Exhibit 10.22
AFTER RECORDING RETURN TO:
SEATTLE-FIRST NATIONAL BANK Loan No. 186603-7
CREG, LOAN ADMINISTRATION Title Co. & No. FATCO; 73016-3
P.O. BOX 3686 (CSC-15)
SEATTLE, WA 98124-3686
Attention: Jolene Tingelstad
DEED OF TRUST, SECURITY AGREEMENT
AND FIXTURE FILING WITH ASSIGNMENT
OF LEASES AND RENTS
THIS DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING WITH ASSIGNMENT
OF LEASES AND RENTS ("Deed of Trust") is made as of December 28, 1994 by
ADVANCED TECHNOLOGY LABORATORIES, INC., a Washington corporation, as "Grantor",
whose address is 22100 Bothell Everett Highway, P.O. Box 3003, Bothell,
Washington 98041-3003; to RAINIER CREDIT COMPANY, as "Trustee", whose address is
P.O. Box 33828, FAB-19, Seattle, WA 98124-3828; for the benefit of SEATTLE-FIRST
NATIONAL BANK, a national banking association, as "Beneficiary", whose address
is 701 Fifth Avenue, 14th Floor, Seattle, WA 98104, Attention: Real Estate Loan
Administration.
ARTICLE I
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1. GRANTING CLAUSE. Grantor irrevocably grants, bargains, sells and
conveys to Trustee and its successors and assigns in trust, with power of sale
and with right of entry and possession as provided herein, all Grantor's estate,
right, title, interest, claim and demand, now owned or hereafter acquired, in
and to the following (the "Property"):
(a) The real property in Snohomish County, Washington, described in
Schedule A attached and any and all improvements now or hereafter located
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thereon (the "Real Property").
(b) All land lying in streets and roads adjoining the Real Property,
and all access rights and easements pertaining to the Real Property.
(c) All the lands, tenements, privileges, reversions, remainders,
irrigation and water rights and stock, oil and gas rights, royalties, minerals
and mineral rights, all development rights and credits, air rights,
hereditaments and appurtenances belonging or in any way pertaining to the Real
Property.
(d) All buildings, structures, improvements, fixtures, equipment and
machinery and property now or hereafter attached to the Real Property including,
but not limited to, heating and incinerating apparatus and equipment, boilers,
engines, motors,
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generating equipment, piping and plumbing fixtures, built-in ranges, cooking
apparatus and mechanical kitchen equipment, built-in refrigerators, cooling,
ventilating, sprinkling and vacuum cleaning systems, fire extinguishing
apparatus, gas and electric fixtures, irrigation equipment, carpeting,
underpadding, elevators, escalators, partitions, mantles, built-in mirrors,
window shades, blinds, screens, storm sash, awnings, and shrubbery and plants.
All property mentioned in this subsection (d) shall be deemed part of the realty
and not severable wholly or in part without material injury to the Real
Property.
(e) All rents, issues and profits of the Real Property, all existing
and future leases of the Real Property (including extensions, renewals and
subleases), all agreements for use and occupancy of the Real Property (all such
leases and agreements whether written or oral, are hereafter referred to as the
"Leases"), and all guaranties of lessees' performance under the Leases, together
with the immediate and continuing right to collect and receive all of the rents,
income, receipts, revenues, issues, profits and other income of any nature now
or hereafter due (including any income of any nature coming due during any
redemption period) under the Leases or from or arising out of the Real Property
including minimum rents, additional rents, percentage rents, parking or common
area maintenance contributions, tax and insurance contributions, deficiency
rents, liquidated damages following default in any Lease, all proceeds payable
under any policy of insurance covering loss of rents resulting from
untenantability caused by destruction or damage to the Real Property, all
proceeds payable as a result of exercise of an option to purchase the Real
Property, all proceeds derived from the termination or rejection of any Lease in
a bankruptcy or other insolvency proceeding, all security deposits or other
deposits for the performance of any lessee's obligations under the Leases, and
all proceeds from any rights and claims of any kind which Grantor may have
against any lessee under the Leases or any occupants of the Real Property (all
of the above are hereafter collectively referred to as the "Rents"). This
subsection (e) is subject to the right, power and authority given to the
Beneficiary in the Loan Documents (as defined herein) to collect and apply the
Rents.
(f) All of Grantor's rights to further encumber said Real Property for
debt and all Grantor's rights to enter into any lease agreement which would
create a tenancy that is or may become subordinate in any respect to any
mortgage or deed of trust other than this Deed of Trust.
2. COLLATERAL. The following described estate, property and rights of
Grantor are also included as security for the performance of each covenant and
agreement of Grantor contained herein and the payment of all sums of money
secured hereby:
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(a) All compensation, awards, damages, rights of action and proceeds
(including insurance proceeds and any interest on any of the foregoing) arising
out of or relating to a taking or damaging of the Property by reason of any
public or private improvement, condemnation proceeding (including change of
grade), fire, earthquake or other casualty, injury or decrease in the value of
the Property, to the extent of the amounts owing under the "Note" (defined
below) and the other "Loan Documents" (defined below) including this Deed of
Trust.
(b) All contracts and agreements pertaining to the ownership,
maintenance or operation of the Property including, but not limited to,
management, operating and maintenance agreements, and governmental licenses and
permits.
(c) All of Grantor's interest in and to the proceeds of the loan (the
"Loan") evidenced by the Note (defined below), whether disbursed or not, any
account into which Loan proceeds are deposited.
(d) All books and records pertaining to the ownership, operation or
maintenance of the Property and the other collateral described above, including
copies of computer readable memory.
(e) All additions, accessions, replacements, substitutions, proceeds
and products of the Property described in this Section 2 and of any of the
Property above which is personal property.
The Property and all of the property and rights described in Sections 1 and 2
above are referred to collectively in this Deed of Trust as the "Collateral".
The Collateral is intended only to include property and rights related to the
ownership, maintenance or operation of the Property and not property and rights
related to the manufacturing business from time to time operated by Grantor from
the Property.
3. SECURITY AGREEMENT. If any of the Collateral is determined to be
personal property, Grantor as Debtor hereby grants to Beneficiary as Secured
Party a security interest in all such personal property to secure payment and
performance of the Secured Obligations. This Deed of Trust constitutes a
security agreement between Grantor and Beneficiary pursuant to the Uniform
Commercial Code as adopted in the State of Washington, as now or hereafter
amended, with respect to the Collateral, and any and all property affecting or
related to the use and enjoyment of the Property, now or hereafter described in
any Uniform Commercial Code Financing Statement naming Grantor as Debtor and
Beneficiary as Secured Party. The remedies of Beneficiary for any violation of
the covenants, terms and conditions of this Deed of Trust or any other
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Loan Document (defined below) shall include all remedies available to secured
parties under the Uniform Commercial Code. Grantor agrees the filing of a
financing statement in the records normally having to do with personal property
shall not be construed as in anywise derogating from or impairing the intention
of Grantor and Beneficiary that the Collateral is, and at all times and for all
purposes and in all proceedings both legal or equitable shall be, regarded as
part of the real estate irrespective of whether (i) any such item is physically
attached to the improvements, (ii) serial numbers are used for the better
identification of certain equipment items capable of being thus identified in
any list filed with the Beneficiary, or (iii) any such item is referred to or
reflected in any such financing statement so filed at any time.
4. FINANCING STATEMENT. This Deed of Trust shall also constitute a
financing statement filed for record in the real estate records as a fixture
filing pursuant to the Uniform Commercial Code.
5. OBLIGATIONS SECURED. The following obligations ("Secured Obligations")
are secured by this Deed of Trust:
(a) Payment of the sum of Eleven Million Five Hundred Thousand Dollars
($11,500,000) or so much thereof as may be advanced with interest thereon
according to the terms of a promissory note of even date herewith, payable to
Beneficiary or order and made by Grantor, including all renewals, amendments,
modifications, extensions and substitutions therefor (the "Note"). THE NOTE MAY
CONTAIN PROVISIONS ALLOWING FOR CHANGES IN THE INTEREST RATE.
(b) Payment of any further sums now or hereafter advanced or loaned by
Beneficiary to Grantor, or any of its successors or assigns, and payment of
every other present and future obligation owing by Grantor to Beneficiary of any
kind, and all renewals, modifications, and extensions thereof, including any
interest, fees, costs, service charges, indemnifications and expenses connected
with such obligations, regardless of whether such sums exceed the amount stated
above in subparagraph (a), if (i) the promissory note or other written document
evidencing the future advance or loan or other obligation specifically states
that it is secured by this Deed of Trust, or (ii) the advance, including costs
and expenses incurred by Beneficiary, is made pursuant to the Note, this Deed of
Trust or any other documents executed by Grantor evidencing, securing, or
relating to the Loan, and/or the Collateral, whether executed prior to,
contemporaneously with, or subsequent to this Deed of Trust (this Deed of Trust,
the Note and all such other documents, including any agreement evidencing an
existing or future "swap transaction" (as referred to below), and all renewals,
amendments, modifications or extensions thereof, are
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hereafter collectively referred to as the "Loan Documents"), together with
interest thereon at the rate set forth in the Note, unless otherwise specified
in the Loan Documents or agreed in writing.
(c) Performance of each agreement, term and condition set forth or
incorporated by reference in the Loan Documents, as such may be amended.
(d) Performance and payment of the obligations of Grantor (or any
other obligor under the Note) under each and every existing or future "swap
transaction" (i.e., any transactions governed by an ISDA master agreement) to
which Grantor (or the obligor under the Note) and Beneficiary are parties, if
this Deed of Trust is referenced in such transaction as a credit support
document.
Notwithstanding any of the foregoing, the Secured Obligations shall not include
the obligations of Grantor under any Certificate and Indemnity Agreement
Regarding Building Laws and Hazardous Substances now or hereafter executed by
Grantor (or any other person or entity) in connection with the loan evidenced by
the Note.
ARTICLE II
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1. ASSIGNMENT OF RENTS AND LEASES. Grantor hereby absolutely and
irrevocably assigns to Beneficiary all Grantor's interest in the Rents and
Leases. The foregoing assignment is subject to the terms and conditions of any
separate assignment of the Leases and/or Rents, whenever executed, in favor of
Beneficiary and covering the Property. Grantor warrants it has made no prior
assignment of the Rents or the Leases and will make no subsequent assignment
(other than to Beneficiary) without the prior written consent of Beneficiary.
At Beneficiary's request, Grantor shall execute and deliver to Beneficiary a
separate assignment of rents containing such terms and conditions as Beneficiary
may reasonably require.
(a) Unless otherwise provided in any separate assignment of the Leases
and/or the Rents, and so long as Grantor is not in default under the Loan
Documents, Grantor may collect the Rents as the Rents become due. Grantor shall
use the Rents to pay normal operating expenses for the Property and sums due and
payments required under the Loan Documents. No Rents shall be collected for a
period subsequent to the current one month rental period and first or last
month's rent. Grantor's right to collect the Rents shall not constitute
Beneficiary's consent to the use of cash collateral in any bankruptcy
proceeding.
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(b) If Grantor is in default under this Deed of Trust or any other
Loan Document, without notice to Grantor, Beneficiary or its agents, or a court
appointed receiver, may collect the Rents. In doing so, Beneficiary may (i)
evict lessees for nonpayment of rent, (ii) terminate in any lawful manner any
tenancy or occupancy, (iii) lease the Property in the name of the then owner on
such terms as it may deem best, (iv) institute proceedings against any lessee
for past due rent, and (v) do all other acts and things as Beneficiary deems
necessary or desirable. The Rents received shall be applied to payment of the
costs and expenses of collecting the Rents, including a reasonable fee to
Beneficiary, a receiver or an agent, operating expenses for the Property and any
sums due or payments required under the Loan Documents, in such order as
Beneficiary may determine. Any excess shall be paid to Grantor, however,
Beneficiary may withhold from any excess a reasonable amount to pay sums
anticipated to become due which exceed the anticipated future Rents.
Beneficiary's failure to collect or discontinuing collection at any time shall
not in any manner affect the subsequent enforcement by Beneficiary of its rights
to collect the Rents. The collection of the Rents by or for Beneficiary shall
not cure or waive any default under the Loan Documents. Any Rents paid to
Beneficiary or a receiver shall be credited against the amount due from the
lessees under the Leases. In the event any lessee under a Lease becomes the
subject of any proceeding under the Bankruptcy Code or any other federal, state
or local statute which provides for the possible termination or rejection of any
Lease assigned hereby, Grantor covenants and agrees that in the event any of the
Leases are so rejected, no damages settlement shall be made without the prior
written consent of Beneficiary; any check in payment of damages for rejection or
termination of any such Lease will be made payable both to the Grantor and
Beneficiary; and Grantor hereby assigns any such payment to Beneficiary and
further covenants and agrees that upon request of Beneficiary, it will duly
endorse to the order of Beneficiary any such check, the proceeds of which will
be applied to any portion of the indebtedness secured hereunder in such manner
as Beneficiary may elect.
(c) Regardless of whether or not Beneficiary, in person or by agent,
takes actual possession of the Property or any part thereof, Beneficiary is not
and shall not be deemed to be: (i) "a mortgagee in possession" for any purpose;
(ii) responsible for performing any of the obligations of the lessor under any
Lease; (iii) responsible for any waste committed by lessees or any other
parties, any dangerous or defective condition of the Property, or any negligence
in the management, upkeep, repair or control of the Property; or (iv) liable in
any manner for the Property or the use, occupancy, enjoyment or operation of all
or any part of it. In exercising its rights under this Section 1 Beneficiary
shall be
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liable only for the proper application of and accounting for the Rents collected
by Beneficiary or its agents.
2. LEASES. Grantor shall fully comply with all of the terms, conditions
and provisions of the Leases so that the same shall not become in default and do
all things necessary to preserve the Leases in force. Unless otherwise agreed
in writing by Beneficiary, without Beneficiary's prior written consent, Grantor
will not enter into any Lease (i) for a term of three (3) years or more, or (ii)
containing an option or right to purchase all or any part of the Collateral in
favor of any lessee. With respect to any Lease of the whole or any part of the
Property involving an initial term of three (3) years or more, Grantor shall
not, without the prior written consent of Beneficiary, (a) permit the assignment
or subletting of all or part of the lessee's rights under the Lease unless the
right to assign or sublet is expressly reserved by the lessee under the Lease,
(b) modify or amend the Lease for a lesser rental or term, or (c) accept
surrender of the Lease or terminate the Lease except in accordance with the
terms of the Lease providing for termination in the event of a default. After a
default under the Note or any other Loan Document, any proceeds or damages
resulting from a lessee's default under any Lease, at Beneficiary's option,
shall be paid to Beneficiary and applied against sums owed under the Loan
Documents even though such sums may not be due and payable. Except for real
estate taxes and assessments, without Beneficiary's prior written consent,
Grantor shall not permit any lien to be created against the Property which may
be or may become prior to any Lease. If the Property is partially condemned or
suffers a casualty, Grantor shall promptly repair and restore the Property in
order to comply with the Leases.
ARTICLE III
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1. NON-AGRICULTURAL USE. Grantor represents and warrants to Beneficiary
that neither the Property nor any other Collateral is used principally or
primarily for agricultural or farming purposes.
2. PERFORMANCE OF OBLIGATIONS. Grantor shall promptly and timely pay all
sums due pursuant to the Loan Documents, strictly comply with all the terms and
conditions of the Loan Documents, and perform each Secured Obligation in
accordance with its terms.
3. WARRANTY OF TITLE. Grantor warrants that it has good and marketable
title to an indefeasible fee simple estate in the Property (unless Grantor's
present interest in the Property is described in Schedule A as a leasehold
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interest, in which case Grantor warrants that it lawfully possesses and holds a
valid leasehold interest in the Property as described in Schedule A), and good
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marketable title to the personal property Collateral, subject to no liens,
encumbrances, easements, assessments, security
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interests, claims or defects of any kind prior or subordinate to the lien of
this Deed of Trust, except those listed in Beneficiary's title insurance policy
or approved by Beneficiary in writing (the "Exceptions") and real estate taxes
and assessments for the current year. Grantor warrants the Exceptions and the
real estate taxes and assessments are not delinquent or in default, and Grantor
has the right to convey the Property to Trustee for the benefit of Beneficiary,
and the right to grant a security interest in the personal property Collateral.
Grantor will warrant and defend title to the Collateral and will defend the
validity and priority of the lien of this Deed of Trust and the security
interests granted herein against any claims or demands.
4. PROHIBITED LIENS.
(a) Subject to Grantor's rights under subsection (b) below, Grantor
shall not permit any governmental or statutory liens (including taxes,
mechanic's or materialmen's liens) to be filed against the Collateral except for
real estate taxes and assessments not yet due and liens permitted by the Loan
Documents or approved by Beneficiary in writing.
(b) Grantor will have the right to contest in good faith by
appropriate legal or administrative proceeding the validity of any prohibited
lien, encumbrance or charge so long as (i) no default exists under the Loan
Documents, (ii) with respect to any lien other than a mechanic's or
materialmen's lien, Grantor first deposits with Beneficiary a bond or other
security satisfactory to Beneficiary in the amount reasonably required by
Beneficiary; (iii) Grantor immediately commences its contest of such lien,
encumbrance or charge, applies to court for a show cause as provided for in RCW
60.04.221(9), as now or hereafter amended, and continuously pursues the contest
in good faith and with due diligence; (iv) foreclosure of the lien, encumbrance
or charge is stayed; and (v) Grantor pays any judgment rendered for the lien
claimant or other third party within ten (10) days after the entry of the
judgment. If the contested item is a mechanic's or materialmen's lien, Grantor
will furnish Beneficiary with an endorsement to its title insurance policy which
insures the priority of this Deed of Trust over the lien being contested.
Grantor will discharge or elect to contest and post an appropriate bond or other
security within twenty (20) days of written demand by Beneficiary.
5. PAYMENT OF TAXES AND OTHER ENCUMBRANCES. Grantor shall pay the real
estate taxes and any assessments or ground rents prior to delinquency unless
otherwise provided for in the reserve account described in Section 15 below.
All other encumbrances, charges and liens affecting the Collateral, including
mortgages and deeds of trust, whether prior to or subordinate to the lien of
this Deed of
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Trust, shall be paid when due and shall not be in default. On request Grantor
shall furnish evidence of payment of these items.
6. MAINTENANCE--NO WASTE. Grantor shall protect and preserve the
Collateral and maintain it in good condition and repair. Grantor shall do all
acts and take all precautions which, from the character and use of the
Collateral, are reasonable, proper or necessary to so maintain, protect and
preserve the Collateral. Grantor shall not commit or permit any waste of the
Collateral.
7. ALTERATIONS, REMOVAL AND DEMOLITION. Unless otherwise agreed in
writing by Beneficiary, Grantor shall not alter, remove or demolish any of the
structural elements of the building or improvements on the Property without
Beneficiary's prior written consent. Grantor shall not remove any fixture or
other item of property which is part of the Collateral without Beneficiary's
prior written consent unless the fixture or item of property is replaced by an
article of equal suitability, owned by Grantor free and clear of any lien or
security interest.
8. COMPLETION, REPAIR AND RESTORATION. Grantor shall promptly complete or
repair and restore in good workmanlike manner any building or improvement on the
Property which may be constructed or damaged or destroyed and shall pay all
costs incurred therefor. With respect to alterations or construction subject to
Beneficiary's approval, prior to commencement of any construction Grantor shall
submit the plans and specifications for Beneficiary's approval and furnish
evidence of sufficient funds to complete the work.
9. COMPLIANCE WITH LAWS. Grantor shall comply with all laws, ordinances,
regulations, covenants, conditions, and restrictions affecting the Collateral,
as applicable, including, without limitation, all applicable requirements of the
Fair Housing Act of 1968 (as amended) and the Americans With Disabilities Act of
1990 (as the same may be amended from time to time), and shall not commit or
permit any act upon or concerning the Collateral in violation of any such laws,
ordinances, regulations, covenants, conditions, and restrictions, as applicable.
Grantor shall defend, indemnify and hold Beneficiary harmless from and against
all liability threatened against or suffered by Beneficiary by reason of a
breach by Grantor of the foregoing representations, warranties, covenants and
agreements. The foregoing indemnity shall include the cost of all alterations
to the Collateral (including architectural, engineering, legal and accounting
costs), all fines, fees and penalties, and all legal and other expenses
(including attorneys' fees) incurred in connection with the Property being in
violation of any such laws, ordinances, regulations, covenants, conditions and
restrictions. If
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Beneficiary or its designee shall become the owner of or acquire an interest in
or rights to the Collateral by foreclosure or deed in lieu of foreclosure of
this Deed of Trust or by other means, the foregoing indemnification obligation
shall survive such foreclosure or deed in lieu of foreclosure or other
acquisition of the Collateral. Notwithstanding the preceding sentence, Grantor
shall have no obligation to defend, indemnify or hold Beneficiary harmless from
any liability arising from or out of the activities of Beneficiary or its agents
with respect to the Collateral on or after the transfer of the Collateral to
Beneficiary pursuant to foreclosure proceedings or in lieu thereof.
10. IMPAIRMENT OF COLLATERAL. Grantor shall not, without Beneficiary's
prior written consent, change the general nature of the occupancy of the
Property, initiate, acquire or permit any change in any public or private
restrictions (including without limitation a zoning reclassification) limiting
the uses which may be made of the Collateral, or take or permit any action which
would impair the Collateral or Beneficiary's lien or security interest in the
Collateral.
11. INSPECTION OF COLLATERAL. Beneficiary and/or its representative may
inspect the Collateral at reasonable times after reasonable notice.
12. GRANTOR'S DEFENSE OF COLLATERAL. Grantor shall appear in and defend
any action or proceeding which may affect the Collateral or the rights or powers
of Beneficiary or Trustee under this Deed of Trust.
13. BENEFICIARY'S RIGHT TO PROTECT COLLATERAL. Beneficiary may commence,
appear in, and defend any action or proceeding which may affect the Collateral
or the rights or powers of Beneficiary or Trustee under this Deed of Trust.
Beneficiary may pay, purchase, contest or compromise any encumbrance, charge or
lien not listed as an Exception which in its judgment appears to be prior or
superior to the lien of this Deed of Trust. If Grantor fails to make any
payment or do any act required under the Loan Documents, Beneficiary, without
any obligation to do so and without releasing Grantor from any obligations under
the Loan Documents, may make the payment or cause the act to be performed in
such manner and to such extent as Beneficiary may deem necessary to protect the
Collateral. Beneficiary is authorized to enter upon the Property for such
purposes. In exercising any of these powers Beneficiary may incur such
expenses, in its absolute discretion, it deems necessary.
14. HAZARDOUS SUBSTANCES.
(a) Grantor represents and warrants to Beneficiary, to the best of
Grantor's knowledge after due and diligent inquiry, no
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hazardous or toxic waste or substances are being stored on the Property nor have
any such waste or substances been stored or used in, on, under, over or about
the Property prior to or during Grantor's ownership, possession or control of
the Property, other than the use or storage of hazardous or toxic waste or
substances generally used in the ordinary course of operating, maintaining or
developing properties such as the Property or in the ordinary course of
operating the business of Grantor (or any prior owner of all or part of the
Property), all of which Grantor covenants have (to its knowledge) and will be
used, stored and disposed of in accordance with all applicable federal, state
and local laws, regulations and ordinances. Grantor shall provide written
notice to Beneficiary immediately upon Grantor becoming aware that the Property
is being or has been contaminated with hazardous or toxic waste or substances.
Grantor will not cause nor permit any activities on the Property which directly
or indirectly could result in the Property or any other property becoming
contaminated with hazardous or toxic waste or substances; provided the foregoing
shall not preclude Grantor from using or generating hazardous or toxic wastes or
other substances in the ordinary course of operating the business of Grantor on
the Property if such use is in accordance with commercially reasonable practices
and all applicable federal, state or local laws, regulations and ordinances.
For purposes of this Deed of Trust, the term "hazardous or toxic waste or
substances" means any chemical, substance or material classified or designated
as hazardous, toxic or radioactive, or similar term, and now or hereafter
regulated under any applicable federal, state or local statute, regulation,
ordinance or requirement, now or hereafter in effect, pertaining to
environmental protection, contamination or cleanup.
(b) Grantor shall comply, at Grantor's expense, with all applicable
statutes, regulations and ordinances which apply to Grantor or the Collateral,
and with all orders, decrees or judgments of governmental authorities or courts
having jurisdiction which Grantor is bound by, relating to the use, collection,
storage, treatment, control, removal or cleanup of hazardous or toxic substances
in, on, under, over or about the Property or in, on, under, over or about any
adjacent property that becomes contaminated with hazardous or toxic substances
as a result of construction, operations or other activities on, or the
contamination of, the Property. Beneficiary may, but is not obligated to, enter
upon the Property to inspect it for compliance and to take such actions and
incur such costs and expenses to effect such compliance as it deems advisable to
protect its interest as Beneficiary; and whether or not Grantor has actual
knowledge of the existence of hazardous or toxic substances in, on, under, over
or about the Property or any adjacent property as of the date hereof, Grantor
shall reimburse Beneficiary on demand for the full amount of all reasonable
costs and expenses incurred by
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Beneficiary prior to Beneficiary acquiring title to the Property through
foreclosure or deed in lieu of foreclosure, in connection with such compliance
activities.
(c) Grantor's obligations under this Section 14 are unconditional and
shall not be limited by a non-recourse or other limitations of liability
provided for in this Deed of Trust or any other Loan Document.
15. RESERVE ACCOUNT.
(a) Subject to subsection (d) below, if Beneficiary so requires,
Grantor shall pay to Beneficiary monthly, together with and in addition to any
payments due under the Note, a sum, as estimated by Beneficiary, equal to the
ground rents, if any, the real estate taxes and assessments next due on the
Property and the premiums next due on insurance policies required under the Loan
Documents, less all sums already paid therefor, divided by the number of months
to elapse before two (2) months prior to the date when the ground rents, real
estate taxes, assessments and insurance premiums will become delinquent. The
monthly reserve accounts payments and any other payments due under the Note
shall be paid in a single payment and applied by Beneficiary, at its option, in
the following order: (1) ground rents, real estate taxes, assessments and
insurance premiums, (2) expenditures made pursuant to the Loan Documents and
interest thereon, (3) interest on the Note, and (4) principal due on the Note.
Grantor shall promptly deliver to Beneficiary all bills and notices pertaining
to the ground rents, taxes, assessments and insurance premiums.
(b) The reserve account is solely for the protection of Beneficiary.
Beneficiary shall have no responsibility except to credit properly the sums
actually received by it. No interest will be paid on the funds in the reserve
account and Beneficiary shall have no obligation to deposit the funds in an
interest-bearing account. Upon assignment of this Deed of Trust by Beneficiary,
any funds in the reserve account shall be turned over to the assignee and any
responsibility of Beneficiary with respect thereto shall terminate. Each
transfer of the Property shall automatically transfer to the grantee all rights
of Grantor to any funds in the reserve account.
(c) If the total of the payments to the reserve account exceeds the
amount of payments actually made by Beneficiary, plus such amounts as have been
reasonably accumulated in the reserve account toward payments to become due,
such excess may, at Beneficiary's election, be (1) credited by Beneficiary
against sums then due and payable under the Loan Documents, or (2) refunded to
Grantor as its name appears on the records of Beneficiary. If, however, the
reserve account does not have sufficient funds to make
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the payments when they become due, Grantor shall pay to Beneficiary the amount
necessary to make up the deficiency within fifteen (15) days after written
notice to Grantor. If this Deed of Trust is foreclosed or if Beneficiary
otherwise acquires the Collateral, the Beneficiary shall, at the time of
commencement of the proceedings or at the time the Collateral is otherwise
acquired, apply the remaining funds in the reserve account, less such sums as
will become due during the pendency of the proceedings, against the sums due
under the Loan Documents and/or to make payments required under the Loan
Documents.
(d) Unless required by the terms of Beneficiary's loan commitment or
any other Loan Document, Grantor shall not be required to pay monthly reserve
account payments so long as there has been no more than four (4) late payments
due under the Note throughout the term of the Loan and there is no other default
under the Loan and so long as Grantor remains in ownership of the Collateral,
provided receipted bills evidencing the payment of all taxes and/or assessments
and insurance premiums are exhibited to Beneficiary within fifteen (15) days
after Beneficiary's request therefor. Upon any change in any of these
conditions, Beneficiary may, at its option then or thereafter exercised, require
the payment of reserves pursuant to this Section 15.
16. REPAYMENT OF BENEFICIARY'S EXPENDITURES. Grantor shall pay within ten
(10) days after written notice from Beneficiary all sums expended by Beneficiary
and all costs and expenses incurred by Beneficiary in taking any actions
pursuant to the Loan Documents including attorneys' fees, accountants' fees,
appraisal and inspection fees, and the costs for title reports. If any laws or
regulations are passed subsequent to the date of this Deed of Trust which
require Beneficiary to incur out-of-pocket expenses in order to maintain,
modify, extend or foreclose this Deed of Trust, revise the terms of the Loan or
consent to an Accelerating Transfer (as defined below), Grantor shall reimburse
Beneficiary for such expenses within fifteen (15) days after written notice from
Beneficiary. Expenditures by Beneficiary shall bear interest from the date of
such advance or expenditure at the default interest rate in the Note, shall
constitute advances made under this Deed of Trust and shall be secured by and
have the same priority as the lien of this Deed of Trust. If Grantor fails to
pay any such expenditures, costs and expenses and interest thereon, Beneficiary
may, at its option, without foreclosing the lien of this Deed of Trust, commence
an independent action against Grantor for the recovery of the expenditures
and/or advance any undisbursed Loan proceeds to pay the expenditures.
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17. ACCELERATING TRANSFERS.
(a) "Accelerating Transfer" means any sale, contract to sell,
conveyance, encumbrance, transfer of full possessory rights, or other transfer
of all or any material part of the Collateral or any interest in it, whether
voluntary, involuntary, by operation of law or otherwise and whether or not for
record or for consideration. If Grantor is a corporation, "Accelerating
Transfer" also means any transfer or transfers of shares possessing, in the
aggregate, more than fifty percent (50%) of the voting power. If Grantor is a
partnership, "Accelerating Transfer" also means withdrawal or removal of any
general partner, dissolution of the partnership under Washington law, or any
transfer or any transfers of, in the aggregate, more than fifty percent (50%) of
the partnership interests. If Grantor is the majority owner of a business,
either through ownership of shares of a corporation or interest in a partnership
or otherwise, which occupies seventy-five percent (75%) or more of the
improvements on the Property, "Accelerating Transfer" also means any sale,
contract to sell, or other transfer of the business or substantial assets of the
business, other than in the ordinary course, or the failure of the business to
continue to occupy the Property.
(b) Grantor acknowledges Beneficiary is taking actions in reliance on
the expertise, skill, experience and reliability of Grantor, and the obligations
secured hereby include material elements similar in nature to a personal service
contract or ownership interest. In consideration of Beneficiary's reliance,
Grantor agrees that Grantor shall not make any Accelerating Transfer without
Beneficiary's prior written consent, which Beneficiary may withhold in its sole
discretion. If Beneficiary consents, it may charge the Grantor a fee as
consideration for such consent and condition its consent on such changes to the
terms and conditions of the Note and other Loan Documents as Beneficiary may
require, including without limitation increasing the interest rate on the Note.
Grantor shall pay Beneficiary's actual costs incurred in making its decision to
consent to an Accelerating Transfer, including but not limited to the cost of
credit reports, an updated appraisal of the Property, an updated environmental
assessment and documentation. If any Accelerating Transfer occurs without
Beneficiary's prior written consent, Beneficiary in its sole discretion may
declare an immediate default and all sums secured by this Deed of Trust to be
immediately due and payable, and Beneficiary may invoke any rights and remedies
provided herein. This provision shall apply to each and every Accelerating
Transfer regardless of whether or not Beneficiary has consented or waived its
rights, whether by action or nonaction, in connection with any previous
Accelerating Transfer(s).
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(c) If all or any part of this Section 17 relevant to a particular
Accelerating Transfer is unenforceable according to the law in effect at the
time of the Accelerating Transfer, then Grantor shall reimburse Beneficiary for
its actual costs incurred in processing the Accelerating Transfer on its
records, including but not limited to the cost of modifications of Loan
Documents, an appraisal, and obtaining relevant credit and financial
information.
(d) By the acceptance of this Deed of Trust, the Beneficiary agrees it
will, upon request of the Grantor, if no default exists under this Deed of Trust
and no event has occurred which through the passage of time, the giving of
notice or both, could constitute a default, join with the Grantor in requesting
the Trustee to partially reconvey a portion of the Property, consisting of
approximately 17 acres (including approximately 7.7 acres of wetlands) of
unimproved real property, if the following conditions are met:
(1) Grantor delivers to Beneficiary evidence that (i) the partial
reconveyance will not have any adverse effect upon the priority position of the
remaining security as evidenced by the title insurance held by the Beneficiary,
and (ii) the remaining Property constitutes one or more "legal lots" under
applicable zoning and subdivision laws.
(2) The Property shall have been short platted or otherwise
subdivided in accordance with regulations of the local government authority, and
Beneficiary must receive evidence of final short plat (or other subdivision)
approval from the government authority. Any such short plat or subdivision
shall be subject to the reasonable approval of Beneficiary.
(3) The release, in Beneficiary's reasonable opinion, will not
result in the loss by any other part of the Property of reasonable access to a
public street or the use of any necessary easements or utility services.
18. RELEASE OF PARTIES OR COLLATERAL. Without affecting the obligations
of any party under the Loan Documents and without affecting the lien of this
Deed of Trust and Beneficiary's security interest in the Collateral, Beneficiary
and/or Trustee may, without notice (a) release all or any Grantor and/or any
other party now or hereafter liable for any of the Secured Obligations
(including guarantors), (b) release all or any part of the Collateral, (c)
subordinate the lien of this Deed of Trust or Beneficiary's security interest in
the Collateral, (d) take and/or release any other security for or guarantees of
the Secured Obligations, (e) grant an extension of time for performance of the
Secured Obligations, (f) modify, waive, forbear, delay or fail to enforce any of
the Secured Obligations, (g) sell or otherwise realize on
15
any other security or guaranty prior to, contemporaneously with or subsequent to
a sale of all or any part of the Collateral, (h) make advances pursuant to the
Loan Documents including advances in excess of the Note amount, (i) consent to
the making of any map or plat of the Property, and (j) join in the grant of any
easement on the Property. Any subordinate lienholder shall be subject to all
such releases, extensions or modifications without notice to or consent from the
subordinate lienholder. Grantor shall pay any Trustee's, attorneys', title
insurance, recording, inspection or other fees or expenses incurred in
connection with release of Collateral, the making of a map, plat or the grant of
an easement.
ARTICLE IV
----------
1. INSURANCE.
(a) Grantor shall maintain such insurance on the Collateral as may be
reasonably required from time to time by Beneficiary, with premiums prepaid,
providing replacement cost coverage and insuring against loss by fire and such
other risks covered by extended coverage insurance, and such other perils and
risks as Beneficiary may reasonably require from time to time, including
earthquake, loss of rents and business interruption. Grantor also shall
maintain comprehensive general public liability insurance and if the Property is
located in a designated flood hazard area, flood insurance. All insurance shall
be with companies reasonably satisfactory to Beneficiary and in such amounts and
with such coverages as Beneficiary may reasonably require from time to time,
with lender's loss payable clauses in favor of and in form reasonably
satisfactory to Beneficiary. At least thirty (30) days prior to the expiration
of the term of any insurance policy, Grantor shall furnish Beneficiary with
written evidence of renewal or issuance of a satisfactory replacement policy.
If requested Grantor shall deliver copies of all polices to Beneficiary. Each
policy of insurance shall provide Beneficiary with no less than forty-five (45)
days prior written notice of any cancellation, expiration, non-renewal or
modification.
(b) In the event of foreclosure of this Deed of Trust all interest of
Grantor in any insurance policies pertaining to the Collateral and in any claims
against the policies and in any proceeds due under the policies shall pass to
Beneficiary.
(c) If under the terms of any Lease the lessee is required to maintain
insurance of the type required by the Loan Documents and if the insurance is
maintained for the benefit of both the lessor and Beneficiary, Beneficiary will
accept such policies provided all of the requirements of Beneficiary and the
Loan Documents are met. In the event the lessee fails to maintain
16
such insurance, Grantor shall promptly obtain such policies as are required by
the Loan Documents.
(d) If Grantor fails to maintain any insurance required of it by
Beneficiary, or fails to pay any premiums with respect to such insurance,
Beneficiary may obtain such replacement insurance as it deems necessary or
desirable, or pay the necessary premium on behalf of Grantor, and any sums
expended by Beneficiary in so doing shall be added to the principal balance of
the Note and bear interest at the default interest rate set forth in the Note.
2. DAMAGES AND CONDEMNATION AND INSURANCE PROCEEDS.
(a) Grantor hereby absolutely and irrevocably assigns to Beneficiary,
and authorizes the payor to pay to Beneficiary, the following claims, causes of
action, awards, payments and rights to payment: (i) all awards of damages and
all other compensation payable directly or indirectly because of a condemnation,
proposed condemnation or taking for public or private use which affects all or
part of the Collateral or any interest in it; (ii) all other awards, claims and
causes of action, arising out of any warranty affecting all or any part of the
Collateral, or for damage or injury to or decrease in value of all or part of
the Collateral or any interest in it; (iii) all proceeds of any insurance
policies payable because of loss sustained to all or part of the Collateral up
to the amount of the indebtedness and obligations of Grantor under the Note and
the other Loan Documents; and (iv) all interest which may accrue on any of the
foregoing.
(b) Grantor shall immediately notify Beneficiary in writing if: (i)
any damage occurs or any injury or loss is sustained in the amount of $25,000 or
more to all or part of the Collateral, or any action or proceeding relating to
any such damage, injury or loss is commenced; or (ii) any offer is made, or any
action or proceeding is commenced, which relates to any actual or proposed
condemnation or taking of all or part of the Collateral. If Beneficiary chooses
to do so, it may in its own name appear in or prosecute any action or proceeding
to enforce any cause of action based on warranty, or for damage, injury or loss
to all or part of the Collateral, and if Grantor is in default under the Note or
any other Loan Document, it may make any compromise or settlement of the action
or proceeding. Beneficiary, if it so chooses, may participate in any action or
proceeding relating to condemnation or taking of all or part of the Collateral,
and may join Grantor in adjusting any loss covered by insurance.
(c) All proceeds of these assigned claims, other property and rights
which Grantor may receive or be entitled to shall be paid to Beneficiary. In
each instance, Beneficiary shall apply those proceeds first toward reimbursement
of all of
17
Beneficiary's costs and expenses of recovering the proceeds, including
attorneys' fees.
(d) If, in any instance, each and all of the following conditions are
satisfied in Beneficiary's reasonable judgment, Beneficiary shall permit Grantor
to use the balance of the proceeds ("Net Claims Proceeds") to pay costs of
repairing or reconstructing the Collateral in the manner described below: (i)
the plans and specifications, cost breakdown, construction contract,
construction schedule, contractor and payment and performance bond for the work
of repair or reconstruction must all be acceptable to Beneficiary; (ii)
Beneficiary must receive evidence satisfactory to it that after repair or
reconstruction, the Collateral will be at least as valuable as it was
immediately before the damage or condemnation occurred; (iii) the Net Claims
Proceeds must be sufficient in Beneficiary's determination to pay for the total
cost of repair or reconstruction, including all associated development costs and
interest projected to be payable on the Note until the repair or reconstruction
is complete; or Grantor must provide its own funds in an amount equal to the
difference between the Net Claims Proceeds and a reasonable estimate, made by
Grantor and found acceptable by Beneficiary, of the total cost of repair or
reconstruction; (iv) Beneficiary must receive evidence satisfactory to it that
all Leases which it may find acceptable will continue after the repair or
reconstruction is complete; (v) Beneficiary has received evidence satisfactory
to it, that reconstruction and/or repair can be completed at least three (3)
months prior to the date the Note secured by this Deed of Trust is due and
payable; and (vi) no default under any of the Loan Documents shall have occurred
and be continuing. If the foregoing conditions are met to Beneficiary's
satisfaction, Beneficiary shall hold the Net Claims Proceeds and any funds which
Grantor is required to provide and shall disburse them to Grantor to pay costs
of repair or reconstruction upon presentation of evidence reasonably
satisfactory to Beneficiary that repair or reconstruction has been completed
satisfactorily and lien-free. However, if Beneficiary finds that one or more of
the conditions are not satisfied, it may apply the Net Claims Proceeds to pay or
prepay some or all of the Note.
ARTICLE V
---------
1. DEFAULT--REMEDIES.
(a) Grantor will be in default under this Deed of Trust if (i) Grantor
fails to make any payment when due under the Note, this Deed of Trust or any
other Loan Document; (ii) Grantor fails to perform any other covenant, agreement
or obligation to be performed by Grantor under this Deed of Trust or any other
Loan Document; (iii) any representation or warranty contained in this
18
Deed of Trust or any other Loan Document, or any financial information furnished
by Grantor or its agents to Beneficiary in connection with the Loan, proves to
be false or misleading in any material respect; (iv) Grantor defaults under any
lease or other contract or agreement relating to the Collateral, and such
default is not cured within the applicable cure period, if any; (v) Grantor
defaults under any other Loan Document; (vi) Grantor or any guarantor of the
Loan fails to pay his, her or its debts generally as they become due, or files a
petition or action for relief under any bankruptcy, reorganization or insolvency
laws or makes an assignment for the benefit of creditor; or (vii) an involuntary
petition is filed against Grantor or any guarantor of the Loan under any
bankruptcy, reorganization or other insolvency laws, or a custodian, receiver or
trustee is appointed to take possession, custody or control of the Collateral or
any other properties of Grantor, or the assets of any guarantor of the Loan, and
such petition or appointment is not set aside, withdrawn or dismissed within
thirty (30) days from the date of filing or appointment.
(b) In the event of a default Beneficiary may declare the Secured
Obligations, including the Loan and all other indebtedness evidenced by the Note
or any other Loan Document, immediately due and payable after notice as set
forth in Section 2 below, and/or exercise its rights and remedies under the Loan
Documents and applicable law including foreclosure of this Deed of Trust
judicially as a mortgage or non-judicially pursuant to the power of sale.
Beneficiary's exercise of any of its rights and remedies shall not constitute a
waiver or cure of a default. Beneficiary's failure to enforce any default shall
not constitute a waiver of the default or any subsequent default. In the event
of foreclosure, the cost of the title premium for the trustee's sale guarantee
(or equivalent title policy or report) shall be paid for by Grantor. If the
Loan Documents are referred to an attorney for enforcement or preservation of
Beneficiary's rights or remedies, whether or not suit is filed or any
proceedings are commenced, Grantor shall pay all Beneficiary's costs and
expenses including Trustee's and attorneys' fees (including attorneys' fees for
any appeal, bankruptcy proceeding or any other proceeding), accountants' fees,
appraisal and inspection fees and cost of title report.
2. NOTICE AND OPPORTUNITY TO CURE. Notwithstanding any other provision of
this Deed of Trust, Beneficiary shall not accelerate the maturity of one or more
of the Secured Obligations (a) because of a monetary default (defined below) by
Grantor unless Grantor fails to cure the default within ten (10) days of the
date on which Beneficiary mails or delivers written notice of the default to
Grantor, or (b) because of a nonmonetary default (defined below) by Grantor
unless Grantor fails to cure the default within thirty (30) days of the date on
which Beneficiary mails or
19
delivers written notice of the default to Grantor. For purposes of this Deed of
Trust, the term "monetary default" means a failure by Grantor to make any
payment required of it pursuant to the Note or any other Loan Document, and the
term "nonmonetary default" means a failure by Grantor or any other person or
entity to perform any obligation contained in the Note or any other Loan
Document, other than the obligation to make payments provided for in the Note or
any other Loan Document. If a nonmonetary default is capable of being cured and
the cure cannot reasonably be completed within the thirty (30) day cure period,
the cure period shall be extended up to ninety (90) days so long as Grantor has
commenced action to cure within the thirty (30) day cure period, and in
Beneficiary's opinion, Grantor is proceeding to cure the default with due
diligence. None of the foregoing shall be construed to obligate Beneficiary to
forebear in any other manner from exercising its remedies and Beneficiary may
pursue any other rights or remedies which Beneficiary may have because of a
default.
3. CUMULATIVE REMEDIES. To the fullest extent allowed by law, all
Beneficiary's and Trustee's rights and remedies specified in the Loan Documents
(including this Deed of Trust) are cumulative, not mutually exclusive and not in
substitution for any rights or remedies available at law or in equity. Without
waiving its rights in the Collateral, Beneficiary may proceed against Grantor or
may proceed against any other security or guaranty for the Secured Obligations,
in such order and manner as Beneficiary may elect. The commencement of
proceedings to enforce a particular remedy shall not preclude the discontinuance
of the proceedings and the commencement of proceedings to enforce a different
remedy.
4. ENTRY. After a default, Beneficiary, in person, by agent or by court
appointed receiver, may enter, take possession of, manage and operate all or any
part of the Collateral, and may also do any and all other things in connection
with those actions that Beneficiary may consider necessary and appropriate to
protect the security of this Deed of Trust, including taking and possessing all
of Grantor's or the then owner's books and records pertaining to the ownership,
operation or maintenance of the Property and the other collateral described
above; entering into, enforcing, modifying, or canceling Leases on such terms
and conditions as Beneficiary may consider proper; obtaining and evicting
tenants; fixing or modifying Rents; collecting and receiving any payment of
money owing to Grantor; completing any unfinished construction; and/or
contracting for and making repairs and alterations.
5. APPOINTMENT OF RECEIVER. In the event of a default, Grantor consents
to, and Beneficiary, to the fullest extent permitted by applicable law, shall be
entitled, without notice, bond or regard to the adequacy of the Collateral, to
the appointment of a receiver for the Collateral. The receiver shall
20
have, in addition to all the rights and powers customarily given to and
exercised by a receiver, all the rights and powers granted to Beneficiary by the
Loan Documents. The receiver shall be entitled to receive a reasonable fee for
management of the Property. If Grantor is an occupant of the Property,
Beneficiary has the right to require Grantor to pay rent at fair market rates
and the right to remove Grantor from Property if Grantor fails to pay rent.
6. SALE OF PROPERTY AFTER DEFAULT. Following a default and the
foreclosure of this Deed of Trust, either judicially or non-judicially, the
Collateral may be sold separately or as a whole, at the option of Beneficiary.
In the event of a trustee's sale of the Collateral pursuant to the power of sale
granted herein, Beneficiary hereby assigns its security interest in the personal
property Collateral to the trustee. Beneficiary may also realize on the
personal property Collateral in accordance with the remedies available to
secured parties under the Uniform Commercial Code or at law. In the event of a
trustee's sale, Grantor, and the holder of any subordinate liens or security
interest with actual or constructive notice hereof, waive any equitable,
statutory or other right they may have to require marshaling of assets in
connection with the exercises of any of the remedies permitted by applicable law
or provided herein, or to direct the order in which any of the Collateral will
be sold in the event of any sale under this Deed of Trust or foreclosure in the
inverse order of alienation.
7. FORECLOSURE OF LESSEE'S RIGHT--SUBORDINATION. Beneficiary shall have
the right, at its option, to foreclose this Deed of Trust subject to the rights
of any lessees of the Property. Beneficiary's failure to foreclose against any
lessee shall not be asserted as a claim against Beneficiary or as a defense
against any claim by Beneficiary in any action or proceeding. Beneficiary at
any time may subordinate this Deed of Trust to any or all of the Leases except
that Beneficiary shall retain its priority claim to any condemnation or
insurance proceeds.
8. REPAIRS DURING REDEMPTION. In the event of a judicial foreclosure the
purchaser during any redemption period may make such repairs and alterations to
the Property as may be reasonably necessary for the proper operation, care,
preservation, protection and insuring of the Property. Any sums so paid,
together with interest from the date of the expenditure at the rate provided in
the judgment, shall be added to the amount required to be paid for redemption of
the Property.
ARTICLE VI
----------
1. ADDITIONAL SECURITY DOCUMENTS. Grantor shall within fifteen (15) days
after request by Beneficiary execute and deliver any financing statement,
renewal, affidavit, certificate,
21
continuation statement, or other document Beneficiary may request in order to
perfect, preserve, continue, extend, or maintain security interests or liens
granted herein to Beneficiary and the priority of such security interests or
liens. Grantor shall pay all costs and expenses incurred by Beneficiary in
connection with the preparation, execution, recording, filing, and refiling of
any such document.
2. RECONVEYANCE AFTER PAYMENT. Upon written request of Beneficiary
stating that all obligations secured by this Deed of Trust have been paid,
Trustee shall reconvey, without warranty, the Collateral then subject to the
lien of this Deed of Trust. Grantor shall pay any costs, trustee's fees and
recording fees incurred in so reconveying the Property.
3. NONWAIVER OF TERMS AND CONDITIONS. Time is of the essence with respect
to performance of the obligations under the Loan Documents. Beneficiary's
failure to require prompt enforcement of any such obligation shall not
constitute a waiver of the obligation or any subsequent required performance of
the obligation. No term or condition of this Deed of Trust or any other Loan
Documents may be waived, modified or amended except by a written agreement
signed by Grantor and Beneficiary. Any waiver of any term or condition of the
Loan Documents shall apply only to the time and occasion specified in the waiver
and shall not constitute a waiver of the term or condition at any subsequent
time or occasion.
4. WAIVERS BY GRANTOR. Without affecting any of Grantor's obligations
under the Loan Documents, Grantor waives the following: (a) any right to
require Beneficiary to proceed against any specific party liable for sums due
under the Loan Documents or to proceed against or exhaust any specific security
for sums due under the Loan Documents; (b) notice of new or additional
indebtedness of any Grantor or any other party liable for sums due under the
Loan Documents to Beneficiary; (c) any defense arising out of Beneficiary
entering into additional financing or other arrangements with any Grantor or any
other party liable for sums due under the Loan Documents and any action taken by
Beneficiary in connection with any such financing or other arrangements or any
pending financing or other arrangements; (d) any defense arising out of the
absence, impairment, or loss of any or all rights of recourse, reimbursement,
contribution or subrogation or any other rights or remedies of Beneficiary
against any Grantor or any other party liable for sums due under the Loan
Documents or any Collateral; and (e) any obligation of Beneficiary to see to the
proper use and application of any proceeds advanced pursuant to the Loan
Documents.
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5. RIGHT OF SUBROGATION. Beneficiary is subrogated to the rights, whether
legal or equitable, of all beneficiaries, mortgagees, lienholders and owners
directly or indirectly paid off or satisfied in whole or in part by any proceeds
advanced by Beneficiary under the Loan Documents, regardless of whether such
parties assigned or released of record their rights or liens upon payment.
6. JOINT AND SEVERAL LIABILITY. If there is more than one Grantor of this
Deed of Trust, their obligations shall be joint and several.
7. STATEMENT OF AMOUNT OWING. Grantor within fifteen (15) days after
request by Beneficiary will furnish Beneficiary a written statement of the
amount due under the Loan Documents, any offsets or defenses against the amount
claimed by Grantor, and such other factual matters as Beneficiary may reasonably
request.
8. BOOKS AND RECORDS; FINANCIAL STATEMENTS.
(a) Grantor will keep and maintain at Grantor's address stated above,
or such other place as Beneficiary may approve in writing, books of accounts and
records adequate to reflect correctly the results of the operation of the
Property and copies of all written contracts, leases and other instruments which
affect the Property. Such books, records, contracts, leases and other
instruments shall be subject to examination, inspection and copying at any
reasonable time by Beneficiary. Except as otherwise agreed in writing by
Beneficiary, Grantor shall provide to Beneficiary within ninety (90) days after
the end of each of Grantor's fiscal years (or within twenty (20) days of
Beneficiary's written request therefor if Grantor is in default), for each
Grantor, for each general partner of Grantor if Grantor is a partnership, and
for each guarantor of all or any of the Secured Obligations, a complete and
current financial statement, together with a statement of income and expenses of
the Property and a statement of changes in financial position with respect to
the Property for the prior year, each in reasonable detail and certified by
Grantor, the general partner or the guarantor, as the case may be. At the same
time, Grantor shall also furnish a current rent roll for the Property, certified
by Grantor, which shall include such information as Beneficiary may require,
including the name of each tenant, the lease expiration date, the monthly rent,
the date to which rent has been paid, and any deposits or prepaid rent Grantor
is holding.
(b) All financial statements shall be prepared in accordance with
generally accepted accounting principles, consistently applied, or such other
accounting practices as Beneficiary may approve. Grantor's compliance with
these provisions shall not limit or affect Grantor's obligations to
23
comply with financial, tax and operation covenants and reporting requirements
under any other agreement between Grantor and Beneficiary whether or not such
other agreement is related to the Secured Obligations. If any of the reporting
requirements in this Section 8 are inconsistent with the reporting requirements
in any such other agreement, the reporting requirements in such other agreement
shall control.
9. APPRAISALS. In the event of a default Beneficiary may obtain a current
regulatory conforming appraisal of the Collateral. In addition, appraisals may
be commissioned by Beneficiary when required by laws and regulations which
govern Beneficiary's lending practices. The cost of all such appraisals (and
related internal review fees and costs) will be paid by Grantor within fifteen
(15) days after request by Beneficiary.
10. EVASION OF PREPAYMENT FEE. If Grantor is in default, whether
Beneficiary has accelerated the maturity of the indebtedness or not, any tender
of payment sufficient to satisfy all sums due under the Loan Documents made at
any time prior to foreclosure sale shall constitute an evasion of the prepayment
terms of the Note, if any, and shall be deemed a voluntary prepayment. Any such
payment, to the extent permitted by law, shall include the additional payment
required under the prepayment fee provision in the Note, if any, or if at that
time prepayment is not permitted, then such payment, to the extent permitted by
law, will include an additional payment of five percent (5%) of the then
principal balance.
11. PAYMENT OF NEW TAXES. If any federal, state or local law is passed
subsequent to the date of this Deed of Trust which requires Beneficiary to pay
any tax because of this Deed of Trust or the sums due under the Loan Documents
(excluding income taxes), then Grantor shall pay to Beneficiary on demand any
such taxes if it is lawful for Grantor to pay them, or, in the alternative
Grantor may repay all sums due under the Loan Documents plus any prepayment fee
within thirty (30) days of such demand.
12. INTENTIONALLY OMITTED.
13. NOTICES. Any notice given by Grantor, Trustee or Beneficiary shall be
in writing and shall be effective (1) on personal delivery to the party
receiving the notice or (2) on the third day after deposit in the United States
mail, postage prepaid with return receipt requested, addressed to the party at
the address set forth above (or such other address as a party may specify by
written notice given pursuant to this paragraph), or with respect to the
Grantor, to the address at which Beneficiary customarily or last communicated
with Grantor.
24
14. CONTROLLING DOCUMENT. In the event of a conflict or inconsistency
between the terms and conditions of this Deed of Trust and the terms and
conditions of any other of the Loan Documents (except for any separate
assignment of the Rents and/or the Leases and any loan agreement which shall
prevail over this Deed of Trust), the terms and conditions of this Deed of Trust
shall prevail.
15. INVALIDITY OF TERMS AND CONDITIONS. If any term or condition of this
Deed of Trust is found to be invalid, the invalidity shall not affect any other
term or condition of the Deed of Trust and the Deed of Trust shall be construed
as if not containing the invalid term or condition.
16. LEGISLATION AFFECTING BENEFICIARY'S RIGHTS. If enactment or
expiration of applicable laws has the effect of rendering any provision of the
Note or this Deed of Trust unenforceable according to its terms, and Beneficiary
in good faith believes the affect of such change in laws will adversely impact
the security for the Note or Grantor's obligation or ability to repay the Loan,
Beneficiary, at its option, may require immediate payment in full of all sums
secured by this Deed of Trust and may invoke any remedies permitted herein.
17. RULES OF CONSTRUCTION. This Deed of Trust shall be construed so that,
whenever applicable, the use of the singular shall include the plural, the use
of the plural shall include the singular, and the use of any gender shall be
applicable to all genders and shall include corporations, partnerships and
limited partnerships. This Deed of Trust inures to the benefit of, and binds
all parties named herein and their successors and assigns. The headings to the
various sections have been inserted for convenience of reference only and shall
not be used to construe this Deed of Trust.
18. APPLICABLE LAW. The Loan Documents shall be governed by and construed
in accordance with the laws of the State of Washington.
GRANTOR
ADVANCED TECHNOLOGY LABORATORIES, INC.,
a Washington corporation
By /s/ Harvey N. Gillis
___________________________________
Its Senior VP & CFO
___________________________________
25
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 28th day of December, 1994, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn
personally appeared Harvey N. Gillis, known to me to be the Senior V.P. CFO &
Treasurer of ADVANCED TECHNOLOGY LABORATORIES, INC., the corporation that
executed the foregoing instrument, and acknowledged the said instrument to be
the free and voluntary act and deed of said corporation, for the purposes
therein mentioned, and on oath stated that he/she was authorized to execute
said instrument.
I certify that I know or have satisfactory evidence that the person
appearing before me and making this acknowledgment is the person whose true
signature appears on this document.
WITNESS my hand and official seal hereto affixed the day and year in the
certificate above written.
/s/ Kevin J. Grady
_____________________________________
Signature
KEVIN J. GRADY
_____________________________________
Print Name
NOTARY PUBLIC in and for the State of
Washington, residing at Seattle.
My commission expires 6/15/95.
26
REQUEST FOR FULL RECONVEYANCE
To be used only when all obligations have been paid
under the Note and this Deed of Trust
TO: TRUSTEE
The undersigned is the legal owner and holder of the Note and all other
indebtedness secured by the within Deed of Trust. Said Note, together with all
other indebtedness secured by said Deed of Trust, has been fully paid and
satisfied; and you are hereby requested and directed, on payment to you of any
sums owing to you under the terms of said Deed of Trust, to cancel said Note
above mentioned and all other evidence of indebtedness secured by said Deed of
Trust delivered to you herewith, together with said Deed of Trust, and to
reconvey, without warranty, to the parties designated by the terms of said Deed
of Trust, all the estate now held by you thereunder.
Dated ________________________, 19__. _____________________
_____________________
Mail reconveyance to:_____________________________________________
27
SCHEDULE A
----------
PARCEL A:
That portion of the following described Parcel "X" lying Westerly of a line
described as follows:
Commencing at the Southwest corner of the North half of the Southeast quarter
of the Northeast quarter of Section 30, Township 27 North, Range 5 East,
W. M., in Snohomish County, Washington;
thence North 00(degrees)35'50"West 180.01 feet along the West line thereof
to the Northwest corner of Tract described in Deed to Barbara McCurdy recorded
in Volume 550 of Deeds, page 1, records of said Snohomish County;
thence South 27(degrees)12'35"East 77.91 feet along the Westerly line of
said McCurdy Tract to the true point of beginning of the line described
herein;
thence South 88(degrees)49'31"West 244.82 feet along the Westerly prolongation
of the South line of said McCurdy Tract;
thence at right angles to said prolongation South 01(degrees)10'29"East 292.22
feet;
thence South 73(degrees)26'46"West 4.76 feet;
thence South 49(degrees)43'26"West 14.89 feet;
thence South 43(degrees)51'11"West 13.46 feet;
thence South 29(degrees)00'08"West 11.98 feet;
thence South 27(degrees)49'25"West 14.13 feet;
thence South 33(degrees)03'37"West 9.82 feet;
thence South 43(degrees)10'30"West 8.10 feet;
thence South 44(degrees)58'09"West 17.01 feet;
thence South 40(degrees)45'05"West 20.21 feet;
thence South 70(degrees)27'47"West 19.21 feet;
thence South 57(degrees)25'32"East 26.11 feet to the beginning of a curve
concave Southwesterly having a radius of 185.00 feet;
thence Southeasterly and Southerly 166.13 feet along said curve through
a central angle of 51(degrees)27'08";
thence South 05(degrees)58'24"East 31.02 feet;
thence South 04(degrees)31'39"East 30.55 feet to the beginning of a curve
concave Northeasterly having a radius of 108.00 feet;
thence Southerly and Southeasterly 81.31 feet along said curve through a
central angle of 43(degrees)08'09";
thence South 47(degrees)39'48"East 30.09 feet to the beginning of a curve
concave Northeasterly having a radius of 111.00 feet;
thence Southeasterly and Easterly 61.94 feet along said curve through
a central angle of 31(degrees)58'16";
thence non-tangent to the preceding curve North 80(degrees)56'26"East 21.35
feet;
thence North 85(degrees)32'25"East 132.33 feet to the beginning of a curve
concave Southerly having a radius of 329.22 feet;
thence Easterly 124.13 feet along said curve through a central angle of
21(degrees)36'12" to the beginning of a reverse curve concave Northerly
having a radius of 20.00 feet;
thence Easterly and Northeasterly 14.42 feet along said curve through a
central angle of 41(degrees)19'01" to the Northwesterly margin of SR 527
as described in Deed to the State of Washington recorded under Snohomish
County Recording No. 9009130330 and the terminus of said line described herein
and from said terminus the most Southerly corner of the right of way parcel
described in last said deed bears South 68(degrees)52'11"East, 16.75 feet
distant.
PARCEL X DESCRIPTION:
The Southwest quarter of the Northeast quarter of Section 30, Township 27
North, Range 5 East, W.M., and that portion of the Southeast quarter of
the Northeast quarter of said Section 30 lying Westerly of SR 527 (AKA The
Old Bothell Everett Road) as it existed prior to 1982 and Southerly of a
line described as follows:
Beginning at the Southwest corner of the North half of the Southeast quarter
of the Northeast quarter of said Section 30;
thence North 01(degrees)15'51"East along the West line of said subdivision
a distance of 180.01 feet and the point of beginning of said line description;
running thence South 25(degrees)20'54"East 77.55 feet;
thence South 89(degrees)14'57"East to the Westerly line of SR 527 (Old Bothell
Everett Highway) and the terminus of said line description.
Except that portion of the Southeast quarter of the Northeast quarter of
said Section 30, lying East of the following described line; Beginning at
a point where the South line of the North half of the Southeast quarter
of the Northeast quarter of said Section 30, intersects with the Westerly
margin line of Secondary State Highway (Aka Old Bothell-Everett Highway);
thence West 170 feet;
thence South 90 feet;
thence West 75 feet and the beginning of said line description;
thence North 160 feet to the termination of said line;
Also excepting therefrom those portions conveyed to the State of Washington
for highway purposes by deeds recorded under Auditor's File Nos. 8312020251,
8410310097, 8508130146, 8706010288 and 9009130330.
PARCEL B:
Lots A & B. Survey recorded in Volume 18 of Surveys, page 289, recorded under
Auditor's File No. 8403015003 being a portion of the North half of the
Southeast quarter of Section 30, Township 27 North, Range 5 East, W.M.;
Except any portion lying within that portion conveyed to State of Washington
under Auditor's File No. 1910167, 8407190177, 8601270196 and 9009120407.
Situate in the County of Snohomish, State of Washington.