RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
Bank United
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
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DEED OF
TRUST,
SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND
RENTS, AND FIXTURE FILING (FINANCING
STATEMENT)
Dated and effective as of
December 31, 1996
by
EMERITUS CORPORATION, a Washington
corporation,
as Trustor and
debtor,
to
CHICAGO TITLE INSURANCE COMPANY,
as
Trustee,
for the
benefit of
BANK
UNITED,
as Beneficiary and
secured party
DEED OF TRUST, SECURITY
AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS, AND
FIXTURE FILING (FINANCING STATEMENT)
THIS DEED OF TRUST, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS, AND FIXTURE
FILING (FINANCING STATEMENT), dated and
effective as of December 31, 1996, by
EMERITUS CORPORATION, a corporation organized
and existing under the laws of the State of
Washington, the trustor and debtor hereunder
(together with its permitted successors and
assigns, "Trustor"), whose address for all
purposes hereunder is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, to
CHICAGO TITLE INSURANCE COMPANY, a
corporation, as trustee (and any subsequent
substitutes or successors thereto, "Trustee")
whose address for all purposes hereunder is
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, and BANK UNITED, the
beneficiary and secured party hereunder
(together with any subsequent transferee,
assignee, holder or owner of the Obligations,
"Beneficiary"), whose address for all
purposes hereunder is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
W I T N E S E T H:
WHEREAS, THIS DEED OF TRUST (as defined
below) is given to secure all the obligations
described in clauses (A) through (D)
immediately below (which are sometimes
hereinafter collectively referred to as the
"Obligations"):
(A) the payment and performance of all
obligations of Trustor under that certain one
Promissory Note (as the same may hereafter be
amended, modified, renewed or extended, the
"Note"), dated of even date herewith,
executed and delivered by Trustor as maker to
Beneficiary pursuant to the Loan Agreement
(as defined below), in the original principal
sum of up to Six Million Seven Hundred
Seventy-Five Thousand United States Dollars
($6,775,000), together with interest earned
thereon, and such other payments and sums to
be paid pursuant thereto at the rates and
times, in the manner and according to the
terms and conditions specified in the Note
and the Loan Agreement; and
(B) the payment of all sums advanced by
Beneficiary to Trustor or to protect the
Trust Property under or pursuant to this Deed
of Trust, the Note, the Loan Agreement and
any of the other Arizona Loan Documents (as
defined in the Loan Agreement), with interest
earned thereon at the rates specified
therein; and
(C) the payment and performance of all
other obligations and agreements of Trustor
contained in the Note, the Loan Agreement and
the other Arizona Loan Documents and each
obligation and agreement of Trustor
incorporated by reference therein or herein,
or contained therein or herein; and
(D) any and all other indebtedness,
obligations and liabilities of any kind of
the Trustor to the Beneficiary, now and
hereafter existing, absolute or contingent,
joint and/or several, secured or unsecured,
due or not due, arising by operation of law
or otherwise, or direct or indirect, arising
out of or respecting the loan evidenced by
the Note.
WHEREAS, this Deed of Trust is given
pursuant to the Loan Agreement, and each and
every term and provision of the Loan
Agreement and the Note, including the rights,
remedies, covenants, conditions, agreements,
indemnities, representations and warranties
of the Trustor therein (except for the
governing law provisions thereof), are hereby
incorporated herein by reference as though
set forth in full herein and shall be
considered a part of this Deed of Trust. A
copy of the Loan Agreement and the Note are
available for inspection by responsible
parties at the offices of Beneficiary located
at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, Trustor is the fee owner of the
real property described in Exhibit A attached
hereto and made a part hereof;
NOW, THEREFORE, with reference to the
foregoing recitals, which are incorporated
into this Deed of Trust, in reliance thereon
and for good and valuable consideration, the
receipt and sufficiency of which are hereby
acknowledged:
TRUSTOR DOES HEREBY IRREVOCABLY GRANT,
BARGAIN, SELL, CONVEY, CONFIRM, WARRANT,
PLEDGE, ASSIGN AND TRANSFER TO TRUSTEE AND
ITS SUCCESSORS, SUBSTITUTES AND ASSIGNS
FOREVER, IN TRUST, WITH POWER OF SALE, for
the benefit of the Beneficiary and for the
purposes and upon the terms and conditions
hereinafter set forth, and grants a security
interest to Trustee in and to, the following
property, all whether now owned or hereafter
acquired, and including replacements,
additions, accessions, substitutions and
products thereto (collectively, the "Trust
Property"):
(i) The property located in Maricopa
County, Arizona as more particularly
described in Exhibit A attached hereto and by
this reference made a part hereof
(collectively, the "Property"); and
(ii) All Improvements and Equipment, all
of which are hereby declared and shall be
deemed to be fixtures and accessions to the
Property and a part of the Property as
between the parties
hereto and all persons claiming by, through
or under them, and which shall be deemed to
be a portion of the security for the
Obligations herein described to be secured by
this Deed of Trust; and
(iii) All Appurtenant Rights; and
(iv) All Leases and Rents; and
(v) All Accounts, General Intangibles,
Instruments, Inventory, Money, and (to the
full extent assignable) Permits; and
(vi) All Tradenames; and
(vii) All Proceeds.
"Trust Property", including each
component thereof, shall be expressly
interpreted as meaning all or, where the
context permits or requires, any portion of
the above, and all or, where the context
permits or requires, any interest of Trustor
therein.
AND without limiting any of the other
provisions of this Deed of Trust, Trustor
expressly grants to Beneficiary, as secured
party, a security interest in the portion of
the Trust Property now owned or hereafter
acquired which is, or which may be, subject
to the provisions of the Uniform Commercial
Code as in effect from time to time in the
State of Arizona (the "Commercial Code")
which are applicable to secured transactions;
it being understood and agreed that the all
Improvements and Equipment are part and
parcel of the Property and appropriated to
the use thereof and, whether affixed or
annexed to the Property or not, shall for the
purposes of this Deed of Trust be deemed
conclusively to be real estate and mortgaged
hereby.
TO HAVE AND TO HOLD as provided herein
the above granted and described Trust
Property unto Trustee and its assigns,
substitutes and successors forever, and
Trustor hereby binds itself and its
successors and assigns to warrant and forever
defend the Trust Property unto Trustee and
Beneficiary and their assigns, substitutes
and successors against the claim or claims of
all parties claiming or to claim the same, or
any part thereof.
IN TRUST, WITH POWER OF SALE, as
security for the payment and performance of
all of the Obligations.
PROVIDED, HOWEVER, that if Trustor shall
pay or cause to be paid in full to
Beneficiary all monetary Obligations
hereunder and under the Note on or before the
date on which they are due and payable in
accordance with the terms hereof and thereof,
and in the manner stipulated herein and
therein, all without deduction or credit for
taxes or other charges paid by Trustor, and
if Trustor shall have kept, performed
and observed all the covenants and conditions
contained in this Deed of Trust and all of
the other Arizona Loan Documents, then
Trustee shall deliver to Trustor, all such
documents, in recordable form, as shall be
necessary to reconvey the Trust Property to
Trustor and to release the Trust Property
from the encumbrances created hereby, but
otherwise this Deed of Trust shall remain in
full force and effect.
AND TO PROTECT THE SECURITY OF THIS DEED
OF TRUST, Trustor represents, warrants,
covenants and agrees as follows:
Article 1
DEFINITIONS
1.1 DEFINITIONS. Capitalized terms
used herein without definition shall have the
respective meanings ascribed to them in the
Loan Agreement. As used herein, the
following terms shall have the following
meanings:
"ACCOUNTS" shall mean, to the extent
assignable by applicable Law, all accounts
(including accounts receivable) arising from
the Property or the operation of the
Facility, including but not limited to,
rights to payment for goods sold or leased or
for services rendered, not evidenced by an
Instrument, and specifically including all
receivables however denominated.
"APPURTENANT RIGHTS" shall mean all
easements, rights-of-way, strips and gores of
land, vaults, streets, ways, alleys,
passages, sewer rights, waters, water
courses, water rights and powers, minerals,
flowers, shrubs, crops, trees, timber and
other emblements now or hereafter appurtenant
to, or used in connection with, or located
on, under or above the Property, or any part
or parcel thereof, and all ground leases,
estates, rights, titles, interests,
privileges, liberties, tenements,
hereditaments and appurtenances, reversions,
and remainders whatsoever, in any way
belonging, relating or appertaining to the
Property or any other Trust Property, or any
part thereof.
"ARIZONA LOAN DOCUMENTS" shall mean any
and all Arizona Loan Documents (as defined in
the Loan Agreement) , as the same may be
amended, restated, replaced, supplemented or
otherwise modified from time to time.
"BENEFICIARY" shall have the meaning
provided in the recitals hereto.
"COLLATERAL" shall have the meaning set
forth in Section 3.1 hereof.
"COMMERCIAL CODE" shall have the meaning
provided in the granting clauses hereof.
"DEED OF TRUST" shall mean this Deed of
Trust, Security Agreement, Assignment of
Leases and Rents, and Fixture Filing
(Financing Statement), as the same may be
amended, restated, replaced, supplemented or
otherwise modified from time to time.
"ENCUMBRANCES" shall mean any mortgage,
deed of trust, pledge, voluntary or
involuntary lien (whether statutory,
constitutional or contractual), encumbrance,
easement, reservation, restriction, right of
way or right of use, option, right of first
refusal, right of redemption or other similar
right, lease, assignment by way of security,
hypothecation, security interest, conditional
sale, capital lease or other title retention
or security arrangement securing any debt,
obligation, commitment, responsibility or
liability of any person.
"EQUIPMENT" shall mean fixtures and
equipment located on, attached to or used in
connection with the Property or Facility,
including, but not limited to, all beds,
linen, televisions, carpeting, telephones,
cash registers, computers, lamps, glassware,
rehabilitation equipment, and restaurant and
kitchen equipment; provided, however, that
with respect to any items which are leased
and not owned, the Equipment shall include
the leasehold interest only together with any
options to purchase any of said items and any
additional or greater rights with respect to
such items which are hereafter acquired (but
nothing herein shall permit the leasing of
any Equipment except as otherwise expressly
permitted herein or in the Loan Agreement
unless Beneficiary's written consent is first
obtained).
"FACILITY" shall mean the residential
care institution/adult apartment facility
located at the Property together with any
other general or specialized care facilities,
if any, now or hereafter operated by Trustor
at the Property.
"GENERAL INTANGIBLES" shall mean all
general intangibles and other intangible
personal property arising out of or connected
with the Property or the Facility (other than
Accounts, Rents, Instruments, Inventory,
Money, Permits and Trade Names), including,
without limitation, things in action,
contract rights and other rights to payment
of Money.
"GOVERNMENTAL AUTHORITY" shall mean any
court, board, agency, commission, office or
authority of any nature whatsoever for any
governmental, judicial, legislative,
executive, administrative or regulatory unit
(foreign, federal, state, county, district,
municipal, city or otherwise) whether now or
hereafter in existence.
"IMPOSITIONS" shall mean all real estate
and personal property
taxes, construction and rental taxes, gross
receipt taxes, water and sewer charges and
all other taxes, levies, assessments and
other similar charges,
general and special, ordinary and
extraordinary, foreseen and unforeseen, of
every kind and nature whatsoever, which at
any time prior to, at, or after the execution
hereof may be assessed, levied or imposed by,
in each case, a Governmental Authority upon
the Trust Property or the construction,
ownership, use, occupancy or enjoyment
thereof, and any interest, costs or penalties
with respect to any of the foregoing.
"IMPROVEMENTS" shall mean all buildings,
structures and improvements of every nature
whatsoever now or hereafter situated on the
Property, including, but not limited to, all
gas and electric fixtures, radiators,
heaters, engines and machinery, boilers,
ranges, elevators and motors, plumbing and
heating fixtures, air conditioning equipment,
carpeting and other floor coverings, water
heaters, awnings and storm sashes, cleaning
apparatus, signs, landscaping and parking
areas, which are or shall be attached to the
Property or said buildings, structures or
improvements.
"INDEBTEDNESS" shall mean, with respect
to any person (a) any debt of such person,
contingent or otherwise, (i) for borrowed
money, the advance of credit, a conditional
sale or a transfer with recourse or with an
obligation to repurchase, obligations under a
lease required to be capitalized for
financial reporting purposes, or purchase
money obligations or (ii) evidenced by a
note, debenture, letter of credit or similar
instrument given in connection with the
acquisition of any property or assets; (b)
any debt of others described in (a) above
which such person has guaranteed or for which
it is otherwise liable; and (c) any
amendment, renewal, extension or refunding of
any such debt.
"INSTRUMENTS" shall mean all
instruments, chattel paper, documents or
other writings obtained from or in connection
with the operation of the Property or the
Facility (including, without limitation, all
ledger sheets, computer records and
printouts, data bases, programs, books of
account and files relating thereto).
"INVENTORY" shall mean all inventory
from time to time used at the Facility,
including, but not limited to, food,
beverages, other comestibles, soap, paper
supplies, medical supplies, drugs and all
other such goods, wares and merchandise held
for sale to or for consumption or use by
guests or residents of the Property or the
Facility, including all such goods that are
returned or repossessed.
"LAWS" shall mean any order, writ,
injunction, decree, demand, judgment, ruling,
decision, determination, award, law, statute,
ordinance, code, rule, regulation, standard,
requirement, criteria, interpretation, or
Permit of any Governmental Authority, or any
binding agreement with any Governmental
Authority.
"LEASES" shall mean any and all leases,
residency agreements, rights of occupancy or
residence, or, to the extent of the interest
therein of Trustor, subleases or sub-
subleases, licenses, concessions or other
agreements (whether written or oral and
whether now or hereafter in effect) pursuant
to which any person is granted a possessory
interest in, or right to use or occupy all or
any portion of the Trust Property, and all
modifications, amendments or other agreements
relating to such leases, residency
agreements, rights of occupancy or residence,
subleases, sub-subleases, or other
agreements, and every guarantee of the
performance and observance of the covenants,
conditions and agreements to be performed and
observed by the other party thereto.
"LOAN AGREEMENT" shall mean the Loan
Agreement, dated the date hereof, between
Beneficiary and Trustor, as the same may be
amended, restated, replaced, supplemented or
otherwise modified from time to time.
"MONEY" shall mean all monies, cash,
rights to deposit or savings accounts or
other items of legal tender obtained from or
for use in connection with the operation of
the Facility.
"NOTE" shall have the meaning provided
in the recitals hereto.
"OBLIGATIONS" shall have the meaning
provided in the recitals hereto.
"PERMITS" shall mean all licenses,
permits, certificates, approvals,
authorizations and registrations obtained
from any governmental or quasi-governmental
authority and used by Trustor in connection
with the ownership, operation, use or
occupancy of the Property or the Facility,
including, without limitation, business
licenses, state health department licenses,
food service licenses, licenses to conduct
business, certificates of need and all such
other permits, licenses and rights.
"PERMITTED ENCUMBRANCES" shall have the
meaning set forth in Section 2.1(a) hereof.
"PROCEEDS" shall mean all proceeds
(whether cash or noncash, moveable or
immoveable, tangible or intangible),
including proceeds of insurance and
condemnation, from the sale, exchange,
transfer, collection, loss, damage,
disposition, substitution or replacement of
any of the Trust Property.
"RENTS" shall mean all rent, revenues,
income and other payments of whatever nature
from time to time payable pursuant to any
lease of the Property or the Facility, or any
part thereof, including, but not limited to,
leases of individual apartments or units to
residents and leases of retail space or other
space at the Property for businesses such as
newsstands, barbershops, beauty shops,
physicians' offices, pharmacies and specialty
shops.
"SALE" shall have the meaning set forth
in Section 2.1(b) hereof.
"TRADE NAMES" shall mean any and all
names, in all forms and variations, used in
connection with the Trust Property, and all
trademarks, trade names, and trade dress
associated therewith, including without
limitation, "Scottsdale Royale" and "Villa
Ocotillo".
"TRUST PROPERTY" shall have the meaning
provided in the granting clauses hereof.
"TRUSTEE" shall have the meaning
provided in the recitals hereto.
"TRUSTOR" shall have the meaning
provided in the recitals hereto.
1.2 PRINCIPLES OF CONSTRUCTION. All
references to sections, schedules and
exhibits are to sections, schedules and
exhibits in or to this Deed of Trust unless
otherwise specified. Unless otherwise
specified, the words "hereof", "herein" and
"hereunder" and words of similar import when
used in this Deed of Trust shall refer to
this Deed of Trust as a whole and not to any
particular provision of this Deed of Trust.
All meanings attributed to defined terms
herein shall be equally applicable to both
the singular and plural forms of the terms so
defined.
1.3 HEADINGS. The Article and Section
titles herein are inserted for convenience of
reference only and shall in no way alter,
modify, define, or be used in construing, the
text of such Articles or Sections.
1.4 PRONOUNS AND PLURALS. All pronouns
used herein shall be deemed to refer to the
masculine, feminine, neuter, singular or
plural as the context may require, and the
singular form of nouns, pronouns and verbs
shall include the plural, and vice versa,
whichever the context may require.
Article 2
COVENANTS OF TRUSTOR; INCORPORATION
OF
REPRESENTATIONS, WARRANTIES AND
COVENANTS
2.1 COVENANTS OF TRUSTOR. Trustor
hereby covenants and agrees with Beneficiary
that:
(a) it shall not create, incur,
assume or suffer to exist any Encumbrance on
any Trust Property or any part thereof,
except the following (collectively,
"Permitted Encumbrances"):
(i) All Liens to title
permitted by the terms of the
Loan Agreement;
(ii) Encumbrances created by
the Arizona Loan
Documents; and
(iii) Other Encumbrances
permitted by the Loan
Agreement.
(b) it shall not sell, convey,
transfer, assign or otherwise relinquish the
Trust Property or any part thereof, or any
interest therein (hereinafter, a "Sale")
without the consent of the Beneficiary and as
otherwise permitted by the Loan Agreement;
(c) it shall pay when due all of
its monetary obligations under the Note, the
Loan Agreement, this Deed of Trust and the
other Arizona Loan Documents, including all
charges, payments, fees, obligations and
principal of, and interest on, any future
advances secured by this Deed of Trust, and
shall perform all of its non-monetary
obligations under, and otherwise comply with
all of the terms of the Note, this Deed of
Trust, the Loan Agreement and all other
Arizona Loan Documents; and
(d) no portion of the Trust
Property shall be located in a Community
Facilities District without the consent of
the Beneficiary.
2.2 INCORPORATION BY REFERENCE OF
REPRESENTATIONS, WARRANTIES AND COVENANTS;
CROSS DEFAULT.
(a) Each and every representation,
warranty, covenant and indemnity contained in
Article VI of the Loan Agreement (except for
any choice of law provision conflicting with
the provisions of Section 7.23 below) are
hereby incorporated herein by reference as
though set forth in full herein and shall be
considered a part of this Deed of Trust.
(b) Without limiting any Event of
Default contained in the Loan Agreement or
Arizona Loan Documents incorporated herein by
reference, the failure of Trustor as borrower
to pay any Indebtedness to Beneficiary as
lender under that certain one promissory note
(as the same may hereafter be amended,
modified or extended), dated of even date
herewith, made by Trustor as borrower to the
order of Beneficiary as lender, in the
original face amount of up to Five Million
Five Hundred Thousand Dollars ($5,500,000)
(the "Florida Note"), after giving effect
to any applicable grace period or cure
period; or the occurrence of any default or
event of default under the Florida Note or
any other Florida Loan Document (as defined
in the Loan Agreement), shall, at
Beneficiary's option, constitute a default
under this Deed of Trust and the other
Arizona Loan Documents. Notwithstanding
anything in this Deed of Trust to the
contrary, this Deed of Trust shall not secure
any Indebtedness, obligation or liability
created by or arising from the Florida Note
or the other Florida Loan Documents or any
interest, premiums or other amounts, if any,
thereon; the limitation to not cross-
collateralize the Florida Note or the other
Florida Loan Documents by this Deed of Trust
being absolute in all respects.
Article 3
SECURITY
AGREEMENT
3.1 Rights to Collateral under the
Commercial Code. This Deed of Trust is both a
real property deed of trust, and a "security
agreement" within the meaning of the
Commercial Code. The Trust Property includes
both real and personal property and all other
rights and interests, whether tangible or
intangible in nature, of Trustor in the Trust
Property. Trustor, by executing and
delivering this Deed of Trust, hereby grants
to Trustee and Beneficiary, as security for
the Obligations, a security interest in the
Trust Property now owned and hereafter
acquired to the fullest extent that the Trust
Property may be subject to the Commercial
Code (said portion of the Trust Property so
subject to the Commercial Code being called
in this Article 3 the "Collateral"). If an
Event of Default shall occur and be
continuing, each of Trustee and Beneficiary,
in addition to any other rights and remedies
which it may have, shall have and may
exercise immediately and without demand, any
and all rights and remedies granted to a
secured party upon default under the
Commercial Code, including, without limiting
the generality of the foregoing, the right to
take possession of the Collateral or any part
thereof, and to take such other measures as
Beneficiary or Trustee may deem necessary for
the care, protection and preservation of the
Collateral. Upon request or demand of
Beneficiary or Trustee, Trustor shall, at its
expense, assemble the Collateral and make it
available to Beneficiary or Trustee at a
convenient place acceptable to Beneficiary or
Trustee. Trustor shall pay to Beneficiary
and Trustee on demand any and all expenses,
including all expenses and reasonable fees of
attorneys, incurred or paid by Beneficiary
and Trustee in protecting their interest in
the Collateral and in enforcing their rights
hereunder with respect to the Collateral.
Any notice of sale, disposition or other
intended action by Beneficiary or Trustee
with respect to the Collateral sent to
Trustor in accordance with the provisions
hereof at least five (5) business days prior
to such action, shall, except as otherwise
provided by applicable Law, constitute
reasonable notice to Trustor. The proceeds
of any disposition of the Collateral, or any
part thereof, shall, except as otherwise
required by applicable Law, be applied by
Beneficiary or Trustee to the payment of the
Obligations in accordance with Section 6.4
hereof.
3.2 FIXTURE FILING. This Deed of Trust
is intended to constitute a financing
statement filed as a fixture filing in
accordance with the applicable provisions of
the Commercial Code. The debtor is the
Trustor and the secured party is the
Beneficiary and their addresses are
those set forth at the beginning of this Deed
of Trust. Certain of the Trust Property is
or will become "fixtures" (as that term is
defined in the Commercial Code) on the
Property, described or referred to in this
Deed of Trust, and this Deed of Trust, upon
being filed for record in the real estate
records of the County where the Trust
Property is located, shall operate also as a
financing statement filed as a fixture filing
in accordance with the applicable provisions
of the Commercial Code upon such of the Trust
Property that is or may become fixtures.
3.3 PRINCIPAL PLACE OF BUSINESS.
Trustor represents and warrants that the
principal place of business of Trustor and
the place where Trustor's books and records
in respect of the Trust Property are kept is
the address of Trustor first set forth above.
Article 4
ASSIGNMENT OF LEASES AND RENTS
4.1 ASSIGNMENT AND AUTHORITY TO COLLECT
RENTS.
(a) Trustor does hereby absolutely
and unconditionally assign to Beneficiary all
present and future Leases and Rents, and this
Assignment constitutes a present, immediate
and absolute assignment and is intended to be
unconditional and not as an assignment for
additional security only. It is further
intended that it not be necessary for
Beneficiary to institute legal proceedings to
enforce the provisions hereof. Trustor
hereby authorizes Beneficiary or its agents
to collect the aforesaid Rents; provided,
however, that prior to notice from
Beneficiary to Trustor of an Event of Default
by Trustor hereunder or under any other
Arizona Loan Document and subject at all
times to the trust created below, Trustor
shall have a revocable license, but limited
as provided in this Deed of Trust and in any
of the other Arizona Loan Documents: (i) to
collect, in trust as trustee for the benefit
of Beneficiary only, all of the Rents for not
more than one monthly installment in advance,
other than a prepayment of the final monthly
installment of Rent under any Lease or the
security or other deposit under any Lease,
and Trustor may receive and thereafter use
such Rents for Trustor's account, subject to
any requirements contained in the Loan
Agreement; and (ii) to otherwise deal with,
and enjoy the rights of the lessor under and
with respect to the Leases and the Rents,
subject to any requirements contained in the
Loan Agreement. Any Rents held or received
by Trustor at any time shall be held or
received by Trustor in trust as trustee for
the benefit of Beneficiary only.
(b) Upon an Event of Default, and
without the necessity of Beneficiary entering
upon or taking and maintaining full control
of the Trust Property in person, by agent, by
court-appointed receiver or otherwise, the
license referred to in Subsection 4.1(a)
above shall
immediately be revoked and Beneficiary shall
have the right, at its option, to exercise
all rights and remedies contained in this
Deed of Trust and the other Arizona Loan
Documents, or otherwise available at law or
in equity. Trustor hereby authorizes and
directs any lessee under any of the Leases
and any successor to all or any part of the
interests of any such lessee to pay to
Beneficiary the Rents due and to become due
under the Leases after an Event of Default.
A demand on any lessee made by Beneficiary
for such payment of Rents in connection
therewith shall be sufficient warrant to the
lessee to make future payments of Rents to
Beneficiary without the necessity for further
consent by the Trustor. Trustor agrees that
upon the occurrence of an Event of Default
(i) each lessee under any of the Leases shall
have the right to rely upon any such request
by Beneficiary, (ii) each lessee shall pay
such Rents to Beneficiary without any
obligation or right to inquire as to whether
such Event of Default actually exists and
notwithstanding any notice from or claim of
Trustor to the contrary, (iii) Trustor shall
have no right to claim against any lessee for
any such Rents so paid by the lessee to
Beneficiary and (iv) Beneficiary shall be
entitled to collect, receive and apply all
Rents regardless of when and to whom such
Rents are and have been paid and regardless
of the form or location of such Rents.
(c) The license referred to in
Subsection 4.1(a) above shall at all times be
subject to Beneficiary's rights to cause a
receiver to be appointed in accordance with
the other provisions of this Deed of Trust or
the other Arizona Loan Documents.
4.2 COLLECTION AND APPLICATION OF
RENTS. Upon or at any time after the
occurrence and during the continuance of an
Event of Default, Beneficiary may, at its
option, without waiving such Event of
Default, without regard to the adequacy of
the security for the Obligations, either in
person or by agent, without bringing any
action or proceeding, or by a receiver
appointed by a court, without taking
possession of the Trust Property in its own
name, demand, sue for or otherwise collect
and receive all Rents, including those
past-due and unpaid, for application to the
payment of the Obligations in such manner and
order as Beneficiary, in its reasonable
discretion, may determine, subject, however,
to the terms of the Loan Agreement. The
exercise by Beneficiary of the option granted
it in this Section 4.2 and the collection of
the Rents and the application thereof as
herein provided shall not be considered a
waiver of any event of default by Trustor
under this Deed of Trust or any other Arizona
Loan Documents.
4.3 RECEIVER'S COLLECTION OF RENT.
Trustor has concurrently herewith executed
and delivered for the benefit of Beneficiary
a separate Absolute Assignment of Rents and
Leases
providing, inter alia, for the appointment of
a receiver in accordance with Section 5(a)
thereof. Trustor acknowledges that a
receiver may be appointed pursuant to such
Absolute Assignment of Rents and Leases, or
pursuant to this Deed of Trust, or in
accordance with the provisions of
Ariz. Rev. Stat. 33-806, or otherwise,
irrespective of whether or not any judicial
or nonjudicial foreclosure of this Deed of
Trust has been instituted. Trustor
acknowledges that in the event of a conflict
between this Deed of Trust and the Absolute
Assignment of Rents, the provision granting
Beneficiary the greatest protections,
benefits and remedies shall control.
4.4 LIMITATION ON LIABILITY; INDEMNITY.
Beneficiary and Trustee shall not be
obligated to perform or discharge any
obligation, duty or liability of Trustor
under any of the Leases by reason of this
Article 4, and Trustor shall, and hereby
agrees to indemnify Beneficiary and the
Trustee for, and to hold Beneficiary and the
Trustee harmless from and against, any and
all claims, liability, expenses, taxes,
losses or damages which may or might be
asserted against or incurred by Beneficiary
or Trustee, as the case may be, solely by
reason of Beneficiary's status as an assignee
(as opposed to Beneficiary's status as
mortgagee in possession in the event
Beneficiary takes possession of the Trust
Property) pursuant to the Assignment of
Leases and Rents contained herein. Should
Beneficiary or Trustee incur any such claim,
liability, expense, tax, loss or damage due
to the events in the preceding sentence, the
amount thereof, including all expenses and
reasonable fees of attorneys, shall
constitute Obligations secured hereby, and
Trustor shall reimburse Beneficiary or
Trustee, as the case may be, therefor
immediately upon demand. Provided, however,
notwithstanding anything herein to the
contrary, in no event shall Trustor be liable
to Beneficiary or Trustee or their respective
agents, employees, officers or servants for
any claims, liabilities, expenses, taxes,
losses or damages which arise from or are the
result of the gross negligence or willful
misconduct of Trustee or Beneficiary or their
respective agents, employees, officers or
servants.
4.5 TRUSTOR'S COLLECTION OF RENTS. The
payment of the Rents to accrue for any
portion of the Trust Property will not be
waived, released, reduced, discounted or
otherwise discharged or compromised by
Trustor except as permitted in the Loan
Agreement. Trustor shall not exercise any
rights of set off against any person in
possession of any portion of the Trust
Property in degradation of Beneficiary's
rights hereunder. Trustor agrees that it
will not assign any of the Rents except in
connection with or as permitted by the other
Arizona Loan Documents.
4.6 BENEFICIARY'S ADDITIONAL RIGHTS.
Beneficiary may at any time and from time to
time by specific written instrument intended
for the purpose, unilaterally subordinate the
lien of this Deed of Trust to any Lease,
without joinder or consent of, or notice to,
Trustor,
any tenant or any other person, and notice is
hereby given to each tenant under a Lease of
such right to subordinate. No such
subordination shall constitute a
subordination to any lien or other
encumbrance, whenever arising, or improve the
right of any junior lienholder; and nothing
herein shall be construed as subordinating
this Deed of Trust to any Lease.
Article 5
ENVIRONMENTAL MATTERS.
Trustor hereby covenants and agrees to
perform each obligation, covenant and
indemnity of Trustor contained in that
certain Certificate and Indemnification
Regarding Hazardous Substances by Trustor to
Beneficiary of even date herewith relating to
the Trust Property, which is incorporated
herein by reference.
Article 6
DEFAULT, FORECLOSURE AND OTHER REMEDIES
6.1 REMEDIES. The Loan Agreement
contains provisions for the acceleration of
the maturity of the Note upon the happening
of certain Events of Default (as defined
therein). Upon the commencement and during
the continuance of an Event of Default,
Beneficiary may also, at its election,
through the Trustee or otherwise, without
notice to or demand upon Trustor except as
expressly required by the Loan Agreement,
without releasing Trustor from any obligation
under the Loan Agreement or any other Arizona
Loan Document and without waiving any rights
Beneficiary may have hereunder or thereunder
or impairing any notice of an Event of
Default or election to cause the Trust
Property to be sold or any sale proceeding
predicated thereon:
(a) demand, collect or realize
upon all or any part of the Trust Property
and assemble or require Trustor to assemble
all or any part of the Trust Property;
(b) commence, appear in or defend
any action or proceeding purporting to affect
all or any part of the Trust Property or the
interests, rights, powers or duties of
Beneficiary therein, whether brought by or
against Trustor, Trustee or Beneficiary;
(c) pay, purchase, contest or
compromise any claim, Imposition, debt, lien,
charge or encumbrance which in the judgment
of Beneficiary may adversely affect the Trust
Property or the interest, rights, powers or
duties of Beneficiary or Trustee therein;
(d) in such manner and to such
extent as Beneficiary
may deem necessary or proper to protect the
Trust Property or the interests, rights,
powers or duties of Beneficiary therein,
prior, concurrently or subsequent to the
institution of any judicial or nonjudicial
foreclosure proceedings, enter into and upon
the Trust Property or any other property at
which the Trust Property may be located and
take and hold exclusive possession of all or
any portion of the Trust Property without
interference from Trustor, including all
books, papers and accounts relating thereto,
and exclude Trustor from the Trust Property,
and whether or not a receiver has been
appointed pursuant to Section 6.3 hereof,
operate, manage and control the Trust
Property and conduct the business, if any,
thereof, either itself or by other persons
and with full power to use such measures,
legal or equitable, as in its discretion may
be deemed proper or necessary to enforce the
payment or security of the income, Rents,
issues, profits and proceeds of the Trust
Property, including, without limitation,
actions for recovery of rent, actions in
forcible detainer, and actions in distress
for rent, all without notice to Trustor; and
rent and lease the Trust Property, cancel or
terminate any Lease for any cause or on any
ground which would entitle Trustor to cancel
the same, extend or modify any Lease, perform
such acts of repair or protection as
Beneficiary may reasonably deem necessary or
proper to conserve the value of the Trust
Property, and collect and apply any and all
income, Rents, issues, profits and proceeds
from the Trust Property all in accordance
with the terms hereof, subject to the terms
of the Loan Agreement, it being understood
that the collection or receipt of income,
Rents, issues, profits or proceeds from the
Trust Property after an Event of Default
shall not affect or impair any notice of an
Event of Default or election to cause the
Trust Property to be sold or any sale
proceedings predicated thereon, but such
proceedings may be conducted and sale
effected notwithstanding the collection or
receipt of any such income, Rents, issues,
profits and proceeds;
(e) exercise the power of sale
provided for in this Deed of Trust, in any
manner permitted by Law or, at its option,
foreclose this Deed of Trust in the manner
provided by applicable Law for the
foreclosure of mortgages on real property.
In exercising the power of sale provided for
in this Deed of Trust, Beneficiary may,
without demand on Trustor except as otherwise
required by applicable Law, sell the Trust
Property at the time and place of sale fixed
by it in such notice of sale, either as a
whole or in separate parcels, and in such
order as it may determine, at public auction,
provided that Beneficiary shall have the
right to bid for such Trust Property on the
same terms as those of third parties to whom
such Trust Property has been offered at such
sale (but the amount of the Obligations shall
be reduced only to the extent of the actual
proceeds received by Beneficiary or of the
amount of the bid by Beneficiary (in the case
of a sale of Trust Property to Beneficiary)
at such sale), subject to applicable Law.
Beneficiary (by and through Trustee) may
postpone sale of all or any portion of the
Trust 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. Any person,
including Trustor or Beneficiary, may
purchase at such sale or sales.
Without limiting the foregoing:
(i) In connection with any
sale or sales hereunder, Beneficiary shall be
entitled to elect to treat any of the Trust
Property which consists of a right in action
or which is property that can be severed from
the Trust Property covered hereby or any
improvements without causing structural
damage thereto as if the same were personal
property, and dispose of the same in
accordance with applicable Law, separate and
apart from the sale of the Trust Property.
Beneficiary shall be entitled to elect to
proceed against all or any portion of the
Trust Property, in such order and manner as
is now or hereafter permitted under
applicable Law;
(ii) If the Trust Property
consists of several lots, parcels or items of
property, Beneficiary (by and through
Trustee), subject to applicable Law, (A)
shall designate the order in which such lots,
parcels or items shall be offered for sale or
sold, or (B) may elect to sell such lots,
parcels or items through a single sale, or
through two or more successive sales, or in
any other manner Beneficiary designates.
Should Beneficiary desire that more than one
sale or other disposition of the Trust
Property be conducted, Beneficiary, subject
to applicable Law, may cause such sales or
dispositions to be conducted simultaneously,
or successively, on the same day, or at such
different days or times and in such order as
Beneficiary may designate, and no such sale
shall terminate or otherwise affect the lien
of this Deed of Trust on any part of the
Trust Property not sold until all the
Obligations hereby secured have been paid in
full. If Beneficiary elects to dispose of
the Trust Property through more than one
sale, except as otherwise provided by
applicable Law, Trustor agrees to pay the
reasonable costs and expenses of each such
sale and of any judicial proceedings wherein
such sale may be made;
(f) enforce its rights under any
other Arizona Loan Document irrespective of
whether or not any judicial or nonjudicial
foreclosure of this Deed of Trust has been
instituted or completed;
(g) take over and direct
collection of the Rents that are included in
the Trust Property and the proceeds thereof,
direct persons obligated to pay Rent to make
payments as Beneficiary, in its sole
discretion, may determine, subject to
Section 4.2 hereof and to the terms of the
Loan Agreement;
(h) take control of any and all of
the Rents, Accounts, and other Trust Property
and Proceeds arising from any such
contractual and other rights and enforce
collection, either in the name of Beneficiary
or in the name of Trustor, of any or all of
the Rents, Accounts, and other
Trust Property and Proceeds thereof by suit
or otherwise, and receive, receipt for,
surrender, release or exchange all or any
part thereof or compromise, settle, extend or
renew (whether or not longer than the
original period) any debt thereunder, subject
to any limitations contained in the Loan
Agreement;
(i) endorse in the name of Trustor
any instrument, howsoever received by
Beneficiary, representing Trust Property or
Proceeds of any of the Trust Property;
(j) subject to the provisions of
Article 3 hereof, exercise all the rights and
remedies granted to a secured party under
Article 9 of the Commercial Code and all
other rights and remedies given to
Beneficiary by this Deed of Trust or any
other Arizona Loan Document or otherwise
available at law or in equity; and
(k) declare the entire
Indebtedness secured hereby, and all interest
thereon and all advances made by Beneficiary
hereunder and Obligations in respect hereof,
immediately due and payable, terminate any
obligation to lend under the Note or Loan
Agreement, and exercise all additional rights
accruing to it under this Deed of Trust.
Trustee and Beneficiary shall not be under
any obligation to make any of the payments or
do any of the acts referred to in this
Section 6.1, and, except as otherwise
required by applicable Law or the Loan
Agreement, any of the actions referred to in
this Section 6.1 may be taken irrespective of
whether any notice has been given and without
regard to the adequacy of the security for
the Obligations. Beneficiary shall have the
right from time to time to take other action
to recover any sum or sums which constitute a
part of the Obligations as such sum or sums
become due, without regard to whether or not
the balance of the Obligations shall be due,
and without prejudice to the right of
Beneficiary thereafter to bring an action of
foreclosure or sale, or any other action, by
reason of an Event of Default by Trustor
existing at the time such earlier action was
commenced. The reasonable costs and expenses
(including, without limitation, all expenses
and reasonable fees of attorneys) of
Beneficiary, Trustee and Beneficiary's agents
incurred in connection with the preservation,
collection and enforcement of this Deed of
Trust or of the liens granted hereby (whether
suit be brought or not, and at all pre-trial,
trial and appellate levels, including,
without limitation, in connection with any
bankruptcy proceedings), including, without
limitation, any amounts advanced by
Beneficiary to protect or preserve the Trust
Property, shall constitute additions to the
Obligations and shall be secured hereby, and
Trustor covenants and agrees to pay them to
the order of Beneficiary (or Trustee, as the
case may be) promptly upon demand.
6.2 RESCISSION OF NOTICE OF EVENT OF
DEFAULT. Beneficiary, at any time before the
sale, may rescind any statutory notice of
default or Event of Default and its election
to cause any Trust Property to be sold. The
exercise by Beneficiary of such right of
rescission shall
not constitute a waiver of any Event of
Default then existing or subsequently
occurring, shall not impair the right of
Beneficiary to cause any Trust Property to be
sold as a result of such or any subsequent
Event of Default and shall not otherwise
affect any provision, agreement, covenant or
condition of this Deed of Trust, the Loan
Agreement or any other Arizona Loan Document
or the rights, obligations or remedies of the
parties hereunder or thereunder.
6.3 APPOINTMENT OF RECEIVER. Upon the
occurrence and during the continuance of an
Event of Default, Beneficiary, as a matter of
absolute right, and without regard to the
revocable license contained in Article 4
hereof or the value of the Trust Property or
any other security for the Obligations
secured by the Trust Property at such time or
the interest of Trustor in the Trust Property
or the insolvency of any party bound for
payment and performance of such Obligations,
shall have the right to apply to any court
having jurisdiction to appoint a receiver or
receivers of the Trust Property, and Trustor
hereby irrevocably consents to such
appointment. Any such receiver or receivers
shall have all the usual powers and duties of
receivers in like or similar cases and all
the powers and duties of Beneficiary in case
of entry as provided herein and shall
continue as receiver or receivers and
exercise all such powers until the date of
sale of the Trust Property unless such
receivership is sooner terminated.
6.4 APPLICATION OF PROCEEDS.
(a) To the extent permitted by
applicable Law and except as otherwise
required by applicable Law, all proceeds
received from the sale or other disposition
of any portion of the Trust Property pursuant
to this Deed of Trust shall be applied by
Beneficiary in accordance with the following
priorities:
FIRST: to the costs and expenses of the
sale or other disposition of the Trust
Property, including, without limitation, the
fees and expenses incurred by Beneficiary and
Trustee in connection with the services of
attorneys, appraisers, environmental
consultants and engineers and other experts;
costs and expenses incurred by Beneficiary
and Trustee in enforcing and preserving their
rights under the Arizona Loan Documents; and
a sheriff or auctioneer's fee if such expense
has been incurred;
SECOND: to the satisfaction of all
interest and late charges payable on the
Note;
THIRD: to the satisfaction of all
principal payable on the Note;
FOURTH: to the satisfaction of all
Obligations then outstanding (including those
that relate to money advanced hereunder with
respect to the Trust Property) other than
those set forth in clause First, Second and
Third above; and
FIFTH: to the payment to whomsoever
shall be entitled thereto under applicable
Law.
(b) If Beneficiary shall be
ordered, in connection with any bankruptcy,
insolvency or reorganization of Trustor, to
restore or repay to or for the account of
Trustor or its creditors any amount
theretofore received under this Section 6.4,
the amount of such restoration or repayment
shall be deemed to be an Obligation so as to
place Beneficiary in the same position it
would have been in had such amount never been
received by Beneficiary.
6.5 ADDITIONAL SECURITY. If
Beneficiary at any time shall have a security
interest in any property other than the Trust
Property securing any of the Obligations,
Beneficiary may enforce the terms of this
Deed of Trust with respect to the Trust
Property, at its option, either before, after
or concurrently with the exercise of remedies
as to such other security or before or after
a sale is made of such other security, and
may, to the extent permitted by applicable
Law, apply the proceeds derived from any such
enforcement to the Obligations without
affecting the status of or waiving any right
to exhaust all or any other security,
including the Trust Property, and without
waiving any breach or Event of Default or any
right or power whether exercised under the
Arizona Loan Documents, contained in the
Arizona Loan Documents or provided for in
respect of any such other security.
6.6 WAIVER OF RIGHT OF REDEMPTION AND
OTHER RIGHTS. To the extent permitted by
applicable Laws, Trustor hereby:
(a) expressly waives all benefits
that might accrue to the Trustor by virtue of
any present or future moratorium laws
exempting the Trust Property, or any other
property, real or personal, or any part of
the proceeds arising from any sale of any
such property, from attachment, levy, or sale
under execution, or providing for any stay of
execution to be issued on any judgment
recovered on any Arizona Loan Document or in
any action to foreclose this Deed of Trust,
exemption from civil process, or extension of
time for payment;
(b) expressly waives and releases
any right to have the Trust Property
marshalled;
(c) if this Deed of Trust is
foreclosed at Beneficiary's election as a
mortgage on real property, expressly waives
any and all rights of redemption from sale
under any order or judgment of foreclosure of
the lien of this Deed of Trust on behalf of
Trustor and each and every person acquiring
any interest in or title to the Trust
Property subsequent to the date of this Deed
of Trust and on behalf of any other persons;
and
(d) expressly waives any and all
rights it may have to
require that the Trust Property be sold as
separate tracts or units in the event of a
foreclosure sale.
6.7 [Intentionally Deleted]
6.8 FAIR MARKET VALUE FOR CALCULATING
DEFICIENCIES. The following shall be the
basis for the finder of fact's determination
of the fair market value of the Trust
Property as of the date of foreclosure
pursuant to the provisions of this Deed of
Trust:
(a) The Trust Property shall be
valued in an "as is" condition as of the date
of the foreclosure sale, without any
assumption or expectation either that
Improvements will be constructed on the above
described Property or any Improvements
previously constructed or started thereon
will be repaired in any manner or completed
as applicable before a resale of the Trust
Property after foreclosure;
(b) The valuation shall be based
upon an assumption that the foreclosure
purchaser desires a prompt resale of the
Trust Property for cash promptly (but no
later than twelve months) following the
foreclosure sale;
(c) All reasonable closing costs
customarily borne by the seller in a
commercial real estate transaction shall be
deducted from the gross fair market value of
the Trust Property, including, without
limitation, brokerage commissions, title
insurance, a survey of the Trust Property,
tax prorations, attorney's fees, and
marketing costs;
(d) The gross fair market value of
the Trust Property shall be further
discounted to account for any estimated
holding costs associated with maintaining the
Trust Property pending sale, including,
without limitation, utilities expenses,
property management fees, taxes and
assessments (to the extent not accounted for
in subsection (c) above), and other
maintenance expenses;
(e) Any expert opinion testimony
given or considered in connection with a
determination of the fair market value of the
Trust Property must be given by persons
having at least five (5) years experience in
appraising property similar to the Trust
Property and who have conducted and prepared
a complete written appraisal of the Trust
Property taking into consideration the
factors set forth above.
6.9 REINSTATEMENT. Trustor's statutory
rights of reinstatement, if any, under
applicable Law are expressly conditioned upon
Trustor's payment of all sums required under
applicable Law and performance of all
required acts under applicable Law and the
Arizona Loan Documents.
6.10 DEFICIENCY PERIOD. Trustor hereby
agrees that the period of time within which
to commence an action to recover a deficiency
shall be 90 days after the date of the last
trustee sale or other foreclosure sale of the
last deed of trust or mortgage executed and
delivered pursuant to the Loan Agreement,
regardless of the location of such trust
property or other real property collateral.
6.11 NO IMPAIRMENT. The parties intend
by this Deed of Trust that any action by the
Trustee or Beneficiary to enforce any of its
rights or remedies under this Deed of Trust
(whether by exercise of the private power of
sale, judicial foreclosure or otherwise) will
not in any way impair any of Beneficiary's
rights or remedies under the Loan Agreement
or any other deed of trust or mortgage
executed and delivered pursuant to the Loan
Agreement, regardless of the location of such
trust property or other real property
collateral.
6.12 REMEDIES CUMULATIVE. No remedy
conferred upon or reserved to the Beneficiary
by this Deed of Trust, any other security
document or any Arizona Loan Document is
intended to be exclusive of any other remedy
provided or permitted by any security
agreement, any other Arizona Loan Document or
by applicable Law, but, subject to applicable
Law, each shall be cumulative and shall be in
addition to every other remedy so provided or
permitted. Every power or remedy given by
this Deed of Trust, any other security
document or any other Arizona Loan Document
to Beneficiary or to which it may be
otherwise entitled may be exercised
concurrently or independently, from time to
time, and as often as may be deemed expedient
by Beneficiary, and Beneficiary (through the
Trustee or otherwise) may pursue inconsistent
remedies.
6.13 SURETYSHIP WAIVERS. To the extent
Arizona law is deemed or found to apply as to
any matter, any Trustor that has signed this
Deed of Trust or any other Arizona Loan
Document as a surety or accommodation party,
or that has guaranteed the payment of the
Note or that has subjected its property to
this Deed of Trust to secure the Indebtedness
of another, hereby expressly waives to the
fullest extent permitted by law any and all
benefits and defenses under the provisions of
Ariz. Rev. Stat. Sections 12-1641 through
12-1644, Section 44-142, Section 47-3605 and
Rules of Civil Procedure, Rule 17(f), and any
other statutes or rules now or hereafter in
effect that purport to confer specific rights
upon or make specific defenses and procedures
available to Trustor, and waives any defense
arising by reason of any disability or other
defense of Trustor or by reason of the
cessation from any cause whatsoever of the
liability of Trustor.
6.14 ATTORNEY-IN-FACT. Upon the
occurrence and during the continuance of an
Event of Default Trustor hereby appoints
Beneficiary attorney-in-fact of Trustor to
take any action and execute any instruments
that Trustor is obligated, or has covenanted
and agreed under the Arizona Loan Documents
to take or execute, which appointment is
irrevocable and coupled with an interest.
Beneficiary agrees to notify Trustor of any
actions taken under this Section 6.14 and, to
the extent reasonable and practicable under
the circumstances, to afford Trustor the
opportunity to take such action hereunder.
Article 7
MISCELLANEOUS
7.1 PERFORMANCE AT TRUSTOR'S EXPENSE.
Except as expressly provided herein or in the
other Arizona Loan Documents to the contrary,
no portion of the cost and expense of
performing or complying with any of the
obligations imposed on Trustor by this Deed
of Trust shall be borne by Beneficiary or
Trustee, and no portion of such cost and
expense shall be, in any way or to any
extent, credited against the aggregate
amounts payable by Trustor under the Note or
pursuant to any other Arizona Loan Document.
7.2 BENEFICIARY'S RIGHT TO PERFORM THE
OBLIGATIONS. If Trustor shall fail or refuse
to duly and punctually make any payment or to
perform, observe, or comply with any of its
warranties, covenants and agreements under
this Deed of Trust or the Note, the Loan
Agreement or any other Arizona Loan Document
when due or required or within any applicable
cure period without waiving or releasing any
other right, remedy or recourse Beneficiary
may have because of such failure or refusal,
then, prior to or after a Default if such
matter could, in Beneficiary's judgment,
result in loss or damage to life or property,
and any time after an Event of Default,
Beneficiary may (but shall not be obligated
to) make such payment or perform such term,
provision, condition, covenant or agreement
or cure any such default or Event of Default
for the account of and at the expense of
Trustor. All sums paid by Beneficiary
pursuant to this Section 7.2 and all other
sums expended by Beneficiary in respect of
which it shall be entitled to indemnity under
this Deed of Trust and the other Arizona Loan
Documents, together with interest thereon at
the rate established by the Note from the
date of such payment or expenditure, shall
constitute additions to the Obligations and
shall be secured hereby, and Trustor
covenants and agrees to pay them to the order
of Beneficiary promptly upon demand.
Notwithstanding the foregoing, Trustor shall
not be liable to, or indemnify or reimburse
Beneficiary for any sums paid by Beneficiary
pursuant to this Section 7.2 which are caused
by or a result of the gross negligence or
willful misconduct of Beneficiary or its
agents, employees, officers or servants.
7.3 SURVIVAL OF OBLIGATIONS. Except as
otherwise provided in the Loan Agreement and
as provided by applicable Laws, each and all
of the Obligations hereby secured shall
survive the execution
and delivery of this Deed of Trust and the
other Arizona Loan Documents, the foreclosure
sale or other exercise of remedies hereunder
and the consummation of the transactions
called for therein and herein.
7.4 NOTICES. Except as otherwise
provided herein and as may be otherwise
required by Title 33 of the Arizona Revised
Statutes, all notices and other
communications required under the terms and
provisions hereof shall be given in
accordance with the Loan Agreement.
7.5 NO WAIVER; REMEDIES. Beneficiary
shall not by any act, delay, omission or
otherwise be deemed to have waived any of its
rights, remedies or privileges hereunder and
no waiver shall be valid unless in writing,
signed by Beneficiary, and then only to the
extent therein set forth. A waiver by
Beneficiary of any right, remedy or privilege
hereunder on any one occasion shall not be
construed as a bar to any right, remedy or
privilege which Beneficiary would otherwise
have had on any future occasion. No failure
to exercise nor any delay in exercising on
the part of Beneficiary any right, power or
privilege hereunder or under the other
Arizona Loan Documents shall be deemed a
waiver of any default or acquiescence therein
or shall preclude any other or further
exercise thereof or the exercise of any other
right, power or privilege. All rights and
remedies existing hereunder are cumulative
and not exclusive of each other and any
rights or remedies otherwise available, and
Beneficiary's single or partial exercise of
any right, remedy, power or privilege
hereunder shall not preclude any other or
further exercise thereof or the exercise of
any other right, remedy, power, or privilege.
7.6 COVENANTS RUNNING WITH THE LAND.
All of the provisions hereof are intended by
the parties to be, and shall be construed as,
covenants running with the Trust Property
until such Trust Property has been released
from the lien of this Deed of Trust.
7.7 FURTHER ASSURANCES. Trustor shall
execute, acknowledge, record and/or file such
further statements, documents, agreements,
Commercial Code financing and continuation
statements and such other instruments and do
such further acts as Beneficiary may
reasonably request as necessary, desirable or
proper to carry out more effectively the
purposes of this Deed of Trust and the other
Arizona Loan Documents, subject to the lien
of this Deed of Trust any property intended
by the terms hereof or of the other Arizona
Loan Documents to be subject thereto,
including, without limitation, any renewals,
additions, substitutions, replacements,
betterments or appurtenances to the Trust
Property. Beneficiary shall be permitted to
inspect the Trust Property in accordance with
the terms of the Loan Agreement.
7.8 SEVERABILITY. This Deed of Trust
is intended to be performed in accordance
with, and only to the extent permitted by,
applicable Laws. If any term or provision of
this Deed of Trust or the
application thereof to any circumstance
shall, in any jurisdiction and to any extent,
be invalid, illegal or unenforceable, such
term or such provision shall be ineffective
as to such jurisdiction to the extent of such
invalidity, illegality or unenforceability
without invalidating or rendering
unenforceable any remaining terms and
provisions hereof or the
application of such term or provision to
circumstances other than those as to which it
is held invalid, illegal or unenforceable.
7.9 ENTIRE AGREEMENT AND MODIFICATION.
This Deed of Trust, the Note, the Loan
Agreement and the other Arizona Loan
Documents constitute the entire agreement and
reasonable expectations among the parties
pertaining to the subject matter hereof and
thereof and supersede all prior and
contemporaneous agreements, understandings,
representations or other arrangements,
whether express or implied, written or oral,
of the parties in connection herewith or
therewith except to the extent expressly
incorporated or specifically referred to
herein or therein. The terms of this Deed of
Trust shall not be altered, modified, amended
or supplemented in any manner except by a
written instrument signed by the Trustor and
Beneficiary.
7.10 LIMITATION ON BENEFICIARY'S
RESPONSIBILITY. No provision of this Deed of
Trust shall operate to place any obligation
or liability for the control, care,
management or repair of the Trust Property
upon Beneficiary, nor shall it operate to
make Beneficiary responsible or liable for
any waste committed on the Trust Property by
the tenants or any other parties, or for any
dangerous or defective condition of the Trust
Property, or for any negligence in the
management, upkeep, repair or control of the
Trust Property resulting in loss or injury or
death to any tenant, licensee, employee or
stranger. Nothing herein contained shall be
construed as constituting Beneficiary a
"mortgagee in possession" absent the actual
taking of possession of the Trust Property by
Beneficiary. The foregoing will not limit
Beneficiary's liability, if any, for gross
negligence or willful misconduct.
7.11 HOLD HARMLESS. Beneficiary and
Trustee shall not be obligated to perform or
discharge, and undertake hereby neither to
perform nor to discharge, any obligation,
duty or liability with respect to the Trust
Property or the Leases solely by reason of
this Deed of Trust or the other Arizona Loan
Documents. Trustor shall and does hereby
agree to defend, indemnify and hold harmless
Beneficiary and Trustee from and against any
and all claims, losses, expenses, taxes,
damages and liabilities (including, without
limitation, all expenses and reasonable
attorneys' fees) which may arise or be
incurred or accrue in connection with the
Trust Property (including Leases) or in
connection with an obligation of Trustor with
respect to the Trust Property, except, in
each case, to the extent incurred as a result
of the gross negligence or willful misconduct
of Beneficiary or Trustee, or of their
respective agents, employees, officers or
servants, as the case may be. Should
Beneficiary or Trustee, as the case may be,
incur any such claim, loss, expense, tax,
damage or liability, the amount thereof,
including all expenses and reasonable
attorneys' fees and reasonable costs and
expenses associated with actions taken by
Beneficiary or Trustee, as the case may be,
in defense thereof, or otherwise in
protecting its interests hereunder, shall
constitute additions to the Obligations and
shall be secured hereby, and Trustor
covenants and agrees to pay them to the order
of Beneficiary or Trustee, as the case may
be, promptly upon demand.
7.12 MARSHALLING; PAYMENTS SET ASIDE.
Beneficiary shall not be under any obligation
to ▇▇▇▇▇▇▇▇ any assets in favor of Trustor or
any other party or against or in payment of
any or all of the Obligations hereby secured.
To the extent that Trustor makes a payment or
payments to Beneficiary or Beneficiary
enforces its encumbrances or exercises any
rights of setoff, and such payment or
payments or the proceeds of such enforcement
or setoff or any part thereof are
subsequently invalidated, declared to be
fraudulent or preferential, set aside or
required to be repaid to a trustee, receiver
or any other party under any bankruptcy law,
state or federal law, common law or equitable
cause, then to the extent of such recovery,
the obligation or part thereof originally
intended to be satisfied, and all such
encumbrances and rights and remedies
therefor, shall be revived and continue in
full force and effect as if such payment had
not been made or such enforcement or setoff
had not occurred.
7.13 FUTURE ADVANCES. This Deed of
Trust shall secure not only existing
Indebtedness and Obligations, but also such
future advances, whether such advances are
obligatory or are to be made at the option of
Beneficiary, or otherwise, as are made by
Beneficiary to or for the benefit of Trustor
or the Trust Property, to the same extent as
if such future advances were made on the date
of the execution of this Deed of Trust.
Nothing in this Deed of Trust shall be deemed
an obligation on the part of the Beneficiary
to make any further advances except such
advances as may be specifically provided for
in, and subject to the terms and conditions
of, the Loan Agreement.
7.14 ABSOLUTE LIEN. The Trustor
acknowledges that this Deed of Trust and the
other Arizona Loan Documents and those
documents required by the Arizona Loan
Documents together secure the Obligations.
The Trustor agrees that the lien of this Deed
of Trust and all Obligations of the Trustor
hereunder shall be absolute and unconditional
and shall not in any manner be affected or
impaired by:
(a) any lack of validity or
enforceability of the Loan Agreement or any
other Arizona Loan Document, any agreement
with respect to any of the Obligations or any
other agreement or instrument relating to any
of the foregoing;
(b)any acceptance by the
Beneficiary of any security for or guarantees
of any of the Indebtedness hereby secured;
(c) any failure, neglect or
omission on the part of the Beneficiary to
realize upon or protect any of the
Indebtedness hereby secured or any collateral
security therefor, including the Arizona Loan
Documents, or due to any other circumstance
which might otherwise constitute a defense
available to, or a discharge of, the Trustor
in respect of the Obligations or this Deed of
Trust (other than the indefeasible payment in
full in United States Dollars of all the
Obligations hereby secured);
(d)any change in the time, manner
or place of payment of, or in any other term
of, all or any of the Obligations;
(e) any release (except as to the
property released), Sale, pledge, surrender,
compromise, settlement, nonperfection,
renewal, extension, indulgence, alteration,
exchange, modification or disposition of any
of the indebtedness hereby secured or of any
of the collateral security therefor;
(f) any amendment or waiver of or
any consent to any departure from the Loan
Agreement or any other Arizona Loan Document
or of any guaranty thereof and the
Beneficiary (through the Trustee or
otherwise) may in its discretion foreclose,
exercise any power of sale, or exercise any
other remedy available to it under any or all
of the Arizona Loan Documents without first
exercising or enforcing any of its rights and
remedies hereunder; and
(g) any exercise of the rights or
remedies of the Beneficiary (through the
Trustee or otherwise) hereunder or under any
or all of the Arizona Loan Documents.
The Trustor specifically consents and agrees
that the Beneficiary (through the Trustee or
otherwise) may exercise its rights and
remedies hereunder and under the other
Arizona Loan Documents separately or
concurrently and in any order that the
Beneficiary may deem appropriate.
7.15 ASSIGNEES. Trustor may not assign
its rights and obligations under this Deed of
Trust. Trustor hereby acknowledges and
agrees that Beneficiary may assign this Deed
of Trust. Subject to the foregoing, this
Deed of Trust shall be binding upon, and
shall inure to the benefit of, Trustor and
Beneficiary and their respective successors
and assigns.
7.16 NO MERGER OF ESTATES. There shall
be no merger of the lien, security interest
or other estate or interest created by this
Deed of Trust with the fee estate, easement
rights, or any other rights or interests in
the Trust Property by reason of any such
interest created by this Deed of Trust being
held, directly or indirectly, by or for the
account of any person who shall own the fee
estate or any other interest in the Trust
Property. No such merger shall occur unless
and until all persons
at the time having such concurrent interests
shall join in a written instrument expressly
specifying such merger, and such instrument
shall be duly recorded.
7.17 CONDEMNATION AND CASUALTY; TAXES.
The Loan Agreement shall control in the event
of condemnation or casualty of all or any
part of the Trust Property. Trustor shall
pay all taxes and assessments on the Trust
Property in accordance with the Loan
Agreement.
7.18 DISCLOSURE. Trustor hereby agrees
that all documentation, financial statements,
appraisals and other data, or copies thereof,
relevant to Trustor or any guarantor of the
Obligations secured hereby, or to the Trust
Property, may be exhibited to and retained by
(i) any bona fide prospective or actual
purchaser of the Note or any interest
therein, provided that such purchaser agrees
to keep such information confidential or (ii)
any title company proposing to issue or
issuing a policy of title insurance to
Beneficiary in connection with this Deed of
Trust; provided, however, Trustor shall have
no liability with respect to any information
contained therein not prepared by Trustor
except as may otherwise be provided under the
Loan Agreement.
7.19 THE TRUSTEE.
(a) HOLDING OF TITLE. Trustee
holds title under this Deed of Trust for the
benefit of Beneficiary in accordance with the
provisions of Ariz. Rev. Stat. 33-801, et
seq.
(b) SUBSTITUTE TRUSTEE. Trustee
may be removed at any time with or without
cause by Beneficiary in accordance with
applicable Law. All references herein to
"Trustee" shall be deemed to refer to Trustee
(including any successor or substitute
appointed and designated as herein provided)
from time to time acting hereunder.
(c) TRUSTEE'S RECEIPT OF FUNDS.
All moneys received by Trustee shall, until
used or applied as herein provided, be held
in trust for the purposes for which they were
received, and shall not be commingled with
any other moneys.
(d) TRUSTEE'S FEES. Trustor shall
pay all reasonable costs, fees and expenses
incurred by Trustee and ▇▇▇▇▇▇▇'s agents and
counsel in connection with the performance by
Trustee of Trustee's duties hereunder.
7.20 ARBITRATION.
(a) To the maximum extent not
prohibited by law, any controversy, dispute
or claim arising out of, in connection with,
or relating to the Obligations, this Deed of
Trust or the other Arizona Loan
Documents or any transaction provided for
therein, including but not limited to any
claim based on or arising from an alleged
tort or an alleged breach of any agreement
contained in this Deed of Trust or any of the
Arizona Loan Documents shall, at the request
of any party to the Obligations, this Deed of
Trust or any of the other Arizona Loan
Documents (either before, concurrently with
or after the commencement of judicial
proceedings), be settled by arbitration
pursuant to Title 9 of the United States
Code, which the parties hereto acknowledge
and agree applies to the transaction involved
herein, and in accordance with the Commercial
Arbitration Rules of the American Arbitration
Association (the "AAA"). If Title 9 of the
United States Code is inapplicable to any
such claim, dispute or controversy for any
reason, such arbitration shall be conducted
in accordance with the Commercial Arbitration
Rules of the AAA. In any such arbitration
proceeding: (i) all statutes of limitations
which would otherwise be applicable shall
apply; and (ii) the proceeding shall be
conducted in Houston, Texas, by a single
arbitrator, if the amount in controversy is
$1 million or less, or by a panel of three
(3) arbitrators if the amount in controversy
is over $1 million. All arbitrators shall be
selected by the process of appointment from a
panel pursuant to Section 13 of the AAA
Commercial Arbitration Rules and each
arbitrator will have AAA-acknowledged
expertise in the appropriate subject matter.
Any award rendered in any such arbitration
proceeding shall be final and binding, and
judgment upon any such award may be entered
in any court having jurisdiction.
(b) If any party to this Deed of
Trust or any other Arizona Loan Documents
files a proceeding in any court to resolve
any such controversy, dispute or claim, such
action shall not constitute a waiver of the
right of such party or a bar to the right of
any other party to seek arbitration under the
provisions of this Section 7.20 of that or
any other claim, dispute or controversy, and
the court shall, upon motion of any party to
the proceeding made within sixty (60) days of
the initiation of such proceeding, direct
that such controversy, dispute or claim be
arbitrated in accordance with this
Section 7.20.
(c) Notwithstanding any of the
foregoing, the parties hereto agree that no
arbitrator or panel of arbitrators shall
possess or have the power to (i) assess
punitive damages, (ii) dissolve, rescind or
reform (except that the arbitrator may
construe ambiguous terms) the Obligations,
this Deed of Trust or any of the other
Arizona Loan Documents, (iii) enter judgment
on the debt, (iv) exercise equitable powers
or issue or enter any equitable remedies or
(v) allow discovery of attorney/client
privileged information. The Commercial
Arbitration Rules of the AAA are hereby
modified to this extent for the purpose of
arbitration of any dispute, controversy or
claim arising out of, in connection with, or
relating to the Obligations, this Deed of
Trust or any of the other Arizona Loan
Documents. The parties further agree to
waive, each to each other, any claims for
punitive damages, and agree that neither an
arbitrator nor any court shall have the power
to assess
punitive damages.
(d) No provision of, or the
exercise of any rights under, this
Section 7.20 shall limit or impair the right
of any party to this Deed of Trust or the
other Arizona Loan Documents before, during
or after any arbitration proceeding to:
(i) exercise self-help remedies such as
setoff or repossession; (ii) foreclose
(judicially, nonjudicially or otherwise) any
lien on or security interest in any real or
personal property collateral; or (iii) obtain
emergency relief from a court of competent
jurisdiction to prevent the dissipation,
damage, destruction, transfer, hypothecation,
pledging or concealment of assets or of
collateral securing any indebtedness,
obligation or guaranty referenced in the
Arizona Loan Documents. Such emergency
relief may be in the nature of, but is not
limited to: pre-judgment attachments,
garnishments, sequestrations, appointments of
receivers, or other emergency injunctive
relief to preserve the status quo.
(e) In the event arbitration is
prohibited by law with respect hereto, any
actions or proceedings with respect to the
Note, the Obligations, the Loan Agreement,
this Deed of Trust or the other Arizona Loan
Documents may be instituted in the courts of
the State of Texas, the United States
District Court for the Southern District of
Texas, or elsewhere to the extent that
jurisdiction shall exist apart from the
provisions of this Section, as the
Beneficiary may elect, and by execution and
delivery of this Agreement, the Trustor
irrevocably and unconditionally submits to
the nonexclusive jurisdiction (both subject
matter and personal) of each such court, and
irrevocably and unconditionally waives
(i) any objection the Trustor may now or
hereafter have to the laying of venue in any
of such courts, and (ii) any claim that any
action or proceeding brought in any of such
courts has been brought in an inconvenient
forum. Court proceedings may be instituted
in the courts of the State of Arizona and the
United States District Court for the District
of Arizona for the limited purposes of the
foreclosure or execution upon any lien or
security interest in the Trust Property
granted hereunder, as Beneficiary may elect;
or for the enforcement of any arbitration
award or court order entered by a Texas
District Court or a United States District
Court for the Southern District of Texas.
7.21 TIME. Time is of the essence for
each provision of this Deed of Trust.
7.22 CONSTRUCTION MORTGAGE. This Deed
of Trust is entitled to the benefits of Ariz.
Rev. Stat. 47-9313(F). The proceeds of the
Obligations secured by this Deed of Trust are
to be used by Trustor for the purpose of
acquiring title to the Property and funding
the acquisition, construction and improvement
of the Fixtures, Equipment and other
Improvements, or refinancing such secured
obligations.
7.23 GOVERNING LAW. This Deed of Trust
shall be governed by and construed in
accordance with the laws of the State of
Texas and the applicable laws of the United
States of America, without regard to the
conflicts of laws principles thereof. This
Deed of Trust has been entered into in ▇▇▇▇▇▇
County, Texas, and it shall be performable
for all purposes in ▇▇▇▇▇▇ County, Texas.
Courts within the State of Texas shall have
jurisdiction over any and all disputes
between Trustor and Beneficiary, whether in
law or equity, including, but not limited to,
any and all disputes arising out of or
relating to this Deed of Trust or any other
Arizona Loan Document; and venue in any such
dispute whether in federal or state court
shall be laid in ▇▇▇▇▇▇ County, Texas.
Notwithstanding the foregoing, the laws of
the State of Arizona shall govern the
perfection of any lien or security interest
in Trust Property granted hereunder and the
foreclosure or execution upon any lien or
security interest in such Trust Property.
7.24 WAIVER OF JURY TRIAL. Trustor and
Beneficiary by its acceptance of this Deed of
Trust hereby expressly waive any right to a
trial by jury in any action or legal
proceeding arising out of or relating to this
Deed of Trust or any other Arizona Loan
Document or the transactions contemplated
hereby or thereby.
7.25 FORECLOSURE REMEDIES. If an Event
of Default shall occur, Beneficiary may
elect, in addition to exercising any and all
other rights, remedies and recourses set
forth or referred to herein to proceed in the
manner set forth in Arizona Revised Statutes
Section 47-9501(D) relating to the procedure
to be followed when a security agreement
covers both real and personal property.
THIS DEED OF TRUST SHALL REMAIN IN FULL
FORCE AND EFFECT AS TO ANY SUBSEQUENT FUTURE
ADVANCES MADE AFTER THE DATE HEREOF WITHOUT
LOSS OF PRIORITY UNTIL THE OBLIGATIONS ARE
PAID IN FULL AND SATISFIED AND THE LOAN
AGREEMENT AND ALL OTHER ARIZONA LOAN
DOCUMENTS BETWEEN BENEFICIARY AND TRUSTOR FOR
FURTHER ADVANCES HAVE BEEN TERMINATED IN
WRITING AND THIS DEED OF TRUST IS RELEASED OF
RECORD.
NOTE: THIS DEED OF TRUST SECURES, INTER
ALIA, OBLIGATIONS WHICH PROVIDE FOR A
VARIABLE RATE OF INTEREST (AS DESCRIBED IN
THE NOTE AND LOAN AGREEMENT).
[EXECUTION PAGE FOLLOWS]
IN WITNESS WHEREOF, this Deed of Trust
has been duly executed by the Trustor as of
the day and year first above written.
Witness: EMERITUS
CORPORATION, a
Washington corporation
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇
▇. ▇▇▇▇▇
--------------------------
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
Its: Director of
Finance, Chief Financial
Officer and Secretary
STATE OF WASHINGTON
COUNTY OF KING
The foregoing instrument was
acknowledged before me this 28 day of
December, 1996, by ▇▇▇▇▇ ▇▇▇▇▇, the Director
of Finance, Chief Financial Officer and
Secretary of Emeritus Corporation, a
Washington corporation, on behalf of the
corporation.
(Seal and Expiration Date)
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary Public in and for the State of
Washington. Residing at SeaHlp
My commission expires 8-2-97