PENNSYLVANIA (CME AND PORTFOLIO)

return to:

James J. Schwert, Esquire

Oppenheimer Wolff & Donnelly LLP

Campbell Mithun Tower – Suite 2000

222 S. Ninth Street

Minneapolis, MN ###-###-####

Tax Parcel Number: ______________________

 

THIS MULTIFAMILY MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (“Instrument”) is made as of July 25, 2013, but is effective as of the 30th day of July, 2013, between EMERIHRT HARRISBURG LLC, a limited liability company organized and existing under the laws of Delaware, whose address is c/o Emeritus Corporation, 3131 Elliott Avenue, Suite 500, Seattle, Washington 98121, as mortgagor (“Borrower”), and KEYCORP REAL ESTATE CAPITAL MARKETS, INC., a corporation organized and existing under the laws of Ohio, whose address is 11501 Outlook Street, Suite 300, Overland Park, Kansas 66211, Mailcode: KS-01-11-0501, as mortgagee (“Lender”). Borrower’s organizational identification number, if applicable, is ###-###-####.

Borrower is indebted to Lender in the principal amount of $3,375,000.00, as evidenced by Borrower’s Multifamily Note payable to Lender, dated as of the date of this Instrument, and maturing on August 1, 2020 (“Maturity Date”).

TO SECURE TO LENDER the repayment of the Indebtedness, and all renewals, extensions and modifications of the Indebtedness, and the repayment of the Total Indebtedness (as defined in the Cross-Collateralization Agreement) in the amount of $17,870,000.00 (of which the Indebtedness is a part), and the performance of the covenants and agreements of Borrower contained in the Loan Agreement or any other Loan Document, Borrower mortgages, warrants, grants, conveys and assigns to Lender the Mortgaged Property, including the Land located in Dauphin County, Commonwealth of Pennsylvania and described in Exhibit A attached to this Instrument.

Borrower represents and warrants that Borrower is lawfully seized of the Mortgaged Property and has the right, power and authority to mortgage, grant, convey and assign the Mortgaged Property, and that the Mortgaged Property is unencumbered, except as shown on the schedule of exceptions to coverage in the title policy issued to and accepted by Lender contemporaneously with the execution and recordation of this Instrument and insuring Lender’s interest in the Mortgaged Property (“Schedule of Title Exceptions”). Borrower covenants that Borrower will warrant and defend generally the title to the Mortgaged Property against all claims and demands, subject to any easements and restrictions listed in the Schedule of Title Exceptions.

Covenants. In consideration of the mutual promises set forth in this Instrument, Borrower and Lender covenant and agree as follows:

“Attorneys’ Fees and Costs” means (a) fees and out‑of‑pocket costs of Lender’s and Loan Servicer’s attorneys, as applicable, including costs of Lender’s and Loan Servicer’s in-house counsel, support staff costs, costs of preparing for litigation, computerized research, telephone and facsimile transmission expenses, mileage, deposition costs, postage, duplicating, process service, videotaping and similar costs and expenses; (b) costs and fees of expert witnesses, including appraisers; (c) investigatory fees; and (d) the costs for any opinion required by Lender pursuant to the terms of the Loan Documents.

“Borrower” means all Persons identified as “Borrower” in the first paragraph of this Instrument, together with their successors and assigns.

“Business Day” means any day other than a Saturday, a Sunday or any other day on which Lender or the national banking associations are not open for business.

“Event of Default” means the occurrence of any event described in Section 8.

“Fixtures” means all property owned by Borrower which is attached to the Land or the Improvements so as to constitute a fixture under applicable law, including: machinery, equipment, engines, boilers, incinerators and installed building materials; systems and equipment for the purpose of supplying or distributing heating, cooling, electricity, gas, water, air or light; antennas, cable, wiring and conduits used in connection with radio, television, security, fire prevention or fire detection or otherwise used to carry electronic signals; telephone systems and equipment; elevators and related machinery and equipment; fire detection, prevention and extinguishing systems and apparatus; security and access control systems and apparatus; plumbing systems; water heaters, ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers, dryers and other appliances; light fixtures, awnings, storm windows and storm doors; pictures, screens, blinds, shades, curtains and curtain rods; mirrors; cabinets, paneling, rugs and floor and wall coverings; fences, trees and plants; swimming pools; and exercise equipment.

“Governmental Authority” means any board, commission, department, agency or body of any municipal, county, state or federal governmental unit, or any subdivision of any of them, that has or acquires jurisdiction over the Mortgaged Property, or the use, operation or improvement of the Mortgaged Property, or over Borrower.

“Ground Lease” means the lease described in the Loan Agreement pursuant to which Borrower leases the Land, as such lease may from time to time be amended, modified, supplemented, renewed and extended.

“Improvements” means the buildings, structures, improvements now constructed or at any time in the future constructed or placed upon the Land, including any future alterations, replacements and additions.

“Indebtedness” means the principal of, interest at the fixed or variable rate set forth in the Note on, and all other amounts due at any time under, the Note, this Instrument or any other Loan Document, including prepayment premiums, late charges, default interest, and advances as provided in Section 7 to protect the security of this Instrument.

“Land” means the land described in Exhibit A.

“Leasehold Estate” means Borrower’s interest in the Land and any other real property leased by Borrower pursuant to the Ground Lease, if applicable, including all of the following:

“Leases” means all present and future leases, subleases, licenses, concessions or grants or other possessory interests now or hereafter in force, whether oral or written, covering or affecting the Mortgaged Property, or any portion of the Mortgaged Property (including proprietary leases or occupancy agreements if Borrower is a cooperative housing corporation), and all modifications, extensions or renewals.

“Lender” means the entity identified as “Lender” in the first paragraph of this Instrument, or any subsequent holder of the Note.

“Loan Agreement” means the Multifamily Loan and Security Agreement executed by Borrower in favor of Lender and dated as of the date of this Instrument, as such agreement may be amended from time to time.

“Loan Documents” means the Note, this Instrument, the Loan Agreement, all guaranties, all indemnity agreements, all collateral agreements, UCC filings, O&M Programs, the MMP and any other documents now or in the future executed by Borrower, any guarantor or any other Person in connection with the loan evidenced by the Note, as such documents may be amended from time to time.

“Loan Servicer” means the entity that from time to time is designated by Lender or its designee to collect payments and deposits and receive Notices under the Note, this Instrument and any other Loan Document, and otherwise to service the loan evidenced by the Note for the benefit of Lender. Unless Borrower receives Notice to the contrary, the Loan Servicer is the entity identified as “Lender” in the first paragraph of this Instrument.

“Mortgaged Property” means all of Borrower’s present and future right, title and interest in and to all of the following:

Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property under the power of eminent domain or otherwise and including any conveyance in lieu thereof.

“Note” means the Multifamily Note (including any Amended and Restated Note, Consolidated, Amended and Restated Note, or Extended and Restated Note) executed by Borrower in favor of Lender and dated as of the date of this Instrument, including all schedules, riders, allonges and addenda, as such Multifamily Note may be amended, modified and/or restated from time to time.

“Notice” or “Notices” means all notices, demands and other communication required under the Loan Documents, provided in accordance with the requirements of Section 11.03 of the Loan Agreement.

“Person” means any natural person, sole proprietorship, corporation, general partnership, limited partnership, limited liability company, limited liability partnership, limited liability limited partnership, joint venture, association, joint stock company, bank, trust, estate, unincorporated organization, any federal, state, county or municipal government (or any agency or political subdivision thereof), endowment fund or any other form of entity.

“Personalty” means all of the following:

“Property Jurisdiction” means the jurisdiction in which the Land is located.

“Rents” means all rents (whether from residential or non-residential space), revenues and other income of the Land or the Improvements, parking fees, laundry and vending machine income and fees and charges for food, health care and other services provided at the Mortgaged Property, whether now due, past due or to become due, and deposits forfeited by tenants, and, if Borrower is a cooperative housing corporation or association, maintenance fees, charges or assessments payable by shareholders or residents under proprietary leases or occupancy agreements, whether now due, past due, or to become due.

“Taxes” means all taxes, assessments, vault rentals and other charges, if any, whether general, special or otherwise, including all assessments for schools, public betterments and general or local improvements, which are levied, assessed or imposed by any public authority or quasi-public authority, and which, if not paid, will become a Lien on the Land or the Improvements.

Collateral separately or together, and in any order, without in any way affecting the availability of Lender’s other remedies.

retained by Borrower free and clear of, and released from, Lender’s rights with respect to Rents under this Instrument.

Borrower’s solvency and without the necessity of giving prior notice (oral or written) to Borrower, Lender may apply to any court having jurisdiction for the appointment of a receiver for the Mortgaged Property to take any or all of the actions set forth in the preceding sentence. If Lender elects to seek the appointment of a receiver for the Mortgaged Property at any time after an Event of Default has occurred and is continuing, Borrower, by its execution of this Instrument, expressly consents to the appointment of such receiver, including the appointment of a receiver ex parte if permitted by applicable law.

Borrower acknowledges and agrees that the exercise by Lender of any of the rights conferred under this Section 3 will not be construed to make Lender a mortgagee-in-possession of the Mortgaged Property so long as Lender has not itself entered into actual possession of the Land and Improvements.

Borrower, anyone claiming under or through Borrower or anyone having an interest in the Mortgaged Property, by reason of any act or omission of Lender under Section 3(c), and Borrower hereby releases and discharges Lender from any such liability to the fullest extent permitted by law.

the terms of any Lease or extend or terminate any Lease. Upon the occurrence of an Event of Default, and during the continuance of such Event of Default, the permission given to Borrower pursuant to the preceding sentence to exercise all rights, power and authority under Leases will automatically terminate. Borrower will comply with and observe Borrower’s obligations under all Leases, including Borrower’s obligations pertaining to the maintenance and disposition of tenant security deposits.

Lender entering upon and taking and maintaining control of the Mortgaged Property directly, by a receiver, or by any other manner or proceeding permitted by the laws of the Property Jurisdiction, Lender immediately will have all rights, powers and authority granted to Borrower under any Lease, including the right, power and authority to modify the terms of any such Lease, or extend or terminate any such Lease.

obligations under this Instrument, the Note and all other Loan Documents will remain unchanged.

granted, now or in the future, to Lender under this Instrument and the Loan Documents or in connection with Lender’s consent rights under Article VII of the Loan Agreement.

after the date of this Instrument, as well as all rights and remedies provided in such lease or leases or at law or in equity for the collection of Rents. The taking of possession and collection of Rents by Lender will not be construed to be an affirmation of any Lease. FOR THE PURPOSE OF OBTAINING POSSESSION OF THE MORTGAGED PROPERTY DURING THE EXISTENCE OF AN EVENT OF DEFAULT, BORROWER AUTHORIZES AND EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD IN THE COMMONWEALTH OF PENNSYLVANIA OR ELSEWHERE, AS ATTORNEY FOR BORROWER AND ALL PERSONS CLAIMING UNDER OR THROUGH BORROWER, TO APPEAR FOR AND CONFESS JUDGMENT AGAINST BORROWER, AND AGAINST ALL PERSONS CLAIMING UNDER OR THROUGH BORROWER, IN AN ACTION IN EJECTMENT FOR POSSESSION OF THE MORTGAGED PROPERTY, IN FAVOR OF LENDER, FOR WHICH THIS INSTRUMENT, OR A COPY VERIFIED BY AFFIDAVIT, WILL BE A SUFFICIENT WARRANT; AND THEREUPON A WRIT OF POSSESSION MAY IMMEDIATELY ISSUE FOR POSSESSION OF THE MORTGAGED PROPERTY, WITHOUT ANY PRIOR WRIT OR PROCEEDING WHATSOEVER AND WITHOUT ANY STAY OF EXECUTION. IF FOR ANY REASON AFTER SUCH ACTION HAS BEEN COMMENCED IT WILL BE DISCONTINUED, OR POSSESSION OF THE MORTGAGED PROPERTY WILL REMAIN IN OR BE RESTORED TO BORROWER, LENDER WILL HAVE THE RIGHT FOR THE SAME DEFAULT OR ANY SUBSEQUENT DEFAULT TO BRING ONE OR MORE FURTHER ACTIONS OF EJECTMENT TO RECOVER POSSESSION OF THE MORTGAGED PROPERTY. LENDER MAY CONFESS JUDGMENT IN AN ACTION IN EJECTMENT BEFORE OR AFTER THE INSTITUTION OF PROCEEDINGS TO FORECLOSE THIS INSTRUMENT OR TO ENFORCE THE NOTE, OR AFTER ENTRY OF JUDGMENT IN THE ACTION OF EJECTMENT OR ON THE NOTE, OR AFTER A SHERIFF’S SALE OR JUDICIAL SALE OR OTHER FORECLOSURE SALE OF THE MORTGAGED PROPERTY IN WHICH LENDER IS THE SUCCESSFUL BIDDER. THIS AUTHORIZATION TO PURSUE SUCH PROCEEDINGS FOR CONFESSION OF JUDGMENT IS AN ESSENTIAL PART OF THE REMEDIES FOR ENFORCEMENT OF THIS INSTRUMENT AND THE NOTE, AND WILL SURVIVE ANY EXECUTION SALE TO LENDER.

EMERIHRT HARRISBURG LLC, a Delaware limited liability company

By: /s/ Eric Mendelsohn                

Name:    Eric Mendelsohn

STATE OF WASHINGTON

COUNTY OF KING

On this, the 25th day of July, 2013, before me Sarah E. Eisenhauer, the undersigned officer, personally appeared Eric Mendelsohn, who acknowledged himself to be the Senior Vice President-Corporate Development of EMERIHRT HARRISBURG LLC, a Delaware limited liability company, and that he, as such Senior Vice President-Corporate Development being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing the name of the limited liability company by himself as the Senior Vice President-Corporate Development.

In witness whereof, I hereunto set my hand and official seal.

Notary Public

Printed Name: Sarah E. Eisenhauer_

My Commission Expires:                 [SEAL]

Without duplication of the definition of Mortgaged Property contained in the Instrument that precedes this Exhibit or the inclusions in Mortgaged Property set forth elsewhere in the Instrument, “Mortgaged Property” includes all of the following real and personal property, both tangible and intangible:

Fixtures, the Facility Personalty or any other item listed in this Exhibit B entered into by Borrower now or in the future, including cash or securities deposited to secure performance by parties of their obligations; and all other contracts and agreements pertaining to the ownership, leasing, operation or management of the Property, including without limitation, management and similar agreements, utility contracts and agreements for the provision of goods or services (or payment therefor) at the Facility (whether to Borrower, Operator, or the residents of the Facility), including without limitation Third Party Provider Agreements.

The following changes are made to the Instrument which precedes this Rider:

“Cross-Collateralization Agreement” means the Master Cross-Collateralization Agreement dated as of the date of this Instrument by and among Borrower, Lender, and the Related Borrowers, as amended from time to time.

“Related Borrower” is defined in the Cross-Collateralization Agreement.

“Related Indebtedness” is defined in the Cross-Collateralization Agreement.

“Related Loan Documents” is defined in the Cross-Collateralization Agreement.

DESCRIPTION OF THE LAND

PARCEL 1:

ALL THAT CERTAIN tract or parcel of land situate in Susquehanna Township, Dauphin County, Pennsylvania, more particularly bounded and described as follows:

BEGINNING at an iron pin at lands n/f of Felix T. and Dorothy C. Kitlinski, lands n/f of the Cherrington Group and the subject tract; thence, from said point of BEGINNING the following seven courses and distances:

(1)    North 83 degrees 01 minute 49 seconds East, a distance of 442.26 feet to a point; thence,

(2)    South 08 degrees 40 minutes 23 seconds West, a distance of 172.50 feet to an iron pipe; thence,

(3)    South 81 degrees 21 minutes 37 seconds East, a distance of 206.19 feet to a point; thence,

(4)    Along a non-tangent curve to the left, with a radius of 1,472.69 feet and an arc length of 82.47 feet to a point; thence,

(5)    South 08 degrees 44 minutes 48 seconds West, a distance of 65.70 feet to a railroad spike; thence,

(6)    South 78 degrees 13 minutes 05 seconds West, a distance of 639.71 feet to a point; thence,

(7)    North 02 degrees 07 minutes 52 seconds East, a distance of 426.07 feet to an iron pin, said point being the point of BEGINNING.

PARCEL 2:

Together with the easement and appurtenant rights and obligations in Easement Agreement dated March 27, 1997 between the Cherrington Group, a Pennsylvania general partnership and Capstone Capital of Pennsylvania, Inc., a Pennsylvania corporation, recorded April 1, 1997 in the Dauphin County Recorder of Deeds Office in Book 2818, Page 109.

PARCEL 3:

Together with the easement and appurtenant rights and obligations in Easement Agreement dated June 6, 1997 between the Cherrington Group, a Pennsylvania general partnership and Capstone Capital of Pennsylvania, Inc., a Pennsylvania corporation, recorded August 4, 1997 in the Dauphin County Recorder of Deeds Office in Book 2903, Page 606.

The following modifications are made to the text of the Instrument that precedes this Exhibit: