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.. I :, •/ TO: Daley, Morrow 1 Poblete, Inc. 726 Auburn Way North Auburn, Washington 98002 Attn: Sean 215 Columbia Street Seattle, Washington 98104 Ref.# DMP Job #07-550 cc: hans@dmp-inc.us SUPPLEMENTAL REPORT #1 OF SHORT PLAT CERTIFICATE PNWT Order Number: 666893 Seller: N/A Buyer/Borrower: EL Holdings, LLC The following matters affect the property covered by this order: • A Full Update of the Short Plat Certificate from January 2, 2008 through October 20, 2009 at 8:00 a.m. has disclosed the following: • Par2.9r21-"'h 2 of the commitment is/are out, 2008 toxes are yaid in t"ull. • The following has been added as paragraph 4: 4. GENERAL AND SPECIAL TAXES AND CHARGES: FIRST HALF DELINQUENT MAY 1, IF UNPAID: SECOND HALF DELINQUENT NOVEMBER 1, IF UNPAID: YEAR: TAX ACCOUNT NUMBER: LEVY CODE: 2009 214480-0810-06 4125 CURRENT ASSESSED VALUE: Land: $123,000.00 Improvements: $157,000.00 AMOUNT BILLED GENERAL TAXES: $3,139.56 SPECIAL DISTRICT: $100.43 $10.57 $2.10 $9.98 TOTAL BILLED: $3,262.64 PAID: $1,631.32 TOTAL DUE: $1,631.32 (continued) SUPPLEMENTAL TITLE REPORT Page 2 Order No. 666893 • There has been no change in the title to the property covered by this order since January 2, 2008, EXCEPT the matters noted hereinabove. Dated as of October 23, 2009 at 8:00 a.m. kt PACIFIC NORTHWEST TITLE COMPANY By: CUrtis Goodman Title Officer Phone Number: 206-343-1327 PACIFIC NORTHWEST TITLE COMPANY OF WASHINGTON, INC. 215 Columbia Street Seattle, Washington 98104-1511 Title Officer, Curtis Goodman (curtisgoodman@pnwt.c "};; Assistant Title Officer, Rob Chelton(robchelton@pnwt com :f> Assistant Title Officer, Ch_arlie Bell (charliebell@p t-<J'J/'} -)0ff ~ Unit No. 12 ./:-, ,jlii ---~-- FAX No. (206) 343-1330 "-'-.. > ',R . '"fl'}.. ..... .. //) •.J Telephone Number (206) 343-1327 '~ · 1');:, Daley, Morrow, Poblete, Inc. 726 Auburn Way North Auburn, Washington 98002 Attention: Sean Your Ref., DMP Job #07-550 GENTLEMEN, SHORT PLAT CERTIFICATE SCHEDULE A ·-:.-::-,-::,_>~ •..J '. ,/ '<o...__ I Title Order No. 666893 CERTIFICATE FOR FILING PROPOSED PLAT In the matter of the plat submitted for your approval, this Company has examined the records of the County Auditor and County Clerk of King County, Washington, and the records of the Clerk of the United States Courts holding terms in said County, and from such examination her~by certifies that according to r-:;aid records the title to the foll•:>win9 described land, As on Schedule A, page 2, attached. IS VESTED IN, EL HOLDINGS, LLC, a Washington limited liability company SUBJECT TO THE FOLLOWING EXCEPTIONS, As on Schedule B, attached hereto. CHARGE, TAX, $250.00 $ 22.25 TOTAL CHARGE, $272.25 RECORDS EXAMINED TO, January 2, 2007 at 8,00 a.m. IFIC NORTHWEST TITLE COMPANY OF Unit No. 12 SHORT PLAT CERTIFICATE SCHEDULE A Page 2 Order No. 666893 The land referred to in this certificate is situated in the State of Washington, and described as follows: That portion of Lots 10 and 11, Block 28, Earlington Acre Tracts, according to the plat thereof recorded in Volume 15 of Plats, page 84, in King County, Washington, described as follows: Beginning at the southeast corner of Lot 11; thence north 77°51'15" west 100 feet; thence north 0°16'15" west 110 feet; thence south 77°51'15'' east 100 feet; thence south 0°16 1 15 11 east 110 feet to the point of beginning. END OF SCHEDULE A GENERAL EXCEPTIONS: SHORT PLAT CERTIFICATE Schedule B Order No. 666893 1. Rights of claims of parties in possession not shown by the public records. 2. Public or private easements, or claims of easements, not shown by the public record. 3. Encroachments, overlaps, boundary line disputes, or other matters which would be disclosed by an accurate survey or inspection of the premises. 4. Any lien, or right to a lien, for services, labor or material heretofore or hereafter furnished, imposed by law and not shown by the public records, or Liens under the Workmen's Compensation Act not shown by the public records. 5. Any title or rights asserted by anyone including but uot limited to persons, corporations, governments or other entities, to tide lands, or lands comprising the shores or bottoms of navigable rivers, lakes, bays, ocean or sound, or lands beyond the line of the harbor lines as established or changed by the United States Government. 6. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water. 7. Any service, installation, connection, maintenance, capacity, or construction charges for sewer, water, electricity or garbage removal. 8. General taxes not now payable or matters relating to special assessments and special levies, if any, preceding the same becoming a lien. 9. Indian tribal codes or regulations, Indian treaty or aboriginal rights, including, but not limited to, easements or equitable servitudes. SPECIAL EXCEPTIONS: SHORT PLAT CERTIFICATE SCHEDULE B Page 2 Order No. 666893 l. NOTICE OF ON SITE SEWAGE SYSTEM AND THE TERMS AND CONDITIONS THEREOF: RECORDED: RECORDING NUMBER: June 8, 2004 20040608003191 2. GENERAL AND SPECIAL TAXES AND CHARGES, PAYABLE ON FEBRUARY 15TH: YEAR: AMOUNT: TAX ACCOUNT NUMBER: LEVY CODE: 2008 NOT YET AVAILABLE 214480-0810-06 4125 CURRENT ASSESSED VALUE: Land: $123,000.00 Improvements: $132,000.00 NOTE: General taxes for 2007 in the sum of $2,814.35 have been paid. NOTE: Special taxes for 2007 in the sum of $122.48 have been paid. 3. COMMERCIAL DEED OF TRUST, ASSIGMENT OF LEASES AND RENTS, SECURITY AGREEMENT, AND FIXTURE FILING AND THE TERMS AND CONDITIONS THEREOF: GRANTOR: TRUSTEE, BENEFICIARY, AMOUNT, DATED: RECORDED, RECORDING NUMBER: El Holdings, LLC, an Washington limited liability company Stewart Title Pacific Crest Savings Bank $166,550.00 May 31, __ June 6, 2007 20070606001153 The amount now secured by said Deed of Trust and the terms upon which the same can be discharged or assumed should be ascertained from the holder of the indebtedness secured. END OF SCHEDULE B Title to this property was examined by: Jeff Olsen Any inquiries should be directed to one of the title officers set forth in Schedule A. CC: EL Holdings LLC/Preston rg/20070606001152 EARLINGTON ACRE TRACTS VOL. 15 PG. 84 ,· .. --------------------------:Jl .. J?_:! ________ _ •" : 2 7 ® ~ 0 i2.4B .lC ~ i,---,rn,1,:s ... ~-1-...,,,~~"!l:'f'----1,---..,...-,-~om;~_J ! 10 •• ' ! l ! : : l ~,.o f.:. '"! ! 11 I J.26 AC •s ;,;,-~ :am l :~"IS i i ! 12 l \ I. . . . .·I~; w.!-1 := PACIFIC ,NORTHWEST TITLE Order No. CompanyofWashington, Inc. " • 666893 IMPORTANT: This is not a Plat of Survey. It is furnished as a convenience to locate the land indicated hereon with reference to streets and other land. No liability is assumed by reason of reliance hereon. N 20070606001152.001 When recorded return to: Elizabeth Lockwood, Managing Member P.0.Box.473 Preston, WA 98050 -~ \lllllllllllllt C ,-~:~ 2007060600J!52 ~~"'"' / Filed for Record at Request of Northwest Escrow Alliance, LLC Escrow Number: 200704081 sff\lART n~E 'UD . '· ' PRGEe01 OF ,ea ~ 161 e&12,,1 i2:a2 l<lNG couNT'f, I.IA Statutory Warranty Deed THE GRANTOR Nerissa Marcos, an unmarried individual for and in consideration of TEN DOLLARS AND OTHER GOOD AND VALUABLE CONSIDERATION in hand paid, conveys a.nd warrants to EL Holdings, LLC, a Washington limited liability company the following described real estate, aitua!ed in the County of King, State of Washington Abbn:viated Legal: PTN OF LTS. 10-11, BLK. 28,EARLINGTON ACRE TRACTS Tax Parcel Numbet(s}: 114480·0810-06 Subject To: Sci:i Exhibit "A" hereto attached and by this reference made a part hereof. SEE EXHIBIT A ATTACHED HERETO Dated June 1, 2007 STATE OF _w=iJ.;,:,;l!&~~"''o"n,_ ______ _ COUNIT OF ~'::, 1 , Q& ss, =s I certify that I know or have salisfactory_evidence that Nerissa Marcos Ro Il l0( lf3 '1te(p STEWART TITLE Pi:tGEHl OF 001 ls/are the person(s) who appeaml before me, 1md said person{s) acknowledged that h~they sigDed this inslrument and acknowledge it to be his/hG}t);lrlr free and volwitary act for the uses and purposes mentionod in this instrument. Dated: LPB l0-0:5(1-1) PiiJtlofl ' 20070606001152.002 EXHIB{TUAn LEGAL DESCRIPTION THAT PORTION OF LOTS 10 AND 11, BLOCK 28, EARLINGTON ACRE TRACTS, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 15 OF PLATS, PAGE(S) 84, RECORDS OF KING COUNTY, WASHINGTON, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF LOT 11; THENCE NORTH 77°51'15" WEST 100 FEET; THENCE NORTH 0'16'15" WEST 110 FEET; THENCE SOUTH 77°51'15" EAST 100 FEET; THENCE SOUTH 0'16'15" EAST 110TO THE POINT OF BEGINNING. ' EXHIBJT"B" SUBJECT TO 20070606001152.003 TERMS AND CONDITIONS OF SELLER'S NOTICE OF ON-SITE SEAGE SYSTEM OPERATION AND MAINTENANCE REQUIREMENTS: RECORDED: JUNE 8,2004 RECORDING NO.: 20040608003191 ' RETURN ADDRESS ?tde1c;a. l Fox lllll-111111101~'~ 20040608003191 ?RCIFIC NU TIT OSS 22 00 ?AGE001 01' 004 06/08/2004 l~ 37 KING COUNTY, UA .;i! tc,;g o? '.1~.ed 4~ Je l3J,7e.£ LJ1am~cJ1 u);; 980/ 0 Please-print neatly or type m!ormauon Document Title: King Coumy Form--Scllcr's Nonce of On-Site Sewage System Operation and Maintenance Rcquitcmcnts lfT')' ·'.'.:'I -'.:) Refel"ence Number(s) of Related Documents: t.::J,// 0'1 C7' 8'.JU)T S(_p L() I I o _ i Additional Reference 11s on page ---- Grantor(s) (Last, First, and Middle lnitfal) Fox 1 ?~-t-C,lt',1a / YO oe Grantee(s) (L,u,t, First, and :Middle Initial) THEPCBLIC Add1uonal GcantOI"\ on page ____ _ Leg.ti De.?>(..riptiou (.sbbreviatccl. form: Jot, block. plat or <iection. t~nship, range, quarter/quarter) of l7eee Asscs\or'• Propcrt)' Ta, Pared/Account Number --.:J./i/L/..80081,Q_, __ ------ AddUtOilc\l p.1n:cl #., tm p:1gc------ l'ht' r'\m.hto11H.e'-011Jfr will rt'h on ih, inh.'l1m:n1nn piov1de-d on rfu, lurm Iht· \tdtf\v1II not 1r:id 1hr tlm Ullh nh lo V<'11l) 1h1.· ,\l'CUl'\t'\ 01 u,mpk'll'Ol'"i' of the: rndu,mg mto1 nMt1on pw\ 1tkd hcn:rn ZUU4UoU!!OU31::t1 ' NWMLS Form 22U Seller's Nohe& of OS$ Rev 4/01 ©Copyr1gh1 2001 Nol'thwcst Multiple Listing S8rv1ce ALL RrGHTS RESERVED ?age 2 013 KING COUNTY FORM - SEl.l-ER'S NOTICE OF ON-SITE SEWAGE SYSTEM OPERATION AND MAINTENANCE REQUIREMENTS Assessor's Tax Parcel ID#: _ ___,,.;J.,,_,(c....;Lf'-'4'-"'8"--"o"'o"----B'""--Ll__,,D"-------------- 1 2 The above-described reaJ propeny ls served by an on~s1te sewrage system f'OSS"). 3. The Code of the King County Board of Health, Section 13.60.005 estabhshes certain respon- s1btlrt1es of the OSS owner with respect to the operation and maintenance qf an On-site Sewage System, as follows: A. The OSS owner 1s responsible for the continuous proper operatJon and maintenance of the OSS, and shall: 1 Determine the level of solids and scum ,n tile seotic tan!< at least once every three (3) years for residential system with no garbage grinder and once every year If a garbage gnnder ,s installed and, unless otherwise provided In writing by the health officer, once every year for commercial systems 2 Employ an approvQ.d pumpor to fQMOve the septagQ from thg tank whgn thg lgv9f of solids and scum indicates that remova[ 1s necessary 3. Cause preventive maintenance/system performance morntonng inspections to be conducted and any indicated service to be performed by an approved person at a minimum frequency m accordance with Table 13 60?1 unless othe-w1se established by the health off1cer or the sewage review committee. 4 Operate and maintain all OSS in accordance wtth this title. with pert1oent alternative system guidelines issued by the DOH [State of Washington Departmem of Health] and With the approved OSS owner's operating and maintenance lnstruchon manual. 5. Protect the OSS area including the reserve area from· a Cover by structures or impervious rnatenal, b Surface drainage; c Sod compact1on, for example, by vehicular traffic or l,vestock, and d Damage by soil removal and grade alteration 6. Maintarn the /low or sew:1go to tne OSS at or below the approved design both m quantity and waste strength 7 Direct drains, suer as fno:1~g of roof drams away from the area where the OSS is located :lUU4Ut;UtlUU;;1 ::11 ~ NWMLS Form 22U Sellef.s Nonce of OS$ RG-V 4/01 Page '3 of 3 ©Copyriglll 2001 Northwest Mu\1\plo l.Istlng Servlco Al.\. RIG>iTS RESERVED KING COUNTY FORM - SELLER'S NOTICE OF ON-SITE SEWAGE SYSTEM OPERATION AND MAINTENANCE REQUIREMENTS B The owner shall not allow· 1. Use or introduction of strong bases, strong acids or organic solvents into an OSS ior the purpose of system cleaning; 2. Use of a sewage system additives unless it is specifically approved by the DOH; or 3. Use of an OSS to dispose of waste components atypical of resldentlal wastewater, for example, but not limited to, petroleum products, paints, solvents, or pesticides. ~~ ~) L. \:{J'Q S? OL\ Seller Date Seller STATE: OF WASHINGTON ) ) ss: COUNTY OF KING ) Date On this 2-,.....l day of :::( ~ __ ;;;i_ __ o_u_L...._{ _____ , before me personally (month) (year) appeared Ii\.{,.. c'<--t'" L. F"'f.-and , to me known to be the ind!Vldual(s) describe herein and whO executed the foregoing instrument as h1s/her/!he1r frqQ ~d volunury :.,.et ~d dc;u~d forthQ Uli.QG' :and purpos.:g~ hG1-r~ln i;tat&d. Given under my hand and official seal this 1.,-.(_ day of ~ oLCll) 'I (month) (year) 7 Pnnt Name: f?q-fr,'q'c, A A'r ,ri:;_,,9 NO, ARY PUBLIC in and for the State of Washington, Residing at· __ J':,,c.:eec..=o::t:f.1..=='------- My Appointment Expires: J -t O -0 f' EXHIBIT "A" Thatporbon of Lots 10 and 11, Block 28, Earlington A;;re Tracts, according to the plat tbereofreccrded in Volume 1.S of:Plats, page 84, in King CoU11ty, W asbmgton, described es ii,Jlows: Beginning at the southeast ea= ofI.ot l l; thenc:euonh 11~s1•is• west 100 fi:ct; th!llllle north o~16'1S" ·west llO feet: thence sou1h 17°51 '15" east 100 feet; thence south 0° 16'15' <last 110 feet to 1he point of beginning. :iUU4UoUtiuu;s1 \11 When recorded return to: STE~ART TITLE DT PAOC001 or 040 0Gl0~/Z001 12:32 KrnG coUt<TV. ~A COMMERCIAL DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT, AND FIXTURE FILING (WASHINGTON) Grantor( s )/Borrower( s): EL HOLDINGS, LLC ~ !l.Dle/1.fo1(Qv; ~EWART TITLE Grantee/Beneficiary: PACIFIC CREST SAVINGS BANK, Beneficiary STEWART TITLE COMPANY, Trustee Legal Description Abbreviated: PTN OF LTS. 10-11, BLK 28, EARLINGTON ACRE TRACTS Additional legal description is on page A-1 of this document. Assessor's Tax Parcel ID#: 214480-0810-06 COMMERCIAL DEED OF TRUST 20070606001153 ---------·- COMMERCIAL DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING THIS COMMERCIAL DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING (the "Instrument") is made this 31ST day of MAY, by EL HOLDINGS, LLC, an WASHINGTON LIMITED LIABILITY COMPANY, whose address is 10000 NE 133RD PLACE KIRKLAND, WA 98034, as grantor ("Borrower"), to STEW ART TITLE, as trustee ("Trustee''), for the benefit of Pacific Crest Savings Bank, a bank corporation organized and existing under the laws of the State ofWashington, whose address is 3500 188th Street SW #575, Lynnwood, WA 98037, as beneficiary ("Lender''). Borrower, in consideration of the Indebtedness and the trust created by this Instrument, irrevocably grants, conveys and assigns to Trustee, in trust, with power of sale, the Mortgaged Property, including the Land located in KING County, State of Washington and described in Exhibit A attached to this Instrument. TO SECURE TO LENDER the repayment of the Indebtedness evidenced by Borrower's Commercial Note payable to Lender, dated as of the date of this Instrument, and maturing on JUNE 01, 2037, in the principal amount of$166,550.00, and all renewals, extensions, advances and modifications of the Indebtedness, and the performance of the covenants and agreements of Borrower contained in the Loan Documents. Borrower represents and warrants that Borrower is lawfully seized of the Mortgaged Property and has the right, power and authority to grant, convey and assign the Mortgaged Property, and that the Mortgaged Property is unenclllllbered. 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 a schedule of exceptions to coverage in any title insurance policy issued to Lender contemporaneously with the execution and recordation of this Instrument and insuring Lender's interest in the Mortgaged Property. Covenants. Borrower and Lender covenant and agree as follows: 1. DEFINITIONS. The following terms, when used in this Instrument (including when used in the above recitals), shall have the following meanings: (a) "Borrower" means all persons or entities identified as "Borrower" in the first paragraph of this Instrument, together with their successors and assigns. (b) "Collateral Agreement" means any separate agreement between Borrower and Lender for the purpose of establishing replacement reserves for the Mortgaged Property, establishing a fund to assure the completion ofrepairs or improvements specified in that COMMERCIAL DEED OF TRUST-WASHINGTON Pagel of40 agreement, or assuring reduction of the outstanding principal balance of the Indebtedness if the occupancy of or income from the Mortgaged Property does not increase to a level specified in that agreement, or any other agreement or agreements between Borrower and Lender which provide for the establishment of any other fund, reserve or account. (c) "Controlling Entity" means an entity which owns, directly or indirectly through one or more intermediaries, (A) a general partnership interest or more than 50% of the limited partnership interests in Borrower (if Borrower is a partnership or joint venture), (B) a manager's interest in Borrower or more than 50% of the ownership or membership interests in Borrower (if Borrower is a limited liability company), or (C) more than 50% of any class of voting stock of Borrower (if Borrower is a corporation). ( d) "Environmental Permit" means any permit, license, or other authorization issued under any Hazardous Materials Law with respect to any activities or businesses conducted on or in relation to the Mortgaged Property. (e) "Event of Default" means the occurrence of any event listed in Section 22. (f) "Fixtures" means all property which is so attached to the Land or the Improvements as to constitute a fixture under applicable law, including: machinery, equipment, engines, boilers, incinerators, 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 mth 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. (g) "Governmental Authority" means any board, commission, department 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. (h) "Hazardous Materials" means petroleum and petroleum products and compounds containing them, including gasoline, diesel fuel and oil; explosives; flammable materials; radioactive materials; polychlorinated biphenyls ("PCBs") and compounds containing them; lead and lead-based paint; asbestos or asbestos-containing materials in any form that is or could become friable; underground or above-ground storage tanks, whether empty or containing any substance; any substance the presence of which on the Mortgaged Property is prolu'bited by any federa~ state or local authority; any substance that requires special handling; and any other COMMERCIAL DEED OF TRUST -WASHINGTON Page 2 of 40 i-----------2007060600 I 153: material or substance now or in the future defined as a "hazardous substance," "hazardous material," 11 hazardous waste," ntoxic substance, 11 "toxic pollutant, 11 11 contaminant," or "pollutant" within the meaning of any Hazardous Materials Law. (i) "Hazardous Materials Laws" means all federal, state, and local laws, ordinances and regulations and standards, rules, policies and other governmental requirements, administrative rulings and court judgments and decrees in effect now or in the future and including all amendments, that relate to Hazardous Materials and apply to Borrower or to the Mortgaged Property. Hazardous Materials Laws include, but are not limited to, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., the Toxic Substance Control Act, 15 U.S.C. Section 2601, et seq., the Clean Water Act, 33 U.S.C. Section 1251, et seq., and the Hazardous Materials Transportation Act, 49 U.S.C. Section 5101, and their state analogs. G) "Impositions" and "Imposition Deposits" are defined in Section 7(a). (k) "Improvements" means the buildings, structures, improvements, and alterations now constructed or at any time in the future constructed or placed upon the Land, including any future replacements and additions. (l) "Indebtedness" means the principal of, interest 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 12 to protect the security of this Instrument. (m) "Initial Owners" means, with respect to Borrower or any other entity, the persons or entities who on the date of the Note own in the aggregate 100% of the ownership interests in Borrower or that entity. (n) "Land" means the land described in Exhibit A. (o) "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. (p) "Lender" means the entity identified as "Lender" in the first paragraph of this Instrument, or any subsequent holder of the Note. (q) "Loan Documents" means the Note, this Instrument, all guaranties, all indemnity agreements, all Collateral Agreements, O&M Programs, and any other documents now or in the COMMERCIAL DEED OF TRUST -WASHINGTON Page 3 of40 2007060600 I 153.0C 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. (r) "Loan Servicer" means the entity that from time to time is designated by Lender 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. (s) "Mortgaged Property" means all of Borrower's present and future right, title and interest in and to all of the following: (I) the Land; (2) the Improvements; (3) the Fixtures; ( 4) the Personalty; (5) all current and future rights, including air rights, development rights, zoning rights and other similar rights or interests, easements, tenements, rights-of-way, strips and gores ofland, streets, alleys, roads, sewer rights, waters, watercourses, and appurtenances related to or benefiting the Land or the Improvements, or both, and all rights-of-way, streets, alleys and roads which may have been or may in the future be vacated; (6) all proceeds paid or to be paid by any insurer of the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property, whether or not Borrower obtained the insurance pursuant to Lender's requirement; (7) all awards, payments and other compensation made or to be made by any municipal, state or federal authority with respect to the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property, including any awards or settlements resulting from condemnation proceedings or the total or partial taking of the Land, the 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; (8) all contracts, options and other agreements for the sale of the Land, the Improvements, the Fixtures, the Personalty or any other part of the COMMERCIAL DEED OF TRUST-WASHINGTON Page 4 of 40 Mortgaged Property entered into by Borrower now or in the future, including cash or securities deposited to secure performance by parties of their obligations; (9) all proceeds from the conversion, voluntary or involuntary, of any of the above into cash or liquidated claims, and the right to collect such proceeds; (10) all Rents and Leases; (11) all earnings, royalties, accounts receivable, issues and profits from the Land, the Improvements or any other part of the Mortgaged Property, and all undisbursed proceeds of the loan secured by this Instrument and, if Borrower is a cooperative housing corporation, maintenance charges or assessments payable by shareholders or residents; ( 12) all Imposition Deposits; (13) all refunds or rebates oflmpositions by any municipa~ state or federal authority or insurance company ( other than refunds applicable to periods before the real property tax year in which this Instrument is dated); (14) all tenant security deposits which have not been forfeited by any tenant under any Lease; and (15) all names under or by which any of the above Mortgaged Property maybe operated or known, and all trademarks, tratle names, and goodwill relating to any of the Mortgaged Property. (t) "Note" means the Commercial Note described on page I of this Instrument, including all schedules, riders, allonges and addenda, as such Commercial Note may be amended from time to time. (u) "O&M Program" is defined in Section 18(a). (v) "Personalty" means all furniture, furnishings, equipment, machinery, building materials, appliances, goods, supplies, tools, books, records (whether in written or electronic fonn), computer equipment (hardware and software) and other tangible personal property (other than Fixtures) which are used now or in the future in connection with the ownership, management or operation of the Land or the Improvements or are located on the Land or in the Improvements, and any operating agreements relating to the Land or the Improvements, and any surveys, plans and specifications and contracts for architectura~ engineering and construction services relating to the Land or the Improvements and all other intangible property and rights relating to the COMMERCIAL DEED OF TRUST -WASHINGTON Page 5 of40 _________ .... ]_ 200706060011 operation of, or used in connection with, the Land or the Improvements, including all goverrunental permits relating to any activities on the Land. (w) ''Property Jurisdiction" is defined in Section 30(a). (x) "Rents" means all rents (whether from residential or non-residential space), revenues and other income of the Land or the Improvements, including 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. (y) "Taxes" means all taxes, assessments, vault rentals and other charges, if any, 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. (z) "Transfer" means (A) a sale, assignment, transfer or other disposition (whether voluntary, involuntary or by operation oflaw); (B) the granting, creating or attachment of a lien, encumbrance or security interest (whether voluntary, involuntary or by operation of law); (C) the issuance or other creation of an ownership interest in a legal entity, including a partnership interest, interest in a limited liability company or corporate stock; (D) the withdrawal, retirement, removal or involuntary resignation of a partner in a partnership or a member or manager in a limited liability company; or (E) the merger, dLssolutioP~ liquidation, or consolidation of a legal entity or the reconstitution of one type oflegai entity into another type oflegal entity. "Transfer" does not include (i) a conveyance ofthe Mortgaged Property at a judicial or non-judicial foreclosure sale under this Instrument or (ii) the Mortgaged Property becoming part of a bankruptcy estate by operation of law under the United States Bankruptcy Code. For purposes of defining the term "Transfer," the term 1'partnership" shall mean a general partnership, a limited partnership, a joint venture and a limited liability partnership, and the term "partner0 shall mean a general partner, a limited partner and a joint venturer. Z. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT. This Instrument is also a security agreement under the Uniform Commercial Code for any of the Mortgaged Property which, under applicable law, may be subject to a security interest under the Uniform Commercial Code, whether acquired now or in the future, and all products and cash and non-cash proceeds thereof(collectively, "UCC Collateral"), and Borrower hereby grants to Lender a security interest in the UCC Collateral. Borrower shall execute and deliver to Lender, upon Lender's request, financing statements, continuation statements and amendments, in such form as Lender may require to perfect or continue the perfection ofthis security interest. Borrower shall pay all filing costs and all costs and expenses of any record searches for financing statements that Lender may require. Without the prior written consent of Lender, Borrower shall not create or permit to exist any other lien or security interest in any of the UCC Collateral. If an Event of Default has occurred and is continuing, Lender shall have the remedies of a secured COMMERCIAL DEED OF TRUST-WASHINGTON Page 6 of40 20070606001153. party under the Uniform Commercial Code, in addition to all remedies provided by this Instrument or existing under applicable law. In exercising any remedies, Lender may exercise its remedies against the UCC Collateral separately or together, and in any order, without in anyway affecting the availability of Lender's other remedies. This Instrument constitutes a financing statement with respect to any part of the Mortgaged Property which is or may become a Fixture. 3. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN POSSESSION. (a) As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally assigns and transfers to Lender all Rents. It is the intention of Borrower to establish a present, absolute and irrevocable transfer and assignment to Lender of all Rents and to authorize and empower Lender to collect and receive all Rents without the necessity of further action on the part of Borrower. Promptly upon request by Lender, Borrower agrees to execute and deliver such further assignments as Lender may from time to time require. Borrower and Lender intend this assignment of Rents to be immediately effective and to constitute an absolute present assignment and not an assignment for additional security only. For purposes of giving effect to this absolute assignment of Rents, and for no other purpose, Rents shall not be deemed to be a part of the "Mortgaged Property'' as that term is defined in Section l(s). However, if this present, absolute and unconditional assignment of Rents is not enforceable by its terms under the laws of the Property Jurisdiction, then the Rents shall be included as a part of the Mortgaged Property and it is the intention of the Borrower that in this circumstance this Instrument create and perfect a lien on Rents in favor of Lender, which lien shall be effective as of the date of this Instrument. (b) After the occurrence ofan Event of Default, Borrower authorizes Lender to collect, sue for and compromise Rents and directs each tenant of the Mortgaged Property to pay all Rents to, or as directed by, Lender. However, until the occurrence of an Event of Default, Lender hereby grants to Borrower a revocable license to collect and receive all Rents, to hold all Rents in trust for the benefit of Lender and to apply all Rents to pay the installments of interest and principal then due and payable under the Note and the other amounts then due and payable under the other Loan Documents, including Imposition Deposits, and to pay the current costs and expenses of managing, operating and maintaining the Mortgaged Property, including utilities, Taxes and insurance premiums (to the extent not included in Imposition Deposits), tenant improvements and other capital expenditures. So long as no Event of Default has occurred and is continuing, the Rents remaining after application pursuant to the preceding sentence may be retained by Borrower free and clear of, and released from, Lender's rights with respect to Rents under this Instrument. From and after the occurrence of an Event of Default, and without the necessity of Lender entering upon and talcing and maintaining control of the Mortgaged Property directly, or by a receiver, Borrower's license to collect Rents shall automatically terminate and Lender shall without notice be entitled to all Rents as they become due and payable, including Rents then due and unpaid. Borrower shall pay to Lender upon demand all Rents to which Lender is entitled. At any time on or after the date of Lender's demand for Rents, Lender may give, and Borrower hereby irrevocably authorizes Lender to give, notice to all tenants of the COMMERCIAL DEED OF TRUST -WASHINGTON Page 7 of 40 20070606001153 Mortgaged Property instructing them to pay all Rents to Lender, no tenant shall be obligated to inquire further as to the occurrence or continuance of an Event of Default, and no tenant shall be obligated to pay to Borrower any amounts which are actually paid to Lender in response to such a notice. Any such notice by Lender shall be delivered to each tenant personally, by mail or by delivering such demand to each rental unit. Borrower shall not interfere with and shall cooperate with Lender's collection of such Rents. ( c) Borrower represents and warrants to Lender that Borrower has not executed any prior assignment of Rents (other than an assignment of Rents securing indebtedness that will be paid off and discharged with the proceeds of the loan evidenced by the Note), that Borrower has not performed, and Borrower covenants and agrees that it will not perform, any acts and has not executed, and shall not execute, any instrument which would prevent Lender from exercising its rights under this Section 3, and that at the time of execution of this Instrument there has been no anticipation or prepayment of any Rents for more than two months prior to the due dates of such Rents. Borrower shall not collect or accept payment of any Rents more than two months prior to the due dates of such Rents. ( d) If an Event of Default has occurred and is continuing, Lender may, regardless of the adequacy of Lender's security or the solvency of Borrower and even in the absence of waste, enter upon and take and maintain full control of the Mortgaged Property in order to perform all acts that Lender in its discretion determines to be necessary or desirable for the operation and maintenance of the Mortgaged Property, including the execution, cancellation or modification of Leases, the collection of all Rents, the making of repairs to the Mortgaged Property and the execution or termination of wntracts providing for the management, operation er maintenance of tlle Mortgaged Property, for the purposes of enforcing the assignment of Rents pursuant to Section 3(a), protecting the Mortgaged Property or the security of this Instrument, or for such other purposes as Lender in its discretion may deem necessary or desirable. Alternatively, if an Event of Default has occurred and is continuing, regardless of the adequacy of Lender's security, without regard to 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 ofa 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. Lender or the receiver, as the case may be, shall be entitled to receive a reasonable fee for managing the Mortgaged Property. Immediately upon appointment of a receiver or immediately upon the Lender's entering upon and taking possession and control of the Mortgaged Property, Borrower shall surrender possession of the Mortgaged Property to Lender or the receiver, as the case may be, and shall deliver to Lender or the receiver, as the case may be, all documents, records (including records on electronic or magnetic media), accounts, surveys, plans, and specifications relating to the Mortgaged Property and all security deposits and prepaid Rents. In the event Lender takes possession and control of the Mortgaged Property, Lender may exclude Borrower and its representatives from the Mortgaged Property. Borrower acknowledges and agrees that the exercise by Lender of any of COMMERCIAL DEED OF TRUST -WASHINGTON Page 8 of 40 ·~--------20070606001 the rights conferred under this Section 3 shall 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. (e) If Lender enters the Mortgaged Property, Lender shall be liable to account only to Borrower and only for those Rents actually received. Lender shall not be liable to 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 this Section 3, and Borrower hereby releases and discharges Lender from any such liability to the fullest extent permitted by law. (f) lfthe Rents are not sufficient to meet the costs of taking control of and managing the Mortgaged Property and collecting the Rents, any funds expended by Lender for such purposes shall become an additional part of the Indebtedness as provided in Section 12. (g) Any entering upon and taking of control of the Mortgaged Property by Lender or the receiver, as the case maybe, and any application of Rents as provided in this Instrument shall not cure or waive any Event of Default or invalidate any other right or remedy of Lender under applicable law or provided for in this Instrument. 4. ASSIGNMENT OF LEASES; LEASES AFFECTING THE MORTGAGED PROPERTY. (a) As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally assigns and transfers to Lender all of Borrower's right, title and interest in, to and under the Leases, including Borrower's right, power and authority to modify the terms of any such Lease, or extend or terminate any such Lease. It is the intention of Borrower to establish a present, absolute and irrevocable transfer and assignment to Lender of all of Borrower's right, title and interest in, to and under the Leases. Borrower and Lender intend this assignment of the Leases lo be immediately effective and to constitute an absolute present assignment and not an assignment for additional security only. For purposes of giving effect to this absolute assignment of the Leases, and for no other purpose, the Leases shall not be deemed to be a part of the ''Mortgaged Property" as that term is defined in Section 1(s). However, if this present, absolute and unconditional assignment of the Leases is not enforceable by its terms under the laws of the Property Jurisdiction, then the Leases shall be included as a part of the Mortgaged Property and it is the intention of the Borrower that in this circumstance this Instrument create and perfect a lien on the Leases in favor of Lender, which lien shall be effective as of the date of this Instrument. (b) Until Lender gives notice to Borrower of Lender's exercise of its rights under this Section 4, Borrower shall have all rights, power and authority granted to Borrower under any Lease (except as otherwise limited by this Section or any other provision of this Instrument), including the right, power and authority to modify the terms of any Lease or extend or terminate any Lease. Upon the occurrence of an Event of Default, the permission given to Borrower pursuant to the preceding sentence to exercise all rights, power and authority under Leases shall automatically terminate. Borrower shall comply with and observe Borrower's obligations under COMMERCIAL DEED OF TRUST -WASHINGTON Page 9 of 40 ----------~ 200706060011 all Leases, including Borrower's obligations pertaining to the maintenance and disposition of tenant security deposits. ( c) Borrower acknowledges and agrees that the exercise by Lender, either directly or by a receiver, of any of the rights conferred under this Section 4 shall 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 the Improvements. The acceptance by Lender of the assignment of the Leases pursuant to Section4(a) shall not at any time or in any event obligate Lender to take any action under this Instrument or to expend any money or to incur any expenses. Lender shall not be liable in any way for any injury or damage to person or property sustained by any person or persons, firm or corporation in or about the Mortgaged Property. Prior to Lender's actual entry into and taking possession of the Mortgaged Property, Lender shall not (i) be obligated to perform any of the terms, covenants and conditions contained in any Lease (or otherwise have any obligation with respect to any Lease); (ir) be obligated to appear in or defend any action or proceeding relating to the Lease or the Mortgaged Property; or (iii) be responsible for the operation, control, care, management or repair of the Mortgaged Property or any portion of the Mortgaged Property. The execution of this Instrument by Borrower shall constitute conclusive evidence that all responsibility for the operation, control, care, management and repair of the Mortgaged Property is and shall be that of Borrower, prior to such actual entry and taking of possession. (d) Upon delivery of notice by Lender to Borrower of Lender's exercise of Lender's rights under this Section 4 at any time after the occurrence of an Event of Default, and without the necessity ofLender 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 shall 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. (e) Borrower shall, promptly upon Lender's request, deliver to Lender an executed copy of each residential Lease then in effect. All Leases for residential dwelling units shall be on forms approved by Lender, shall be for initial terms of at least six months and not more than two years, and shall not include options to purchase. (f) Borrower shall not lease any portion of the Mortgaged Property for non-residential use except with the prior written consent of Lender and Lender's prior written approval of the Lease agreement. Borrower shall not modify the terms of, or extend or terminate, any Lease for non-residential use (including any Lease in existence on the date of this Instrument) without the prior written consent of Lender. Borrower shall, without request by Lender, deliver an executed copy of each non-residential Lease to Lender promptly after such Lease is signed. All non- residential Leases, including renewals or extensions of existing Leases, shall specifically provide that (1) such Leases are subordinate to the lien of this Instrument; (2) the tenant shall attom to Lender and any purchaser at a foreclosure sale, such attornment to be self-executing and effective upon acquisition of title to the Mortgaged Property by any purchaser at a foreclosure sale or by COMMERCIAL DEED OF TRUST -WASHINGTON Page 10 of 40 20070606001153 Lender in any manner; (3) the tenant agrees to execute such further evidences of attorrunent as Lender or any purchaser at a foreclosure sale may from time to time request; (4) the Lease shall not be terminated by foreclosure or any other transfer of the Mortgaged Property; (5) after a foreclosure sale of the Mortgaged Property, Lender or any other purchaser at such foreclosure sale may, at Lender's or such purchaser's option, accept or tenninate such Lease; and (6) the tenant shal~ upon receipt after the occurrence of an Event of Default of a written request from Lender, pay all Rents payable under the Lease to Lender. (g) Borrower shall not receive or accept Rent under any Lease (whether residential or non-residential) for more than two months in advance. 5. PAYMENT OF INDEBTEDNESS; PERFORMANCE UNDER LOAN DOCUMENTS. Borrower shall pay the Indebtedness when due in accordance with the terms of the Note and the other Loan Documents and shall perform, observe and comply with all other provisions of the Note and the other Loan Documents. 6. EXCULPATION. Borrower's personal liability for payment of the Indebtedness and for performance of the other obligations to be performed by it under this Instrument is not limited in any manner. 7. DEPOSITS FOR TAXES, INSURANCE AND OTHER CHARGES. ( a) Borrower shall deposit with Lender on the day monthly instalhnents of principal or interest, or both, are due under the Note (or on another day designated in writing by Lender), until the Indebtedness is paid in full, an additionai amount sufficient to accumulate with Lender the entire sum required to pay, when due(]) any water and sewer charges which, if not paid, may result in a lien on all or any part of the Mortgaged Property, (2) the premiums for fire and other hazard insurance, rent loss insurance and such other insurance as Lender may require under Section 19, (3) Taxes, and (4) amounts for other charges and expenses which Lender at any time reasonably deems necessary to protect the Mortgaged Property, to prevent the imposition of liens on the Mortgaged Property, or otherwise to protect Lender's interests, all as reasonably estimated from time to time by Lender, plus one-sixth of such estimate. The amounts deposited under the preceding sentence are collectively referred to in this Instrument as the "Imposition Deposits". The obligations of Borrower for which the Imposition Deposits are required are collectively referred to in this Instrument as "Impositions". The amount of the Imposition Deposits shall be sufficient to enable Lender to pay each Imposition before the last date upon which such payment may be made without any penalty or interest charge being added. Lender shall maintain records indicating how much of the monthly lmposition Deposits and how much of the aggregate Imposition Deposits held by Lender are held for the purpose of paying Taxes, insurance premiums and each other obligation of Borrower fur which Imposition Deposits are required. Any waiver by Lender of the requirement that Borrower remit Imposition Deposits to Lender may be revoked by Lender, in Lender's discretion, at any time upon notice to Borrower. COMMERCIAL DEED OF TRUST-WASHINGTON Page ll of40 20070606001153. (b) Imposition Deposits shall be held in an institution (which maybe Lender, if Lender is such an institution) whose deposits or accounts are insured or guaranteed by a federal agency. Lender shall not be obligated to open additional accounts or deposit Imposition Deposits in additional institutions when the amount of the Imposition Deposits exceeds the maximum amount of the federal deposit insurance or guaranty. Lender shall apply the Imposition Deposits to pay Impositions so long as no Event of Default has occurred and is continuing. Unless applicable Jaw requires, Lender shall not be required to pay Borrower any interest, earnings or profits on the Imposition Deposits. Borrower hereby pledges and grants to Lender a security interest in the Imposition Deposits as additional security for all of Borrower's obligations under this Instrument and the other Loan Documents. Any amounts deposited with Lender under this Section 7 shall not be trust funds, nor shall they operate to reduce the Indebtedness, unless applied by Lender for that purpose under Section 7(e). ( c) If Lender receives a bill or invoice for an Imposition, Lender shall pay the Imposition from the Imposition Deposits held by Lender. Lender shall have no obligation to pay any Imposition to the extent it exceeds Imposition Deposits then held by Lender. Lender may pay an Imposition according to any bi!~ statement or estimate from the appropriate public office or insurance company without inquiring into the accuracyaof the bill, statement or estimate or into the validity of the Imposition. (d) If at anytime the amount of the Imposition Deposits held by Lender for payment of a specific Imposition exceeds the amount reasonably deemed necessary by Lender plus one- sixth of such estimate, the excess shall be credited against future installments oflmposition Deposits. If at any time the amount of the Imposition Deposits held by Lender for payment of a specific Imposition is less than the amount reasonably estimated by Lender to be necessary plus one-sixth of such estimate, Borrower shall pay to Lender the amount of the deficiency within 15 days after notice from Lender. (e) !fan Event of Default has occurred and is continum.g, Lender may apply any Imposition Deposits, in any amounts and in any order as Lender determines, in Lender's discretion, to pay any Impositions or as a credit against the Indebtedness. Upon payment in full of the Indebtedness, Lender shall refund to Borrower any Imposition Deposits held by Lender. 8. COLLATERAL AGREEMENTS. Borrower shall deposit with Lender such amounts as may be required by any Collateral Agreement and shall perform all other obligations of Borrower under each Collateral Agreement. 9. APPLICATION OF PAYMENTS. Ifat anytime Lender receives, from Borrower or otherwise, any amount applicable to the Indebtedness which is less than all amounts due and payable at such time, then Lender may apply that payment to amounts then due and payable in any manner and in any order determined by Lender, in Lender's discretion. Neither Lender's acceptance of an amount which is less than all amounts then due and payable nor Lender's application of such payment in the manner authorized shall constitute or be deemed to COMMERCIAL DEED OF TRUST -WASHINGTON Page 12 of 40 2007060600115, constitute either a waiver of the unpaid amounts or an accord and satisfaction. Notwithstanding the application of any such amount to the Indebtedness, Borrower's obligations under this Instrument and the Note shall remain unchanged. 10. COMPLIANCE WITH LAWS. Borrower shall comply with all laws, ordinances, regulations and requirements of any Governmental Authority and all recorded lawful covenants and agreements relating to or affecting the Mortgaged Property, including all laws, ordinances, regulations, requirements and covenants pertaining to health and safety, construction of improvements on the Mortgaged Property, fair housing, zoning and land use, and Leases. Borrower also shall comply with all applicable laws that pertain to the maintenance and disposition of tenant security deposits. Borrower shall at all times maintain records sufficient to demonstrate compliance with the provisions of this Section 10. Borrower shall take appropriate measures to prevent, and shall not engage in or knowingly permit, any illegal activities at the Mortgaged Property that could endanger tenants or visitors, result in damage to the Mortgaged Property, result in forfeiture of the Mortgaged Property, or otherwise materially impair the lien created by this Instrument or Lender's interest in the Mortgaged Property. Borrower represents and warrants to Lender that no portion of the Mortgaged Property has been or will be purchased with the proceeds of any illegal activity. 11. USE OF PROPERTY. Unless required by applicable Jaw, Borrower shall not (a) except for any change in use approved by Lender, allow changes in the use for which all or any part of the Mortgaged Property is being used at the time this Instrument was executed, (b) convert any individual dwelling units or common areas to commercial use, (c) initiate or acquiesce in a change in the zoning classification of the Mortgaged Property, or (d) establish any condominium or cooperative regime with respect to the Mortgaged Property. 12. PROTECTION OF LENDER'S SECURITY. (a) IfBorrower fails to perform any of its obligations under this Instrument or any other Loan Document, or if any action or proceeding is commenced which purports to affect the Mortgaged Property, Lender's security or Lender's rights under this Instrument, including eminent domain, insolvency, code enforcement, civil or criminal forfeiture, enforcement of Hazardous Materials Laws, fraudulent conveyance or reorganizations or .proceedings involvini a bankrupt or decedent, then Lender at Lender's option may make such appearances, disburse such sums and take such actions as Lender reasonably deems necessary to perform such obligations ofBorrower and to protect Lender's interest, including (1) payment of fees and out of pocket expenses of attorneys, accountants, inspectors and consultants, (2) entry upon the Mortgaged Property to make repairs or secure the Mortgaged Property, (3) procurement of the insurance required by Section 19, and (4) payment of amounts which Borrower has failed to pay under Sections 15 and 17. (b) Any amounts disbursed by Lender under this Section 12, or under any other provision of this Instrument that treats such disbursement as being made under this Section 12, COMMERCIAL DEED OF TRUST-WASHINGTON Page 13 of40 ----------·-0070606001153.0 shall be added to, and become part of, the principal component of the Indebtedness, shall be immediately due and payable and shall bear interest from the date of disbursement until paid at the "Default Rate'', as defined in the Note. (c) action. Nothing in this Section 12 shall require Lender to incur any expense or take any 13. INSPECTION. Lender, its agents, representatives, and designees may make or cause to be made entries upon and inspections of the Mortgaged Property (including environmental inspections and tests) during normal business hours, or at any other reasonable time. 14, BOOKS AND RECORDS; FINANCIAL REPORTING. (a) Borrower shall keep and maintain at all times at the Mortgaged Property or the management agent's offices, and upon Lender's request shall make available at the Mortgaged Property, complete and accurate books of account and records (including copies of supporting bills and invoices) adequate to reflect correctly the operation oftbe Mortgaged Property, and copies ofall written contracts, Leases, and other instruments which affect the Mortgaged Property. The books, records, contracts, Leases and other instruments shall be subject to examination and inspection at any reasonable time by Lender. (b) Borrower shall furnish to Lender all of the following: (1) upon Lenders request, within 120 days after the end of each fiscal year of Borrower, a statement of income and expenses for Borrower's operation of the Mortgaged Property for that fiscal year, a statement of changes in financial position of Borrower relating to the Mortgaged Property for that fiscal year and, when requested by Lender, a balance sheet showing all assets and liabilities of Borrower relating to the Mortgaged Property as of the end of that fiscal year; (2) upon Lenders request, within 120 days after the end of each fiscal year of Borrower, and at any other time upon Lender's request, a rent schedule for the Mortgaged Property showing the name of each tenant, and for each tenant, the space occupied, the lease expiration date, the rent payable for the current month, the date through which rent has been paid, and any related information requested by Lender; (3) upon Lenders request, within 120 days after the end of each fiscal year of Borrower, and at any other time upon Lender's request, an accounting of all security deposits held pursuant to all Leases, including the name of the institution (if any) and the names and identification numbers of the COMMERCIAL DEED OF TRUST -WASHINGTON Page 14 of40 ----------- accounts (if any) in which such security deposits are held and the name of the person to contact at such financial institution, along with any authority or release necessary for Lender to access information regarding such accounts; ( 4) upon Lenders request, within 120 days after the end of each fiscal year of Borrower, and at any other time upon Lender's request, a statement that identifies all owners of any interest in Borrower and any Controlling Entity and the interest held by each, if Borrower or a Controlling Entity is a corporation, all officers and directors of Borrower and the Controlling Entity, and if Borrower or a Controlling Entity is a limited liability company, all managers who are not members; (5) upon Lender's request, quarterly income and expense statements for the Mortgaged Property; (6) upon Lender's request at any time when an Event of Default has occurred and is continuing, monthly income and expense statements for the Mortgaged Property; (7) upon Lender's request, a monthly property management report for the Mortgaged Property, showing the number of inquiries made and rental applications received from tenants or prospective tenants and deposits received from tenants and any other information requested by Lender; and (8) upon Lender's request, a balance sheet, a statement of income and expenses for Borrower and a statement of changes in financial position of Borrower for Borrower's most recent fiscal year. (c) Each of the statements, schedules and reports required by Section 14(b) shall be certified to be complete and accurate by an individual having authority to bind Borrower, and shall be in such form and contain such detail as Lender may reasonably require. Lender also may require that any statements, schedules or reports be audited at Borrower's expense by independent certified public accountants acceptable to Lender. (d) If Borrower fails to provide in a timely manner the statements, schedules and reports required by Section 14(b), Lender shall have the right to have Borrower's books and records audited, at Borrower's expense, by independent certified public accountants selected by Lender in order to obtain such statements, schedules and reports, and all related costs and expenses of Lender shall become immediately due and payable and shall become an additional part of the Indebtedness as provided in Section 12. COMMERCIAL DEED OF TRUST -WASHINGTON Page 15 of 40 ----------·-20070606001153. (e) If an Event of Default has occurred and is continuing, Borrower shall deliver to Lender upon written demand all books and records relating to the Mortgaged Property or its operation. (f) Borrower authorizes Lender to obtain a credit report on Borrower at any time. 15. TAXES; OPERATING EXPENSES. (a) Subject to the provisions of Section 15(c) and Section 15(d), Borrower shall pay, or cause to be paid, all Taxes when due and before the addition of any interest, fine, penalty or cost for nonpayment. (b) Subject to the provisions of Section 15(c), Borrower shall pay the expenses of operating, managing, maintaining and repairing the Mortgaged Property (including insurance premiums, utilities, repairs and replacements) before the last date upon which each such payment may be made without any penalty or interest charge being added. (c) As long as no Event of Default exists and Borrower has timely delivered to Lender any bills or premium notices that it has received, Borrower shall not be obligated to pay Taxes, insurance premiums or any other individual Imposition to the extent that sufficient Imposition Deposits are held by Lender for the purpose of paying that specific Imposition. !fan Event of Default exists, Lender may exercise any rights Lender may have with respect to Imposition Deposits without regard to whether Impositions are then due and payable. Lender shall have no liability to Borrower for failing to pay any Impositions to the extent that any Eveni of Default has occurred and is continuing, insufficient Imposition Deposits are held by Lender at the time an Imposition becomes due and payable or Borrower has failed to provide Lender with bills and premium notices as provided above. ( d) Borrower, at its own expense, may contest by appropriate legal proceedings, conducted diligently and in good faith, the amount or validity of any Imposition other than insurance premiums, if(!) Borrower notifies Lender of the commencement or expected commencement of such proceedings, (2) the Mortgaged Property is not in danger ofbeing sold or forfeited, (3) Borrower deposits with Lender reserves sufficient to pay the contested Imposition, if requested by Lender, and ( 4) Borrower furnishes whatever additional security is required in the proceedings or is reasonably requested by Lender, which may include the delivery to Lender of the reserves established by Borrower to pay the contested Imposition. (e) Borrower shall promptly deliver to Lender a copy of all notices of, and invoices for, Impositions, and if Borrower pays any Imposition directly, Borrower shall promptly furnish to Lender receipts evidencing such payments. 16. LIENS; ENCUMBRANCES. Borrower acknowledges that, to the extent · provided in Section 21, the grant, creation or existence of any mortgage, deed of trust, deed to COMMERCIAL DEED OF TRUST-WASIIlNGTON Page 16 of 40 -----------20070606001 secure debt, security interest or other lien or encumbrance ( a "Lien") on the Mortgaged Property ( other than the lien of this Instrument) or on certain ownership interests in Borrower, whether voluntary, involuntary or by operation oflaw, and whether or not such Lien has priority over the lien of this Instrument, is a "Transfer" which constitutes an Event of Default and subjects Borrower to personal liability under the Note. 17. PRESERVATION, MANAGEMENT AND MAINTENANCE OF MORTGAGED PROPERTY. Borrower (a) shall not commit waste or permit impairment or deterioration of the Mortgaged Property, (b) shall not abandon the Mortgaged Property, ( c) shall restore or repair promptly, in a good and workmanlike manner, any damaged part of the Mortgaged Property to the equivalent of its original condition, or such other condition as Lender may approve in writing, whether or not insurance proceeds or condemnation awards are available to cover any costs of such restoration or repair, (d) shall keep the Mortgaged Property in good repair, including the replacement of Personalty and Fixtures with items of equal or better function and quality, (e) shall provide for professional management of the Mortgaged Property by a residential rental property manager satisfactory to Lender under a contract approved by Lender in writing, and (f) shall give notice to Lender of and, unless otherwise directed in writing by Lender, shall appear in and defend any action or proceeding purporting to affect the Mortgaged Property, Lender's security or Lender's rights under this Instrument. Borrower shall not (and shall not permit any tenant or other person to) remove, demolish or alter the Mortgaged Property or any part of the Mortgaged Property except in connection with the replacement of tangible Personalty. 18. ENVIRONMENTAL HAZARDS. (a) Except for matters covered by a written program of operations and maintenance approved in writing by Lender (an "O&M Program") or matters described in Section 18(b), Borrower shall not cause or permit any of the following; (1) the presence, use, generation, release, treatment, processing, storage (including storage in above ground and underground storage tanks), handling, or disposal of any Hazardous Materials on or under the Mortgaged Property or any other property of Borrower that is adjacent to the Mortgaged Property; (2) the transportation of any Hazardous Materials to, from, or across lhe Mortgaged Property; (3) any occurrence or condition on the Mortgaged Property or any other property of Borrower that is adjacent to the Mortgaged Property, which occurrence or condition is or may be in violation of Hazardous Materials Laws; or COMMERCIAL DEED OF TRUST-WAS!IlNGTON Page 17 of40 20070606001153.01 (4) any violation of or noncompliance with the terms of any Environmental Permit with respect to the Mortgaged Property or any property of Borrower that is adjacent to the Mortgaged Property. The matters described in clauses (1) through ( 4) above are referred to collectively in this Section 18 as "Prohibited Activities or Conditions". (b) Proluoited Activities and Conditions shall not ioclude the safe and lawful use and storage of quantities of (1) pre-packaged supplies, cleaning materials and petroleum products customarily used in the operation and maintenance of comparable commercial properties, (2) cleaning materials, personal grooming items and other items sold io pre-packaged containers for consumer use and used by tenants and occupants of residential dwelling units in the Mortgaged Property; and (3) petroleum products used in the operation and maintenance of motor vehicles from time to time located on the Mortgaged Property's parking areas, so long as all of the foregoing are used, stored, handled, transported and disposed of in compliance with Hazardous Materials Laws. (c) Borrower shall take all commercially reasonable actions (including the inclusion of appropriate provisions in any Leases executed after the date of this Instrument) to prevent its employees, agents, and contractors, and all tenants and other occupants from causing or permitting any Prohibited Activities or Conditions. Borrower shall not lease or allow the sublease or use of all or any portion of the Mortgaged Property to any tenant or subtenant for nonresidential use by any user that, in the ordinary course of its business, would cause or permit any Proluoited Activity or Condition. (d) !fan O&M Program has been established with respect to Hazardous Materials, Borrower shall comply in a timely manner with, and cause all employees, agents, and contractors of Borrower and any other persons present on the Mortgaged Property to comply with the O&M Program. All costs of performance of Borrower's obligations under any O&M Program shall be paid by Borrower, and Lender's out-of-pocket costs iocurred in connection with the monitoring and review of the O&M Program and Borrower's performance shall be paid by Borrower upon demand by Lender. Any such out-of-pocket costs of Lender which Borrower fails to pay promptly shall become an additional part of the Indebtedness as provided in Section 12. (e) Borrower represents and warrants to Lender that, except as previously disclosed by Borrower to Lender in writing: (I) Borrower has not at any time engaged in, caused or permitted any· Prohibited Activities· or Conditions; (2) to the best of Borrower's knowledge after reasonable and diligent inquiry, no Prohibited Activities or Conditions exist or have existed; COMMERCIAL DEED OF TRUST -WASHINGTON Page l8 of40 ----------- (3) (4) (5) (6) (7) 20070606001 except to the extent previously disclosed by Borrower to Lender in writing, the Mortgaged Property does not now contain any underground storage tanks, and, to the best of Borrower's knowledge after reasonable and diligent inquiry, the Mortgaged Property has not contained any underground storage tanks in the past. If there is an underground storage tank located on the Property which has been previously disclosed by Borrower to Lender in writing, that tank complies with all requirements of Hazardous Materials Laws; Borrower has complied with all Hazardous Materials Laws, including all requirements for notification regarding releases of Hazardous Materials. Without limiting the generality of the foregoing, Borrower has obtained all Environmental Permits required for the operation of the Mortgaged Property in accordance with Hazardous Materials Laws now in effect and all such Environmental Permits are in full force and effect; no event has occurred with respect to the Mortgaged Property that constitutes, or with the passing of time or the giving of notice would constitute, noncompliance with the terms of any Environmental Permit; there are no actions, suits, claims or proceedings pending or, to the best of Borrower's knowledge after reasonable and diligent inquiry, threatened that involve the Mortgaged Property and allege, arise out of, or relate to any Prohibited Activity or Condition; and Borrower has not received any complaint, order, notice of violation or other communication from any Governmental Authority with regard to air emissions, water discharges, noise emissions or Hazardous Materials, or any other environmentai health or safety matters affecting the Mortgaged Property or any other property of Borrower that is adjacent to the Mortgaged Property. The representations and warranties in this Section 18 shall be continuing representations and warranties that shall be deemed to be made by Borrower throughout the term of the loan evidenced by the Note, until the Indebtedness has been paid in full. (f) Borrower shall promptly notify Lender in writing upon the occurrence of any of the fo !lowing events: (!) Borrower's discovery of any Prohibited Activity or Condition; (2) Borrower's receipt of or knowledge of any complaint, order, notice of violation or other communication from any Governmental Authority or other person with regard to present or future alleged Prohibited Activities COMMERCIAL DEED OF TRUST -WASHINGTON Page 19 of 40 20070606001 or Conditions or any other envirorunental, health or safety matters affecting the Mortgaged Property or any other property of Borrower that is adjacent to the Mortgaged Property; and (3) any representation or warranty in this Section 18 becomes untrue after the date of this Agreement. Any such notice given by Borrower shall not relieve Borrower of, or result in a waiver of, any obligation under this Instrument, the Note, or any other Loan Document. (g) Borrower shall pay promptly the costs of any environmental inspections, tests or audits ("Environmental Inspections") required by Lender in connection with any foreclosure or deed in lieu of foreclosure, or as a condition of Lender's consent to any Transfer under Section 21, or required by Lender following a reasonable determination by Lender that Prohibited Activities or Conditions may exist. Any such costs incurred by Lender (including the fees and out-of-pocket costs of attorneys and technical consultants whether incurred in connection with any judicial or administrative process or otherwise) which Borrower fails to pay promptly shall become an additional part of the Indebtedness as provided in Section 12. The results of all Envirorunental Inspections made by Lender shall at all times remain the property of Lender and Lender shall have no obligation to disclose or otherwise make available to Borrower or any other party such results or any other information obtained by Lender in connection with its Envirorunental Inspections. Lender hereby reserves the right, and Borrower hereby expressly authorizes Lender, to make available to any party, including any prospective bidder at a foreclosure sale of the Mortgaged Property, the results of any Environmental Inspections made by Lender with respect to the Mortgaged Property. Borrower consents to Lender notifying any party (either as part of a notice of sale or otherwise) of the results of any of Lender's Environmental Inspections. Borrower acknowledges that Lender cannot control or otherwise assure the truthfulness or accuracy of the results of any of its Environmental Inspections and that the release of such results to prospective bidders at a foreclosure sale of the Mortgaged Property may have a material and adverse effect upon the amount which a party may bid at such sale. Borrower agrees that Lender shall have no liability whatsoever as a result of delivering the results of any of its Environmental Inspections to any third party, and Borrower hereby releases and forever discharges Lender from any and all claims, damages, or causes of action, arising out of, connected with or incidental to the results of, the delivery of any of Lender's Environmental Inspections. (h) If any investigation, site monitoring, containment, clean-up, restoration or other remedial work ("Remedial Work") is necessary to comply with any Hazardous Materials Law or order of any Governmental Authority that has or acquires jurisdiction over the Mortgaged Property or the use, operation or improvement of the Mortgaged Property under any Hazardous Materials Law, Borrower shall, by the earlier of (I) the applicable deadline required by Hazardous Materials Law or (2) 30 days after notice from Lender demanding such action, begin performing the Remedial Work, and thereafter diligently prosecute it to completion, and shall in any event COMMERCIAL DEED OF TRUST-WASHINGTON Page 20of40 200706060011 complete the work by the time required by applicable Hazardous Materials Law. If Borrower fails to begin on a timely basis or diligently prosecute any required Remedial Work, Lender may, at its option, cause the Remedial Work to be completed, in which case Borrower shall refuiburse Lender on demand for the cost of doing so. Any reimbursement due from Borrower to Lender shall become part of the Indebtedness as provided in Section 12. (i) Borrower shall cooperate with any inquiry by any Governmental Authority and shall comply with any governmental or judicial order which arises from any alleged Prohibited Activity or Condition. G) Borrower shall indemnify, hold harmless and defend (i) Lender, (ii') any prior owner or holder of the Note, (iii') the Loan Servicer, (iv) any prior Loan Servicer, (v) the officers, directors, shareholders, partners, employees and trustees of any of the foregoing, and (vi) the heirs, legal representatives, successors and assigns of each of the foregoing ( collectively, the "Indemnitees") from and against all proceedings, claims, damages, penalties and costs (whether initiated or sought by Governmental Authorities or private parties), including fees and out of pocket expenses of attorneys and expert witnesses, investigatory fees, and remediation costs, whether incurred in connection with any judicial or administrative process or otherwise, arising directly or indirectly from any of the following; (1) any breach of any representation or warranty of Borrower in this Section 18; (2) any failw-e by Borrower to perform any of its obligations under this Section 18; · (3) the existence or alleged existence of any Prohibited Activity or Condition; ( 4) the presence or alleged presence of Hazardous Materials on or under the Mortgaged Property or any property of Borrower that is adjacent to the Mortgaged Property; and (5) the actual or alleged violation of any Hazardous Materials Law. (k) Counsel selected by Borrower to defend Indemnitees shall be subject to the approval of those Indemnitees. However, any Indemnitee may elect to defend any claim or legal or administrative proceeding at the Borrower's expense. (1) Borrower shall not, without the prior written consent of those Indemnitees who are named as parties to a claim or legal or administrative proceeding (a "Claim"), settle or compromise the Claim if the settlement (1) results in the entry of any judgment that does not include as an unconditional term the delivery by the claimant or plaintiff to Lender of a written COMMERCIAL DEED OF TRUST -WASfilNGTON Page 21 of 40 -----------200706060011 release of those Indemnitees, satisfactory in form and substance to Lender; or (2) may materially and adversely affect Lender, as determined by Lender in its discretion. (m) Borrower's obligation to indemnify the Indemnitees shall not be limited or impaired by any of the following, or by any failure of Borrower or any guarantor to receive notice of or consideration for any of the following: (1) any amendment or modification of any Loan Document; (2) any extensions of time for performance required by any Loan Document; (3) any provision in any of the Loan Documents limiting Lender's recourse to property securing the Indebtedness, or limiting the personal liability of Borrower or any other party for payment of all or any part of the Indebtedness; ( 4) the accuracy or inaccuracy of any representations and warranties made by Borrower under this Instrument or any other Loan Document; (5) the release of Borrower or any other person, by Lender or by operation of law, from performance of any obligation under any Loan Document; (6) the release or substitution in whole or in part of any security for the Indebtedness; and (7) Lender's failure to properly perfect any lien or security interest given as security for the Indebtedness. (n) Borrower shall, at its own cost and expense, do all of the following: (1) pay or satisfy any judgment or decree that maybe entered against any Indemnitee or Indemnitees in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be indemnified under this Section 18; (2) reimburse lndemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees are entitled to be indemnified under this Section 18; and (3) reimburse lndemnitees for any and all expenses, including fees and out of pocket expenses of attorneys and expert witnesses, paid or incurred in connection with the enforcement by Indemnitees of their rights under this Section 18, or in monitoring and participating in any legal or administrative proceeding. COMMERCIAL DEED OF TRUST -WASHINGTON Page22 of40 20070606001153 ( o) In any circumstances in which the indemnity under this Section 18 applies, Lender may employ its own legal counsel and consultants to prosecute, defend or negotiate any claim or legal or administrative proceeding and Lender, with the prior written consent of Borrower (which shall not be unreasonably withheld, delayed or conditioned) may settle or compromise any action or legal or administrative proceeding. Borrower shall reimburse Lender upon demand for all costs and expenses incurred by Lender, including all costs of settlements entered into in good faith, and the fees and out of pocket expenses of such attorneys and consultants. (p) The provisions of this Section 18 shall be in addition to any and all other obligations and liabilities that Borrower may have under applicable law or under other Loan Documents, and each Indemnitee shall be entitled to indemnification under this Section 18 without regard to whether Lender or that lndemnitee has exercised any rights against the Mortgaged Property or any other security, pursued any rights against any guarantor, or pursued any other rights available under the Loan Documents or applicable law. If Borrower consists of more than one person or entity, the obligation of those persons or entities to indemnify the Jndernnitees under this Section 18 shall be joint and several. The obligation of Borrower to indemnify the Indemnitees under this Section 18 shall survive any repayment or discharge of the Indebtedness, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release ofrecord of the lien of this Instrument. 19. PROPERTY AND LIABILITY INSURANCE. (a) Borrower shall keep the Improvements insured at all times against such hazards a:; Lender may from time to time require, which insurance shall include but not be limited to coverage against loss by frre and allied perils, general boiler and machinery coverage, and business income coverage. Lender's insurance requirements may change from time to time throughout the term of the Indebtedness. If Lender so requires, such insurance shall also include sinkhole insurance, mine subsidence insurance, earthquake insurance, and, if the Mortgaged Property does not conform to applicable zoning or land use laws, building ordinance or law coverage. If any of the Improvements is located in an area identified by the Federal Emergency Management Agency ( or any successor to that agency) as an area having special flood hazards, and if flood insurance is available in that area, Borrower shall insure such Improvements against loss by flood. (b) All premiums on insurance policies required under Section 19(a) shall be paid in the manner provided in Section 7, unless Lender has designated in writing another method of payment. All such policies shall also be in a form approved by Lender. All policies of property damage insurance shall include a non-contributing, non-reporting mortgage clause in favor of, and in a form approved by, Lender. Lender shall have the right to hold the original policies or duplicate original policies of all insurance required by Section 19(a). Borrower shall promptly deliver to Lender a copy of all renewal and other notices received by Borrower with respect to the policies and all receipts for paid premiums. At least 30 days prior to the expiration date of a policy, Borrower shall deliver to Lender the original (or a duplicate original) of a renewal policy in form satisfactory to Lender. COMMERCIAL DEED OF TRUST -WASHINGTON Page 23 of 40 (c) Borrower shall maintain at all times commercial general liability insurance, workers' compensation insurance and such other liability, errors and omissions and fidelity insurance coverages as Lender may from time to time require. (d) All insurance policies and renewals of insurance policies required by this Section 19 shall be in such amounts and for such periods as Lender may from time to time require, and shall be issued by insurance companies satisfactory to Lender. 20070606001153 (e) Borrower shall comply with all insurance requirements and shall not permit any condition to exist on the Mortgaged Property that would invalidate any part of any insurance coverage that this Instrument requires Borrower to maintain. (f) In the event ofloss, Borrower shall give inunediate written notice to the insurance carrier and to Lender. Borrower hereby authorizes and appoints Lender as attorney-in-fact for Borrower to make proof ofloss, to adjust and compromise any claims under policies of property damage insurance, to appear in and prosecute any action arising from such property damage insurance policies, to collect and receive the proceeds of property damage insurance, and to deduct from such proceeds Lender's expenses incurred in the collection of such proceeds. This power of attorney is coupled with an interest and therefore is irrevocable. However, nothing contained in this Section 19 shall require Lender to incur any expense or take any action. Lender may, at Lender's option, (1) hold the balance of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Mortgaged Property to the equivalent of its original condition or to a condition approved by Lender (the "Restoration"), or (2) apply the balance of such proceeds to the payment of the Indebtedness, whether or not then due. To the extent Lender determines to apply insurance proceeds to Restoration, Lender shall do so in accordance with Lender's then-current policies relating to the restoration of casualty damage on similar commercial properties. (g) Lender shall not exercise its option to apply insurance proceeds to the payment of the Indebtedness if all of the following conditions are met: (!) no Event of Default (or any event which, with the giving of notice or the passage of time, or both, would constitute an Event of Default) has occurred and is continuing; (2) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration; (3) Lender determines, in its discretion, that the rental income from the Mortgaged Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, Imposition Deposits, deposits to reserves and loan repayment obligations relating to the Mortgaged Property; and (4) Lender determines, in its discretion, that the Restoration will be completed before the earlier of(A) one year before the maturity date of the Note or (B) one year after the date of the loss or casualty. (h) If the Mortgaged Property is sold at a foreclosure sale or Lender acquires title to the Mortgaged Property, Lender shall automatically succeed to all rights of Borrower in and to COMMERCIAL DEED OF TRUST -WASHINGTON Page 24 of40 __________ ,_ any insurance policies and unearned insurance premiums and in and to the proceeds resulting from any damage to the Mortgaged Property prior to such sale or acquisition. 20. CONDEMNATION. (a) Borrower shall promptly notify Lender of any action or proceeding relating to any condemnation or other taking, or conveyance in lieu thereof, of all or any part of the Mortgaged Property, whether direct or indirect (a "Condemnation"), Borrower shall appear in and prosecute or defend any action or proceeding relating to any Condemnation unless otherwise directed by Lender in writing. Borrower authorizes and appoints Lender as attorney-in-fact for Borrower to commence, appear in and prosecute, in Lender's or Borrower's name, any action or proceeding relating to any Condemnation and to settle or compromise any claim in connection with any Condemnation. This power of attorney is coupled with an interest and therefore is irrevocable, However, notbing contained in this Section 20 shall require Lender to incur any expense or take any action. Borrower hereby transfers and assigns to Lender all right, title and interest of Borrower in and to any award or payment with respect to (i) any Condemnation, or any conveyance in lieu of Condenmation, and (ii) any damage to the Mortgaged Property caused by governmental action that does not result in a Condemnation. (b) Lender may apply such awards or proceeds, after tile deduction of Lender's expenses incurred in the collection of such amounts, at Lender's option, to the restoration or repair of the Mortgaged Property or to the payment of the Indebtedness, with the balance, if any, to Borrower. Unless Lend~r otherwise agrees in writing, any application of any awards or proceeds to the Indebtedness shall not extend or postpone the due date of any monthly installments referred to in the Note, Section 7 of this Instrument or any Collateral Agreement, or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. 21. TRANSFERS OF IBE MORTGAGED PROPERTY OR INTERESTS IN BORROWER. (a) The occurrence of any of the following events shall constitute an Event of Default under this Instrument; (1) a Transfer of all or any part of the Mortgaged Property or any interest in the Mortgaged Property; (2) if Borrower is a limited partnership, a Transfer of(A) any general partnership interest, or (B) limited partnership interests in Borrower that would cause the Initial Owners of Borrower to own less than 51 % of all limited partnership interests in Borrower; COMMERCIAL DEED OF TRUST-WASHINGTON Page 25 of40 '------------ (3) (4) (5) (6) 20070606001 "153. if Borrower is a general partnership or a joint venture, a Transfer of any general partnership or joint venture interest in Borrower; if Borrower is a limited liability company, a Transfer of (A) any membership interest in Borrower which would cause the Initial Owners to own less than 51 % of all the membership interests in Borrower, or (B) any membership or other interest of a manager in Borrower; if Borrower is a corporation, (A) the Transfer of any voting stock in Borrower which would cause the Initial Owners to own less than 51 % of any class of voting stock in Borrower or (B) if the outstanding voting stock in Borrower is held by I 00 or more shareholders, one or more transfers by a single transferor within a 12-month period affecting an aggregate of 5% or more of that stock; if Borrower is a trust, (A) a Transfer of any beneficial interest in Borrower which would cause the Initial Owners to own less than 51 % of all the beneficial interests in Borrower, or (B) the termination or revocation of the trust, or (C) the removal, appointment or substitution of a trustee of Borrower; and (7) a Transfer of any interest in a Contro !ling Entity which, if such Controlling Entity were Borrower, would result in an Event of Default under any of Sections 2l(a)(l) through (6) above. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default in order to exercise any of its remedies with respect to an Event of Default under this Section 21. (b) The occurrence of any of the following events shall not constitute an Event of Default under this Instrument, notwithstanding any provision of Section 21 (a) to the contrary: (1) a Transfer to which Lender has consented; (2) a Transfer that occurs by devise, descent, or by operation oflaw upon the death of a natural person; (3) the grant ofa leasehold interest in an individual dwelling unit for a term of two years or less not containing an option to purchase; ( 4) a Transfer of obsolete or worn out Personalty or Fixtures that are contemporaneously replaced by items of equal or better function and quality, which are free of liens, encumbrances and security interests other than those created by the Loan Documents or consented to by Lender; COMMERCIAL DEED OF TRUST -WASHINGTON Page 26 of 40 (5) the grant of an easement, if before the grant Lender determines that the easement will not materially affect the operation or value of the Mortgaged Property or Lender's interest in the Mortgaged Property, and Borrower pays to Lender, upon demand, all costs and expenses incurred by Lender in connection with reviewing Borrower's request; and (6) the creation ofa mechanic's, materialman's, or judgment lien against the Mortgaged Property which is released ofrecord or otherwise remedied to Lender's satisfaction within 30 days of the date of creation. (c) Lender may consent, in its discretion, to a Transfer that would otherwise violate this Section 21 if, prior to the Transfer, Borrower has satisfied each of the following requirements; · (1) the submission to Lender of all information required by Lender to make the determination required by this Section 21(c); (2) the Mortgaged Property and the transferee meet all of the eligibility, credit, management and other standards (including but not limited to any standards with respect to previous relationships between Lender and the transferee and the organization of the transferee) customarily applied by Lender to the approval of borrowers and properties in connection with the origination or purchase of similar mortgages or deeds of trust on commercial properties; (3) the absence of any Event of Default; ( 4) the execution of an assumption agreement that is acceptable to Lender and that, among other things, requires the transferee to perform all obligations of Borrower set forth in the Note, this Instrument and any other Loan Documents, and may require that the transferee comply with any provisions of this Instrument or any other Loan Document which previously may have been waived by Lender; and (5) Lender's receipt of all of the following: (A) a review fee in the amount of$_500 ; (B) a transfer fee in an amount equal to __J_% of the unpaid principal balance of the Indebtedness immediately before the Transfer; and (C) the amount of Lender's out-of-pocket costs (including reasonable attorneys' fees) incurred in reviewing the Transfer request. COMMERCIAL DEED OF TRUST-WASHINGTON Page 27 of 40 . _, ________ _ 20070606001 22. EVENTS OF DEFAULT. The occurrence of anyone or more of the following shall constitute an Event of Default under this Instrument: ( a) any failure by Borrower to pay or deposit when due any amount required by the Note, this Instrument or any other Loan Document; (b) any failure by Borrower to maintain the insurance coverage required by Section 19; (c) any failure by Borrower to comply with the provisions of Section 33; ( d) fraud or material misrepresentation or material omission by Borrower, any of its officers, directors, trustees, general partners or managers or any guarantor in connection with (A) the application for or creation of the Indebtedness, (B) any financial statement, rent roll, or other report or information provided to Lender during the term of the Indebtedness, or (C) any request for Lender's consent to any proposed action, including a request for disbursement of funds under any Collateral Agreement; (e) any Event of Default under Section 21; (f) the commencement of a forfeiture action or proceeding, whether civil or criminal, which, in Lender's reasonable judgment, could result in a forfeiture of the Mortgaged Property or otherwise materially impair the lien created by this Instrument or Lender's interest in the Mortgaged Property; (g) . any failure by Borrower to perform any of its obligations under this Instrument (other than those specified in Sections 22(a) through (f)), as and when required, which continues for a period of30 days after notice of such failure by Lender to Borrower. However, no such notice or grace period shall apply in the case of any such failure which could, in Lender's judgment, absent immediate exercise by Lender of a right or remedy under this Instrument, result in harm to Lender, impairment of the Note or this Instrument or any other security given under any other Loan Document; (h) any failure by Borrower to perform any of its obligations as and when required under any Loan Document other than this Instrument which continues beyond the applicable cure period, if any, specified in that Loan Document; (i) any exercise by the holder of any debt instrument secured by a mortgage, deed of trust or deed to secure debt on the Mortgaged Property of a right to declare all amounts due under that debt instrument immediately due and payable; and COMMERCIAL DEED OF TRUST -WASHINGTON Page 28 of40 20070606001 (fJ Borrower voluntarily files for bankruptcy protection under the United States Bankruptcy Code or voluntarily becomes subject to any reorganization, receivership, insolvency proceeding or other similar proceeding pursuant to any other federal or state law affecting debtor and creditor rights, or an involuntary case is commenced against Borrower by any creditor ( other than Lender) of Borrower pursuant to the United States Bankruptcy Code or other federal or state law affecting debtor and creditor rights and is not dismissed or discharged within 6() days after filing. 23. REMEDIES CUMULATIVE. Each right and remedy provided in this Instrument is distinct from all other rights or remedies under this Instrument or any other Loan Document or afforded by applicable law, and each shall be cumulative and may be exercised concurrently, independently, or successively, in any order. 24. FORBEARANCE. (a) Lender may (but shall not be obligated to) agree with Borrower, from time to time, and without giving notice to, or obtaining the consent of, or having any effect upon the obligations of, any guarantor or other third partyobligor, to take any of the following actions: extend the time for payment of all or any part of the Indebtedness; reduce the payments due under this Instrument, the Note, or any other Loan Document; release anyone liable for the payment of any amounts under this Instrument, the Note, or any other Loan Document; accept a renewal of the Note; modify the terms and time of payment of the Indebtedness; join in any extension or subordination agreement; release any Mortgaged Property; take or release other or additional security; modify the rate of interest or period of amortization of the Note or change the amount of the monthly installments payable under the Note; and otherwise modify this Instrument, the Note, or any other Loan Document. (b) Any forbearance by Lender in exercising any right or remedy under the Note, this Instrument, or any other Loan Document or otherwise afforded by applicable law, shall not be a waiver of or preclude the exercise of any right or remedy. The acceptance by Lender of payment of all or any part of the Indebtedness after the due date of such payment, or in an amount which is less than the required payment, shall not be a waiver of Lender's right to require prompt payment when due of all other payments on account of the Indebtedness or to exercise any remedies for any failure to make prompt payment. Enforcement by Lender of any security for the Indebtedness shall not constitute an election by Lender of remedies so as to preclude the exercise of any other right available to Lender. Lender's receipt of any awards or proceeds under Sections 19 and 20 shall not operate to cure or waive any Event of Default. 25. LOAN CHARGES. If any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower is interpreted so that any charge provided for in any Loan Document, whether considered separately or together with other charges levied in connection with any other Loan Document, violates that law, and Borrower is entitled to the benefit of that law, that charge is hereby reduced to the extent necessary to eliminate that COMMERCIAL DEED OF TRUST-WASHINGTON Page 29 of 40 200706060011 violation. The amounts, if any, previously paid to Lender in excess of the permitted amounts shall be applied by Lender to reduce the principal of the Indebtedness. For the purpose of determining whether any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower has been violated, all Indebtedness which constitutes interest, as well as all other charges levied in connection with the Indebtedness which constitute interest, shall be deemed to be allocated and spread over the stated term of the Note. Unless otherwise required by applicable Jaw, such allocation and spreading shall be effected in such a manner that the rate of interest so computed is uniform throughout the stated term of the Note. 26. WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby waives the right to assert any statute oflirnitations as a bar to the enforcement of the lien of this Instrument or to any action brought to enforce any Loan Document. 27. WAIVER OF MARSHALLING. Notwithstanding the existence of any other security interests in the Mortgaged Property held by Lender or by any other party, Lender shall have the right to determine the order in which any or all of the Mortgaged Property shall be subjected to the remedies provided in this Instrument, the Note, any other Loan Document or applicable law. Lender shall have the right to determine the order in which any or all portions of the Indebtedness are satisfied from the proceeds realized upon the exercise of such remedies. Borrower and any party who now or in the future acquires a security interest in the Mortgaged Property and who has actual or constructive notice of this Instrument waives any and all right to require the marshalling of assets or to require that any of the Mortgaged Property be sold in the inverse order of alienation or that any of the Mortgaged Property be sold in parcels or as an entirety in connection with the exe.rcise of any of the remedies permitted by applicable law or provided in this Instrument. 28. FURTHER ASSURANCES. Borrower shall execute, acknowledge, and deliver, at its sole cost and expense, all further acts, deeds, conveyances, assignments, estoppel certificates, financing statements, transfers and assurances as Lender may require from time to time in order to better assure, grant, and convey to Lender the rights intended to be granted, now or in the future, to Lender under this Instrument and the Lo an Documents. 29. ESTOPPEL CERTIFICATE. Within 10 days after a request from Lender, Borrower shall deliver to Lender a written statement, signed and acknowledged by Borrower, certifying to Lender or any person designated by Lender, as of the date of such statement, (i) that the Loan Documents are unmodified and in full force and effect (or, ifthere have been modifications, that the Loan Documents are in full force and effect as modified and setting forth such modifications); (ii) the unpaid principal balance of the Note; (iii) the date to which interest under the Note has been paid; (iv) that Borrower is not in default in paying the Indebtedness or in performing or observing any of the covenants or agreements contained in this Instrument or any of the other Loan Documents ( or, if the Borrower is in default, describing such default in reasonable detail); (v) whether or not there are then existing any setoffs or defenses known to COMMERCIAL DEED OF TRUST -WASHINGTON Page 30 of 40 -----------2007060600 I 153.1 Borrower against the enforcement of any right or remedy of Lender under the Loan Documents; and (vi) any additional facts requested by Lender. 30. GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE. ( a) This Instrument, and any Loan Document which does not itself expressly identify the law that is to apply to it, shall be governed by the laws of the jurisdiction in which the Land is located (the "Property Jurisdiction"). (b) Borrower agrees that any controversy arising under or in relation to the Note, this Instrument, or any other Loan Document shall be litigated exclusively in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to the Note, any security for the Indebtedness, or any other Loan Document. Borrower irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. 31. NOTICE. (a) All notices, demands and other communications ("notice") under or concerning this Instrument shall be in writing. Each notice shall be addressed to the intended recipient at its address set forth in this Instrument, and shall be deemed given on the earliest to occur of(!) the date when the notice is recdved by the addressee; (2) the first Business Day after the notice is delivered to a recogmzed overnight courier service, with arrangements made for payment of charges for next Business Day delivery; or (3) the third Business Day after the notice is deposited in the United States mail with postage prepaid, certified mai~ return receipt requested. As used in this Section 31, the term "Business Day'' means any day other than a Saturday, a Sunday or any other day on which Lender is not open for business. (b) Any party to this Instrument may change the address to which notices intended for it are to be directed by means of notice given to the other party in accordance with this Section 31. Each party agrees that it will not refuse or reject delivery of any notice given in accordance with this Section 31, that it will acknowledge, in writing, the receipt of any notice upon request by the other party and that any notice rejected or refused by it shall be deemed for purposes of this Section 31 to have been received by the rejecting party on the date so refused or rejected, as conclusively established by the records of the U.S. Postal Service or the courier service. (c) Any notice under the Note and any other Loan Document which does not specify how notices are to be given shall be given in accordance with this Section 31. 32. SALE OF NOTE; CHANGE IN SERVICER. The Note or a partial interest in the Note (together with this Instrument and the other Loan Documents) may be sold one or more COMMERCIAL DEED OF TRUST -WASHINGTON Page31 of40 -----------007060600'l 1o.l times without prior notice lo Borrower. A sale may result in a change of the Loan Servicer. There also maybe one or more changes of the Loan Servicer unrelated to a sale of the Note. If there is a change of the Loan Servicer, Borrower will be given notice of the change. 33. SINGLE ASSET BORROWER. Not applicable. 34. SUCCESSORS AND ASSIGNS BOUND. This Instrument shall bind, and the rights granted by this Instrument shall inure to, the respective successors and assigns of Lender and Borrower. However, a Transfer not permitted by Section 21 shall be an Event of Default. 35. JOINT AND SEVERAL LIABILITY. If more than one person or entity signs this Instrument as Borrower, the obligations of such persons and entities shall be joint and several. 36. RELATIONSHIP OF PARTIES; NO THIRD PARTY BENEFICIARY. (a) The relationship between Lender and Borrower shall be solely that of creditor and debtor, respectively, and nothing contained in this Instrument shall create any other relationship between Lender and Borrower. (b) No creditor of any party to this Instrument and no other person shall be a third party beneficiary of this Instrument or any other Loan Document. Without limiting the generality of the preceding sentence, (1) any arrangement (a "Servicing Arrangement") between the Lender and any Loan Servicer for loss sharing or interim advancement of funds shall constitute a contractual obligation of such Loar: Servicer that is independent of the obligation of Borrower for the payment of the Indebtedness, (2) Borrower shall not be a third party beneficiary of any Servicing Arrangement, and (3) no payment by the Loan Servicer under any Servicing Arrangement will reduce the amount of the Indebtedness. 37. SEVERABILITY; AMENDMENTS. The invalidity or unenforceability of any provision of this Instrument shall not affect the validity or enforceability of any other provision, and all other provisions shall remain in full force and effect. This Instrument contains the entire agreement among the parties as to the rights granted and the obligations assumed in this Instrument. This Instrument may not be amended or modified except by a writing signed by the party against whom enforcement is sought. 38. CONSTRUCTION. The captions and headings of the sections of this Instrument are for convenience only and shall be disregarded in construing this Instrument. Any reference in this Instrument to an "Exhibit" or a "Section" shall, unless otherwise explicitly provided, be construed as referring, respectively, to an Exluoit attached to this Instrument or to a Section of this Instrument. All Exhibits attached to or referred to in this Instrument are incorporated by reference into this Instrument. Any reference in this Instrument to a statute or regulation shall be construed as referring to that statute or regulation as amended from time to time. Use of the COMMERCIAL DEED OF TRUST -WASHINGTON Page32 of40 2007060600115 singular in this Agreement includes the plural and use of the plural includes the singular. As used in this Instrument, the term "including" means "including, but not limited to." 39. LOAN SERVICING. All actions regarding the servicing of the loan evidenced by the Note, including the collection of payments, the giving and receipt of notice, inspections of the Property, inspections of books and records, and the granting of consents and approvals, may be taken by the Loan Servicer unless Borrower receives notice to the contrary. If Borrower receives conflicting notices regarding the identity of the Loan Servicer or any other subject, any such notice from Lender shall govern. 40. DISCLOSURE OF INFORMATION. Lender may furnish information regarding Borrower or the Mortgaged Property to third parties with an existing or prospective interest in the servicing, enforcement, evaluation, performance, purchase or securitization of the Indebtedness, including but not limited to trustees, master servicers, special servicers, rating agencies, and organizations maintaining databases on the underwriting and performance of commercial mortgage loans. Borrower irrevocably waives any and all rights it may have under applicable law to prohtoit such disclosure, including but not limited to any right of privacy. 41. NO CHA.t'IGE IN FACTS OR CIRCUMSTANCES. All information in the application for the loan submitted to Lender (the "Loan Application") and in all financial statements, rent rolls, reports, certificates and other documents submitted in connection with the Loan Application are complete and accurate in all material respects. There has been no material adverse change in any fuel or circumstance that would make any such information incomplete or inaccurate. 42. SUBROGATION. If, and to the extent that, the proceeds of the loan evidenced by the Note are used to pay, satisfy or discharge any obligation of Borrower for the payment of money that is secured by a pre-existing mortgage, deed of trust or other lien encumbering the Mortgaged Property (a "Prior Lien"), such loan proceeds shall be deemed to have been advanced by Lender at Borrower's request, and Lender shall automatically, and without further action on its part, be subrogated to the rights, including lien priority, of the owner or holder of the obligation secured by the Prior Lien, whether or not the Prior Lien is released. 43. ACCELERATION; REMEDIES. At any time during the existence ofan Event of Default, Lender, at Lender's option, may declare the Indebtedness to be immediately due and payable without further demand. After giving Borrower notice of the occurrence ofan Event of Default in the manner prescribed by Washington law, Lender may invoke the power of sale and any other remedies permitted by Washington law or provided in this Instrument or in any other Loan Document. Borrower acknowledges that the power of sale granted in this Instrument may be exercised by Lender without prior judicial hearing. Borrower has the right to bring an action to assert that an Event of Default does not exist or to raise any other defense Borrower may have to acceleration and sale. Lender shall be entitled to collect all costs and expenses incurred in COMMERCIAL DEED OF TRUST -WASHINGTON Page 33 of 40 20070606001 pursuing such remedies, including attorneys' fees and costs of documentary evidence, abstracts and title reports. If Lender invokes the power of sale, Lender shall give written notice to Trustee of the occurrence of the Event of Default and of Lender's election to cause the Mortgaged Property to be sold. Trustee and Lender shall give such notices as Washington law may require to Borrower and to all other persons entitled to receive notice under Washington law. After the lapse of such time as may be required by Washington law, Trustee shall sell the Mortgaged Property according to Washington law. Trustee may sell the Mortgaged Property at the time and place and under the terms designated in the notice of sale in one or more parcels and in such order as Trustee may determine. Trustee may postpone the sale of all or any part of the Mortgaged Property for a period or periods not exceeding a total of30 days by public announcement at the time and place fixed in the notice of sale. Lender or Lender's designee may purchase the Mortgaged Property at any sale. Trustee shall deliver to the purchaser at the sale, within a reasonable time after the sale, a deed conveying the Mortgaged Property so sold without any covenant or warranty, express or implied. The recitals in Trustee's deed shall be prirna facie evidence of the truth of the statements made in the recitals. Trustee shall apply the proceeds of the sale in the following order: (a) to all costs and expenses of the sale, including Trustee's fees not to exceed 5% of the gross sales price, attorneys' fees and costs of title evidence; (b) to the Indebtedness in such order as Lender, in · Lender's discretion, directs; and (c) the excess, if any, to the clerk of the superior court of the county in which the sale took place. 44. RECONVEYANCE. Upon payment of the Indebtedness, Lender shall request Trustee to reconvey the Mortgaged Property and shall deliver this Instrument and the Note to Trustee. Trustee shall reconvey the Mortgaged Property without warranty to the person or persons legally entitled thereto. Such person or persons shall pay Trustee's reasonable costs incurred in so reconveying the Mortgaged Property. 45. SUBSTITUTE TRUSTEE. In accordance with Washington law, Lender may from time to time appoint a successor trustee to any Trustee appointed under this Instrument who has ceased to act. Without conveyance of the Mortgaged Property, the successor trustee shall succeed to all the title, power and duties conferred upon the predecessor Trustee and by applicable law. 46. USE OF PROPERTY. The Mortgaged Property is not used principally for agricultural or farming purposes. 47. WAlVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF TffiS INSTRUMENT OR THE RELATIONSIDP BETWEEN THE PARTIES AS BORROWER AND LENDER THAT IS TRIABLE OF COMMERCIAL DEED OF TRUST -WASHINGTON Page34of40 2007060600115 RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL. ATTACHED EXHIBITS. The following Exhibits are attached to this Instrument: ~ ExhibitA DI Exhibit B Description of the Land (required), Modifications to Instrument IN WITNESS WHEREOF, Borrower has signed and delivered this Instrument or has caused this Instrument to be signed and delivered by its duly authorized representative. [SIGNATURES AND ACKNOWLEDGMENTS) COMMERCIAL DEED OF TRUST -WASHINGTON Page35 of40 Borrower: ~LDING;, ;LL7C0.$%'.c;n::'~,.,_, By:& ELIZ H LOCKWOOD MANAGER By: __________ _ By:. __________ _ By: __________ _ COMMERCIAL DEED OF TRUST-WASHINGTON Page 36of40 20070606001 Washington STATE OF County of _kin,,,"00g~-------' SS: On this 1 day of June 2007 before me, the undersigned, a Notary Public in and for lhe State of Washington, duly conunissioned and sworn, personally appeared _______ _ Elizabelh Lockwood to me known to be lhe individual is described in and who executed the foregoing instrwncnt, as General partner ___ of the EL HoldingsLLC --.,.--------,------,--' a Limited Partnership, and acknowledged to me that S1J:f..., signed and sealed this said instrument as ~h"'e"'r-~ ____ free and voluntary act and deed for the nse and purposes therein ffientioned} and on oath stated She is authorized to execute the said instrument. Given under my hand and official seal this I day of Ju~ne2007 ''Ill Y:'. °'-!C --·· ~AAV14 n '-'"' H111 '4-\ .:::-~~" "-· l.el-fA./1,1 ~ st--..;,,. ... , ... "'\''ht,~.A .,,, .:= ..:J-~'fl,f:t\ON ~i,-,;.v ~ -~~ 1A ..,,<i,,i;.: 'l. E ff,¥.;. o -Ii')-~~ z .... ~o ~ fl':::: ~ ~ :=o Q)~ ~ ~ ~ g E z ',: ,0 C, ... ~ --~ IJl 'I U5\.\ Eo -I'. :.>,', I Cb --i, -, ,,,,_ 1 .. 09 .. 0 .. ~C,"'5 ,,, .>-i;o''''h\'\""''"':~~ .:::-''11 F WASP,,, .... 1111111\\,,,, Notary Public in a Residing at -~~,£Jb.Lld:::::..L.d'.-,-,,<C..,..--,,-=..,,,,-- My appointment expires: 'J EXHIBIT A [DESCRIPTION OF THE LAND] THAT PORTION OF LOTS 10 AND 11, BLOCK 28, EARLINGTON ACRE TRACTS, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 15 OF PLATS, PAGE(S) 84, RECORDING OF KING COUNTY, WASHINGTON, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF LOT 11; THENCE NORTH 77 51'15" WEST JOO FEET THENCE NORTH O 16'15" WEST 110 FEET; THENCE SOUTH 77 51'15" EAST 100 FEET; THENCE SOUTH O 16' 15" EAST 110 TO THE POINT OF BEGINNING Which has the address: 8436 SOUTH 134TH STREET SEATTLE, WA98178 200/060600115 20070606001153. EXHIBITB Modifications to Instrument The following modifications are made to the text of the Instrument that precedes this Exhibit: SECURITY INSTRUMENT (FREDDIE MAC) -WASHINGTON SIWAFR02.D0C PAGE B-1 TECHNICAL INFORMATION REPORT FOR LOCKWOOD SHORT PLAT CLIENT: EL Holdings, LLC P.O. Box473 Preston, WA 98050 Phone: (206) 390-1980 PREPARED BY: Daley-Morrow-Poblete, Inc. 726 Auburn Way N Auburn, WA 98003 Phone: (253) 333-2200 PROJECT No. 07-550 DATE: Oct. 28, 2009 STAMP NOT VM.ll UNLESS SIGHED at OAlED TABLE OF CONTENTS DESCRIPTION SECTION I -PROJECT OVERVIEW Project Overview Vicinity Map TIR Worksheet Soils Map SECTION II -PRELIMINARY CONDillONS SUMMARY SECTION I1I -OFF-SITE ANALYSIS SECTION IV -DETENTION FACILITY DESIGN SECTION V -CONVEYANCE SYSTEMS DESIGN SECTION VI -SPECIAL REPORTS AND STUDIES SECTION VII -BASIN AND COMMUNITY PLAN AREAS SECTION VIII -OTHER PERMITS SECTION IX -EROSION & SEDIMENTATION CONTROL DESIGN SECTION X BOND QUANTITIES WORKSHEET, STORMW ATER FACILITY SUMMARY SHEET & SKETCH SECTION X -MAINTENANCE AND OPERATIONS MANUAL PAGE I 2 3-4 5 6 NA NA NA NA NA NA NA NA NA PROJECT OVERVIEW The Lockwood Short Plat is located on an existing 0.25-acre site. The parcel is located in a portion of Section 18, Township 23 North, Range 5 East, Willamette Meridian, King County Washington. The parcel number is 2144800810. The property address is 8436 South 134lil Street and is currently occupied by a single-family residence. The existing zoning is R-10. The short plat proposes to create one additional single-family lot for a total of two. The existing residence will be demolished to accommodate the irroject. The property is located within unincorporated King County, and abuts South 134 Street to the south, and single-family residence on all remaining sides. All necessary utilities and stormwater facilities will be constructed to serve the new lot. Zoning for the property allows 50% building coverage. The two lots combined potentially may create 5,371 sq.ft. of building coverage. An additional 1,188 sq.ft. of driveway will be created by the two lots combined. The total impervious surface may reach 6,559 sq.ft. once the project is complete. However, there are existing impervious surfaces equal to 2,436 sq.ft. The new impervious surfaces may therefore equal 4,123 sq.ft. Since the new impervious surface is less than 5,000 sq.ft., this project is exempt from the drainage review. 0 r-r-............ r : ! I I ! ' ! j I [ i Vicinity Map Page 1 of 2 King County Building and Land Development Division TECHNICAL INFORMATION REPORT (TIR) WORKSHEET ,.7, • ' • f 1 '/ ~' ', ' , r 'f ART 2 PRQJECT LOCATION .. c, .: . •• · " , ", o·i' i ; ' • AND DESCRIPTION ·., :-',;,,.''.· , , . ' , , .. ~:}.;~, .. ,• . .,. ...... _~~ Project Owner Et. flo !.,t) ;,UG S ,,_,--"t.eelC:,c,,. ___ _ Address f>.CJ. !3t2)( 473 1 ProjectName t:.DC/:::WOOLJ Sh'<'.ll?T ,,00'1! Location Township 2.3 /\) Range ..5' E Section /8 Phone CZoC,) 3212___-/9,gc) Project Engineer Ac.EX /?0/3L.FTC. AC. CompanyLJm4 111/C. I Address Phone zi£ AV/3U/UI,/ q;A 1./ N L AU/3Ul'<N . t<JA 980QZ. r2S3) 3J:s~22.oo 12·i;sfii1Pi•JJ#§;Jhit1P@d·SU·U II D §!lbdivision I 0 Short Subdivision D Grading D Commercial D Other-----· Project Size CJ · 2 S At' AC Upstream Drainage Basin Size O AC ·.pxi::t7 if,ojueR PE. RMITS , · · '~.· i' · ' · :; nf""}I • , I • N/> , • • D DOF/GHPA D Shoreline Management D COE404 D Rockery D DOE Dam Safety c_-i Structural Vaults D FEMA Floodplain D Other D COE Wetlands D HPA Community _&J"t 0/ ,{){;'-,1/ 7oH-___ _ L Drainage Basin =l,_,J}_,_,KE"---_(,(Ll.'Au./,4.,_..S.,.,ff,_.._! AJG=Tt-'--'o:C.:,V_.__ _____________ _ D River ______ _ D Stream-· ______ _ D Critical Stream Reach D Floodplain --------------- 0 Wetlands --------------- 0 Seeps/Springs D Depressions/Swales D Lake D Steep Slopes D Lakeside/Erosion Hazard D HighGroundwa!erTable D Groundwater Recharge D Other PART7SOJLS . .. . .-.. .-.. '. · ·: .. · ·,· ,' . ; ·. , l ,, -' . , ' -, . I ~" ' Soil Type ) /!utilY.S17E ($eC . Slopes "'& (l -/?, • D Additional Sheets Attatched Erosion Potential 01 tJOFt2A rr l/90 @ Page2 of 2 King County Building and Land Development Division TECHNICAL INFORMATION REPORT (TIR) WORKSHEET PART 8 DEVELOPMENT LIMITATIONS REFERENCE CJ Ch. 4 -Downstream Analysis LIMITATION/SITE CONSTRAINT A/olflE D D D D D D Additional Sheets Attatched PART 9 ESC REQUIREMENTS MINIMUM ESC REQUIREMENTS DURING CONSTRUCTION D Sedimentation Facilities [Zj Stabilized Construction Entrance [?f" Perimeter Runoff Control D Clearing and Grading Restrictions W Cover Practices D Construction Sequence D Other MINIMUM ESC REQUIREMENTS FOLLOWING CONSTRUCTION G"" Stabilize Exposed Surface D ,,Remove and Restore Temporary ESC Facilities @ Clean and Remove All Silt and Debris G:V Ensure Operation of Permanent Facilities D Rag limits of NGPES D Other . . PART 10 SURFACE WATER SYSTEM . D Grass lined Channel D Tank D Infiltration Method of Analysis D Pipe System D Vault D Depression &'./4 D Open Channel D Energy Dissapator D Flow Dispersal Compensation/Mitigation D Dry Pond D Wetland D Waiver of Eliminated Site Storage D Wet Pond D Stream D Regional Detention Brief Description of System Operation .,;'/'245 /I 1.7 t..OCK:r_ W{.CC g~ ' /o/2o!L?.L7C.O, Facility Related Site Limitations D Additional Sheets Attatched Reference Facility PART 11 STRUCTURAL ANALYSIS (May require special structural review) Limitation D Cast in Place Vault D Other D Retaining Wall D Rockery>4'High D Structural on Steep Slope PART 14 SIGNATURE OF PROFESSIONAL ENGINEER I or a civil engineer under my supeivision have visited the site. Actual site conditions as observed were incorporated into this worksheet and the attatchments. To the best of my knowledge the information provided here is accurate.. PART 12 EASEMENTS/TRACTS D Drainage Easement D Access Easement D Native Growth Protection Easement D Tract GJ'()ther sr;;-wc/( If.}() @ 'OF AGRICULTURE ~TION SERVICE :o' 30" I /I I ::2Doo R. 4 E. R. 5 £ So Tu u King County Soils Survey >--~~ / I P Ir l II 111 1' C .,.=;n:1!"'111 ·-~ r PRELIMINARY CONDITIONS SUMMARY Core Requirement # 1: Discharge at the Natural Location The project will continue to discharge to the natural location. Core Requirement #2: Off-site Analysis Since less than 5,000 sq.ft. of new impervious surface will be created, this project is exempt from this requirement. Core Requirement #3: Runoff control Since less than 5,000 sq.ft. of new impervious surface will be created, this project is exempt from this requirement. Core Requirement #4: Conveyance System There are no conveyance systems being proposed. Core Requirement #5: Temporary Erosion and Sedimentation Control Will be provided during construction. Core Requirement #6: Maintenance and Operation Facilities are private and will be maintained by the homeowners. Core Requirement #7: Bonds and Liability Will be provided if required.