CASH MANAGEMENT AND SECURITY AGREEMENTCash Management Agreement |
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EMERITUS CORP\WA\ | EMERITUS PROPERTIES XII, LLC. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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Exhibit 10.55.8
CASH MANAGEMENT AND SECURITY AGREEMENT
(this "Agreement")
dated as of September 29, 1999
among
EMERITUS PROPERTIES XII, LLC
c/o Emeritus Corporation
3131 Elliott Avenue, Suite 500
Seattle, Washington 98121
Attn: William Shorten
(the "Borrower"),
EMERITUS CORPORATION
3131 Elliott Avenue, Suite 500
Seattle, Washington 98121
Attn: William Shorten
(the "Manager"),
and
AMRESCO CAPITAL, L.P.
c/o AMRESCO Services, L.P.
245 Peachtree Center Avenue, N.E.
Suite 1800
Atlanta, Georgia 30303-1231
Attention: Loan Servicing
(together with its successors and
assigns, the "Lender")
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WHEREAS, pursuant to the Deed of Trust and Security Agreement dated as of _______________,1999 (the "Mortgage"), by and between the Lender and the Borrower, the Lender has provided financing (the "Loan") to the Borrower secured by the property or properties owned by the Borrower and described in the Mortgage (the "Property");
WHEREAS, from and after the Lockbox Effective Date and continuing throughout any Sweep Period (as defined below), the Lender may deliver to the Borrower's bank or banks (the "Clearing Bank") maintaining the operating account or accounts of the Borrower (the "Property Account") a Clearing Bank Instruction Letter attached as Exhibit A, hereto (together with any modifications, amendments or replacements thereof, the "Instruction Letter"), which provides that all Rents (as defined in the Mortgage) be deposited in the account named therein (upon delivery of the Instruction Letter, a "Clearing Account") and swept periodically into the accounts established hereunder;
NOW THEREFORE, in consideration of the mutual premises contained herein and for other good and valuable consideration the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
Section 1. Defined Terms.
(a) As used herein the following capitalized terms shall have the respective meanings set forth below:
"Account Proceeds" shall mean any and all Rents and other revenue in connection with any Property that is deposited by any Clearing Bank, the Borrower, the Manager or otherwise into the Cash Collateral Account from time to time.
"Accrued Interest" shall have the meaning given to such term in the Note.
"Affiliate Expense" shall have the meaning ascribed to such term in Section 3 hereof.
"Amounts Due" shall have the meaning ascribed to such term in Section 6 hereof.
"Approved Operating Budget" shall have the meaning given to such term in Section 3(e) below.
"Borrower's Interest" shall have the meaning ascribed to such term in Section 2(b) below.
"Borrower Remainder Account" shall mean the account of Borrower to which monies in the Borrower Remainder Sub-account are allocated in accordance with the terms hereof.
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"Business Day" shall mean any day other than a Saturday, Sunday or any day on which commercial banks in the City in which the Deposit Bank is located are closed for business.
"Capital Expenditures Budget" shall have the meaning ascribed to such term in Section 3 hereof.
"Cash Collateral Account" shall have the meaning ascribed to such term in Section 2 hereof.
"Certificates" means the securities issued in connection with a Secondary Market Transaction of the Loan.
"Clearing Account" shall have the meaning given such term in the Recitals.
"Cash Collateral Account Payments" shall mean the disbursement of funds from the Cash Collateral Account for the payment of the following items in the following order of priority:
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1st, |
to the payment required to be made to the Tax and Insurance Escrow Fund in accordance with the terms and conditions of the Mortgage; |
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2nd, |
to the payment of the Monthly Payment (with interest payable at the Initial Interest Rate and principal payable in the scheduled installment amount); |
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3rd, |
to the payment required to be made to the Replacement Escrow Fund in accordance with the terms and conditions of the Mortgage; |
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4th, |
to the payment of operating expenses incurred for the Property pursuant to the terms and conditions of the applicable Approved Operating Budget ("Monthly Operating Expenses"), including the payment of property management fees to Manager (an affiliate of Borrower) (or the successor thereto owned substantially by the same parties thereof) pursuant to a property management agreement approved by Lender and in accordance with the Approved Operating Budget, but excluding any Affiliate Expenses; |
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5th, |
to the payment of Extraordinary Expenses approved in writing by Lender, if any; |
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6th, |
to the payment of any other amounts due under the Loan Documents, including without limitation (a) any advances made by Lender thereunder for the protection of the Property and Lender's lien thereon and (b) any escrows or reserves which are established or required under the Loan Documents and whose funding is not provided for above; |
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7th, |
to the principal amount currently due under the Note until such principal amount is paid in full; |
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8th, |
to the payment of Accrued Interest, including interest legally permitted to accrue thereon, or to the payment of interest accrued at the Default Rate, it being understood that upon an Event of Default or at any time on or after the Final Demand Date, Lender may apply any sums then held in the Cash Collateral Account or collected thereafter to the payment of the Debt in the foregoing or any other order, in Lender's sole discretion; |
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10th, |
to the payment of Affiliate Expenses; and |
Last, the remaining funds, if any, shall be disbursed to Borrower.
"Clearing Bank" shall have the meaning given such term in the Recitals.
"Collateral" shall mean (i) the Cash Collateral Account, (ii) the Tax and Insurance Escrow Fund, (iii) the Replacement Escrow Fund, and (iv) any and all proceeds and products thereof.
"Collection Period" with respect to any Payment Date, shall mean the period of days from the eleventh day of the month immediately preceding the Payment Date to the tenth day of the month in which such Payment Date occurs. With respect to the first Payment Date, the Collection Period shall commence on and include the date hereof and end on and include the tenth day of the calendar month of such first Payment Date.
"Debt" shall have the meaning set forth for such term in the Note.
"Default Rate" shall have the meaning given to such term in the Note.
"Deposit Bank" shall mean the bank or banks selected by the Lender to maintain the Cash Collateral Account.
"Eligible Account" Either (i) an account or accounts maintained with an Eligible Bank or (ii) a Trust Account. Eligible Accounts may bear interest.
"Eligible Bank" shall mean a bank that insures deposits held by such bank through the Federal Deposit Insurance Corporation.
"Escrow Accounts" shall have the meaning ascribed to such term in Section 2(e) below.
"Event of Default" shall have the meaning set forth for such term in the Mortgage.
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"Extraordinary Expenses" shall have the meaning ascribed to such term in Section 3 hereof.
"Final Demand Date" shall have the meaning set forth for such term in the Note.
"Final Payment Date" shall have the meaning given to such term in the Note.
"Initial Interest Rate" shall have the meaning given to such term in the Note.
"Instruction Letter" shall have the meaning ascribed to such term in the Recitals.
"Loan" shall have the meaning ascribed to such term in the Recitals.
"Loan Documents" shall have the meaning set forth for such term in the Mortgage.
"Lockbox Effective Date" shall mean the earlier of the following dates: (a) the Scheduled Maturity Date if the Debt has not been paid in full by such date, or (b) the date of any Event of Default which has not been cured to Lender's satisfaction before the expiration of any applicable notice and cure period provided under the Loan Documents.
"Lockbox Termination Date" shall mean the earlier of (i) the date that the Debt is paid in full, (ii) the date (from time to time) that the deposit account arrangement (as set forth herein) is suspended or terminated in writing by Lender (in its sole discretion), (iii) the date an Event of Default and the passage of applicable cure periods is cured to Lender's satisfaction (Lender having no obligation to accept any such cure unless required by applicable law), or (iv) the date Lender has foreclosed upon the Property or otherwise obtained legal title and control of the Property and all Rents therefrom.
"Monthly Operating Expense" shall have the meaning given to such term in the definition of Cash Collateral Account Payments.
"Monthly Payment" shall have the meaning given to such term in the Note.
"Mortgage" shall have the meaning given such term in the Recitals.
"Mortgage Sub-accounts" shall have the meaning ascribed to such term in Section 2(c).
"Note" shall mean that certain Fixed Rate Note of even date herewith, made by the Borrower in favor of the Lender and evidencing the Loan, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.
"Operating Budget" shall have the meaning ascribed to such term in Section 3 hereof.
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"Operating Expenses" shall mean, collectively, all capital and operating costs for the Property incurred by Borrower in accordance with the terms and provisions of the Loan Documents.
"Payment Date" shall mean the respective date upon which the respective payment is due under the Loan Documents.
"Person" shall mean any individual, sole proprietorship, partnership, limited liability partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, institution, entity, party or government (whether territorial, national, federal, state, county, city, municipal or otherwise, including, without limitation, any instrumentality, division, agency, body or department thereof).
"Property" shall have the meaning ascribed to such term in the Recitals.
"Rating Agencies" shall mean (i) any nationally-recognized statistical rating organizations that provide a rating on any Certificates on the date of issuance of the Certificates or (ii) prior to the issuance of the Certificates, any nationally-recognized statistical rating organizations that have been designated by the Lender in its sole discretion.
"Rents" shall have the meaning ascribed to such term in the Mortgage.
"Replacement Escrow Fund" shall have the meaning ascribed to such term in the Mortgage.
"Scheduled Maturity Date" means the "Scheduled Maturity Date" as defined in the Note.
"Secondary Market Transaction" shall have the meaning given to such term in the Mortgage.
"Servicer" shall mean a servicer or account administrator of the Lender designated by and acting for the benefit of the Lender.
"Special Debt Service Reserve" shall have the meaning given to such term in the definition of Cash Collateral Account Payments.
"Sweep Period" shall mean that period of time commencing on the Lockbox Effective Date until the Lockbox Termination Date.
"Tax and Insurance Escrow Fund" shall have the meaning given to such term in the Mortgage.
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"Trust Account" shall mean a segregated trust account maintained by a corporate trust department of a federal depository institution or a state chartered depository institution subject to regulations regarding fiduciary funds on deposit similar to Title 12 of the Code of Federal Regulations § 9.10(B) which has corporate trust powers and is acting in its fiduciary capacity.
(b) The meanings given to capitalized terms defined herein shall be equally applicable in both singular and plural forms of such terms.
(c) Capitalized terms used and not defined herein shall have the respective meanings given to such terms in the Mortgage.
(d) The Agreement constitutes the "Disbursement Agreement" referred to in the Note and constitutes one of the "Loan Documents" referred to in the Note.
Section 2. Deposit of Rent; Establishment of the Accounts and Other Matters.
(a) During any Sweep Period, all Rents and other revenue, income and sums collected from, or arising with respect to, the Property shall be deposited in the Clearing Account, to be disbursed in accordance with the provisions of this Agreement.
(b) Prior to or during any Sweep Period, Lender will establish and maintain (while the Loan is outstanding) a cash collateral account (which may be a book-entry sub-account of an Eligible Account) at the Deposit Bank (the "Cash Collateral Account") which shall be entitled "AMRESCO Capital, L.P. as Mortgagee of Emeritus Properties XII, LLC Cash Collateral Account." In connection with a Secondary Market Transaction, the Lender shall have the right to cause Deposit Bank to entitle the Cash Collateral Account with such other designation as the Lender may select in its reasonable discretion to reflect such assignment or transfer. The Lender shall, or shall cause the Servicer to, cause the Deposit Bank to deposit into the Cash Collateral Account, all Rents and other amounts transferred to the Deposit Bank from the Clearing Bank.
(c) If required under the Loan Documents, all or any sub-account of the Cash Collateral Account shall be an interest bearing account; and in conjunction therewith, Lender shall be entitled to, and shall report under its Federal tax identification number, the interest amount allocated to Borrower by Lender, if any, on such account or sub-account. With respect to any such interest, Lender shall allocate to Borrower an interest amount equal to an amount determined by applying to the average monthly balance of the applicable account (or sub-account), the quoted interest rate for the Deposit Bank's business money market savings account, as such rate changes from time to time (such allocated amount being referred to as "Borrower's Interest"). If such Deposit Bank quotes more than one interest rate for a business money market savings account, then the lowest of such rates shall be utilized. If the Deposit Bank does not have an established business money market savings account (or if any rate for such account can not otherwise be determined in connection with the deposit of the same), the comparable interest rate as quoted by Bank of America, N.A. (or its successor institution) shall be utilized. Borrower's Interest, less applicable administrative fees as set
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forth in the Loan Documents (if any), shall be and become part of the Cash Collateral Account or the Escrow Accounts (as applicable). Lender shall not be responsible for obtaining a specific return or yield on such deposit. Lender shall cause to be furnished to Borrower on an annual basis such income tax reporting forms as are required by applicable Federal law.
(d) The following sub-accounts (collectively, the "Mortgage Sub-accounts") of the Cash Collateral Account shall be maintained on a ledger-entry basis:
(i) "Tax and Insurance Impound Fund Sub-account";
(ii) "Monthly Payment Sub-account";
(iii) "Replacement Escrow Fund Sub-account";
(iv) "Operating Expense Sub-account";
(v) "Casualty and Condemnation Proceeds Sub-account"; and
(vi) "Borrower Remainder Sub-account".
Amounts allocated to the Mortgage Sub-accounts shall be disbursed in accordance with the terms of this Agreement and the Mortgage.
(e) (i) During any Sweep Period, the Lender may deliver one or more executed Instruction Letters to the Clearing Bank. The Borrower hereby agrees that it shall, within five (5) Business Days after receipt of an Instruction Letter, execute an Instruction Letter to cover such bank, bank location and/or account, which Instruction Letter shall be in the form of the Instruction Letter annexed hereto as Exhibit A, with such changes thereto as may be requested by such Clearing Bank in order to conform such Instruction Letter with such new bank's customary requirements. If any Clearing Bank shall request any changes, modifications or supplements to any Instruction Letter to conform to the Clearing Bank's customary practice or requirements, as the same may change from time to time, then if such changes, modifications or supplements are acceptable to Lender, Borrower shall execute and deliver to Lender such instruments as the Clearing Bank shall request to effectuate such modifications or changes. In the event the Borrower fails to execute an Instruction Letter as provided above, Borrower hereby appoints the Lender as its attorney-in-fact with full authority to enter into Instruction Letter(s) and to execute on behalf of the Borrower any new modified Instruction Letter acceptable to the proposed Clearing Bank. All costs and expenses incurred by the Lender to negotiate and execute any Instruction Letter shall be paid by the Borrower.
(ii) At the election of the Lender, during any Sweep Period, within ten (10) Business Days, the Borrower will establish a new Eligible Account (which shall become the Clearing Account) at a bank selected by the Lender and shall cause all funds in the existing
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Clearing Account to be transferred to the new Clearing Account and any future Rents from the Property to be deposited in such new Clearing Account.
(f) Lender may elect to establish and maintain while the Loan is outstanding at the Deposit Bank one or more accounts (which may be a sub-account of the Cash Collateral Account) (singularly and collectively referred to as the "Escrow Accounts"), which if established shall be entitled "AMRESCO Capital, L.P. as Mortgagee of [BORROWER] [insert name of escrow] Escrow Account," and into which Lender may deposit (i) the Tax and Insurance Escrow Fund, (ii) the Replacement Escrow Fund, and (iii) any other escrow funds set forth under the Loan Documents. Amounts on deposit in the Escrow Accounts shall be disbursed at the direction of the Lender in accordance with the Loan Documents. The Escrow Accounts each shall be assigned the federal tax identification number of the Lender.
(g) In order to further secure the Debt and as a material inducement for the Lender to make the Loan in accordance with the terms of the Loan Documents, the Borrower hereby (i) requests that the Cash Collateral Account and the Escrow Accounts be established on its behalf at the Deposit Bank in the names set forth above and (ii) acknowledges that (A) the Cash Collateral Account and the Escrow Accounts will be subject to the sole dominion, control and discretion of the Lender (which may be exercised through the Servicer), subject to the terms, covenants and conditions of this Agreement and the Mortgage, (B) the Lender shall have the sole right to make withdrawals or transfers of funds from the Cash Collateral Account and the Escrow Accounts, and (C) neither the Borrower nor any other Person claiming on behalf of or through the Borrower shall have any right or authority, whether express or implied, to make use of, or withdraw any funds, investments or other properties from, the Cash Collateral Account or the Escrow Accounts, or to give any instructions with respect to the Cash Collateral Account or the Escrow Accounts.
(h) Lender may require Borrower to execute (or Lender may execute as Borrower's attorney-in-fact) any payment directions to the manager and tenants of the Property (whose estoppel certificates shall acknowledge their agreement to make payments in accordance with such directions) and such additional documentation as Lender may deem necessary to institute such arrangements.
(i) In the event this Agreement becomes effective upon the Scheduled Maturity Date, Lender may require Borrower to do the following: (A) to execute an agreement in recordable form to toll or extend the applicable statute of limitations after the Scheduled Maturity Date, and (B) to obtain at Borrower's expense such title policy endorsements as Lender may deem necessary to reflect such agreement and such additional engineering report on the Property as Lender may deem necessary to confirm the adequacy of the Capital Expenditures Budget (as defined in the Note) beyond the Scheduled Maturity Date.
Section 3. Allocation and Disbursement of Funds in the Cash Collateral Account.
(a) Commencing on the first Business Day of each Collection Period on or after the commencement, and during the continuance of, a Sweep Period occurring prior to the Scheduled Maturity Date, the Lender or the Servicer shall allocate amounts deposited in the Cash Collateral
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Account from time to time during such Collection Period in the order and priority set forth for the Clearing Account Payments as set forth in the Note.
(b) During a Sweep Period (and subject to Section 3(a) and 3(c) above), Lender or the Servicer shall disburse, on the tenth (10th) day of each calendar month, the following amounts from the Cash Collateral Account:
(i) Amounts allocated to the Tax and Insurance Impound Fund Sub-account to the Tax and Insurance Escrow Fund on each Payment Date for further disbursement therefrom as set forth in the Mortgage;
(ii) Amounts allocated to the Monthly Payment Sub-account to the Lender on the related Payment Date;
