇▇▇-▇▇▇▇
Notwithstanding the foregoing, any notice in fact
received shall be effective as of the time of
receipt.
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5.6 LEGAL CONSTRUCTION. This Deed of Trust
shall be governed by and construed in accordance
with the laws of the State of Washington
(excluding conflicts of law) and the United States
of America. ▇▇▇▇▇▇ County, Washington, shall be a
proper place of venue for all suits to enforce
this Deed of Trust. Grantor and Beneficiary each
hereby irrevocably agree that any legal proceeding
arising out of or in connection with this Deed of
Trust shall be brought in the superior courts of
▇▇▇▇▇▇ County, Washington or the United States
District Court for the Western District of
Washington.
5.7 UNENFORCEABLE PROVISIONS. In the event
any provision of this Deed of Trust is declared or
adjudged to be unenforceable or unlawful by any
Governmental Authority, then such unenforceable or
unlawful provisions shall be excised here from,
and the remainder of this Deed of Trust, together
with all rights and remedies granted thereby,
shall continue and remain in full force and
effect.
5.8 USURY LIMITATIONS. It is the intention
of the parties to conform strictly to applicable
usury laws from time to time in force, and all
agreements between Grantor and Beneficiary,
whether now existing or hereafter arising and
whether oral or written, are hereby expressly
limited so that in no contingency or event
whatsoever, whether by acceleration of maturity of
the Note or otherwise, shall the amount paid or
agreed to be paid to Beneficiary, or collected by
Beneficiary, for the use, forbearance or detention
of the money to be loaned pursuant to the Loan
Agreement, this Deed of Trust or the other Loan
Documents or otherwise, or for the payment or
performance of any covenant or obligation
contained herein or in any other Loan Document, or
in any other document evidencing, securing, or
pertaining to the Indebtedness secured hereby,
exceed the maximum amount permissible under
applicable usury laws (the "HIGHEST LAWFUL RATE").
If under any circumstances whatsoever fulfillment
of any provision hereof or any other Loan
Documents, at the time performance of such
provision shall be due, shall involve an amount or
any portion thereof in excess of the Highest
Lawful Rate, then ipso facto, the payment to be
made or the amount to be delivered to be fulfilled
shall be reduced to the limit of such validity;
and if under any circumstances Beneficiary shall
ever receive an amount deemed interest by
applicable law which would exceed the Highest
Lawful Rate, such amount that would be excessive
interest under applicable usury laws shall be
applied to the reduction of the principal amount
owing under the Note or to other Indebtedness
secured by this Deed of Trust and not to the
payment of interest, or if such excessive interest
exceeds the unpaid balance of principal and other
indebtedness, the excess shall be deemed to have
been a payment made by mistake and shall be
refunded to Grantor or to any other person making
such payment on Grantor's behalf All sums paid or
agreed to be paid to Beneficiary for the use, -
forbearance or detention of the indebtedness of
Grantor evidenced and secured hereby, outstanding
from time to time shall, to the extent permitted
by applicable law, be amortized, prorated,
allocated and spread from the date of disbursement
of the proceeds of the Note until payment in full
of such indebtedness so that the actual rate of
interest on account of such indebtedness is
uniform through the term hereof. The terms and
provisions of this paragraph shall control and
supersede every other provision of all agreements
between Beneficiary and Grantor and any endorser
or guarantor of the Note.
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5. 9 RIGHTS OF BENEFICIARY.
5.9.1 RIGHTS NOT LIMITED. The rights,
powers, privileges and discretions (hereinafter
collectively called the "rights") specifically
granted to Beneficiary under this Deed of Trust
are not in limitation of but in addition to those
to which they are entitled under any general or
local law relating to deeds of trust and mortgages
in the State of Washington, now or hereafter
existing.
5.9.2 BENEFIT TO SUCCESSORS AND ASSIGNS.
The rights to which Beneficiary may be entitled
shall inure to the benefit of its successors and
assigns.
5.9.3 RIGHTS CUMULATIVE. All the rights
of Beneficiary are cumulative and not alternative
and may be enforced successively or concurrently.
5.10 NO WAIVER. Failure of Beneficiary to
exercise any of its rights shall not impair any of
its rights nor be deemed a waiver thereof, and no
waiver of any of its rights shall be deemed to
apply to any other such rights, nor shall it be
effective unless in writing and signed by the
party waiving the right. The acceptance by
Beneficiary of any partial payment after default
or an Event of Default, with or without knowledge
of the default or Event of Default, shall not be a
waiver of the default or Event of Default unless
Beneficiary shall specifically state in writing
that the acceptance waives the default or Event of
Default or states further conditions which must be
satisfied to constitute such a waiver. The failure
of Beneficiary to exercise the option for
acceleration of maturity, foreclosure, or either,
following an Event of Default or to exercise any
other option or privilege granted to Beneficiary
hereunder in any, one or more instances, shall
not constitute a waiver of any such default, but
such option or privilege shall remain continuously
in force.
5.11 MUTUAL WAIVER OF JURY TRIAL. GRANTOR AND
BENEFICIARY EACH WAIVE ALL RIGHTS TO TRIAL BY JURY
OF ANY AND ALL CLAIMS, COUNTERCLAIMS, AND DEFENSES
AMONG AND BETWEEN ANY OF THEM ARISING UNDER THIS
DEED OF TRUST OR THE OTHER LOAN DOCUMENTS, OR ANY
OTHER AGREEMENT OR AGREEMENTS BETWEEN OR AMONG ANY
OF THEM AT ANY TIME RELATING TO THE LOAN,
INCLUDING ANY SUCH AGREEMENTS, WHETHER WRITTEN OR
ORAL, MADE OR ALLEGED TO HAVE BEEN MADE AT ANY
TIME PRIOR TO THE DATE HEREOF, AND ALL AGREEMENTS
MADE HEREAFTER OR OTHERWISE. IN MAKING THIS WAIVER
GRANTOR AND BENEFICIARY ACKNOWLEDGE AND AGREE THAT
ANY AND ALL SUCH CLAIMS, COUNTERCLAIMS, AND
DEFENSES SHALL BE HEARD BY A JUDGE OF A COURT OF
COMPETENT JURISDICTION, WITHOUT A JURY. GRANTOR
AND BENEFICIARY ACKNOWLEDGE AND AGREE THAT THIS
WAIVER OF TRIAL BY JURY IS A MATERIAL ELEMENT OF
THE CONSIDERATION FOR THIS DEED OF TRUST. GRANTOR
AND BENEFICIARY ACKNOWLEDGE THAT THIS IS A WAIVER
OF A LEGAL RIGHT AND THAT THIS WAIVER IS MADE
KNOWINGLY AND VOLUNTARY AFTER CONSULTATION WITH,
OR THE OPPORTUNTY TO CONSULT WITH, COUNSEL OF ITS
CHOICE.
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5.12 NO PARTNERSHIP. Grantor acknowledges and
agrees that nothing contained in the terms and
conditions of this Deed of Trust or any other Loan
Document shall be deemed to create a partnership,
joint venture or joint enterprise between the
parties hereto, each of which is acting
independently and for its own account and benefit.
The relationship created is that of lender and
borrower. The Beneficiary's commitment to make the
Loan and its financing of the development and
construction of the Project does not create, and
shall not be deemed to create, a partnership,
joint venture or joint enterprise between the
parties.
5.13 BINDING EFFECT. This Deed of Trust shall
be binding upon and inure to the benefit of
Grantor, its successors, and those assigns
consented to in writing by Beneficiary, and upon
Beneficiary, its successors and assigns. Any
assignment attempted by Grantor without the
written consent of Beneficiary shall be void.
Wherever the word "Beneficiary" is used herein it
shall be deemed to include also the successors and
assigns of Beneficiary, and the word "Grantor"
shall include the successors of Grantor and shall
include those assignees of Grantor consented to in
writing by Beneficiary. No consent by Beneficiary
of an assignment by Grantor shall release Grantor
as a party primarily obligated and liable under
the terms of this Deed of Trust unless Grantor
shall be released specifically by Beneficiary in
writing. No consent by Beneficiary to an
assignment shall be deemed to be a waiver of the
requirement of consent by Beneficiary of each and
every further assignment, as a condition precedent
to the effectiveness of such assignment.
5.14 GENDER. Unless the context clearly
indicates to the contrary, words singular or
plural in number shall be deemed to include the
other and pronouns having a neuter, masculine or
feminine gender shall be deemed to include the
others.
5.15 TIME OF ESSENCE. Time is of the essence
of the obligations of Grantor in this Deed of
Trust and each and every term, covenant and
condition made herein by or applicable to Grantor.
5.16 CAPTIONS. The captions used for the
Articles and Sections in this Deed of Trust are
inserted only as a matter of convenience and for
reference and in no way define, limit or describe
the scope or intent of this Deed of Trust or any
Article or Section hereof.
5.17 DRAFTING OF LOAN DOCUMENTS. The parties
hereto acknowledge and agree that the terms,
covenants, and conditions of the Loan Documents
have been drafted, reviewed, negotiated, and
revised by all the parties, with the assistance of
counsel of their choice, and that should any
ambiguities occur herein, such ambiguities shall
not be construed or interpreted against one party
or another by virtue of that party's status as
drafting or reviewing party.
5.18 ORAL AGREEMENTS OR ORAL COMMITMENTS TO
LOAN MONEY EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE
UNDER WASHINGTON LAW.
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IN WITNESS WHEREOF, ▇▇▇▇▇▇▇ has caused this
Deed of Trust to be duly executed on its behalf as
of the date first above written.
EMERITUS PROPERTIES III, INC.,
a Washington corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
31
STATE OF WASHINGTON )
)
ss.
COUNTY OF KING )
On this 31st day of January, 1997, before me
personally, appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇, to me
personally known to be the secretary of Emeritus
Properties III, Inc., the corporation that
executed the within and foregoing instrument, and
acknowledged said instrument to be the free and
voluntary act and deed of said corporation, for
the uses and purposes therein mentions, and on
oath stated that (s)he was authorized to execute
said instrument and that the seal affixed, if any,
is the seal of said corporation.
IN WITNESS WHEREOF, I have hereunto set my
hand and affixed my seal the day and year first
above written.
[SEAL]
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
---------
Notary Public in and for the
State of
Washington residing at
Bellevue
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
My appointment expires: 2-24-
98
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