Exhibit 10.49


 


RECORDING
REQUESTED BY AND


WHEN
RECORDED MAIL TO:


Kennedy
Covington Lobdell & Hickman, L.L.P.


214 North Tryon Street, Ste 4700


Charlotte, North Carolina  28202


Attn.:  Donnie E. Martin, Esq.


 


[SPACE ABOVE LINE FOR RECORDER’S USE ONLY]


 


SECOND LIEN DEED OF TRUST,


ASSIGNMENT OF RENTS AND LEASES,


SECURITY AGREEMENT AND


FIXTURE FILING


 


THIS DOCUMENT SERVES AS A
FIXTURE FILING UNDER SECTION 9-502

OF THE CALIFORNIA UNIFORM COMMERCIAL CODE.


 


Grantor’s Organizational
Identification Number:  CA-C2110879


 


Street Address of
Property:  13222 Bloomfield Avenue,
Norwalk, California  90650


 


This SECOND LIEN DEED OF
TRUST, ASSIGNMENT OF RENTS AND LEASES, SECURITY AGREEMENT AND FIXTURE FILING (this
“Deed of Trust”) is made as of August 8, 2007, by ALTA LOS ANGELES HOSPITALS, INC., a California corporation
(the “Grantor”), as trustor, in favor of PRLAP, INC.,
as trustee (“Trustee”), for the benefit of BANK OF
AMERICA, N.A., a national banking association, as beneficiary in its
capacity as administrative agent (“Administrative Agent”) for the
lenders (each, a “Lender” and collectively, “Lenders”) from time
to time party to that certain Second Lien Credit Agreement of even date
herewith (the “Credit Agreement”) among Prospect Medical Group, Inc.,
a California professional corporation, and Prospect Medical Holdings, Inc.,
a Delaware corporation (collectively, “Borrowers”), Lenders and
Administrative Agent.  Trustee is an
affiliate of Administrative Agent.  The
addresses for Grantor, Administrative Agent and Trustee are set forth at the
end of this Deed of Trust.


 


STATEMENT OF PURPOSE


 


This Deed of Trust secures (i) (A) all
“Guaranteed Obligations” of the Grantor under and as defined in that certain
Continuing Guaranty (Second Lien ) of even date herewith made by the Grantor
and certain other parties in favor of the Administrative Agent (as further
amended, modified, renewed, replaced, restated, extended or reaffirmed from
time to time, the “Guaranty”), pursuant to which Guaranty the Grantor
has guaranteed the obligations of Borrowers (as defined herein) under the
Credit Agreement and (B) all obligations of the Grantor under all of the Loan
Documents (as defined herein); and (ii) the payment by the Grantor of
all other sums, with interest thereon, advanced by the Administrative Agent to
protect the security of this Deed of Trust.


 


[Norwalk Community Hospital
– Second Lien]


 

















 


The Administrative Agent and
the Lenders are unwilling to enter into the Credit Agreement, or to make
available the Loan to the Borrowers pursuant thereto, unless the Grantor agrees
to execute and deliver this Deed of Trust, and to grant the lien and security
interest created pursuant hereto, in favor of the Administrative Agent, for its
own benefit and for the benefit of any other Lender(s), to secure the
obligations of Grantor under the Loan Documents and all other matters and
indebtedness defined below as Secured Indebtedness pursuant to the Guaranty and
the other Loan Documents.  The Grantor is
an indirect subsidiary of Prospect Medical Holdings, Inc. and will receive
a direct benefit from the Loan under the Credit Agreement, and therefore the
Grantor has agreed to execute and deliver this Deed of Trust, and to grant the
lien and security interest created pursuant hereto, in favor of the Administrative
Agent, for its own benefit and for the benefit of any other Lender(s), to
secure the obligations of Grantor under the Loan Documents and all other
matters and indebtedness defined below as Secured Indebtedness incurred
pursuant to the Guaranty and the other Loan Documents.


 


ARTICLE 1


Definitions; Granting
Clauses; Secured Indebtedness


 


Section 1.1             Secured
Indebtedness.  This Deed of Trust is
made to secure the obligations of Grantor under the Loan Documents and all
other matters and indebtedness defined below as Secured Indebtedness.  This Deed of Trust shall secure a maximum
principal amount of FIFTY MILLION AND NO/100 DOLLARS ($50,000,000.00) at any
one time.


 


Section 1.2             Selected
Definitions.


 


(a)           Defined
terms used herein, as indicated by the initial capitalization thereof, shall
have the meanings ascribed to such terms in the Credit Agreement or other
applicable Loan Document, unless otherwise provided herein.  Each of the following terms shall have the
meaning assigned to it, such definitions to be applicable equally to the
singular and the plural forms of such terms and to all genders:


 


“Administrative Agent”:  Bank of America, N.A, in its capacity as
second lien administrative agent for Lenders, or any successor administrative
agent.


 


“Borrowers”: 
Unless the context clearly indicates otherwise, the Borrowers named in
the introductory paragraph hereof, together with all heirs, devisees,
representatives, successors and assigns of such Borrowers pursuant to Section 6.18
below, or any of them.


 


“Collateral”: 
All of the Property constituting personal property or fixtures in which
Grantor is granting Administrative Agent a security interest for the ratable
benefit of Lenders under this Deed of Trust, together with all proceeds and
products thereof and all supporting obligations ancillary thereto or arising in
any way in connection therewith.


 


“Credit Agreement”:  The Second Lien Credit Agreement dated of
even date herewith evidencing and governing the Loan, executed by and among
Borrowers, Administrative Agent and Lenders, as it may from time to time be
amended, modified, restated, replaced or supplemented.


 


2

















 


“Debtor Relief Law”:  Any federal, state or local law, domestic or
foreign, as now or hereafter in effect relating to bankruptcy, insolvency,
liquidation, receivership, reorganization, arrangement, composition, extension
or adjustment of debts, or any similar law affecting the rights of creditors.


 


“Default”: 
Any of the events described in Section 4.1 of this Deed of
Trust.


 


“Dispute”: 
Any controversy, claim or dispute between Grantor and Administrative
Agent or any other Lender(s) or Holder, including any such controversy,
claim or dispute arising out of or relating to (i) this Agreement, (ii) any
other Loan Document, (iii) any related agreements or instruments, or (iv) the
transaction contemplated herein or therein (including any claim based on or
arising from an alleged personal injury or business tort).


 


“Holder”: 
Administrative Agent for the ratable benefit of Lenders or the
subsequent beneficiary at the time in question under this Deed of Trust.


 


“Indemnified Matters”:  Any and all claims, demands, liabilities
(including strict liability), losses, damages (including consequential
damages), causes of action, judgments, penalties, fines, costs and expenses
(including reasonable fees and expenses of attorneys and other professional
consultants and experts, and of the investigation and defense of any claim,
whether or not such claim is ultimately defeated, and the settlement of any
claim or judgment including all value paid or given in settlement) of every
kind, known or unknown, foreseeable or unforeseeable, which may be imposed
upon, asserted against or incurred or paid by any Indemnified Party at any time
and from time to time, whenever imposed, asserted or incurred, because of,
resulting from, in connection with, or arising out of any transaction, act,
omission, event or circumstance in any way connected with the Property or with
this Deed of Trust or any other Loan Document, including any bodily injury or
death or property damage occurring in or upon or in the vicinity of the
Property through any cause whatsoever at any time, any act performed or omitted
to be performed hereunder or under any other Loan Document, any breach by
Borrowers or Grantor of any representation, warranty, covenant, agreement or
condition contained in this Deed of Trust or in any other Loan Document to
which Grantor is a party, any Default, or any claim under or with respect to
any Lease.


 


“Indemnified Party”:  Each of the following persons and
entities:  (i) Administrative Agent,
any Lender and any Holder; (ii) Trustee; (iii) any persons or
entities owned or controlled by, owning or controlling, or under common control
or affiliated with, Administrative Agent, any Lender, any Holder and/or
Trustee; (iv) any participants and future co-lenders in the Loan; (v) the
directors, officers, partners, employees, attorneys, agents and representatives
of each of the foregoing persons and entities; and (vi) the heirs,
personal representatives, successors and assigns of each of the foregoing
persons and entities.


 


“Intercreditor Agreement”:  That certain Intercreditor Agreement, of even
date herewith, among Bank of America, N.A., as first lien administrative agent,
Bank of America, N.A., as second lien administrative agent, Borrowers and such
other parties as may be added thereto from time to time in accordance with the
terms thereof and as such Intercreditor Agreement may be amended or otherwise
modified from time to time in accordance with the terms thereof.


 


3

















 


“Law”: 
Any federal, state or local law, statute, ordinance, code, rule,
regulation, license, permit, authorization, decision, order, injunction or
decree, domestic or foreign.


 


“Lease”: 
Each existing or future lease, sublease (to the extent of Grantor’s
rights thereunder) or other agreement under the terms of which any person has
or acquires any right to occupy or use the Property or any part thereof or
interest therein, and each existing or future guaranty of payment or
performance thereunder, and any and all existing or future security therefor
and letter-of-credit-rights with respect thereto, whether or not the letter of
credit is evidenced by a writing.


 


“Legal Requirement”:  Any law, agreement, covenant, restriction,
easement or condition (including, without limitation of the foregoing, any
condition or requirement imposed by any insurance or surety company), as any of
the same now exists or may be changed or amended or come into effect in the
future.


 


“Lender”: 
Each Lender from time to time party to the Credit Agreement.


 


“Loan”: 
Collectively, the extensions of credit to be provided to the Borrowers
by the Administrative Agent and the Lenders pursuant to the terms of the Credit
Agreement.


 


 “Loan
Documents”:  This Deed of Trust and
any other document now or hereafter evidencing, governing, securing or
otherwise executed in connection with the Loan, including the Credit Agreement,
the Notes, the Collateral Documents, the Guaranty, each Secured Hedge
Agreement, each Secured Cash Management Agreement, the Credit Succession
Agreement and each other document executed in connection with the Credit
Agreement, as each of them may have been or may be from time to time renewed,
extended, supplemented, increased or modified.


 


“Permitted Encumbrances”:  (i) Any matters set forth in any policy
of mortgagee title insurance issued to Administrative Agent for the benefit of
Lenders which are acceptable to Administrative Agent as of the date hereof, (ii) the
liens and security interests evidenced by this Deed of Trust, (iii) the
first priority liens and security interests evidenced by that certain First
Lien Deed of Trust, Assignment of Rents and Leases, Security Agreement and
Fixture Filing made as of the date hereof by Alta Los Angeles Hospitals, Inc.,
as trustor, in favor of PRLAP, Inc., as trustee, for the benefit of Bank
of America, N.A., a national banking association, as beneficiary in its capacity
as administrative agent for the lenders from time to time party to that certain
First Lien Credit Agreement of even date herewith among the Borrowers, the
lenders party thereto and Bank of America, N.A., (iv) statutory liens for
real estate taxes and assessments on the Property which are not yet delinquent,
(v) other liens and security interests (if any) in favor of Administrative
Agent for the benefit of Lenders, (vi) the rights of tenants in possession
as of the date hereof, if any, pursuant to Leases approved by Administrative
Agent and the rights of future tenants under any Leases made in accordance with
the Loan Documents, and the assignment of such Leases pursuant to this Deed of
Trust, and (vii) any matters arising after the date hereof which may be
acceptable to Administrative Agent or any Holder in its sole and absolute
discretion, which Permitted Encumbrances in the aggregate do not materially
adversely affect the value or use of the Property or Borrowers’ ability to
repay the Secured Indebtedness.


 


4

















 


“Rents”: 
All of the rents, revenue, accounts, deposit accounts, payment
intangibles, commercial tort claims, income, profits and proceeds derived and
to be derived from the Property or arising from the use or enjoyment of any
portion thereof or from any Lease, including the proceeds from any negotiated
lease termination or buyout of such Lease, liquidated damages following default
under any such Lease, all proceeds payable under any policy of insurance
covering loss of rents resulting from untenantability caused by damage to any
part of the Property, all of Grantor’s rights to recover monetary amounts from
any tenant in bankruptcy, including rights of recovery for use and occupancy
and damage claims arising out of Lease defaults, including rejections, under
any applicable Debtor Relief Law, together with any sums of money that may now
or at any time hereafter be or become due and payable to Grantor by virtue of
any and all royalties, overriding royalties, bonuses, delay rentals and any
other amount of any kind or character arising under any and all present and
future oil, gas, mineral and mining leases covering the Property or any part
thereof, and all proceeds and other amounts paid or owing to Grantor under or
pursuant to any and all contracts and bonds relating to the construction or
renovation of the Property.


 


“Secured Indebtedness”:  The following obligations, indebtedness,
duties and liabilities and all renewals, extensions, supplements, increases and
modifications thereof and thereto, in whole or in part, from time to time:


 


(i)            All indebtedness, liabilities, duties, covenants,
promises and other obligations owed by Borrowers, its Subsidiaries and
Affiliates, to Administrative Agent and/or Lenders pursuant to the Loan
Documents, but expressly excluding any guaranty executed by a third party,
whether now existing or hereafter arising, and whether joint or several, direct
or indirect, primary or secondary, fixed or contingent, liquidated or unliquidated,
and the cost of collection of all such amounts;


 


(ii)           All amounts that Administrative Agent, Lenders or any
other Holder may from time to time advance pursuant to the terms and conditions
of this Deed of Trust with respect to an obligation secured by a lien or
encumbrance prior to the lien of this Deed of Trust or for the protection of
this Deed of Trust, together with interest thereon; and


 


(iii)          If and only if evidenced by a writing reciting that it is
secured by this Deed of Trust, any other loan, future advance, debt, obligation
or liability owed by Borrowers of every kind or character, whether now existing
or hereafter arising, whether joint or several, direct or indirect, primary or
secondary, fixed or contingent, liquidated or unliquidated, and the cost of
collection of all such amounts, and whether or not originally payable to
Administrative Agent, Lenders or any other Holder, it being contemplated that
Borrowers may hereafter become indebted to Administrative Agent, Lenders or
another Holder for one or more of such further loans, future advances, debts,
obligations and liabilities.


 


“Transfer”: 
Any sale, lease, conveyance, assignment, pledge, encumbrance or
transfer, whether voluntary, involuntary, by operation of law or otherwise.


 


“Trustee”: 
The trustee identified in the introductory paragraph of this Deed of
Trust, and any successor or substitute appointed and designated as herein
provided, from time to time acting hereunder.


 


5

















 


(b)           Any
term used or defined in the California Uniform Commercial Code, as in effect
from time to time, which is not defined in this Deed of Trust has the meaning
given to that term in the California Uniform Commercial Code, as in effect from
time to time, when used in this Deed of Trust. 
However, if a term is defined in Division 9 of the California Uniform
Commercial Code differently than in another Division of the California Uniform
Commercial Code, the term has the meaning specified in Division 9.


 


Section 1.3             Granting
Clause.  For good and valuable
consideration, the receipt and sufficiency of which are acknowledged by
Grantor, to secure the obligations of Borrowers under the Loan Documents and
all other matters and indebtedness constituting the Secured Indebtedness,
Grantor hereby GRANTS, TRANSFERS and ASSIGNS to Trustee, in trust for the
benefit of Administrative Agent for the ratable benefit of Lenders, with power
of sale and right of entry and possession, all estate, right, title and
interest which Grantor now has or may hereafter acquire in and to the following
Premises, Accessories (each as hereafter defined) and other rights, interests
and properties, and all rights, estates, powers and privileges appurtenant
thereto (collectively, the “Property”):


 


(a)           The
real property described in Exhibit A, which is attached hereto and
incorporated herein by reference (the “Land”), together with:  (i) any and all buildings, structures,
improvements, alterations or appurtenances now or hereafter situated or to be
situated on the Land (collectively, the “Improvements”); and (ii) all
right, title and interest of Grantor, now owned or hereafter acquired, in and
to (A) all streets, roads, alleys, easements, rights-of-way, licenses,
rights of ingress and egress, vehicle parking rights and public places,
existing or proposed, abutting, adjacent, used in connection with or pertaining
to the Land or the Improvements; (B) any strips or gores between the Land
and abutting or adjacent properties; (C) all options to purchase the Land
or the Improvements or any portion thereof or interest therein, and any greater
estate in the Land or the Improvements; (D) all water, water rights
(whether riparian, appropriative or otherwise, and whether or not appurtenant)
and water stock, timber, crops and mineral interests on or pertaining to the
Land; and (E) all development rights and credits and air rights (the Land,
Improvements and other rights, titles and interests referred to in this clause (a) being
herein sometimes collectively called the “Premises”);


 


(b)           All
fixtures, equipment, systems, machinery, furniture, furnishings, appliances,
inventory, goods, building and construction materials, supplies, and other
articles of personal property, of every kind and character, tangible and
intangible (including software embedded therein), now owned or hereafter
acquired by Grantor, which are now or hereafter attached to or situated in, on
or about the Land or the Improvements, or used in or necessary to the complete
and proper planning, development, use, occupancy or operation thereof, or
acquired (whether delivered to the Land or stored elsewhere) for use or
installation in or on the Land or the Improvements, and all renewals and
replacements of, substitutions for and additions to the foregoing (the properties
referred to in this clause (b) being herein sometimes collectively called
the “Accessories,” all of which are hereby declared to be permanent
accessions to the Land);


 


(c)           All
(i) plans and specifications for the Improvements, (ii) Grantor’s
rights, but not liability for any breach by Grantor, under all commitments
(including any commitments for financing to pay any of the Secured
Indebtedness), insurance policies (or additional or supplemental coverage
related thereto, including from an insurance provider meeting the


 


6

















 


requirements of the Loan Documents or from or through any state or
federal government-sponsored program or entity), contracts and agreements for
the design, construction, operation or inspection of the Improvements and other
contracts and general intangibles (including payment intangibles and any
trademarks, trade names, goodwill, software and symbols) related to the
Premises or the Accessories or the operation thereof, (iii) deposits and
deposit accounts arising from or relating to any transactions related to the
Premises or the Accessories (including Grantor’s rights in tenants’ security
deposits, deposits with respect to utility services to the Premises, and any
deposits, deposit accounts or reserves hereunder or under any other Loan
Documents for taxes, insurance or otherwise), (iv) rebates or refunds of
impact fees or other taxes, assessments or charges, money, accounts (including
deposit accounts), instruments, documents, promissory notes and chattel paper
(whether tangible or electronic) arising from or by virtue of any transactions
related to the Premises or the Accessories, (v) permits, licenses,
franchises, certificates, development rights, commitments and rights for
utilities, and other rights and privileges obtained in connection with the
Premises or the Accessories, (vi) Leases, Rents and other benefits of the
Premises and the Accessories (without derogation of Article 3
hereof), (vii) as-extracted collateral produced from or allocated to the
Land, including oil, gas and other hydrocarbons and other minerals and all
products processed or obtained therefrom and the proceeds thereof, and (viii) engineering,
accounting, title, legal, and other technical or business data concerning the Property,
including software, which are in the possession of Grantor or in which Grantor
can otherwise grant a security interest;


 


(d)           All
(i) accounts and proceeds (whether cash or non-cash and including payment
intangibles), of or arising from the properties, rights, titles and interests
referred to above in this Section 1.3, including the proceeds of
any sale, lease or other disposition thereof, proceeds of each policy of
insurance, present and future (or additional or supplemental coverage related
thereto, including from an insurance provider meeting the requirements of the
Loan Documents or from or through any state or federal government-sponsored
program or entity), payable because of loss sustained to all or part of the
Property (including premium refunds), whether or not such insurance policies
are required by Administrative Agent, proceeds of the taking thereof or of any
rights appurtenant thereto, including change of grade of streets, curb cuts or
other rights of access, by condemnation, eminent domain or transfer in lieu
thereof for public or quasi-public use under any law, proceeds arising out of
any damage thereto, including any and all commercial tort claims, (ii) all
letter-of-credit rights (whether or not the letter of credit is evidenced by a
writing) Grantor now has or hereafter acquires relating to the properties,
rights, titles and interests referred to in this Section 1.3, (iii) all
commercial tort claims Grantor now has or hereafter acquires relating to the
properties, rights, titles and interests referred to in this Section 1.3,
and (iv) other interests of every kind and character which Grantor now has
or hereafter acquires in, to or for the benefit of the properties, rights,
titles and interests referred to above in this Section 1.3 and all
property used or useful in connection therewith, including rights of ingress
and egress and remainders, reversions and reversionary rights or interests;


 


(e)           If
the estate of Grantor in any of the property referred to above in this Section 1.3
is a leasehold estate, this conveyance shall include, and the lien and security
interest created hereby shall encumber and extend to, all other or additional
title, estates, interests or rights which are now owned or may hereafter be
acquired by Grantor in or to the property demised under the lease creating the
leasehold estate; and


 


7

















 


(f)            All
proceeds and products of, additions and accretions to, substitutions and
replacements for, and changes in any of the property referred to above in this Section 1.3.


 


Section 1.4             Security
Interest.  To secure the obligations
of Borrowers, its Subsidiaries and Affiliates under the Loan Documents and all
other matters and indebtedness constituting the Secured Indebtedness, Grantor
hereby grants to Administrative Agent for the ratable benefit of Lenders a
security interest in all of the Collateral, including all proceeds and products
thereof and all supporting obligations ancillary thereto or arising in any way
in connection therewith.  In addition to
its rights hereunder or otherwise, Administrative Agent, on behalf of itself
and Lenders, and any Holder shall have all of the rights of a secured party
under the California Uniform Commercial Code, as in effect from time to time,
or under the Uniform Commercial Code in force from time to time in any other
state to the extent the same is applicable law.


 


Section 1.5             Intercreditor
Agreement.  Notwithstanding anything
herein to the contrary, the lien and security interest granted to the Trustee,
in trust for the benefit of the Administrative Agent for the ratable benefits
of the Lenders pursuant to this Deed of Trust and the exercise of any right or
remedy by the Trustee hereunder are subject to the provisions of the
Intercreditor Agreement.  In the event of
any conflict between the terms of the Intercreditor Agreement and this Deed of
Trust, the terms of the Intercreditor Agreement shall govern.


 


Section 1.6             Subordination.  The liens and security interests created by
this Deed of Trust shall be, until the Discharge of the First Lien Obligations
(as defined in the Intercreditor Agreement), a second priority lien (subject to
permitted encumbrances and other permitted liens), subordinate in all respects
(including the exercise of remedies with respect to the Collateral) to the
prior lien of the applicable First Lien Loan Documents (as defined in the
Intercreditor Agreement) on and subject to the terms and conditions set forth
in the Intercreditor Agreement.


 


ARTICLE 2


Representations, Warranties
and Covenants


 


Section 2.1             Grantor
represents, warrants and covenants as follows:


 


(a)           Payment
and Performance.  Grantor will timely
and properly perform and comply with all of the covenants, agreements and
conditions imposed upon it by this Deed of Trust and will not permit a Default
to occur hereunder or thereunder.  Time
shall be of the essence in this Deed of Trust.


 


(b)           Title
and Permitted Encumbrances.  Grantor
has in Grantor’s own right, and Grantor covenants to maintain lawful, good and
marketable title to the Property, is lawfully seized and possessed of the
Property and every part thereof, and has the right to convey the same, free and
clear of all liens, charges, claims, security interests, and encumbrances
except for the Permitted Encumbrances. 
Grantor will warrant generally and forever defend title to the Property,
subject as aforesaid to the Permitted Encumbrances, to Trustee and its
successors or substitutes and assigns, against the claims and demands of all
persons claiming or to claim the same or any part thereof.  Grantor will punctually pay, perform, observe
and keep all covenants, obligations and conditions in or pursuant to any
Permitted Encumbrance and will not modify or 


 


8

















 


permit modification of any Permitted Encumbrance without the prior
written consent of Holder.  Inclusion of
any matter as a Permitted Encumbrance does not constitute approval or waiver by
Holder or Lenders of any existing or future violation or other breach thereof
by Grantor, the Property or otherwise. 
If any right or interest of Holder or any Lender in the Property or any
part thereof shall be endangered or questioned or shall be attacked directly or
indirectly, Trustee, Holder and Lenders, or any of them (whether or not named
as parties to legal proceedings with respect thereto), are hereby authorized
and empowered to take such steps as in their discretion may be proper for the
defense of any such legal proceedings or the protection of such right or
interest of Holder and each Lender, including the employment of independent
counsel, the prosecution or defense of litigation, and the compromise or
discharge of adverse claims.  All
expenditures so made of every kind and character shall be a demand obligation
(which obligation Grantor hereby promises to pay) owing by Grantor to Trustee
or to Holder, for its own account or the account of Lenders (as the case may
be), and the party (Trustee, Holder or Lenders, as the case may be) making such
expenditures shall be subrogated to all rights of the person receiving such
payment.


 


(c)           Taxes
and Other Impositions.  Grantor will
pay or cause to be paid all taxes, assessments and other charges or levies
imposed upon or against or with respect to the Property or the ownership, use,
occupancy or enjoyment of any portion thereof, or any utility service thereto,
as the same become due and payable, including all real estate taxes assessed
against the Property or any part thereof, and shall deliver promptly to Holder
such evidence of the payment thereof as Holder may require.


 


(d)           Insurance
Coverage.  Grantor shall obtain and
maintain at Grantor’s sole expense:  (i) property
insurance with respect to all insurable Property, against loss or damage by
fire, lightning, windstorm, explosion, hail, tornado and such additional
hazards as are presently included in Special Form (also known as “all-risk”)
coverage and against any and all acts of terrorism and such other insurable
hazards as Holder may require, in an amount not less than 100% of the full replacement
cost, including the cost of debris removal, without deduction for depreciation
and sufficient to prevent Grantor, Holder and Lenders from becoming a
coinsurer, such insurance to be in “builder’s risk” completed value
(non-reporting) form during and with respect to any construction on the
Premises; (ii) if and to the extent any portion of the Improvements is,
under the Flood Disaster Protection Act of 1973 (“FDPA”), as it may be
amended from time to time, in a Special Flood Hazard Area, within a Flood Zone
designated A or V in a participating community, a flood insurance policy in an
amount required by Holder, but in no event less than the amount sufficient to
meet the requirements of applicable law and the FDPA, as such requirements may
from time to time be in effect; (iii) general liability insurance, on an “occurrence”
basis against claims for “personal injury” liability, including bodily injury,
death or property damage liability, for the benefit of Grantor as named insured
and Holder as additional insured on behalf of itself and Lenders; (iv) statutory
workers’ compensation insurance with respect to any work on or about the
Premises (including employer’s liability insurance, if required by Holder),
covering all employees of Grantor and any contractor; (v) if there is a
general contractor, commercial general liability insurance, including products
and completed operations coverage, and in other respects similar to that
described in clause (iii) above, for the benefit of the general contractor
as named insured and Grantor and Holder (on behalf of itself and Lenders) as
additional insureds, in addition to statutory workers’ compensation insurance
with respect to any work on or about the Premises (including


 


9

















 


employer’s liability insurance, if required by Holder), covering all
employees of the general contractor and any contractor; and (vi) such
other insurance on the Property and endorsements as may from time to time be
required by Holder (including soft cost coverage, automobile liability
insurance, business interruption insurance or delayed rental income insurance,
wind insurance, boiler and machinery insurance, sinkhole coverage, and/or
permit to occupy endorsement) and against other insurable hazards or casualties
which at the time are commonly insured against in the case of premises
similarly situated, due regard being given to the height, type, construction,
location, use and occupancy of buildings and improvements.


 


(e)           Insurance
Policy Requirements.  All insurance
policies shall be issued and maintained by insurers, in amounts, with
deductibles, limits and retentions and in forms satisfactory to Holder.  All insurance policies shall require at least
ten (10) days’ prior written notice to Holder of any cancellation for
nonpayment of premiums and at least thirty (30) days’ prior written notice to
Holder of any other cancellation or any change of coverage.  All insurance companies must be licensed to
do business in the state in which the Property is located and must have A. M.
Best Company financial and performance ratings of A-:IX or better.  All insurance policies maintained, or caused
to be maintained, by Grantor with respect to the Property, except for general
liability insurance, shall provide that each such policy shall be primary
without right of contribution from any other insurance that may be carried by
Grantor, Holder or any Lender and that all of the provisions thereof, except
the limits of liability, shall operate in the same manner as if there were a
separate policy covering each insured. 
If any insurer which has issued a policy of hazard, liability or other
insurance required pursuant to this Deed of Trust or any other Loan Document
becomes insolvent or the subject of any petition, case, proceeding or other
action pursuant to any Debtor Relief Law or if in Holder’s reasonable opinion
the financial responsibility of such insurer is or becomes inadequate, Grantor
shall, upon its discovery thereof or upon request by Holder therefor, promptly
obtain and deliver to Holder, at Grantor’s expense in each instance, a like
policy (or, if and to the extent permitted by Holder, acceptable evidence of
insurance) issued by another insurer, which insurer and policy meet the
requirements of this Deed of Trust or such other Loan Document, as the case may
be.  Without limiting the discretion of
Holder with respect to required endorsements to insurance policies, all such
policies for loss of or damage to the Property shall contain a standard
mortgagee clause (without contribution) naming Holder as mortgagee for the
benefit of itself and Lenders with loss proceeds payable to Holder on behalf of
itself and Lenders notwithstanding (i) any act, failure to act or
negligence of or violation of any warranty, declaration or condition contained
in any such policy by any named or additional insured, (ii) the occupation
or use of the Property for purposes more hazardous than permitted by the terms
of any such policy, (iii) any foreclosure or other action by Holder or
Lenders under the Loan Documents, or (iv) any change in title to or
ownership of the Property or any portion thereof, such proceeds to be held for
application as provided in the Loan Documents. 
The originals of each initial insurance policy (or to the extent permitted
by Holder, a copy of the original policy and such evidence of insurance as may
be acceptable to Holder) shall be delivered to Holder at the time of execution
of this Deed of Trust, with all premiums fully paid current, and each renewal
or substitute policy (or evidence of insurance) shall be delivered to Holder,
with all premiums fully paid current, at least ten (10) days before the
termination of the policy it renews or replaces.  Grantor shall pay all premiums on policies
required hereunder as they become due and payable and promptly deliver to
Holder evidence satisfactory to Holder of the timely payment thereof.


 


10














 


(f)                                    Insurance
Proceeds.  If any loss
occurs at any time when Grantor has failed to perform Grantor’s covenants and
agreements with respect to any insurance payable because of loss sustained to
any part of the Property, whether or not such insurance is required by Holder,
Holder, on behalf of itself and Lenders, shall nevertheless be entitled to the
benefit of all insurance covering the loss and held by or for Grantor, to the
same extent as if it had been made payable to Holder for the benefit of itself
and Lenders.  Upon any foreclosure hereof
or transfer of title to the Property in extinguishment of the whole or any part
of the Secured Indebtedness, all of Grantor’s right, title and interest in and
to the insurance policies referred to in this clause (f) (including
unearned premiums) and all proceeds payable thereunder shall thereupon vest in
the purchaser at foreclosure or other such transferee, to the extent
permissible under such policies.  Holder
shall have the right on behalf of Lenders (but not the obligation) to make
proof of loss for, settle and adjust any claim under, and receive the proceeds
of, all insurance for loss of or damage to the Property, regardless of whether
or not such insurance policies are required by Holder, and the expenses incurred
by Holder and Lenders in the adjustment and collection of insurance proceeds
shall be a part of the Secured Indebtedness and shall be due and payable to
Holder on demand (for its own account or for the account of Lenders, as
applicable).  Neither Holder nor Lenders
shall be, under any circumstances, liable or responsible for failure to collect
or exercise diligence in the collection of any of such proceeds or for the
obtaining, maintaining or adequacy of any insurance or for failure to see to
the proper application of any amount paid over to Grantor.  Grantor shall at all times comply with the
requirements of the insurance policies required hereunder and of the issuers of
such policies and of any board of fire underwriters or similar body as
applicable to or affecting the Property.


 


(g)                                 Reserve for
Insurance, Taxes and Assessments.  Upon request of Holder and upon the
occurrence of a Default, to secure the payment and performance of the Secured
Indebtedness, but not in lieu of such payment and performance, Grantor will
deposit with Holder for the benefit of itself and Lenders a sum equal to real
estate taxes, assessments and charges (which charges for the purposes of this
clause (g) shall include any recurring charge which could result in a lien
against the Property) against the Property for the current year and the
premiums for such policies of insurance for the current year, all as estimated
by Holder and prorated to the end of the calendar month following the month
during which Holder’s request is made, and thereafter will deposit with Holder,
on each date when an installment of principal and/or interest is due pursuant
to the Credit Agreement, sufficient funds (as estimated from time to time by
Holder) to permit Holder to pay at least fifteen (15) days prior to the due
date thereof, the next maturing real estate taxes, assessments and charges and
premiums for such policies of insurance. 
Holder shall have the right to rely upon tax information furnished by
applicable taxing authorities in the payment of such taxes or assessments and
shall have no obligation to make any protest of any such taxes or
assessments.  Any excess over the amounts
required for such purposes shall be held by Holder for future use, applied to
any Secured Indebtedness or refunded to Grantor, at Holder’s option, and any
deficiency in such funds so deposited shall be made up by Grantor upon demand
of Holder.  All such funds so deposited
shall bear no interest, may be commingled with the general funds of Holder and
shall be applied by Holder toward the payment of such taxes, assessments,
charges and premiums when statements therefor are presented to Holder by
Grantor (which statements shall be presented by Grantor to Holder a reasonable
time before the applicable amount is due); provided, however, that, if a
Default shall have occurred hereunder, such funds may at Holder’s option be
applied to the payment of the Secured Indebtedness in the order determined by
Holder in its sole discretion, and that Holder may (but shall have no
obligation) at 


 


11

















 


any time, in its discretion, apply all or any part of such funds toward
the payment of any such taxes, assessments, charges or premiums which are past
due, together with any penalties or late charges with respect thereto.  The conveyance or transfer of Grantor’s
interest in the Property for any reason (including the foreclosure of a
subordinate lien or security interest or a transfer by operation of law) shall
constitute an assignment or transfer of Grantor’s interest in and rights to
such funds held by Holder under this clause (g) but subject to the rights
of Holder and Lenders hereunder.


 


(h)                                 Condemnation.  Grantor shall notify Holder immediately of
any threatened or pending proceeding for condemnation affecting the Property or
arising out of damage to the Property, and Grantor shall, at Grantor ‘s
expense, diligently prosecute any such proceedings.  Holder shall have the right (but not the
obligation) to participate in any such proceeding and to be represented by
counsel of its own choice.  Holder shall
be entitled to receive, on behalf of itself and Lenders, all sums which may be
awarded or become payable to Grantor for the condemnation of the Property, or
any part thereof, for public or quasi-public use, or by virtue of private sale
in lieu thereof, and any sums which may be awarded or become payable to Grantor
for injury or damage to the Property. 
Grantor shall, promptly upon request of Holder, execute such additional
assignments and other documents as may be necessary from time to time to permit
such participation and to enable Holder to collect and receipt for any such
sums.  Neither Holder nor Lenders shall
be, under any circumstances, liable or responsible for failure to collect or to
exercise diligence in the collection of any such sum or for failure to see to
the proper application of any amount paid over to Grantor.  Holder is hereby authorized, in its own name
on behalf of itself and Lenders or in Grantor’s name, to settle or compromise
any condemnation claim or cause of action, and to execute and deliver valid
acquittances for, and to appeal from, any award, judgment or decree arising
from any such claim or cause of action. 
All costs and expenses (including attorneys’ fees) incurred by Holder or
Lenders in connection with any condemnation shall be a demand obligation owing
by Grantor (which Grantor hereby promises to pay) to Holder (for its own
account or for the account of Lenders, as applicable) pursuant to this Deed of
Trust.


 


(i)                                     Damages and
Insurance and Condemnation Proceeds.  Grantor hereby absolutely and irrevocably
assigns to Administrative Agent for the ratable benefit of itself and Lenders,
and authorizes the payor to pay to Administrative Agent or any other Holder,
the following claims, causes of action, awards, payments and rights to payment
(collectively, “Claims”):  all
awards of damages and all other compensation payable directly or indirectly
because of a condemnation, proposed condemnation or taking which affects any
part of the Property; all awards and other Claims arising out of any warranty
affecting any part of the Property or for damage or injury to any part of the
Property; all proceeds of any insurance policies payable because of loss
sustained to any part of the Property, whether or not such insurance policies
are required by Holder, and all interest that may accrue on any of the
foregoing.  All proceeds of Claims
described in this clause (i) shall be payable to Holder and shall be
applied first to reimburse Holder and Lenders for their costs and expenses of
recovering such proceeds, including attorneys’ fees.  Upon satisfaction of each of the following
conditions, provided that no Default exists, Grantor shall be permitted to use
the balance of the proceeds (“Net Claims Proceeds”) to pay the costs of
repairing or reconstructing the Property:


 


12

















 


(i)                                     Holder shall
have approved the plans and specifications, construction budget, construction
schedule, contractor, architect, engineer and payment and performance bond (if
required by Holder);


 


(ii)                                  Grantor shall
have presented sufficient evidence to Holder that after the repair or
reconstruction, the Property will be completely restored to its use, value and
condition immediately prior to the occurrence of the damage or condemnation;


 


(iii)                               Holder shall
have determined that the Net Claims Proceeds are sufficient to pay the total
cost of the repair or reconstruction, including all development costs and
interest due on the Secured Indebtedness until the work is complete, or Grantor
must provide (or deposit with Holder) its own funds equal to the difference
between the Net Claims Proceeds and the total cost of the work, as estimated by
Grantor and approved by Holder;


 


(iv)                              Grantor shall
have presented sufficient evidence that the Property’s operations and income
after the repair or reconstruction will be sufficient to pay the operating
expenses of the Property including evidence that a sufficient number of
existing Leases will continue in full force and effect (subject to rent
abatement as may be provided in the Leases) or if any have been terminated, a
sufficient number of terminated Leases shall have been replaced with Leases of
equal quality in the reasonable judgment of Holder.  Any tenant having the right to terminate its
Lease due to the damage or condemnation, which has not exercised that right,
shall have confirmed in writing to Holder its irrevocable waiver of such
termination right;


 


(v)                                 All parties
having operating, management or franchise interests in and arrangements
concerning the Property shall have agreed that they will continue their
interests and arrangements for the contract terms then in effect following the
repair or reconstruction;


 


(vi)                              All parties
having commitments to provide financing with respect to the Property, to
purchase Grantor’s interest in full or in part in the Property or to purchase
the Loan shall have agreed in a manner satisfactory to Holder that their
commitments will continue in full force and effect and, if necessary, the
expiration of such commitments shall be extended by the time necessary to
complete the repair or reconstruction;


 


(vii)                           Grantor shall
have presented sufficient evidence to Holder that all necessary governmental
approvals and permits can be obtained to allow the rebuilding and reoccupancy
of the Property;


 


(viii)                        Grantor shall
have presented sufficient evidence to Holder that the reconstruction of the
Improvements will take no longer than twelve (12) months to reconstruct and
that such reconstruction will be completed prior to the stated maturity of the
Loan.


 


If the foregoing conditions are met to Holder’s
reasonable satisfaction, Holder shall hold the Net Claims Proceeds and any
funds that Grantor is required to provide in an interest-bearing account and
shall disburse them to Grantor to pay the costs of the work in accordance with
normal and customary construction draw terms and conditions.  Interest on the funds shall accrue at the
rate of interest then being paid by Holder to regular savings account customers
and shall be credited to Grantor. 
Grantor shall provide evidence acceptable to Holder that all work has
been completed lien-free, in a workmanlike manner and in accordance with all
Legal Requirements.


 


13

















 


Grantor agrees that the
conditions described above are reasonable. 
If the foregoing conditions are not satisfied, or if a Default occurs
after Holder’s receipt of the Net Claims Proceeds, Holder may, at Holder’s
absolute discretion and regardless of whether the security of Holder and
Lenders is impaired, apply all or any of the Net Claims Proceeds to pay or
prepay the Secured Indebtedness in such order and in such amounts as Holder may
elect.  Following the application of any
Net Claims Proceeds as contemplated by this clause (i), the unpaid portion of
the Secured Indebtedness shall remain in full force and effect and the payment
thereof shall not be excused. 
Notwithstanding the foregoing, the rights of Holder and Lenders shall be
subject to applicable law governing use of the Net Claims Proceeds, if any.


 


(j)                                     Compliance with
Legal Requirements.  The
Property and the use, operation and maintenance thereof and all activities
thereon do and shall at all times comply with all applicable Legal
Requirements.  The Property is not, and
shall not be, dependent on any other property or premises or any interest
therein other than the Property to fulfill any requirement of any Legal
Requirement.  Grantor shall not, by act
or omission, permit any building or other improvement not subject to the lien
of this Deed of Trust to rely on the Property or any interest therein to
fulfill any requirement of any Legal Requirement.  No improvement upon or use of any part of the
Property constitutes a nonconforming use under any zoning law or similar law or
ordinance.  Grantor has obtained and
shall preserve in force all requisite zoning, utility, building, health,
environmental and operating permits from the governmental authorities having
jurisdiction over the Property.  If
Grantor receives a notice or claim from any person that the Property, or any
use, activity, operation or maintenance thereof or thereon, is not in
compliance with any Legal Requirement, Grantor will promptly furnish a copy of
such notice or claim to Holder.  Grantor
has received no notice and has no knowledge of any such noncompliance.


 


(k)                                  Maintenance,
Repair and Restoration. 
Grantor will keep the Property in first class order, repair, operating
condition and appearance, causing all necessary repairs, renewals,
replacements, additions and improvements to be promptly made, and will not
allow any of the Property to be misused, abused or wasted or to
deteriorate.  Notwithstanding the
foregoing, Grantor will not, without the prior written consent of Holder, (i) remove
from the Property any fixtures or personal property covered by this Deed of
Trust except such as is replaced by Grantor by an article of equal suitability
and value, owned by Grantor, free and clear of any lien or security interest
(except that created by this Deed of Trust), or (ii) make any structural
alteration to the Property or any other alteration thereto which impairs the
value thereof. If any act or occurrence of any kind or nature (including any
condemnation or any casualty for which insurance was not obtained or
obtainable) shall result in damage to or loss or destruction of the Property,
Grantor shall give prompt notice thereof to Holder and Grantor shall promptly,
at Grantor’s sole cost and expense and regardless of whether insurance or
condemnation proceeds (if any) shall be available or sufficient for the
purpose, secure the Property as necessary and commence and continue diligently
to completion to restore, repair, replace and rebuild the Property as nearly as
possible to its value, condition and character immediately prior to the damage,
loss or destruction.


 


(l)                                     No Other Liens.  Grantor will not, without the prior written
consent of Holder, create, place or permit to be created or placed, or through
any act or failure to act, acquiesce in the placing of, or allow to remain, any
deed of trust, mortgage, voluntary or involuntary lien, whether statutory,
constitutional or contractual, security interest, encumbrance or charge, or 


 


14

















 


conditional sale or other title retention document, against or covering
the Property, or any part thereof, other than the Permitted Encumbrances,
regardless of whether the same are expressly or otherwise subordinate to the
lien or security interest created in this Deed of Trust, and should any of the
foregoing become attached hereafter in any manner to any part of the Property
without the prior written consent of Holder, Grantor will cause the same to be
promptly discharged and released.  Grantor
will own all parts of the Property and will not acquire any fixtures, equipment
or other property (including software embedded therein) forming a part of the
Property pursuant to a lease, license, security agreement or similar agreement,
whereby any party has or may obtain the right to repossess or remove same,
without the prior written consent of Holder. 
If Holder consents to the voluntary grant by Grantor of any deed of
trust, lien, security interest, or other encumbrance (hereinafter called “Subordinate
Lien”) covering any of the Property or if the foregoing prohibition is
determined by a court of competent jurisdiction to be unenforceable as to a
Subordinate Lien, any such Subordinate Lien shall contain express covenants to
the effect that:  (i) the
Subordinate Lien is unconditionally subordinate to this Deed of Trust and all
Leases; (ii) if any action (whether judicial or pursuant to a power of
sale) shall be instituted to foreclose or otherwise enforce the Subordinate
Lien, no tenant of any of the Leases shall be named as a party defendant, and
no action shall be taken that would terminate any occupancy or tenancy without
the prior written consent of Holder; (iii) Rents, if collected by or for
the holder of the Subordinate Lien, shall be applied first to the payment of
the Secured Indebtedness then due and expenses incurred in the ownership,
operation and maintenance of the Property in such order as Holder may
determine, prior to being applied to any indebtedness secured by the
Subordinate Lien; (iv) written notice of default under the Subordinate
Lien and written notice of the commencement of any action (whether judicial or
pursuant to a power of sale) to foreclose or otherwise enforce the Subordinate
Lien or to seek the appointment of a receiver for all or any part of the
Property shall be given to Holder with or immediately after the occurrence of
any such default or commencement; and (v) neither the holder of the
Subordinate Lien, nor any purchaser at foreclosure thereunder, nor anyone
claiming by, through or under any of them shall succeed to any of Grantor’s
rights hereunder without the prior written consent of Holder.


 


(m)                               Operation of
Property.  Grantor
will operate the Property in a good and workmanlike manner and in accordance
with all Legal Requirements and will pay all fees or charges of any kind in
connection therewith.  Grantor will keep
the Property occupied so as not to impair the insurance carried thereon.  Grantor will not use or occupy or conduct any
activity on, or allow the use or occupancy of or the conduct of any activity
on, the Property in any manner which violates any Legal Requirement or which
constitutes a public or private nuisance or which makes void, voidable or
cancelable, or increases the premium of, any insurance then in force with
respect thereto.  Grantor will not
initiate or permit any zoning reclassification of the Property or seek any
variance under existing zoning ordinances applicable to the Property or use or
permit the use of the Property in such a manner which would result in such use
becoming a nonconforming use under applicable zoning ordinances or other Legal
Requirement.  Grantor will not impose any
easement, restrictive covenant or encumbrance upon the Property, execute or
file any subdivision plat or condominium declaration affecting the Property or
consent to the annexation of the Property to any municipality, without the
prior written consent of Holder.  Grantor
will not do or suffer to be done any act whereby the value of any part of the
Property may be lessened.  Grantor will
preserve, protect, renew, extend and retain all material rights and privileges
granted for or applicable to the Property. 
Without the prior written consent of Holder, there shall be no drilling
or exploration for or extraction, removal or production of any mineral, 


 


15

















 


hydrocarbon, gas, natural element, compound or substance (including
sand and gravel) from the surface or subsurface of the Land regardless of the
depth thereof or the method of mining or extraction thereof.  Grantor will cause all debts and liabilities
of any character (including all debts and liabilities for labor, material and
equipment (including software embedded therein) and all debts and charges for
utilities servicing the Property) incurred in the construction, maintenance,
operation and development of the Property to be promptly paid.


 


(n)                                 Further
Assurances.  Grantor
will, promptly on request of Holder, (i) correct any defect, error or
omission which may be discovered in the contents, execution or acknowledgment
of this Deed of Trust or any other Loan Document; (ii) execute,
acknowledge, deliver, procure and record and/or file such further documents
(including further deeds of trust, security agreements, and assignments of
rents or leases) and do such further acts as may be necessary, desirable or
proper to carry out more effectively the purposes of this Deed of Trust and the
other Loan Documents, to more fully identify and subject to the liens and
security interests hereof any property intended to be covered hereby (including
specifically, but without limitation, any renewals, additions, substitutions,
replacements, or appurtenances to the Property) or as deemed advisable by
Holder to protect the lien or the security interest hereunder against the
rights or interests of third persons; and (iii) provide such certificates,
documents, reports, information, affidavits and other instruments and do such
further acts as may be necessary, desirable or proper in the reasonable
determination of Holder to enable Holder and Lenders to comply with the
requirements or requests of any agency having jurisdiction over Holder or any
Lender or any examiners of such agencies with respect to the indebtedness
secured hereby, Grantor or the Property. 
Grantor shall pay all costs connected with any of the foregoing, which
shall be a demand obligation owing by Grantor (which Grantor hereby promises to
pay) to Holder (for its own account or the account of Lenders, as applicable)
pursuant to this Deed of Trust.


 


(o)                                 Fees and
Expenses.  Without
limitation of any other provision of this Deed of Trust or of any other Loan
Document and to the extent not prohibited by applicable law, Borrowers will
pay, and will reimburse to Holder (for its own account or the account of
Lenders, as applicable) and/or Trustee on demand to the extent paid by Holder,
Lenders and/or Trustee:  (i) costs
of appraisals obtained in connection with the origination of the Loan and after
the occurrence of a Default; (ii) all filing, registration and recording
fees, recordation, transfer and other taxes, brokerage fees and commissions,
abstract fees, title search or examination fees, title policy and endorsement
premiums and fees, Uniform Commercial Code search fees, judgment and tax lien
search fees, escrow fees, attorneys’ fees, architect’s fees, engineering fees,
construction consultant fees, environmental inspection fees, survey fees, and
all other costs and expenses of every character incurred by Borrowers or
Holder, Lenders and/or Trustee in connection with the preparation of the Loan
Documents, the evaluation, closing and funding of the Loan, and any and all
amendments and supplements to this Deed of Trust or any other Loan Documents or
any approval, consent, waiver, release or other matter requested or required
hereunder or thereunder, or otherwise attributable or chargeable to Grantor as
owner of the Property; and (iii) all costs and expenses, including
attorneys’ fees and expenses (including the market value of services provided
by in-house counsel), incurred or expended in connection with the exercise of
any right or remedy, or the defense of any right or remedy or the enforcement
of any obligation of Borrowers or Grantor, hereunder or under any other Loan
Document.


 


16

















 


(p)                                 Indemnification.  Grantor will indemnify and hold harmless each
and every Indemnified Party from and against, and reimburse them on demand for,
any and all Indemnified Matters.  Without
limitation, the foregoing indemnity shall apply to each Indemnified Party with
respect to matters which in whole or in part are caused by or arise out of the
negligence of such (and/or any other) Indemnified Party.  However, such indemnity shall not apply to a
particular Indemnified Party to the extent that the subject of the
indemnification is caused by or arises out of the gross negligence or willful
misconduct of that Indemnified Party. 
Any amount to be paid under this clause (p) by Grantor to any
Indemnified Party shall be a demand obligation owing by Grantor (which Grantor
hereby promises to pay) to such Indemnified Party pursuant to this Deed of
Trust.  The indemnity in this clause (p) shall
not terminate upon the release, foreclosure or other termination of this Deed
of Trust but will survive the enforcement of any remedy provided in any Loan
Document including the foreclosure of this Deed of Trust or conveyance in lieu
of foreclosure, the repayment of the Secured Indebtedness, the discharge and
release of this Deed of Trust and the other Loan Documents, any bankruptcy or
other proceeding under any Debtor Relief Law, and any other event
whatsoever.  The rights of Indemnified
Parties under this clause (p) shall be in addition to all other rights
that Indemnified Parties or any of them may have under this Deed of Trust or
any other Loan Document.  Nothing in this
clause (p) or elsewhere in this Deed of Trust shall limit or impair any
rights or remedies that any Indemnified Party may have (including any rights of
contribution or indemnification) against Grantor or any other person under any
other provision of this Deed of Trust, any other Loan Document, any other
agreement or any applicable Legal Requirement.


 


(q)                                 Taxes on Deed
of Trust.  Grantor
will promptly pay all income, franchise and other taxes owing by Grantor and
any stamp, documentary, recordation and transfer taxes or other taxes (unless
such payment by Grantor is prohibited by law) which may be required to be paid
with respect to any Note, this Deed of Trust or any other instrument evidencing
or securing any of the Secured Indebtedness. 
In the event of the enactment after this date of any law of any
governmental entity applicable to Holder, any Lender, the Property or this Deed
of Trust deducting from the value of property for the purpose of taxation any
lien or security interest thereon, or imposing upon Holder or any Lender the
payment of the whole or any part of the taxes or assessments or charges or
liens herein required to be paid by Grantor, or changing in any way the laws
relating to the taxation of deeds of trust or mortgages or security agreements
or debts secured by deeds of trust or mortgages or security agreements or the
interest of the mortgagee or secured party in the property covered thereby, or
the manner of collection of such taxes, so as to affect this Deed of Trust or
the Secured Indebtedness or Holder or any Lender, then, and in any such event,
Grantor, upon demand by Holder, shall pay such taxes, assessments, charges or
liens, or reimburse Holder therefor (for its own account or the account of the
affected Lender(s), as applicable); provided, however, that if in the opinion
of counsel for Holder (i) it might be unlawful to require Grantor to make
such payment or (ii) the making of such payment might result in the
imposition of interest beyond the maximum amount permitted by law, then and in
such event, Holder may elect, by notice in writing given to Grantor, to declare
all of the Secured Indebtedness to be and become due and payable sixty (60)
days from the giving of such notice.


 


(r)                                    Statement
Concerning the Loan or Deed of Trust.  Grantor shall at any time and from time to
time furnish within seven (7) days of request by Holder a written
statement in such form as may be required by Holder stating (i) that this
Deed of Trust and the other Loan 


 


17

















 


Documents are valid and binding obligations, and enforceable against
Grantor in accordance with their terms; (ii) the aggregate unpaid
principal balance of the Loan; (iii) the date to which interest on the
Loan is paid; (iv) that this Deed of Trust and the other Loan Documents
have not been released, subordinated or modified; and (v) that there are
no offsets or defenses against the enforcement of this Deed of Trust or any
other Loan Document.  Alternatively, if
any of the foregoing statements in clauses (i), (iv) and (v) are
untrue, Grantor shall specify the reasons therefor.


 


(s)                                  Letter-of-Credit
Rights.  If Grantor is at any time a
beneficiary under a letter of credit (whether or not the letter of credit is
evidenced by a writing) relating to the properties, rights, titles and
interests referred to in Section 1.3 of this Deed of Trust now or
hereafter issued in favor of Grantor, Grantor shall promptly notify Holder
thereof and, at the request and option of Holder, Grantor shall, pursuant to an
agreement in form and substance satisfactory to Holder, either (i) arrange
for the issuer and any confirmer of such letter of credit to consent to an
assignment to Holder of the proceeds of any drawings under the letter of
credit, or (ii) arrange for Holder to become the transferee beneficiary of
the letter of credit, with Holder agreeing, in each case, that the proceeds of
any drawing under the letter of credit are to be applied as provided in Section 5.2
of this Deed of Trust.


 


(t)                                    Status of
Grantor.  Grantor is and will continue
to be (i) duly organized, validly existing and in good standing under the
laws of its state of organization, (ii) authorized to do business and in
good standing in each state in which the Property is located, and (iii) possessed
of all requisite power and authority to carry on its business and to own and
operate the Property.  Grantor’s exact
legal name is correctly set forth at the end of this Deed of Trust.  Grantor is an organization of the type
specified in the introductory paragraph of this Deed of Trust.  If Grantor is a registered entity, Grantor is
incorporated in or organized under the laws of the state specified in the
introductory paragraph of this Deed of Trust. 
If Grantor is an unregistered entity (including a general partnership),
it is organized under the laws of the state specified in the introductory
paragraph of this Deed of Trust.  Grantor
will not cause or permit any change to be made in its name, identity (including
its trade name or names), or corporate or partnership structure unless Grantor
shall have notified Holder in writing of such change at least 30 days prior to
the effective date of such change, and shall have first taken all action
required by Holder for the purpose of further perfecting or protecting the lien
and security interest of Holder in the Property.  In addition, Grantor shall not change its
corporate or partnership structure without first obtaining the prior written
consent of Holder.  Grantor’s principal
place of business and chief executive office, and the place where Grantor keeps
its books and records, including recorded data of any kind or nature,
regardless of the medium of recording, including software, writings, plans,
specifications and schematics concerning the Property, has been for the
preceding four months (or, if less, the entire period of the existence of
Grantor) and will continue to be the address of Grantor set forth at the end of
this Deed of Trust (unless Grantor notifies Holder of any change in writing at
least 30 days prior to the date of such change).  Grantor’s organizational identification
number, if any, assigned by the state of incorporation or organization is
correctly set forth on the first page of this Deed of Trust.  Grantor shall promptly notify Holder of any
change in its organizational identification number.  If Grantor does not now have an
organizational identification number and later obtains one, Grantor shall
promptly notify Holder of such organizational identification number.


 


18

















 


Section 2.2                                      Performance by
Holder on Grantor’s Behalf.  Grantor agrees that if Grantor fails to
perform any act or to take any action which under any Loan Document Grantor is
required to perform or take, or to pay any money which under any Loan Document
Grantor is required to pay, and whether or not the failure then constitutes a
Default, and whether or not there has occurred any Default or the Secured
Indebtedness has been accelerated, Holder, in Grantor’s name or its own name on
behalf of itself and Lenders, may, but shall not be obligated to, perform or
cause to be performed such act or take such action or pay such money, and any
expenses so incurred by Holder or Lenders and any money so paid by Holder or
Lenders shall be a demand obligation owing by Grantor to Holder for its own
account or the account of Lenders, as applicable (which obligation Grantor
hereby promises to pay), shall be a part of the Secured Indebtedness, and
Holder and/or Lenders, upon making such payment, shall be subrogated to all of
the rights of the person, entity or body politic receiving such payment.  Holder and its designees shall have the right
to enter upon the Property at any time and from time to time for any such
purposes.  No such payment or performance
by Holder or Lenders shall waive or cure any Default or waive any right, remedy
or recourse of Holder or Lenders.  Any
such payment may be made by Holder or Lenders in reliance on any statement,
invoice or claim without inquiry into the validity or accuracy thereof.  Each amount due and owing by Grantor to
Holder or Lenders pursuant to this Deed of Trust shall bear interest, from the date
such amount becomes due until paid, at the rate per annum provided in the
Credit Agreement for interest on past-due principal owed on the Loan but never
in excess of the maximum nonusurious amount permitted by applicable law, which
interest shall be payable to Holder on demand for its own account or the
account of Lenders, as applicable; and all such amounts, together with such
interest thereon, shall automatically and without notice be a part of the
Secured Indebtedness.  The amount and
nature of any expense by Holder or Lenders hereunder and the time when paid
shall be fully established by the certificate of Holder or any of Holder’s
officers or agents.


 


Section 2.3                                      Absence of
Obligations of Holder and Lenders with Respect to Property.  Notwithstanding anything in this Deed of
Trust to the contrary, including the definition of “Property” and/or the
provisions of Article 3 hereof, (i) to the extent permitted by
applicable law, the Property is composed of Grantor’s rights, title and
interests therein but not Grantor’s obligations, duties or liabilities
pertaining thereto, (ii) Holder and Lenders neither assume nor shall have
any obligations, duties or liabilities in connection with any portion of the
items described in the definition of “Property” herein, either prior to or
after obtaining title to such Property, whether by foreclosure sale, the
granting of a deed in lieu of foreclosure or otherwise, and (iii) Holder
may, at any time prior to or after the acquisition of title to any portion of
the Property as above described, advise any party in writing as to the extent
of Holder’s and Lenders’ interest therein and/or expressly disaffirm in writing
any rights, interests, obligations, duties and/or liabilities with respect to
such Property or matters related thereto. 
Without limiting the generality of the foregoing, it is understood and
agreed that neither Holder nor Lenders shall have any obligations, duties or
liabilities prior to or after acquisition of title to any portion of the
Property, as lessee under any lease or purchaser or seller under any contract
or option unless Holder elects otherwise by written notification.


 


Section 2.4                                      Authorization
to File Financing Statements; Power of Attorney.  Grantor hereby authorizes Holder at any time
and from time to time to file any initial financing statements, amendments
thereto and continuation statements as authorized by applicable law, required
by Holder to establish or maintain the validity, perfection and priority of the
security 


 


19

















 


interests granted by this Deed of Trust.  For purposes of such filings, Grantor agrees
to furnish any information requested by Holder promptly upon request by
Holder.  Grantor also ratifies its
authorization for Holder to have filed any like initial financing statements,
amendments thereto or continuation statements if filed prior to the date of
this Deed of Trust.  Grantor hereby
irrevocably constitutes and appoints Holder and any officer or agent of Holder,
with full power of substitution, as its true and lawful attorneys-in-fact with
full irrevocable power and authority in the place and stead of Grantor or in
Grantor’s own name to execute in Grantor’s name any such documents and to
otherwise carry out the purposes of this Section 2.4, to the extent
that Grantor’s authorization above is not sufficient.  To the extent permitted by law, Grantor
hereby ratifies all acts said attorneys-in-fact have lawfully done in the past
or shall lawfully do or cause to be done in the future by virtue hereof.  This power of attorney is a power coupled
with an interest and shall be irrevocable.


 


ARTICLE 3


Assignment
of Rents and Leases


 


Section 3.1                                      Assignment.  To secure the obligations of Borrowers under
the Loan Documents and all matters and indebtedness constituting the Secured
Indebtedness, Grantor hereby assigns to Administrative Agent for the ratable
benefit of itself and Lenders all Rents and all of Grantor’s rights in and
under all Leases.  Upon the occurrence
and during the continuation of any Default, Administrative Agent and any other
Holder shall have the right, power and authority to collect any and all Rents
on behalf of itself and Lenders.  While
any Default is continuing, all Rents shall be paid directly to Holder and not
through Grantor, all without the necessity of any further action by Holder,
including any action to obtain possession of the Land, Improvements or any
other portion of the Property or any action for the appointment of a
receiver.  Grantor hereby authorizes and
directs the tenants under the Leases to pay Rents to Holder upon written demand
by Holder, without further consent of Grantor, without any obligation of such
tenants to determine whether a Default has in fact occurred and regardless of
whether Holder has taken possession of any portion of the Property, and the
tenants may rely upon any written statement delivered by Holder to the
tenants.  Any such payments to Holder
shall constitute payments to Grantor under the Leases, and Grantor hereby
irrevocably appoints Holder as its attorney-in-fact, which power of attorney is
with full power of substitution and coupled with an interest, to do all things
during the continuance of a Default, which Grantor might otherwise do with
respect to the Property and the Leases thereon, including:  (a) demanding, receiving and enforcing
payment of any and all Rents; (b) giving receipts, releases and
satisfactions for any and all Rents; (c) suing either in the name of
Grantor or in Holder’s own name on behalf of itself and Lenders for any and all
Rents; (d) applying the net proceeds of any and all Rents collected by
Holder, after deducting all expenses of collection, including attorneys’ fees
and expenses, to the Secured Indebtedness in such order and manner as Holder
may elect and/or to the operation and management of the Property, including the
payment of management, brokerage and attorneys’ fees and expenses (including
reasonable reserves for anticipated expenses), or at the option of Holder,
holding the same as security for the payment of the Secured Indebtedness; (e) leasing,
in the name of Grantor, the whole or any part of the Property which may become
vacant; (f) employing agents for such leasing and paying such agents
reasonable compensation for their services; and (g) requiring Grantor to
deliver to Holder all security deposits and executed originals of all Leases
and copies of all records relating thereto. 
Holder may take any or all of the foregoing actions with or without
taking possession of any 


 


20

















 


portion of the Property or taking any action with respect to such
possession.  The assignment contained in
this Section 3.1 shall become null and void upon the reconveyance
of this Deed of Trust.


 


Section 3.2                                      Covenants,
Representations and Warranties Concerning Leases and Rents.


 


Grantor covenants, represents and warrants that:


 


(a)                                  Grantor has
good title to, and is the owner of the entire landlord’s interest in, the
Leases and Rents hereby assigned and has authority to assign them;


 


(b)                                 All Leases are
valid and enforceable, and in full force and effect, and are unmodified except
as stated therein;


 


(c)                                  Grantor is not
in default under any Lease (and no event has occurred which with the passage of
time or notice or both would result in a default under any Lease) and is not
the subject of any petition, case, proceeding or other action pursuant to any
Debtor Relief Law;


 


(d)                                 To Grantor’s
knowledge, no tenant in the Property is in default under its Lease (and no
event has occurred which with the passage of time or notice or both would
result in a default under its Lease) or is the subject of any petition, case,
proceeding or other action pursuant to any Debtor Relief Law;


 


(e)                                  Unless
otherwise stated in a Permitted Encumbrance, no Rents or Leases have been or
will be assigned, mortgaged, pledged or otherwise encumbered and no other
person has acquired or will acquire any right, title or interest in such Rents
or Leases;


 


(f)                                    No Rents have
been waived, released, discounted, set off or compromised;


 


(g)                                 Except as
stated in the Leases, Grantor has not received any funds or deposits from any
tenant for which credit has not already been made on account of accrued Rents;


 


(h)                                 Grantor shall
perform all of its obligations under the Leases and enforce the tenants’
obligations under the Leases to the extent enforcement is prudent under the
circumstances;


 


(i)                                     Grantor will
not, without the prior written consent of Holder, waive, release, discount, set
off, compromise, reduce or defer any Rent, receive or collect Rents more than
one (1) month in advance, grant any rent-free period to any tenant, reduce
any Lease term or waive, release or otherwise modify any other material
obligation under any Lease, renew or extend any Lease except in accordance with
a right of the tenant thereto in such Lease, approve or consent to an
assignment of a Lease or a subletting of any part of the premises covered by a
Lease, or settle or compromise any claim against a tenant under a Lease in
bankruptcy, in any other proceeding pursuant to any Debtor Relief Law or
otherwise;


 


(j)                                     Grantor will
not, without the prior written consent of Holder, terminate or consent to the
cancellation or surrender of any Lease having an unexpired term of one (1) year
or more;


 


21














 


(k)                                  Grantor will
not execute any Lease except in accordance with the Loan Documents and for
actual occupancy by the tenant thereunder;


 


(l)                                     Grantor shall
give prompt notice to Holder, as soon as Grantor first obtains notice, of any
claim, or the commencement of any action, by any tenant or subtenant under or
with respect to a Lease regarding any claimed damage, default, diminution of or
offset against Rent, cancellation of the Lease, or constructive eviction, and
Grantor shall defend, at Grantor’s expense, any proceeding pertaining to any
Lease, including, if Holder so requests, any such proceeding if Holder and/or
Lenders are parties thereto;


 


(m)                               Promptly upon
request by Holder and upon the occurrence of a Default, Grantor shall deliver
to Holder all security deposits and executed originals of all Leases and copies
of all records relating thereto;


 


(n)                                 There shall be
no merger of the leasehold estates created by the Leases, with the fee estate
of the Land without the prior written consent of Holder; and


 


(o)                                 Holder, on
behalf of itself and Lenders, may at any time and from time to time by specific
written instrument intended for the purpose, unilaterally subordinate the lien
of this Deed of Trust to any Lease, without joinder or consent of or notice to
Grantor, any tenant or any other person, and notice is hereby given to each
tenant under a Lease of such right to subordinate.  No such subordination shall constitute a
subordination to any lien or other encumbrance, whenever arising, or improve
the right of any junior lienholder, and nothing herein shall be construed as
subordinating this Deed of Trust to any Lease.


 


Section 3.3                                      No Liability of
Holder or Lenders.  Holder and
Lenders neither have nor assume any obligations as lessor or landlord with
respect to any Lease.  Administrative
Agent’s acceptance of this assignment on behalf of itself and Lenders shall not
be deemed to constitute any Holder or any Lender a “mortgagee in possession,”
nor shall such acceptance obligate Holder or any Lender to appear in or defend
any proceeding relating to any Lease or to the Property, or to take any action
hereunder, expend any money, incur any expenses, perform any obligation or
liability under any Lease, or assume any obligation for any deposit delivered
to Grantor by any tenant and not as such delivered to and accepted by
Holder.  Neither Holder nor Lenders shall
be liable for any injury or damage to person or property in or about the
Property, or for Holder’s failure to collect or to exercise diligence in
collecting Rents, but Holder and Lenders shall be accountable only for Rents
that they shall actually receive. 
Neither the assignment of Leases and Rents, nor enforcement of the
rights of Holder and Lenders regarding Leases and Rents (including collection
of Rents), nor possession of the Property by Holder or Lenders, nor Holder’s
consent to or approval of any Lease (nor all of the same), shall render Holder
or any Lender liable on any obligation under or with respect to any Lease or
constitute affirmation of, or any subordination to, any Lease, occupancy, use
or option.


 


Section 3.4                                      Rights
Cumulative.  The powers
and rights of Holder and Lenders under this Article 3 shall be
cumulative of all other powers and rights of Holder and Lenders under the Loan
Documents or otherwise.  Such powers and
rights granted in this Article 3 shall be in addition to the other
remedies provided for in this Deed of Trust upon the occurrence of a Default
and may be exercised independently of or concurrently with any of said
remedies.  If 


 


22

















 


Holder or Lenders seek or obtain any judicial relief regarding Rents or
Leases, the same shall in no way prevent the concurrent or subsequent
employment of any other appropriate rights or remedies nor shall the same
constitute an election of judicial relief for any foreclosure or any other
purpose.


 


ARTICLE 4


Default


 


Section 4.1                                      Events of
Default.  The occurrence of any one of
the following shall be a default under this Deed of Trust (“Default”):


 


(a)                                  Nonperformance
of Covenants.  Any
covenant, agreement or condition of this Deed of Trust (other than covenants
otherwise addressed in another clause of this Section 4.1) is not
fully and timely performed, observed or kept, and such failure is not cured within
the applicable notice and cure period (if any) provided for herein.


 


(b)                                 Default under
other Loan Documents / Cross-Default.  A Default occurs under any other Loan
Document, specifically including any default pursuant to any of the following
deeds of trust granted to Trustee, in favor of the Administrative Agent, for
its own benefit and for the benefit of any other Lender(s):


 


·                  That certain
Second Lien Deed of Trust, Assignment of Rents and Leases, Security Agreement
and Fixture Filing dated of even date herewith and granted by Alta Hollywood
Hospitals, Inc., as grantor thereunder, encumbering properties located at
14433 Emelita Street, 5835 Sylmar Avenue, and 14407 Emelita Street;


 


·                  That certain
Second Lien Deed of Trust, Assignment of Rents and Leases, Security Agreement
and Fixture Filing dated of even date herewith and granted by Alta Hollywood
Hospitals, Inc., as grantor thereunder, encumbering properties located at
6245 De Longpre Avenue and 6228 Leland Way;


 


·                  That certain
Second Lien Deed of Trust, Assignment of Rents and Leases, Security Agreement
and Fixture Filing dated of even date herewith and granted by Alta Los Angeles
Hospitals, Inc., as grantor thereunder, encumbering properties located at
4081, 4059 and 4125 East Olympic Boulevard;


 


(c)                                  Transfer of the
Property.  Any
Transfer occurs with respect to all or any part of the Property or any interest
therein, except for:  (i) sales or
transfers of items of the Accessories which have become obsolete or worn beyond
practical use and which have been replaced by adequate substitutes owned by
Grantor, having a value equal to or greater than the replaced items when new;
and (ii) the grant, in the ordinary course of business, of a leasehold
interest in a part of the Improvements to a tenant for occupancy, not
containing a right or option to purchase and not in contravention of any
provision of this Deed of Trust or of any other Loan Document.  Holder may, in its sole discretion, waive a
Default under this clause (c), but it shall have no obligation to do so.  Any waiver will be conditioned upon the
grantee’s integrity, reputation, character, creditworthiness and management
ability being satisfactory to Holder in its sole judgment, and may also be
conditioned upon such one or more of the following, if any, that 


 


23

















 


Holder may require:  the
execution by the grantee of a written assumption agreement prior to such
Transfer containing such terms as Holder may require; the receipt by Holder and
Lenders of a principal paydown on the Loan; the receipt by Holder and Lenders
of an assumption fee; the reimbursement of all of the expenses incurred by
Holder and Lenders in connection with such Transfer, including attorneys’ fees;
and any modification of the Loan Documents as Holder may require, including an
increase in the rate of interest payable under the Loan and/or a modification
of the terms of the Loan.  NOTICE - THE
SECURED INDEBTEDNESS IS SUBJECT TO ACCELERATION IN THE EVENT OF A TRANSFER
WHICH IS PROHIBITED UNDER THIS CLAUSE (c).


 


(d)                                 Transfer of
Interests in Grantor.  (i) If
Grantor is a corporation, a Transfer occurs with respect to shares possessing,
in the aggregate, more than fifty percent (50%) of the voting power without the
prior written consent of Holder; (ii) if Grantor is a partnership or joint
venture, a Transfer occurs with respect to more than fifty percent (50%) of the
partnership or joint venture interests in the aggregate, or any general partner
or joint venturer withdraws or is removed or admitted without the prior written
consent of Holder; or (iii) if Grantor is a limited liability company, a
Transfer occurs with respect to more than fifty percent (50%) of the voting
power or ownership interests, in either case in the aggregate, or any managing
member withdraws or is removed or admitted without the prior written consent of
Holder.  NOTICE - THE SECURED
INDEBTEDNESS IS SUBJECT TO ACCELERATION IN THE EVENT OF A TRANSFER WHICH IS
PROHIBITED UNDER THIS CLAUSE (d).


 


(e)                                  Grant of
Easement, Etc.  Without the
prior written consent of Holder, Grantor grants any easement or dedication, or
files any plat, condominium declaration or restriction, or otherwise encumbers
the Property, or seeks or permits any zoning reclassification or variance,
unless such action is expressly permitted by the Loan Documents or does not
affect the Property.


 


(f)                                    Abandonment.  The owner of the Property abandons any of the
Property.


 


(g)                                 Default Under
Other Lien.  A default
or event of default occurs under any lien, security interest or assignment
covering the Property or any part thereof (whether or not Holder and Lenders
have consented, and without hereby implying any consent by Holder or Lenders,
to any such lien, security interest or assignment not created hereunder), or
the holder of any such lien, security interest or assignment declares a default
or institutes foreclosure or other proceedings for the enforcement of its
remedies thereunder.


 


(h)                                 Destruction.  The Property is so demolished, destroyed or
damaged that in the reasonable opinion of Holder, it cannot be restored or
rebuilt with available funds to a profitable condition within a reasonable
period of time and in any event prior to the final maturity date of the Loan.


 


(i)                                     Condemnation.  (i) Any governmental authority requires
or commences any proceeding for the demolition of any building or structure
comprising a part of the Premises, or (ii) there is commenced any
proceeding to condemn or otherwise take pursuant to the power of eminent
domain, or a contract for sale or a conveyance in lieu of such a taking is
executed which provides for the transfer of, a material portion of the
Premises, including the taking (or transfer in lieu thereof) of any portion
which would result in the blockage or substantial impairment of 


 


24

















 


access or utility service to the Improvements or which would cause the
Premises to fail to comply with any Legal Requirement.


 


Section 4.2                                      Notice and Cure.  If any provision of this Deed of Trust or any
other Loan Document provides for Holder to give to Grantor any notice regarding
a default or incipient default, then if Holder shall fail to give such notice
to Grantor as provided, the sole and exclusive remedy of Grantor for such
failure shall be to seek appropriate equitable relief to enforce the agreement
to give such notice and to have any acceleration of the maturity of the Loan
and the Secured Indebtedness postponed or revoked and foreclosure proceedings
in connection therewith delayed or terminated pending or upon the curing of
such default in the manner and during the period of time permitted by such
agreement, if any, and Grantor shall have no right to damages or any other type
of relief not herein specifically set out against Holder or Lenders, all of
which damages or other relief are hereby waived by Grantor.  Nothing herein or in any other Loan Document
shall operate or be construed to add on or make cumulative any cure or grace
periods specified in any of the Loan Documents.


 


ARTICLE 5


Remedies


 


Section 5.1                                      Certain
Remedies.  If a
Default shall occur, Holder may (but shall have no obligation to) exercise any
one or more of the following remedies, without notice (unless notice is
required by applicable statute):


 


(a)                                  Acceleration.  Holder may at any time and from time to time
declare any or all of the Secured Indebtedness immediately due and payable and
such Secured Indebtedness shall thereupon be immediately due and payable,
without presentment, demand, protest, notice of protest, notice of acceleration
or of intention to accelerate or any other notice or declaration of any kind,
all of which are hereby expressly waived by Borrowers, which waiver is hereby
acknowledged by Grantor.


 


(b)                                 Enforcement of
Assignment of Rents.  Holder may
take any of the actions described in Article 3 with or without
taking possession of any portion of the Property or taking any action with
respect to such possession.


 


(c)                                  Trustee’s Sale.


 


(i)                                     Holder may
execute and deliver to Trustee written declaration of default and demand for
sale and written notice of default and of election to cause all or any part of
the Property to be sold, which notice Trustee shall cause to be filed for
record; and after the lapse of such time as may then be required by law
following the recordation of such notice of default, and notice of sale having
been given as then required by law, Trustee, without demand on Borrowers or
Grantor, shall sell such Property at the time and place fixed by Trustee in
such notice of sale, either as a whole or in separate parcels and in such order
as Holder may direct (Borrowers and Grantor each waiving any right to direct
the order of sale), at public auction to the highest bidder for cash in lawful
money of the United States (or cash equivalents acceptable to Trustee to the
extent permitted by applicable law), payable at the time of sale.  Trustee may postpone the sale of all or any
part of the Property by public announcement at the time fixed by the preceding 


 


25

















 


postponement.  Trustee shall
deliver to the purchaser at such sale its deed conveying the property so sold,
but without any covenant or warranty, express or implied, and the recitals in
such deed of any matters or facts shall be conclusive proof of the truthfulness
thereof.  Any person, including Trustee,
Holder or any Lender, may purchase at such sale, and any bid by Holder or any
Lender may be, in whole or in part, in the form of cancellation of all or any
part of the Secured Indebtedness.


 


(ii)                                  The sale by Trustee
of less than the whole of the Property shall not exhaust the power of sale
herein granted, and Trustee is specifically empowered to make successive sales
under such power until the whole of the Property shall be sold.  In the event any sale hereunder is not
completed or is defective in the opinion of Holder, such sale shall not exhaust
the power of sale hereunder and Holder shall have the right to cause a
subsequent sale or sales to be made hereunder. 
If the proceeds of any sale of less than the whole of the Property shall
be less than the aggregate of the Secured Indebtedness and the expense of
executing this trust as provided herein, this Deed of Trust and the lien hereof
shall remain in full force and effect as to the unsold portion of the Property
just as though no sale had been made; provided, however, that neither Borrowers
nor Grantor shall have any right to require the sale of less than the whole of
the Property but Holder shall have the right, at its sole election, to request
Trustee to sell less than the whole of the Property.


 


(iii)                               Trustee may,
after any request or direction by Holder, sell not only the real property but
also the Collateral and other interests which are a part of the Property, or
any part thereof, as a unit and as a part of a single sale, or may sell any
part of the Property separately from the remainder of the Property.  It shall not be necessary for Trustee to have
taken possession of any part of the Property or to have present or to exhibit
at any sale any of the Collateral.


 


(iv)                              After each
sale, Trustee shall receive the proceeds of said sale and apply the same as
herein provided.  Payment of the purchase
price to Trustee shall satisfy the obligation of purchaser at such sale
therefor, and such purchaser shall not be responsible for the application
thereof.


 


(v)                                 Trustee or its
successor or substitute may appoint or delegate any one or more persons as
agent to perform any act or acts necessary or incident to any sale held by
Trustee, including the posting of notices and the conduct of sale, but in the
name and on behalf of Trustee, its successor or substitute.  If Trustee or its successor or substitute
shall have given notice of sale hereunder, any successor or substitute Trustee
thereafter appointed may complete the sale and the conveyance of the property
pursuant thereto as if such notice had been given by the successor or
substitute Trustee conducting the sale.


 


(d)                                 Uniform
Commercial Code.  Without
limitation of any rights of enforcement of Holder and Lenders with respect to
the Collateral or any part thereof in accordance with the procedures for
foreclosure of real estate, Holder may exercise its rights of enforcement with
respect to the Collateral or any part thereof under the California Uniform
Commercial Code, as in effect from time to time (or under the Uniform
Commercial Code in force, from time to time, in any other state to the extent
the same is applicable law) and in conjunction with, in addition to or in
substitution for those rights and remedies: 
(i) Holder may enter upon Grantor’s premises to 


 


26

















 


take possession of, assemble and collect the Collateral or, to the
extent and for those items of the Collateral permitted under applicable law, to
render it unusable; (ii) Holder may require Grantor to assemble the
Collateral and make it available at a place Holder designates which is mutually
convenient to allow Holder to take possession or dispose of the Collateral; (iii) written
notice mailed to Grantor as provided herein at least five (5) days prior
to the date of public sale of the Collateral or prior to the date on which
private sale of the Collateral will be made shall constitute reasonable notice;
provided that, if Holder fails to comply with this clause (iii) in any
respect, the liability of Holder and Lenders for such failure shall be limited
to the liability (if any) imposed on them as a matter of law under the
California Uniform Commercial Code, as in effect from time to time (or under
the Uniform Commercial Code, in force from time to time, in any other state to
the extent the same is applicable law); (iv) any sale made pursuant to the
provisions of this clause (d) shall be deemed to have been a public sale
conducted in a commercially reasonable manner if held contemporaneously with
and upon the same notice as required for the sale of the Property under power
of sale as provided in clause (c) above in this Section 5.1; (v) in
the event of a foreclosure sale, whether made by Trustee under the terms
hereof, or under judgment of a court, the Collateral and the other Property
may, at the option of Holder, be sold as a whole; (vi) it shall not be
necessary for Holder to take possession of the Collateral or any part thereof
prior to the time that any sale pursuant to the provisions of this clause (d) is
conducted and it shall not be necessary for the Collateral or any part thereof
to be present at the location of such sale; (vii) with respect to
application of proceeds from disposition of the Collateral under Section 5.2
hereof, the costs and expenses incident to disposition shall include the
reasonable expenses of retaking, holding, preparing for sale or lease, selling,
leasing and the like and the reasonable attorneys’ fees and legal expenses
incurred by Holder and Lenders (including the market value of services provided
by in-house counsel); (viii) any and all statements of fact or other
recitals made in any bill of sale or assignment or other instrument evidencing
any foreclosure sale hereunder as to nonpayment of the Secured Indebtedness or
as to the occurrence of any Default, or as to Holder having declared all of
such indebtedness to be due and payable, or as to notice of time, place and
terms of sale and of the properties to be sold having been duly given, or as to
any other act or thing having been duly done by Holder or Lenders, shall be
taken as prima facie evidence of the truth of the facts so stated and recited; (ix) Holder
may appoint or delegate any one or more persons as agent to perform any act or
acts necessary or incident to any sale held by Holder, including the sending of
notices and the conduct of the sale, but in the name of Holder on behalf of
itself and Lenders; (x) Holder may comply with any applicable state or
federal law or regulatory requirements in connection with a disposition of the
Collateral, and such compliance will not be considered to affect adversely the
commercial reasonableness of any sale of the Collateral; (xi) Holder may sell
the Collateral without giving any warranties as to the Collateral, and may
specifically disclaim all disposition warranties, including warranties relating
to title, possession, quiet enjoyment and the like, and all warranties of
quality, merchantability and fitness for a specific purpose, and this procedure
will not be considered to affect adversely the commercial reasonableness of any
sale of the Collateral; (xii) Grantor acknowledges that a private sale of the
Collateral may result in less proceeds than a public sale; and (xiii) Grantor
acknowledges that the Collateral may be sold at a loss to Grantor, and that in
such event neither Holder nor Lenders shall have any liability or
responsibility to Grantor for such loss.


 


(e)                                  Judicial Action.  Subject to any provision of the Credit
Agreement regarding reference and arbitration, Holder may bring an action on
behalf of itself and Lenders in any court 


 


27

















 


of competent jurisdiction to foreclose this instrument or to obtain
specific performance of any of the covenants or agreements of this Deed of
Trust.


 


(f)                                    Entry on
Property.  Holder is
authorized on behalf of itself and Lenders, prior or subsequent to the
institution of any foreclosure proceedings, to the fullest extent permitted by
applicable law, to enter upon the Property or any part thereof, and to take
possession of the Property and all books and records, and all recorded data of
any kind or nature, regardless of the medium of recording, including all
software, writings, plans, specifications and schematics relating thereto, and
to exercise without interference from Grantor any and all rights which Grantor
has with respect to the management, possession, operation, protection or
preservation of the Property.  Holder
shall not be deemed to have taken possession of the Property or any part
thereof except upon the exercise of its right to do so, and then only to the
extent evidenced by its demand and overt act specifically for such
purpose.  All costs, expenses and
liabilities of every character incurred by Holder and Lenders in managing,
operating, maintaining, protecting or preserving the Property shall constitute
a demand obligation of Grantor (which obligation Grantor hereby promises to
pay) to Holder (for its own account or the account of Lenders, as applicable)
pursuant to this Deed of Trust.  If
necessary to obtain the possession provided for above, Holder may invoke any
and all legal remedies to dispossess Grantor. 
In connection with any action taken by Holder pursuant to this clause
(f), neither Holder nor Lenders shall be liable for any loss sustained by
Grantor resulting from any failure to let the Property or any part thereof, or
from any act or omission of Holder in managing the Property unless such loss is
caused by the willful misconduct and bad faith of Holder, nor shall Holder or
Lenders be obligated to perform or discharge any obligation, duty or liability
of Grantor arising under any lease or other agreement relating to the Property
or arising under any Permitted Encumbrance or otherwise arising.  Grantor hereby assents to, ratifies and
confirms any and all actions of Holder with respect to the Property taken under
this clause (f).


 


(g)                                 Receiver.  Holder, on behalf of itself and Lenders,
shall as a matter of right be entitled to the appointment of a receiver or
receivers for all or any part of the Property, whether such receivership is
incident to a proposed sale (or sales) of such property or otherwise, and
without regard to the value of the Property or the solvency of any person or
persons liable for the payment of the Secured Indebtedness, and Grantor does
hereby irrevocably consent to the appointment of such receiver or receivers,
waives notice of such appointment, of any request therefor or hearing in
connection therewith, and any and all defenses to such appointment, agrees not
to oppose any application therefor by Holder, and agrees that such appointment
shall in no manner impair, prejudice or otherwise affect the rights of Holder
and Lenders to application of Rents as provided in this Deed of Trust.  Nothing herein is to be construed to deprive
Holder or Lenders of any other right, remedy or privilege they may have under
the law to have a receiver appointed. 
Any money advanced by Holder or Lenders in connection with any such
receivership shall be a demand obligation (which obligation Grantor hereby
promises to pay) owing by Grantor to Holder (for its own account or the account
of Lenders, as applicable) pursuant to this Deed of Trust.


 


(h)                                 Powers of
Holder.  Holder may, on behalf of
itself and Lenders, either directly or through an agent or court-appointed
receiver, and without regard to the adequacy of any security for the Secured
Indebtedness:


 


28

















 


(i)                                     enter, take
possession of, manage, operate, protect, preserve and maintain, and exercise
any other rights of an owner of, the Property, and use any other properties or
facilities of Grantor relating to the Property, all without payment of rent or
other compensation to Grantor;


 


(ii)                                  enter into such
contracts and take such other action as Holder deems appropriate to complete
all or any part of the Improvements or any other construction on the Land,
subject to such modifications and other changes in the Improvements or the plan
of development as Holder may deem appropriate;


 


(iii)                               make, cancel,
enforce or modify leases, obtain and evict tenants, fix or modify rents and, in
its own name or in the name of Grantor, otherwise conduct any business of
Grantor in relation to the Property and deal with Grantor’s creditors, debtors,
tenants, agents and employees and any other persons having any relationship
with Grantor in relation to the Property, and amend any contracts between them,
in any manner Holder may determine;


 


(iv)                              either with or
without taking possession of the Property, notify obligors on any contracts
that all payments and other performance are to be made and rendered directly
and exclusively to Holder, and in its own name on behalf of itself and Lenders
supplement, modify, amend, renew, extend, accelerate, accept partial payments
or performance on, make allowances and adjustments and issue credits with
respect to, give approvals, waivers and consents under, release, settle,
compromise, compound, sue for, collect or otherwise liquidate, enforce or deal
with any contracts or other rights, including collection of amounts past due
and unpaid (Grantor agreeing not to take any such action after the occurrence
of a Default without prior written authorization from Holder);


 


(v)                                 endorse, in the
name of Grantor, all checks, drafts and other evidences of payment relating to
the Property, and receive, open and dispose of all mail addressed to Grantor
and notify the postal authorities to change the address for delivery of such
mail to such address as Holder may designate; and


 


(vi)                              take such other
action as Holder deems appropriate to protect the security of this Deed of
Trust.


 


(i)                                     Other Rights
and Remedies.  Holder and
Lenders may exercise any and all other rights and remedies which Holder and
Lenders may have under the Loan Documents, or at law or in equity or otherwise.


 


Section 5.2                                      Proceeds of
Foreclosure.  The
proceeds of any sale held by Trustee or Holder or any receiver or public
officer in foreclosure of the liens and security interests evidenced hereby
shall be applied in accordance with the requirements of applicable laws and to
the extent consistent therewith, FIRST, to the payment of all necessary
costs and expenses incident to such foreclosure sale, including all attorneys’
fees and legal expenses (including the market value of services provided by
in-house counsel), advertising costs, auctioneer’s fees, costs of title
rundowns, lien searches, trustee’s sale guaranties, foreclosure sale
guaranties, litigation guaranties and/or other title policies and endorsements,
inspection fees, appraisal costs, fees for professional services, environmental
assessment and remediation fees, all court costs and 


 


29

















 


charges of every character, and the maximum fee legally permitted, or a
reasonable fee when the law provides no maximum limit, to Trustee acting under
the provisions of clause (c) of Section 5.1 hereof if
foreclosed by power of sale as provided in said clause (c), and to the payment
of the other Secured Indebtedness, including specifically without limitation
the principal, accrued interest and attorneys’ fees due and unpaid on the Loan
and the amounts due and unpaid and owed to Holder and Lenders under this Deed
of Trust, the order and manner of application to the items in this clause FIRST
to be in Holder’s sole discretion; and SECOND, the remainder, if any,
shall be paid to Grantor, or to Grantor’s representatives, successors or
assigns, or such other persons (including the holder or beneficiary of any
inferior lien) as may be entitled thereto by law; provided, however, that if
Holder is uncertain which person or persons are so entitled, Holder, on behalf
of itself and Lenders, may interplead such remainder in any court of competent
jurisdiction, and the amount of any attorneys’ fees, court costs and expenses
incurred in such action shall be a part of the Secured Indebtedness and shall
be reimbursable (without limitation) from such remainder.


 


Section 5.3                                      Holder or
Lender as Purchaser.  Holder and
any Lender shall have the right to become the purchaser at any sale held by
Trustee or its substitute or successor or by any receiver or public officer or
at any public sale.  Holder shall have
the right to credit upon the amount of Holder’s successful bid, to the extent
necessary to satisfy such bid, all or any part of the Secured Indebtedness in
such manner and order as Holder may elect. 
Any Lender shall have the right to credit upon the amount of the Lender’s
successful bid, all or any part of the Secured Indebtedness payable to the
Lender in such manner and order as the Lender may elect.


 


Section 5.4                                      Remedies
Cumulative.  All rights
and remedies provided for herein and in any other Loan Document are cumulative
of each other and of any and all other rights and remedies existing at law or
in equity, and Trustee, Holder and Lenders shall, in addition to the rights and
remedies provided herein or in any other Loan Document, be entitled to avail
themselves of all such other rights and remedies as may now or hereafter exist
at law or in equity for the collection of the Secured Indebtedness and the
enforcement of the covenants herein and the foreclosure of the liens and
security interests evidenced hereby, and the resort to any right or remedy
provided for hereunder or under any such other Loan Document or provided for by
law or in equity shall not prevent the concurrent or subsequent employment of
any other appropriate right or rights or remedy or remedies.


 


Section 5.5                                      Discretion as
to Security.  Holder, on
behalf of itself and Lenders, may resort to any security given by this Deed of
Trust or to any other security now existing or hereafter given to secure the
payment of the Secured Indebtedness, in whole or in part, and in such portions
and in such order as may seem best to Holder in its sole and uncontrolled
discretion, and any such action shall not in anywise be considered as a waiver
of any of the rights, benefits, liens or security interests evidenced by this
Deed of Trust.


 


Section 5.6                                      Grantor’s
Waiver of Certain Rights.  To
the full extent Grantor may do so, Grantor agrees that Grantor will not at any
time insist upon, plead, claim or take the benefit or advantage of any law now
or hereafter in force providing for any appraisement, valuation, stay,
extension or redemption, homestead, moratorium, reinstatement, marshaling or
forbearance, and Grantor, for Grantor, Grantor’s representatives, successors
and assigns, and for any and all persons ever claiming any interest in the
Property, to the extent permitted by applicable law, 


 


30

















 


hereby waives and releases all rights of redemption, valuation,
appraisement, stay of execution and all rights to a marshaling of assets of
Grantor, including the Property, or to a sale in inverse order of alienation in
the event of foreclosure of the liens and/or security interests hereby
created.  Grantor shall not have or
assert any right under any statute or rule of law pertaining to the
marshaling of assets, sale in inverse order of alienation, the exemption of
homestead, the administration of estates of decedents, or other matters
whatsoever to defeat, reduce or affect the right of Holder and Lenders under
the terms of this Deed of Trust to a sale of the Property for the collection of
the Secured Indebtedness without any prior or different resort for collection,
or the right of Holder and Lenders under the terms of this Deed of Trust to the
payment of the Secured Indebtedness out of the proceeds of sale of the Property
in preference to every other claimant whatsoever.


 


Section 5.7                                      Delivery of
Possession After Foreclosure.  In the event there is a foreclosure sale
hereunder and at the time of such sale, Grantor or Grantor’s representatives,
or successors as owners of the Property are occupying or using the Property, or
any part thereof, each and all shall immediately become the tenant of the
purchaser at such sale, which tenancy shall be a tenancy from day to day,
terminable at the will of purchaser, at a reasonable rental per day based upon
the value of the property occupied, such rental to be due daily to the
purchaser; and to the extent permitted by applicable law, the purchaser at such
sale shall, notwithstanding any language herein apparently to the contrary,
have the sole option to demand immediate possession following the sale or to
permit the occupants to remain as tenants at will.


 


ARTICLE 6


Miscellaneous


 


Section 6.1                                      Scope of Deed
of Trust.  This Deed
of Trust is a deed of trust with respect to that portion of the Property which
is real property, a security agreement with respect to that portion of the
Property which is personal property (it being agreed that, whenever possible,
components of the Property shall be deemed to be real property rather than
personal property), an assignment of rents and leases, a financing statement
and fixture filing and a collateral assignment. 
In addition to the foregoing, this Deed of Trust covers all proceeds.


 


Section 6.2                                      Effective as a
Financing Statement and Fixture Filing.  This Deed of Trust shall be effective as a
financing statement filed as a fixture filing with respect to all fixtures
included within the Property and is to be filed for record in the real estate
records of each county where any part of the Property (including said fixtures)
is situated.  This Deed of Trust shall
also be effective as a financing statement covering as-extracted collateral
(including oil and gas), accounts and general intangibles under the California
Uniform Commercial Code, as in effect from time to time, and the Uniform
Commercial Code, as in effect from time to time, in any other state where the
Property is situated which will be financed at the wellhead or minehead of the
wells or mines located on the Property and is to be filed for record in the
real estate records of each county where any part of the Property is
situated.  This Deed of Trust shall also
be effective as a financing statement covering any other Property and may be
filed in any other appropriate filing or recording office.  The respective mailing addresses of Grantor
and Administrative Agent are set forth at the end of this Deed of Trust.  A carbon, photographic or other reproduction
of this Deed of Trust or of any financing statement relating to this Deed of 


 


31

















 


Trust shall be sufficient as a financing statement for any of the
purposes referred to in this Section 6.2.


 


Section 6.3                                      Notice to
Account Debtors.  In addition
to the rights granted elsewhere in this Deed of Trust, Holder may at any time
notify the account debtors or obligors of any accounts, chattel paper, general
intangibles, negotiable instruments or other evidences of indebtedness included
in the Collateral to pay Holder directly.


 


Section 6.4                                      Waiver by
Holder.  Holder may at any time and
from time to time by a specific writing intended for the purpose:  (a) waive any Default without waiving
any other prior or subsequent Default; (b) waive compliance by Borrowers
or Grantor with any covenant herein made by Borrowers or Grantor to the extent
and in the manner specified in such writing; (c) consent to Borrowers or
Grantor doing any act which hereunder Borrowers or Grantor are prohibited from
doing, or to Borrowers or Grantor failing to do any act which hereunder
Borrowers or Grantor are required to do, to the extent and in the manner
specified in such writing; (d) release any part of the Property or any
interest therein from the lien and security interest of this Deed of Trust,
without the joinder of Trustee; or (e) release any party liable, either
directly or indirectly, for the Secured Indebtedness or for any covenant herein
or in any other Loan Document without impairing or releasing the liability of
any other party.  In addition to the
foregoing, Holder may remedy any Default without waiving the Default remedied.  No such act shall in any way affect the
rights or powers of Holder, Lenders or Trustee hereunder except to the extent
specifically agreed to by Holder in such writing.  Neither failure by Holder or Lenders to
exercise, nor delay by Holder or Lenders in exercising, nor discontinuance of
the exercise of any right, power or remedy (including the right to accelerate
the maturity of the Secured Indebtedness or any part thereof) upon or after any
Default shall be construed as a waiver of such Default or as a waiver of the
right to exercise any such right, power or remedy at a later date.  No single or partial exercise by Holder or
Lenders of any right, power or remedy hereunder shall exhaust the same or shall
preclude any other or further exercise thereof, and every such right, power or
remedy hereunder may be exercised at any time and from time to time.  No waiver of any provision hereof or consent
to any departure by Borrowers or Grantor therefrom shall in any event be
effective unless the same shall be in writing and signed by Holder and then
such waiver or consent shall be effective only in the specific instance, for
the purpose for which given and to the extent therein specified.  No notice to or demand on Grantor in any case
shall of itself entitle Grantor to any other or further notice or demand in
similar or other circumstances.


 


Section 6.5                                      No Impairment
of Security.  The lien,
security interest and other security rights of Holder and Lenders hereunder or
under any other Loan Document shall not be impaired by any indulgence,
moratorium or release granted by Holder including any renewal, extension or
modification which Holder may grant with respect to any Secured Indebtedness,
or any surrender, compromise, release, renewal, extension, exchange or substitution
which Holder may grant in respect of the Property, or any part thereof or any
interest therein, or any release or indulgence granted to any endorser,
guarantor or surety of any Secured Indebtedness.  The taking of additional security by Holder
and Lenders shall not release or impair the lien, security interest or other
security rights of Holder and Lenders hereunder or affect the liability of Borrowers
or the Grantor or of any endorser, guarantor or surety, or improve the right of
any junior lienholder in the Property (without implying hereby any consent to
any junior lien by Holder or Lenders).


 


32














 


Section 6.6                                      Grantor’s
Successors.  If the
ownership of the Property or any part thereof becomes vested in a person other
than Grantor, Holder may, on behalf of itself and Lenders, without notice to
Grantor, deal with such successor or successors in interest with reference to
this Deed of Trust and to the Secured Indebtedness in the same manner as with
Grantor, without in any way vitiating or discharging Grantor’s liability
hereunder or its liability for the payment of the Secured Indebtedness or
performance of the obligations secured hereby. 
No transfer of the Property, no forbearance on the part of Holder, and
no extension of the time for the payment of the Secured Indebtedness given by
Holder shall operate to release, discharge, modify, change or affect, in whole
or in part, the liability of Grantor hereunder for the payment of the Secured
Indebtedness or performance of the obligations secured hereby or the liability
of any other person hereunder for the payment of the Secured Indebtedness.  Grantor agrees that it shall be bound by any
modification of this Deed of Trust or any of the other Loan Documents made by
Holder on behalf of itself and Lenders and any subsequent owner of the
Property, with or without notice to such Grantor, and no such modifications
shall impair the obligations of such Grantor under this Deed of Trust or any
other Loan Document.  Nothing in this Section or
elsewhere in this Deed of Trust shall be construed to imply any consent by
Holder or Lenders to any transfer of the Property.


 


Section 6.7                                      Place of
Payment; Forum.  All Secured
Indebtedness which may be owing hereunder at any time by Borrowers or Grantor
shall be payable at the place designated in the Credit Agreement (or if no such
designation is made, at the address of Holder indicated at the end of this Deed
of Trust).  Grantor hereby irrevocably
submits generally and unconditionally for itself and in respect of its property
to the non-exclusive jurisdiction of any California state court or any United
States federal court sitting in the county in which the Secured Indebtedness is
payable, and to the non-exclusive jurisdiction of any state or United States
federal court sitting in the state in which any of the Property is located,
over any suit, action or proceeding arising out of or relating to this Deed of
Trust or the Secured Indebtedness. 
Grantor hereby irrevocably waives, to the fullest extent permitted by
law, any objection that Grantor may now or hereafter have to the laying of
venue in any such court and to any claim that any such court is an inconvenient
forum.  Grantor hereby agrees and
consents that, in addition to any methods of service of process provided for
under applicable law, all service of process in any such suit, action or proceeding
in any California state court or any United States federal court sitting in the
state in which the Secured Indebtedness is payable may be made by certified or
registered mail, return receipt requested, directed to Grantor at its address
stated at the end of this Deed of Trust or at a subsequent address of Grantor
of which Holder received actual notice from Grantor in accordance with this
Deed of Trust, and service so made shall be complete five (5) days after
the same shall have been so mailed. 
Nothing herein shall affect the right of Holder to serve process in any
manner permitted by law or limit the right of Holder to bring proceedings
against Grantor in any other court or jurisdiction; provided, however, that in
the event of any inconsistency between the terms and conditions of this Section 6.7
and those of any provision in the Credit Agreement regarding reference and
arbitration, the terms and conditions of the reference and arbitration
provision of the Credit Agreement shall prevail.


 


Section 6.8                                      WAIVER OF JURY TRIAL.  WITHOUT
INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO SUBMIT TO JUDICIAL
REFERENCE OR ARBITRATION ANY “DISPUTE” (AS DEFINED IN SECTION 1.2(a))
AS SET FORTH IN THE CREDIT AGREEMENT, GRANTOR, HOLDER AND 


 


33

















 


LENDERS WAIVE TRIAL BY JURY IN RESPECT OF ANY AND ALL “DISPUTES”
AND ANY ACTION ON ANY “DISPUTE.”  THIS
WAIVER SHALL APPLY TO THE EXTENT ANY “DISPUTE” IS NOT SUBMITTED TO JUDICIAL
REFERENCE OR ARBITRATION, OR IS DEEMED BY THE ARBITRATOR, REFEREE OR ANY COURT
WITH JURISDICTION TO BE NOT REQUIRED TO BE DETERMINED BY JUDICIAL REFERENCE OR
ARBITRATION, OR NOT SUSCEPTIBLE OF BEING SO DETERMINED.  THIS WAIVER IS KNOWINGLY, WILLINGLY AND
VOLUNTARILY MADE BY GRANTOR, HOLDER AND LENDERS, AND GRANTOR, HOLDER AND LENDERS
HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY
ANY PERSON OR ENTITY TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY
MODIFY OR NULLIFY ITS EFFECT.  THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THE LOAN
DOCUMENTS.  GRANTOR, HOLDER AND LENDERS
ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY
PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL.  GRANTOR FURTHER REPRESENTS AND WARRANTS THAT
IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS DEED OF TRUST AND IN THE MAKING
OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE
REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND
THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.


 


Section 6.9                                      Subrogation to
Existing Liens; Vendor’s Lien.  To the extent that proceeds of the Loan are
used to pay indebtedness secured by any outstanding lien, security interest,
charge or prior encumbrance against the Property, such proceeds have been
advanced by Holder and Lenders at Borrowers’ request, and Holder and Lenders
shall be subrogated to any and all rights, security interests and liens owned
by any owner or holder of such outstanding liens, security interests, charges
or encumbrances, however remote, regardless of whether said liens, security
interests, charges or encumbrances are released, and all of the same are
recognized as valid and subsisting and are renewed and continued and merged
herein to secure the Secured Indebtedness, but the terms and provisions of this
Deed of Trust shall govern and control the manner and terms of enforcement of
the liens, security interests, charges and encumbrances to which Holder and
Lenders are subrogated hereunder.  It is
expressly understood that, in consideration of the payment of such indebtedness
by Holder and Lenders, Grantor hereby waives and releases all demands and
causes of action for offsets and payments in connection with said
indebtedness.  If all or any portion of
the proceeds of the Loan or of any other Secured Indebtedness has been advanced
for the purpose of paying the purchase price for all or a part of the Property,
no vendor’s lien is waived; and Holder shall have, and is hereby granted, for
the ratable benefit of itself and Lenders, a vendor’s lien on the Property as
cumulative additional security for the Secured Indebtedness.  Holder, on behalf of itself and Lenders, may
foreclose under this Deed of Trust or under the vendor’s lien without waiving
the other or may foreclose under both.


 


Section 6.10                                Application of
Payments to Certain Indebtedness.  If any part of the Secured Indebtedness
cannot be lawfully secured by this Deed of Trust or if any part of the Property
cannot be lawfully subject to the lien and security interest hereof to the full
extent of 


 


34

















 


such indebtedness, then all payments made shall be applied on said
indebtedness first in discharge of that portion thereof which is not secured by
this Deed of Trust.


 


Section 6.11                                Nature of Loan;
Compliance with Usury Laws.  The Loan is being made solely for the purpose
of carrying on or acquiring a business or commercial enterprise.  It is the intent of Grantor, Holder and
Lenders and all other parties to the Loan Documents to conform to and contract
in strict compliance with applicable usury law from time to time in
effect.  All agreements among Holder,
Lenders and Grantor (or any other party liable with respect to any indebtedness
under the Loan Documents) are hereby limited by the provisions of this Section 6.11,
which shall override and control all such agreements, whether now existing or
hereafter arising.  In no event or
contingency (including prepayment, default, demand for payment or acceleration
of the maturity of any obligation), shall the interest taken, reserved,
contracted for, charged, chargeable or received under this Deed of Trust or any
other Loan Document or otherwise, exceed the maximum nonusurious amount
permitted by applicable law (the “Maximum Amount”).  If from any possible construction of any
document, interest would otherwise be payable in excess of the Maximum Amount,
any such construction shall be subject to the provisions of this Section 6.11
and such document shall ipso facto be automatically reformed and the interest
payable shall be automatically reduced to the Maximum Amount, without the
necessity of execution of any amendment or new document.  If Holder and Lenders shall ever receive
anything of value which is characterized as interest under applicable law and
which would apart from this provision be in excess of the Maximum Amount, an
amount equal to the amount which would have been excessive interest shall,
without penalty, be applied to the reduction of the principal amount owing on
the Secured Indebtedness in the inverse order of its maturity and not to the
payment of interest, or refunded to Grantor or the other payor thereof if and
to the extent such amount which would have been excessive exceeds such unpaid
principal.  The right to accelerate the
maturity of the Loan or any other Secured Indebtedness does not include the
right to accelerate any interest which has not otherwise accrued on the date of
such acceleration, and Holder and Lenders do not intend to charge or receive
any unearned interest in the event of acceleration.  All interest paid or agreed to be paid to
Holder and Lenders shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full stated term
(including any renewal or extension) of the Secured Indebtedness so that the
amount of interest on account of such indebtedness does not exceed the Maximum
Amount.  As used in this Section, the
term “applicable law” shall mean the laws of the State of California or
the federal laws of the United States applicable to this transaction, whichever
laws allow the greater interest, as such laws now exist or may be changed or
amended or come into effect in the future.


 


Section 6.12                                Substitute
Trustee.  Trustee may resign by an
instrument in writing addressed to Holder or Trustee may be removed at any time
with or without cause by an instrument in writing executed by Holder.  In case of the resignation, removal or
disqualification of Trustee, or if for any reason Holder shall deem it
desirable to appoint a substitute or successor trustee to act instead of the
herein-named trustee or any substitute or successor trustee, then Holder shall
have the right and is hereby authorized and empowered to appoint a successor
trustee(s) or a substitute trustee(s) without any formality other
than appointment and designation in writing executed by Holder and the
authority hereby conferred shall extend to the appointment of other successor
and substitute trustees successively until the Secured Indebtedness has been
paid in full or until the Property is fully and finally sold hereunder.  If Holder is a corporation or 


 


35

















 


association and such appointment is executed on its behalf by an
officer of such corporation or association, such appointment shall be
conclusively presumed to be executed with authority and shall be valid and
sufficient without proof of any action by the board of directors or any
superior officer of the corporation or association.  Upon the making of any such appointment and
designation, all of the estate and title of Trustee in the Property shall vest
in the named successor or substitute Trustee(s) and it shall thereupon
succeed to, and shall hold, possess and execute, all of the rights, powers, privileges,
immunities and duties herein conferred upon Trustee.


 


Section 6.13                                No Liability of
Trustee.  Trustee shall not be liable
for any error of judgment or act done by Trustee in good faith, or be otherwise
responsible or accountable under any circumstances whatsoever (including
Trustee’s negligence), except for Trustee’s gross negligence or willful
misconduct.  Trustee shall have the right
to rely on any instrument, document or signature authorizing or supporting any
action taken or proposed to be taken by it hereunder, believed by it in good
faith to be genuine.  All moneys received
by Trustee shall, until used or applied as herein provided, be held in trust
for the purposes for which they were received, but need not be segregated in
any manner from any other moneys (except to the extent required by law), and
Trustee shall be under no liability for interest on any moneys received by it
hereunder.  Grantor hereby ratifies and
confirms any and all acts which the herein-named Trustee or its successor or successors,
substitute or substitutes, in this trust, shall do lawfully by virtue
hereof.  Grantor will reimburse Trustee
for, and save Trustee harmless against, any and all liability and expenses
which may be incurred by Trustee in the performance of its duties.  The foregoing indemnity shall not terminate
upon discharge of the Secured Indebtedness or foreclosure, release or other
termination of this Deed of Trust.


 


Section 6.14                                Reconveyances.


 


(a)                                  Reconveyance
from Deed of Trust.  If all of
the Secured Indebtedness shall have been paid in full, and all of the
covenants, warranties, undertakings and agreements made in this Deed of Trust
shall have been kept and performed, and all obligations, if any, of Holder and
Lenders for further advances shall have been terminated, then, and in that
event only, all rights under this Deed of Trust shall terminate (except to the
extent expressly provided herein with respect to indemnifications,
representations and warranties and other rights which are to continue following
the reconveyance hereof) and the Property shall become wholly clear of the
liens, security interests, conveyances and assignments evidenced hereby, and
the Property shall be reconveyed by Holder in due form at Grantor’s cost.  Without limitation, all provisions herein for
indemnity of Holder, Lenders and/or Trustee shall survive discharge of the
Secured Indebtedness and any foreclosure, reconveyance or termination of this
Deed of Trust.


 


(b)                                 Partial
Reconveyance; No Reconveyance in Default.  Holder may, regardless of consideration,
cause the reconveyance of any part of the Property from the lien of this Deed
of Trust without in any manner affecting or impairing the lien or priority of
this Deed of Trust as to the remainder of the Property.  No partial reconveyance shall be sought,
requested or required if any Default has occurred which has not been cured.


 


(c)                                  Reconveyance
Fee.  Grantor agrees to pay fees in
the maximum amounts legally permitted, or reasonable fees when the law provides
no maximum limit, for Trustee’s rendering 


 


36

















 


of services in connection with each partial or complete reconveyance of
the Property from the lien of this Deed of Trust.


 


Section 6.15                                Notices.  All notices, requests, consents, demands and
other communications required or which any party desires to give hereunder or
under any other Loan Document shall be in writing and, unless otherwise
specifically provided in such other Loan Document, shall be deemed sufficiently
given or furnished if delivered by personal delivery, by nationally recognized
overnight courier service, or by registered or certified United States mail,
postage prepaid, addressed to the party to whom directed at the addresses
specified at the end of this Deed of Trust (unless changed by similar notice in
writing given by the particular party whose address is to be changed) or by
facsimile.  Any such notice or
communication shall be deemed to have been given either at the time of personal
delivery or, in the case of courier or mail, as of the date of first attempted
delivery at the address and in the manner provided herein, or, in the case of
facsimile, upon receipt; provided, that service of a notice required by the
California Civil Code shall be considered complete when the requirements of
that statute are met.  Notwithstanding
the foregoing, no notice of change of address shall be effective except upon
receipt.  Any party whose address is set forth
at the end of this Deed of Trust hereby requests that a copy of notice of
default and notice of sale be mailed to it at that address.  If any Grantor fails to insert an address,
that failure shall constitute a designation of such Grantor’s last known
address as the address for such notice. 
This Section shall not be construed in any way to affect or impair
any waiver of notice or demand provided in any Loan Document or to require
giving of notice or demand to or upon any person in any situation or for any
reason.


 


Section 6.16                                Invalidity of
Certain Provisions.  A
determination that any provision of this Deed of Trust is unenforceable or
invalid shall not affect the enforceability or validity of any other
provisions, and the determination that the application of any provision of this
Deed of Trust to any person or circumstance is illegal or unenforceable shall
not affect the enforceability or validity of such provision as it may apply to
other persons or circumstances.


 


Section 6.17                                Interpretation.  References to Articles, Sections and Exhibit(s) are,
unless specified otherwise, references to articles, sections and exhibit(s) of
this Deed of Trust.  Words of any gender
shall include each other gender.  Words
in the singular shall include the plural and words in the plural shall include
the singular.  The words “herein,”
“hereof,” “hereunder” and other similar compounds of the word “here”
shall refer to this entire Deed of Trust and not to any particular Article,
Section, paragraph or provision.  The
words “include” and “including” shall be interpreted as if
followed by the words “without limitation.”  Captions and headings in this Deed of Trust
are for convenience only and shall not affect the construction of this Deed of
Trust.  The term “person” and
words importing persons as used in this Deed of Trust shall include firms,
associations, partnerships (including limited partnerships and limited
liability partnerships), joint ventures, trusts, corporations, limited
liability companies and other legal entities, including public or governmental
bodies, agencies or instrumentalities, as well as natural persons.


 


Section 6.18                                Binding Effect;
Grantor.  The terms, provisions,
covenants and conditions hereof shall be binding upon Borrowers and Grantor and
the representatives, successors and assigns of Borrowers and Grantor; provided,
however, that Grantor may not assign this Deed of Trust, or assign or delegate
any of its rights or obligations under this Deed of Trust, without the prior
written consent of each Lender in each instance (and any attempted assignment
or 


 


37

















 


delegation by Grantor without such consent shall be null and
void).  If any Grantor or any signatory
who signs on behalf of any Grantor is a corporation, partnership or other legal
entity, Grantor and any such signatory, and the person or persons signing for
it, represent and warrant to Holder and Lenders that this instrument is
executed, acknowledged and delivered by Grantor’s duly authorized
representatives.


 


Section 6.19                                Trustee, Holder
and Lender Assigns; Covenants Running with the Land.  The terms, provisions, covenants and
conditions hereof shall inure to the benefit of Trustee, Holder, any Lender and
any of their successors and assigns and shall constitute covenants running with
the Land.  Holder and any Lender may,
from time to time, sell, transfer or assign all or a portion of its respective
interest in the Secured Indebtedness and the Loan Documents, on and subject to
the terms and conditions of the Credit Agreement.  In the event of any such sale, transfer or
assignment, the corresponding whole or part of the rights and benefits under
this Deed of Trust and the corresponding interest herein may be transferred
with such Secured Indebtedness.  Except
as provided in the Credit Agreement, Borrowers and Grantor waive notice of any
sale, transfer or assignment of the Secured Indebtedness or any part thereof or
any interest therein.  Borrowers and
Grantor agree that failure by Holder, Lenders or any other party to give notice
of any such sale, transfer or assignment will not affect the liability of
Borrowers and Grantor hereunder.


 


Section 6.20                                Execution;
Recording.  This Deed
of Trust may be executed in several counterparts, all of which counterparts
together shall constitute one and the same instrument.  The date or dates reflected in the
acknowledgments hereto indicate the date or dates of actual execution of this
Deed of Trust, but such execution is as of the date shown on the first page hereof,
and for purposes of identification and reference the date of this Deed of Trust
shall be deemed to be the date reflected on the first page hereof.  Grantor will cause this Deed of Trust and all
amendments and supplements thereto and substitutions therefor and all financing
statements and continuation statements relating thereto to be recorded, filed,
re-recorded and refiled in such manner and in such places as Trustee or Holder
shall reasonably request and will pay all such recording, filing, re-recording
and refiling taxes, fees and other charges.


 


Section 6.21                                Modification or
Termination.  The Loan
Documents may be modified or terminated only by a written instrument or
instruments intended for that purpose and executed by the party against which
enforcement of the modification or termination is asserted.  Any alleged modification or termination which
is not so documented shall not be effective as to any party.


 


Section 6.22                                No Partnership,
Etc.  The relationship between
Grantor on the one hand and Holder and Lenders on the other is solely that of
grantor and lender.  Holder and Lenders
have no fiduciary or other special relationship with Grantor.  Nothing contained in the Loan Documents is
intended to create any partnership, joint venture, association or special
relationship between Grantor and Holder and Lenders or in any way to make
Holder or any Lender a co-principal with Grantor with reference to the
Property. All agreed contractual duties between or among Holder, Lenders,
Grantor and Trustee are set forth herein and in the other Loan Documents, and
any additional implied covenants or duties are hereby disclaimed.  Any inferences to the contrary of any of the
foregoing are hereby expressly negated.


 


38

















 


Section 6.23                                Applicable Law.  THIS DEED OF TRUST, AND ITS VALIDITY,
ENFORCEMENT AND INTERPRETATION SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED
AND ENFORCED IN ACCORDANCE WITH AND PURSUANT TO THE LAWS OF THE STATE OF NEW
YORK (WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED
STATES FEDERAL LAW, EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW
AND EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTION
OTHER THAN THE STATE OF NEW YORK ARE GOVERNED BY THE LAWS OF SUCH OTHER
JURISDICTION; PROVIDED, HOWEVER, THAT WITH RESPECT TO THE CREATION, PERFECTION,
PRIORITY AND ENFORCEMENT OF THE LIEN OR INTEREST OF THIS DEED OF TRUST, THE
LAWS OF CALIFORNIA SHALL APPLY.


 


Section 6.24                                Entire
Agreement.  The Loan
Documents constitute the entire understanding and agreement among Borrowers,
Grantor, Holder and Lenders with respect to the transactions arising hereunder
in connection with the Secured Indebtedness and supersede all prior written or
oral understandings and agreements among Grantor, Holder and Lenders with
respect to the matters addressed in the Loan Documents.  Borrowers and Grantor hereby acknowledge
that, except as incorporated in writing in the Loan Documents, there are not
and were not, and no persons are or were authorized by Holder or Lenders to
make, any representations, understandings, stipulations, agreements or
promises, oral or written, with respect to the matters addressed in the Loan
Documents.


 


39

















 


IN WITNESS WHEREOF, Borrowers and Grantor have
executed this instrument as of the date first written on page 1 hereof.


 


	
  The address of Grantor is:

  	
   

  	
  GRANTOR: 

  
	
   

  	
   

  	
   

  
	
  400 Corporate Point,
  Suite 525

  	
   

  	
  ALTA LOS ANGELES
  HOSPITALS, 

  
	
  Culver City, California
  90230

  	
   

  	
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						



 


 


	
  The address of Borrower
  is:

  	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
  400 Corporate Point, Suite 525

  	
   

  	
  PROSPECT MEDICAL HOLDINGS,

  
	
  Culver City,
  California  90230

  	
   

  	
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  The address of Borrower
  is:

  	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
  400 Corporate Point, Suite 525

  	
   

  	
  PROSPECT MEDICAL GROUP,
  INC.

  
	
  Culver City, California  90230

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						



 


 


The address of Administrative Agent/Holder is:


 


Bank of America, N.A.


800 Fifth Avenue, 32nd Floor


Mail Code WA1-501-32-37


Seattle, Washington  98104


 


 


The address of Trustee is:


 


PRLAP, Inc.


P.O. Box 2240


Brea, California 
92822


 


[Norwalk Community Hospital – Second Lien]


 

















 


STATE OF CALIFORNIA


 


COUNTY OF


 


On
                                              ,
before me,
                                                ,
a notary public, personally appeared                                               ,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on
the instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.


 


WITNESS my hand and official seal.


 


 


	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  



 


[Notarial Seal]


 


 


My commission expires:


 


STATE OF CALIFORNIA


 


COUNTY OF


 


On
                                              ,
before me,
                                                ,
a notary public, personally appeared
                                              ,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on
the instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.


 


WITNESS my hand and official seal.


 


	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  



 


[Notarial Seal]


 


My commission expires:


 


 


[Norwalk Community Hospital – Second Lien]


 

















 


STATE OF CALIFORNIA


 


COUNTY OF


 


On
                                              ,
before me,
                                                ,
a notary public, personally appeared
                                              ,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on
the instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.


 


WITNESS my hand and official seal.


 


	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  



 


[Notarial Seal]


 


My commission expires:


 


 


[Norwalk Community Hospital – Second Lien]


 

















 


EXHIBIT A


 


LAND


 


All that parcel or parcels of real property located
in the City of Norwalk, County of Los Angeles, State of California, and more
particularly described as follows:


 


The West 320 feet of that
portion of the Northwest Quarter of Section 17, Township 3 South, Range 11
West, in the Rancho Los Coyotes, in the City of Norwalk, County of Los Angeles,
State of California, as shown upon a map recorded in Book 41819 Pages 141,
et seq., Official records, in the office of the county recorder of said county,
described as follows:


 


Beginning at a point in the
center line of Bloomfield Avenue, formerly Anaheim Street, 60 feet wide, as
described in the deed to said county recorder on August 23, 1916 in Book
6283 Page 341 of Deeds, that is distant along said center line, North 0o
24’ 30” West 287.60 feet from the Easterly prolongation of the center line of
Goller Avenue, as shown on the map of Tract No. 15205, as per map recorded
in Book 354, Pages 11, et seq., of Maps, in the office of the county
recorder of said county; thence North 89o 37’ 45” East 30 feet to the true
point of beginning in the East line of said avenue; thence North 89o 37’ 45”
East 630.61 feet; thence North 0o 37’ 15” West 272.60 feet to the South line of
the land described in the Decree of Condemnation by the State of California, a
certified copy of said decree being recorded December 28, 1950 in Book
35179 Page 201, Official Records; thence along said county line South 89o
37’ 45” West 629.60 feet to the said East line of Bloomfield Avenue; thence
South 0o 24’ 30” East 272.60 feet to the true point of beginning.


 


Except any portion of said
land included within a strip of land, 60 feet wide, the center line of said 60
foot strip of land being the West line of Section 17, Township 3 South,
Range 11 West, in the Rancho Los Coyotes, as shown on map made by Charles T.
Healey upon survey by him about 1870 for the Stearns Ranchos Company, as
reserved for roads, railroads, and ditches in deeds from Alfred Robinson,
Trustee or Stearns Ranchos Company, all said reservation, not theretofore
release or conveyed, were quitclaimed to the County of Los Angeles, by the
Stearns Ranchos Company, by deed dated May 17, 1918 and recorded on June 10,
1918 in Book 6678 Page 217 of Deeds.


 


A-1