EXHIBIT 10.5
(Baton Rouge)
MORTGAGE, LEASEHOLD MORTGAGE, ASSIGNMENT OF RENTS,
FIXTURE FILING, SECURITY AGREEMENT AND
FINANCING STATEMENT
Dated as of January 27, 1999
LOUISIANA CASINO CRUISES, INC.
("Grantor")
to
U. S. BANK TRUST NATIONAL ASSOCIATION
as Trustee
("Mortgagee")
TABLE OF CONTENTS
PARAGRAPH PAGE
--------- ----
GRANTING CLAUSES.................................................................2
HABENDUM ........................................................................6
REPRESENTATIONS, WARRANTIES, COVENANTS, AGREEMENTS AND
CONDITIONS.......................................................................6
1. Payment of Secured Obligations.................................6
2. Warranty of Title..............................................6
3. Subordinate Mortgages and Liens................................7
4. Representations and Warranties.................................7
5. Covenants of Grantor as to Performance and Other Matters.......8
6. Performance by Mortgagee......................................11
7. Conflicts with Security Agreement.............................11
8. Insurance.....................................................11
9. Payment of Taxes, etc.........................................14
10. Escrow Fund...................................................14
11. Space Leases, Rents and Cash Collateral.......................15
12. Maintenance of the Property; Alterations......................17
13. Damage to and Destruction of the Mortgaged Property...........17
14. Condemnation..................................................17
15. Compliance with Agreements, Laws, etc.........................18
16. Contest of Taxes, Assessments and Liens.......................18
17. Cure of Defaults by Mortgagee.................................19
18. Indemnity.....................................................20
19. Event of Default..............................................20
20. Additional Remedies...........................................21
21. Confession of Judgment. .....................................22
22. Authorization to Execute Deeds, Appointment of Keeper, etc....22
23. Proceeds of Foreclosure Sale..................................23
24. Purchase of the Property by Mortgagee.........................24
25. Waiver of Right to Bring Counterclaim in Foreclosure Action...24
26. Uniform Commercial Code.......................................24
27. Intentionally Omitted.........................................25
28. Terms Subject to Applicable Law; Severability.................25
29. Modifications by Mortgagee....................................25
30. Change in Laws Regarding Taxation.............................25
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31. Documentary Stamps............................................26
32. Cumulative Remedies of Mortgagee; No Waiver...................26
33. Filing of Shore Mortgage, etc.................................26
34. Marshaling....................................................27
35. Waiver of Notice..............................................27
36. Recovery of Sums Required to Be Paid..........................27
37. Further Assurances............................................27
38. Notices.......................................................28
39. Liability.....................................................28
40. Headings, etc.................................................28
41. Successors and Assigns........................................28
42. Discharge of Lien.............................................28
43. Survival of Assignment........................................28
44. Miscellaneous.................................................28
45. Governing Law; Interpretation.................................29
46. True Copy.....................................................29
47. Expenses of Enforcement.......................................29
48. Waiver........................................................29
49. Construction Mortgage.........................................30
50. The Mortgagee's Duties........................................30
51. Shore Mortgage Absolute.......................................30
52. Authentic Evidence............................................31
53. Interaction with Indenture....................................31
54. Excluded Assets...............................................31
Schedule A - Leasehold Interest
Schedule B - Permitted Encumbrances
Schedule C - Certified Copy of Resolutions
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MORTGAGE, LEASEHOLD MORTGAGE, * UNITED STATES OF AMERICA
ASSIGNMENT OF LEASES AND RENTS, *
FIXTURE FILING, SECURITY *
AGREEMENT AND FINANCING *
STATEMENT * STATE OF NEW YORK
*
BY *
*
LOUISIANA CASINO CRUISES, INC. * COUNTY OF NEW YORK
*
TO *
*
U.S. BANK TRUST NATIONAL *
ASSOCIATION, AS TRUSTEE *
* * * * * * * * * * * * * * * * * * * * *
BE IT KNOWN, that as of this 26th day of January, 1999, but for all
purposes herein effective as of January 27, 1999, before me the undersigned
Notary Public duly commissioned and qualified, personally came and appeared:
LOUISIANA CASINO CRUISES, INC., a Louisiana corporation (Federal
Taxpayer Identification No. ▇▇-▇▇▇▇▇▇▇), appearing through its
undersigned representative duly authorized hereunto by virtue of a
resolution of the Board of Directors thereof, a certified copy of which
is attached hereto as Schedule C, which has a mailing address of ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
("GRANTOR"), who declared that Grantor does by these presents declare and
acknowledge an indebtedness unto:
U. S. BANK TRUST NATIONAL ASSOCIATION, a national banking association
(Federal Taxpayer Identification No. ▇▇-▇▇▇▇▇▇▇), as trustee for the
Holders under an Indenture, dated as of January 27, 1999 (such
Indenture, as amended or otherwise modified from time to time, the
"Indenture"), between Grantor, the Subsidiary Guarantors referred to
therein and Trustee, appearing herein through its undersigned officer
duly authorized hereunto, which has a mailing address of ▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Department.
("MORTGAGEE"), here present who accepts this Mortgage, Leasehold Mortgage,
Assignment of Leases and Rents, Fixture Filing, Security Agreement and Financing
Statement (this "SHORE MORTGAGE"; capitalized terms not otherwise defined in
this Shore Mortgage shall have the meanings set forth for such terms in the
Indenture).
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W I T N E S S E T H
WHEREAS, Grantor is the owner of a (i) leasehold interest (the
"LEASEHOLD INTEREST") created under that certain Ground Lease Agreement, dated
June 16, 1993, between Capitol Lake Properties, Inc., as landlord, and Grantor,
as tenant, as amended by that certain Supplemental Agreement to Ground Lease,
dated June 16, 1993, between Capitol Lake Properties, Inc. and Grantor and that
certain Amendment to Ground Lease Agreement, dated September 30, 1993, between
Capitol Lake Properties, Inc. and Grantor (as so amended, the "LEASE"), and (ii)
a fee simple interest (the "FEE SIMPLE INTEREST") pursuant to that certain Cash
Sale by Luhr Bros., Inc. in favor of Grantor dated September 15, 1998, for
certain premises located in East Baton Rouge Parish, Louisiana, and more
particularly described on Schedule A attached hereto (such Leasehold Interest
and Fee Simple Interest being hereinafter defined as the "REAL PROPERTY"); and
WHEREAS, Grantor has entered into the Indenture, pursuant to which
Grantor has issued or will issue up to $55,000,000 of its 11% Senior Secured
Notes due 2005 (the "NOTES"); and
WHEREAS, Grantor has entered into a Purchase Agreement, dated as of
January 22, 1999 (the "PURCHASE AGREEMENT") with the Initial Purchaser (as
defined therein) pursuant to which the Initial Purchaser has agreed to purchase
the Notes specified in such Purchase Agreement; and
WHEREAS, the proceeds of the purchase of the Notes will be available to
Grantor to enable Grantor to repay the existing $50 million of Senior Secured
Increasing Rate Notes due 2001 and for working capital purposes, and therefore,
Grantor will derive substantial direct benefit from the transactions
contemplated herein, in the Indenture, the Security Documents (as defined in the
Indenture; such documents being collectively hereinafter referred to as the
"TRANSACTION DOCUMENTS") and the Purchase Agreement; and
WHEREAS, it is a condition precedent to the purchase of the Notes by
the Initial Purchaser and to the Purchase Agreement that Grantor shall have
executed and delivered this Shore Mortgage.
GRANTING CLAUSES
NOW, THEREFORE, in consideration of ten dollars and other good and
valuable consideration, the receipt of and sufficiency of which are hereby
acknowledged, and to secure (i) the payment when due of indebtedness evidenced
by the Notes in the principal sum of FIFTY-FIVE MILLION DOLLARS ($55,000,000),
payable to the order of the Holders, bearing interest as set forth in the
Indenture and maturing on December 1, 2005, such date being the "Maturity Date",
and any notes exchanged for the Notes or issued in replacement of the Notes (in
each case pursuant to the terms of the Indenture), including, without
limitation, all accrued and unpaid interest thereon, and premiums and penalties,
if any, thereon, including late payment charges and Additional Interest (as
defined in Paragraph 17 hereof), (ii) the payment by Grantor if and when
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due of (a) the Change of Control Payment (as defined in Section 4.14 of the
Indenture), in an amount not to exceed such amount calculated in accordance with
Section 4.14 of the Indenture, and (b) amounts due in connection with an Excess
Proceeds Offer (as defined in Section 4.10 of the Indenture) in an amount not to
exceed such amount calculated in accordance with Section 4.10 of the Indenture,
in either case together with interest thereon as set forth in the Indenture, and
premiums and penalties, if any, thereon, including Additional Interest, (iii)
all other sums that may or shall become due hereunder, in connection with the
Notes or under the other Transaction Documents, including the costs and expenses
of enforcing any provision of any of the foregoing documents or any extensions
or modifications of the Notes or any substitutions therefor, (iv) the
reimbursement to Mortgagee of all monies which may be advanced as herein
provided and of any and all costs and expenses (including reasonable attorneys'
fees and expenses) incurred or paid on account of any litigation at law or in
equity that may arise in respect of this Shore Mortgage or the obligations
secured hereby or the lands and premises and other property herein mentioned or
in obtaining possession of said lands and premises and other property after any
sale that may be made as hereinafter provided, (v) the payment by Grantor to
Mortgagee of all sums, if any, as may be duly expended or advanced by Mortgagee
in the performance of any obligation of Grantor as provided hereunder, (vi) the
payment of any and all other indebtedness that this Shore Mortgage by its terms
secures and (vii) the performance and observance of the covenants, agreements
and obligations of Grantor contained herein and in the other Transaction
Documents (all obligations and sums included in the foregoing clauses (i), (ii),
(iii), (iv), (v), (vi) and (vii) being hereinafter collectively referred to as
the "SECURED OBLIGATIONS"), and in order to charge with such performance and
with such payments said lands and premises and other property hereinafter
described and the rents, revenues, issues, income and profits thereof, Grantor
does hereby mortgage, affect, hypothecate, to inure to the use and benefit of
Mortgagee (as trustee under the Indenture), and its successors and assigns, all
right, title and interest of Grantor now owned or leased, or hereafter acquired,
in, to or under, or derived from each and all of the following properties,
estates, rights, titles and interests (collectively, the "MORTGAGED PROPERTY"):
(a) the Real Property and all tenements, hereditaments,
appurtenances, estates and rights in and to any of the Real Property
and all component parts of the Real Property;
(b) all buildings, improvements and other structures now or
hereafter located on any of the Real Property (the "IMPROVEMENTS");
(c) all of Grantor's right, title and interest in and to all
servitudes, easements, rights-of-way, gores of land, streets, ways,
alleys, passages, sewer rights, waters, water courses, water rights and
powers, and all estates, rights, title, interests, privileges,
liberties, prescriptions, advantages and appurtenances of any nature
whatsoever, in any way belonging, relating or pertaining to any of the
Real Property or the Improvements;
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(d) all of Grantor's right, title and interest in and to any
right to purchase, or to use and occupy, any land adjacent to any of
the Real Property and any land lying in the bed of any street, road or
avenue, opened or proposed, in front of or adjoining any of the Real
Property;
(e) all of Grantor's right, title and interest to all
machinery, apparatus, equipment, fittings, fixtures and other property
of every kind and nature whatsoever now or hereafter located upon any
of the Real Property or the Improvements, and all component parts of
any building or other construction located on any of the Real Property
or appurtenances thereto, and used in connection with the operation and
occupancy of any of the Real Property or the Improvements, and all
building equipment, materials and supplies of any nature whatsoever now
or hereafter located in or upon any of the Real Property or the
Improvements, including, without limitation, ships, boats, barges and
vessels together with all of the boilers, engines, machinery, masts,
spars, sails, anchors, cables, chains, rigging, tackle, fittings and
all other appurtenances thereunto appertaining or belonging, and all
structural steel and other metals, lumber and lumber products, bricks,
stones, building blocks, sand, cement, roofing materials, paint, doors,
windows, hardware, wires, wiring and other building materials and any
building equipment, materials and supplies obtained for use in
connection with any of the Real Property or the Improvements and all
additions, replacements, modifications and alterations of any of the
foregoing, including, but without limiting the generality of the
foregoing, all heating, lighting, incinerating and power equipment,
engines, pipes, tanks, motors, conduits, switchboards, plumbing,
lifting, cleaning, fire prevention, fire extinguishing, refrigerating,
ventilating and communications apparatus, air cooling and air
conditioning apparatus, elevators, ducts and compressors and all other
equipment and fixtures (collectively, the "EQUIPMENT"). Grantor
acknowledges that all Equipment is part and parcel of the real estate
and appropriated to the use of the real estate and, whether or not
affixed or annexed to the Improvements, shall for the purpose of this
Shore Mortgage be deemed conclusively to be real estate and mortgaged
hereby;
(f) all of Grantor's right, title and interest to all plans
and specifications for the Real Property and the Improvements, all
contracts with architects and engineers responsible for the design of
the Improvements, the preparation or evaluation of any of such plans
and specifications or the supervision of the construction of any of the
Improvements, all contracts to which Grantor is now or hereafter a
party providing for the construction of any of the Improvements, or the
furnishing of labor or materials in connection therewith or the
furnishing or installation of any Equipment or other personal property
in connection therewith, all contracts to which Grantor is now or
hereafter a party providing for the management of the construction of
any of the Improvements, all rights of Grantor as a third party
beneficiary under all contracts and subcontracts pertaining to the Real
Property or the Improvements as to which Grantor is not a party, all
payment and performance bonds relating to the Real Property or the
Improvements and all other contracts and agreements related to the
design, management, construction,
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equipping and development of the Real Property or the Improvements
(collectively, the "CONSTRUCTION DOCUMENTS");
(g) all of Grantor's right, title and interest to all awards
or payments, and any interest paid or payable with respect thereto,
that may be made with respect to all or any portion of the Real
Property, the Improvements or the Equipment, whether from the exercise
of right of condemnation, eminent domain or similar proceedings
(including any transfer made in lieu of the exercise of said right), or
from any taking for public use, or for any other injury to or decrease
in the value of all or any portion of the Real Property, the
Improvements or the Equipment, or as a result of the exercise by any
governmental authority of any right or option to purchase any of the
Real Property, all of the foregoing to be held, applied and paid in
accordance with the provisions of this Shore Mortgage (collectively,
the "EMINENT DOMAIN AWARDS");
(h) all of Grantor's right, title and interest to all proceeds
of, and any unearned premiums on, any insurance policies covering all
or any portion of the Real Property, the Improvements or the Equipment
or the Rents (as hereinafter defined), including, without limitation,
the right to receive and apply the proceeds of any insurance,
judgments, or settlements made in lieu thereof, for damage to all or
any portion of the Real Property, the Improvements or the Equipment and
any interest actually paid with respect thereto, all of the foregoing
to be held, applied and paid in accordance with the provisions of this
Shore Mortgage (collectively, the "INSURANCE PROCEEDS");
(i) all of Grantor's right, title and interest as lessor or
landlord to all leases and other agreements affecting the use or
occupancy of any of the Real Property or the Improvements now in effect
or hereafter entered into (including, without limitation, subleases
(including subleases of the Lease, licenses, concessions, tenancies and
other occupancy agreements covering or encumbering all or any portion
of the Real Property or the Improvements), but excluding any licenses
and permits to the extent not assignable under applicable law,
including without limitation, liquor and gaming licenses, together with
any modifications, extensions or renewals of the same (collectively,
excluding the Lease, the "SPACE LEASES") and the rents, revenues,
issues, income, products and profits of the Real Property and the
Improvements, including, without limitation, any security deposits or
other funds deposited with Grantor pursuant to the Space Leases
(collectively, the "Rents"), together with any guarantees of the Space
Leases or Rents delivered to the Grantor from time to time, and any
modifications, extensions and renewals of any such guarantees, together
with the right, but not the obligation, to exercise options, to give
consents and to collect, receive and receipt for the Rents and apply
the Rents to the payment of the Secured Obligations and to demand, ▇▇▇
for and recover the Rents (when due and payable), subject to a license
in favor of Grantor in respect thereof prior to the occurrence of an
Event of Default (as defined in Paragraph 19 hereof); and
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(j) any and all other, further or additional rights, title,
estates and interests of Grantor in and to any of the Real Property or
the Improvements or the Equipment, and all renewals, substitutions and
replacements of and all additions and appurtenances to any of the Real
Property or the Improvements or the Equipment or constructed, assembled
or placed on any of the Real Property or the Improvements, and all
conversions of the security constituted thereby that, immediately upon
such acquisition, construction, assemblage, placement or conversion, as
the case may be, and in each such case without any further mortgage,
conveyance, assignment or other act by Grantor, shall become subject to
the lien of this Shore Mortgage as fully and completely, and with the
same effect, as though now owned by Grantor, Grantor expressly agreeing
that if Grantor shall at any time acquire any other right, title,
estate or interest in and to any of the Real Property, the Improvements
or the Equipment, the lien of this Shore Mortgage shall automatically
attach to and encumber such other right, title, estate or interest as a
first lien thereon.
AND, as additional security, Grantor hereby grants to Mortgagee a
continuing security interest in (a) the Equipment, (b) the Construction
Documents, (c) the Insurance Proceeds, (d) the Eminent Domain Awards, (e) the
Space Leases, (f) the Rents, (g) all proceeds of the foregoing and (h) all
proceeds of any of the Real Property and the Improvements (collectively, the
"SECURITY INTEREST PROPERTY") and this Shore Mortgage shall be effective as a
security agreement pursuant to the Uniform Commercial Code as enacted and in
effect in the state in which any of the Real Property is located (the "CODE").
HABENDUM
TO HAVE AND TO HOLD the Mortgaged Property, the rights and privileges
hereby conveyed or assigned, or intended so to be, unto Mortgagee (as trustee
under the Indenture), its successors and assigns, forever for the uses and
purposes and subject to the terms and conditions herein set forth.
REPRESENTATIONS, WARRANTIES, COVENANTS,
AGREEMENTS AND CONDITIONS
THIS SHORE MORTGAGE FURTHER WITNESSETH the following representations,
warranties, covenants, agreements and conditions:
1. PAYMENT OF SECURED OBLIGATIONS. The Grantor will duly and punctually
pay the principal (and premium, if any) and interest on the Notes in accordance
with the terms of the Notes and the Indenture.
2. WARRANTY OF TITLE. Grantor warrants that it has good and marketable
title to all of the Real Property and the Improvements, subject only to the
encumbrances set forth on Schedule B hereto ("PERMITTED ENCUMBRANCES"); Grantor
has and will continue to have full power and
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lawful authority to encumber and convey the Mortgaged Property as provided
herein. Grantor owns all other Mortgaged Property free and clear of all liens,
charges and encumbrances of every kind and character, subject only to the
Permitted Encumbrances and Permitted Liens. Grantor further covenants that it
will preserve such title and will forever warrant and defend the title to the
Mortgaged Property unto Mortgagee against all claims whatsoever, subject to
Permitted Encumbrances and Permitted Liens and will forever warrant and defend
the validity, enforceability and priority of the lien of this Shore Mortgage
against the claims of all persons and parties whomsoever.
3. SUBORDINATE MORTGAGES AND LIENS. This Shore Mortgage is and shall be
maintained by Grantor as a valid first mortgage lien on and first security
interest in the Mortgaged Property, subject only to the Permitted Encumbrances
and Permitted Liens and such other matters as may be expressly permitted under
the Transaction Documents. Except as otherwise provided in the Transaction
Documents, Grantor shall not, directly or indirectly, create or suffer, or
permit to be created or suffered, against the Mortgaged Property or any part
thereof, including, without limitation, the Equipment or the Rents, and Grantor
will promptly discharge, any mortgage, lien (including the liens of mechanics
and materialmen), pledge, title retention agreement, attachment, security
interest, encumbrance or charge that may affect the Mortgaged Property, or any
part thereof, or interest therein, EXCEPT (i) the Permitted Encumbrances and
Permitted Liens and (ii) matters being contested in good faith and by
appropriate proceedings in the manner permitted by Paragraph 16 of this Shore
Mortgage. If any mortgage or other lien not permitted hereunder is filed,
Grantor will cause the same to be discharged promptly by payment or bonding or
otherwise to the satisfaction of Mortgagee and will exhibit to Mortgagee
evidence of payment, discharge, bonding or other disposition satisfactory to
Mortgagee.
4. REPRESENTATIONS AND WARRANTIES. In order to induce (i) Initial
Purchaser to purchase the Notes, and (ii) Mortgagee to accept this Shore
Mortgage, Grantor represents and warrants to Mortgagee that:
(a) The representations and warranties contained in the
Transaction Documents are true and correct as of the date hereof.
(b) This Shore Mortgage constitutes a valid mortgage and, upon
proper recording hereof, will constitute a valid and perfected mortgage
lien on, and security interest in, the Mortgaged Property (subject only
to the Permitted Encumbrances and Permitted Liens), and there are no
defenses or offsets to Grantor's obligations pursuant to this Shore
Mortgage or the other Transaction Documents, including, without
limitation, Grantor's applicable obligations to pay and perform the
Secured Obligations.
(c) Grantor's possession of the Mortgaged Property has been
peaceable and undisturbed and, to the best of Grantor's knowledge, the
title thereto has never been disputed or questioned, and Grantor does
not know of any facts by reason of which any
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adverse claim to any part of the Mortgaged Property or to any undivided
interest therein might be set up or made.
(d) There are no federal, state or local tax claims or liens
assessed or filed against Grantor or the Mortgaged Property for taxes
which are due and payable, unsatisfied of record or docketed in any
court of the state in which the Real Property is located or in any
other court located in the United States, and no petition in bankruptcy
has ever been filed by Grantor, or, to the best of Grantor's knowledge,
against Grantor, and Grantor has never made any assignment for the
benefit of creditors or taken advantage of any insolvency act or any
act for the benefit of debtors.
(e) The Mortgaged Property has not been damaged or destroyed
by fire or other casualty, and no condemnation or eminent domain
proceedings have been commenced and are pending with respect to the
Mortgaged Property, and, to the best of Grantor's knowledge, no such
condemnation or eminent domain proceedings are about to be commenced.
(f) The Lease is now a valid and subsisting lease and is in
full force and effect in accordance with the terms thereof and has not
been modified, and all of the rental, additional rental and other
charges payable under the Lease prior to the execution hereof have been
paid, and all of the material terms, conditions and agreements
contained in the Lease have been performed by Grantor, and no material
default exists under the Lease. This Shore Mortgage is lawfully
executed and delivered in conformity with the Lease and is and will be
kept a valid first priority lien on the interest of the Grantor
therein.
5. COVENANTS OF GRANTOR AS TO PERFORMANCE AND OTHER MATTERS. (a)
Grantor shall perform, observe and comply in all material respects with all
agreements, covenants and obligations imposed by the provisions of this Shore
Mortgage and each other Transaction Document or imposed upon or assumed by
Grantor by virtue of the provisions of any deed, conveyance, lease, agreement,
statute or ordinance pursuant to which Grantor or any predecessor in title of
the Mortgaged Property acquired the Mortgaged Property or any rights or
privileges appurtenant thereto or for the benefit thereof.
(b) Except as otherwise expressly permitted under the
Transaction Documents or as otherwise expressly permitted hereunder,
Grantor, without the prior written consent of Mortgagee, shall not
effect, and shall not permit, any sale, lease, transfer or other
disposition of any of its assets, including, without limitation, any of
the Mortgaged Property.
(c) Subject to Section 4.13 of the Indenture, Grantor will do
or cause to be done all things necessary to preserve and keep in full
force and effect the corporate existence, rights (charter and
statutory) and franchises of Grantor.
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(d) Except as otherwise expressly permitted under the
Transaction Documents or as otherwise expressly permitted hereunder,
Grantor shall not, without Mortgagee's prior consent, which consent
will not be unreasonably withheld, enter into any agreement with or
conveyance to any other person or entity permitting the use of any
excess development rights that might otherwise be used by Grantor in
expanding, altering, reconstructing, replacing or otherwise improving
the Improvements or making any other improvements on the Mortgaged
Property, or otherwise permit or suffer any change of the zoning of the
Mortgaged Property or the use that may be made thereof.
(e) Grantor shall indemnify Mortgagee and each Holder from and
against any claims for brokerage fees or commissions payable to any
broker or finder with whom Grantor has dealt (or Grantor is alleged to
have dealt) in connection with this Shore Mortgage and shall pay all
reasonable expenses incurred by Mortgagee or any Holder in connection
with the defense of any action brought to collect any such brokerage
fee or commission by any such person or entity.
(f) Intentionally Omitted.
(g) Without limiting the foregoing, with respect to the Lease,
Grantor hereby covenants and agrees that:
(i) Grantor will promptly pay when due and payable
the rentals, additional rentals and other charges mentioned in
and payable under the Lease within the grace and cure periods
provided in the Lease.
(ii) Grantor will promptly perform and observe all of
the terms, covenants and conditions required to be performed
and observed by Grantor, as lessee under the Lease, within the
grace and cure periods provided in the Lease, and will do all
things reasonably necessary to preserve and to keep unimpaired
its rights under the Lease. Grantor will enforce or cause to
be enforced the obligations of the lessor under the Lease, to
the end that Grantor may enjoy all of the material rights
granted to it as lessee under the Lease.
(iii) Grantor will promptly notify Mortgagee of any
material default by Grantor in the performance or observance
of any of the terms, covenants or conditions on the part of
Grantor to be performed or observed under the Lease.
(iv) Grantor will (1) promptly notify Mortgagee of
the receipt by Grantor of any notice from the lessor under the
Lease of a default by Grantor in the performance or observance
of any of the terms, covenants or conditions on the part of
Grantor to be performed or observed under the Lease, (2)
promptly notify Mortgagee of the receipt by Grantor of any
notice from the lessor under the Lease to Grantor of
termination of the Lease pursuant to the provisions thereof
and (3)
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promptly cause a copy of each such notice received by Grantor
from the lessor under the Lease to be delivered to Mortgagee.
(v) Except as otherwise expressly permitted under the
Transaction Documents or as otherwise expressly permitted
hereunder, Grantor will not, without the prior consent of
Mortgagee (1) terminate, cancel, modify, supplement or
surrender or suffer or permit any termination, modification or
surrender of the Lease, (2) fail or refuse to take timely and
appropriate action to renew the Lease pursuant to the
applicable provisions thereof, (3) consent or refuse to
consent to any action taken or to be taken by the lessor or
anyone else under the Lease, the result of which would
materially diminish or impair the security of this Shore
Mortgage (as determined by Mortgagee), (4) further encumber
the Leasehold Interest, notwithstanding any such right given
to Grantor under the Lease, or (5) subordinate or consent to
the subordination of the Lease to any mortgage on the lessor's
interest in the premises demised by the Lease.
(vi) Supplementing the provisions of subparagraph (v)
above, if the Lease is rejected or disaffirmed by the lessor
thereunder (or by any receiver, trustee, custodian or other
party who succeeds to the rights of such lessor, such
receiver, trustee, custodian or other party being
collectively, the "ACTING LESSOR") pursuant to any bankruptcy,
insolvency, reorganization, moratorium or similar law (any
such law hereinafter collectively referred to as a "BANKRUPTCY
LAW"), Grantor covenants that it will not elect to treat the
Lease as terminated under 11 U.S.C. ss. 365(h) or any similar
or successor law or right, and hereby assigns to Mortgagee the
sole and exclusive right to make or refrain from making any
such election, and Grantor agrees that any such election, if
made by Grantor, shall be void and of no force or effect.
(vii) If the lessor or acting lessor under the Lease
rejects or disaffirms the Lease pursuant to any Bankruptcy Law
and Mortgagee elects to have Grantor remain in possession
under any legal right Grantor may have to occupy the premises
leased pursuant to the Lease, then (1) Grantor shall remain in
such possession and shall perform all acts necessary for
Grantor to retain its right to remain in such possession for
the unexpired term of the Lease (including all renewals
thereof) whether such acts are required under the then
existing terms and provisions of the Lease or otherwise, and
(2) all of the terms and provisions of this Shore Mortgage and
the lien created hereby shall remain in full force and effect
and shall be extended automatically to such possession,
occupancy and interest of Grantor.
(viii) Grantor will from time to time, after demand
of Mortgagee, use reasonable efforts to obtain and deliver to
Mortgagee a written statement from lessor under the Lease,
duly acknowledged, and certifying to Mortgagee and the
10
Holders (i) that the Lease is then in full force and effect
and has not been modified (or, if modified, setting forth all
modifications), (ii) the date to which the rent, additional
rent and other charges thereunder have been paid, (iii)
whether or not, to the best knowledge of lessor under the
Lease, Grantor is in default under the Lease, and, if Grantor
is in default, the specific nature of all such defaults and
(iv) as to any other matters reasonably requested by Mortgagee
and reasonably related to the Lease.
(ix) Grantor shall deliver to Mortgagee an original
Non Disturbance and Attornment Agreement from the holder of
any mortgage encumbering the real property affected by the
Leasehold Interest, in a form previously agreed to by
Mortgagee.
(h) Each provision of this Shore Mortgage is subject to, and
shall be enforced in compliance with, the Gaming Laws.
6. PERFORMANCE BY MORTGAGEE. All sums duly paid by Mortgagee or any
Holder in connection with the payment or performance of any act performed by
Mortgagee in connection with the Mortgaged Property shall be paid by Grantor to
Mortgagee in accordance with the Transaction Documents, as applicable, and, if
such payment by Mortgagee or any Holder occurs after the applicable grace or
cure period, then such payment shall be with interest, payable from and
including the date of disbursement or advance, to and including the date of
payment calculated at the Additional Interest Rate (as hereinafter defined), and
the same shall be deemed to be secured by this Shore Mortgage and shall be a
lien on the Mortgaged Property prior to any right, title to, interest in or
claim upon the Mortgaged Property attaching subsequent to the attachment of the
lien of this Shore Mortgage. For the purpose of so curing any such default,
Mortgagee may after any applicable cure period (but shall be under no obligation
to) do any act or execute any document necessary or desirable for such purpose
in the name of Grantor, and Grantor irrevocably appoints Mortgagee as its true
and lawful attorney-in-fact, which appointment is coupled with an interest and
is unconditional and irrevocable, for such purposes.
7. CONFLICTS WITH SECURITY AGREEMENT. In the event of a conflict
between the provisions of the Security Agreement and the provisions of this
Shore Mortgage, the Shore Mortgage shall govern in all matters relating to the
validity and enforceability of the lien created hereby on the Real Property and
the Improvements and (except as expressly set forth to the contrary herein or in
the Security Agreement), the Security Agreement shall govern in all other
respects.
8. INSURANCE. (a) Unless such types of insurance are no longer
reasonably commercially available, Grantor shall maintain all insurance required
by the Lease and in addition, with respect to the Real Property and the
Improvements, as follows: (i) special causes of loss insurance (formerly known
as all-risk insurance), flood and sprinkler leakage, if applicable, in an amount
sufficient to prevent Grantor from being or becoming a co-insurer
11
within the terms of the policy or policies providing such insurance, and in any
event for not less than the full replacement value of the Improvements and the
Equipment, as reasonably determined by Mortgagee; (ii) business interruption
insurance for loss occasioned by the perils commonly insured in a special causes
of loss policy for a period ending no earlier than the Maturity Date and in an
aggregate amount not less than the real estate taxes, additional interest and
other assessments for the Real Property and the Improvements and all other
continuing expenses of the Mortgaged Property, including, without limitation,
all payments required to be made by Grantor under the Lease; (iii) commercial
general liability insurance, including blanket contractual liability, completed
operations and personal injury coverage, with a combined single limit for any
one occurrence of at least FIVE MILLION DOLLARS ($5,000,000); (iv) worker's
compensation and employer's liability insurance, subject to statutory limits or
better, in respect of any work or other operations on, about or in connection
with the Real Property and the Improvements; and (v) such other insurance with
respect to the Real Property and the Improvements in such amounts as Mortgagee,
from time to time, may reasonably request against such other insurable hazards
which are commonly insured against in respect of property similar to the Real
Property and the Improvements (and, with respect to clause (v) only, PROVIDED
that such insurance is available at commercially reasonable rates).
(b) The insurance maintained by Grantor under clauses (i),
(ii) and, if appropriate, (v) of subparagraph (a) of this Paragraph
shall bear a standard noncontributory first mortgagee endorsement in
favor of Mortgagee. The insurance maintained by Grantor under clause
(iii) and, if appropriate, (v) above shall name Mortgagee as an
additional insured. All insurance maintained by Grantor shall provide
that no cancellation, material change or reduction in the coverage or
amounts thereof shall be effective until at least thirty (30) days or,
in the case of non-payment of premiums, ten (10) days, after written
notice to Mortgagee thereof.
(c) Grantor shall furnish Mortgagee with certificates
evidencing all such policies, endorsements and renewals and evidence of
payment of premiums therefor and, certified copies of all such
policies, endorsements and renewals certified by the insurance carrier.
In this regard, Grantor further covenants and agrees that, in any suit
or action for damages arising from the alleged negligence of Grantor in
which action Mortgagee or any Holder is included or made a defendant,
Grantor agrees to assume all of the burden, cost and expense of the
defense or settlement of such action or claim and will pay any judgment
which may be obtained against Mortgagee or any Holder.
(d) Grantor shall not carry separate or additional insurance
concurrent in form or contributing, in the event of loss, with that
required hereunder unless endorsed in favor of Mortgagee as loss payee
or additional insured, as applicable, and designating that such
insurance shall contain endorsements providing coverage secondary to
the insurance required to be carried hereunder. Nothing contained
herein shall prohibit Grantor from holding or obtaining an owner's
policy of title insurance covering the Real Property.
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(e) Each policy of insurance required by this Shore Mortgage
(hereinafter collectively referred to as the "POLICIES") shall be
carried with a company which is licensed to do business in the state in
which the Real Property is located and is rated A-minus-12 or higher by
Best's Rating Guide, or an equivalent rating, with such other
publication of a similar nature as shall be in current use, except that
Grantor may obtain such insurance from Lloyds of London or from a
protection and indemnity club which is comparable in financial strength
to insurance companies rated A-minus-12. All policies of insurance
placed with a mutual company shall be nonassessable. All policies of
insurance at any time carried by Grantor on the Mortgaged Property
(whether carried pursuant to the requirements of this Shore Mortgage or
otherwise) shall name Mortgagee as joint payee for all payments made by
such insurance company. Grantor shall pay the premiums for the Policies
as the same become due and payable. Not later than thirty (30) days
prior to the expiration date of each of the Policies, Grantor will
deliver to Mortgagee a renewal policy or policies (or binder(s)
evidencing-same) marked "premium paid" or accompanied by other evidence
of payment of premium satisfactory to Mortgagee.
(f) In the event of any insured loss, Grantor hereby
authorizes and directs any insurance company concerned to make payment
of such loss (only with respect to the insurance policies described in
subparagraphs 8(a)(i), 8(a)(ii) (PROVIDED, HOWEVER, in the case of
8(a)(ii) only, any such payments shall be made to Mortgagee only after
an Event of Default has occurred, as defined in Paragraph 19 hereof,
which has not been waived in writing by the Holders under the
Indenture) and, as applicable, 8(a)(v)) directly and solely to
Mortgagee to be applied as hereinafter provided. Grantor, acting in its
reasonable judgment, shall make any necessary proof of loss and shall
adjust and compromise all claims under all policies and shall cause the
applicable insurance company to make payment thereof as herein
provided; and Grantor shall sign all receipts, vouchers, releases and
other instruments which may be reasonably necessary or desirable in aid
of such payment. Any Insurance Proceeds paid to Mortgagee shall be held
as trust funds, and Mortgagee shall dispose of such proceeds, as
provided in Paragraph 13 hereof. In the event that any Insurance
Proceeds are paid by check to Grantor or to Grantor and Mortgagee as
joint payees, Grantor agrees that it shall endorse such check over to
Mortgagee.
(g) In the event that Grantor fails to keep the Real Property
and the Improvements insured in compliance with this Paragraph,
Mortgagee may, but shall not be obligated to, obtain insurance and pay
the premiums therefor, and Grantor shall, on demand, reimburse
Mortgagee for all sums advanced and expenses incurred in connection
therewith. Such sums and expenses, together with interest thereon at
the Additional Interest Rate, shall be deemed part of the Secured
Obligations and secured by the lien of this Shore Mortgage.
(h) Subject to the provisions of Paragraph 13 hereof, nothing
contained in this Paragraph or elsewhere in this Shore Mortgage shall
relieve Grantor of its duty to
13
maintain, repair, replace or restore the Improvements or the Equipment
or rebuild the Improvements, from time to time, in accordance with the
applicable provisions of the Transaction Documents, and nothing in this
Paragraph or elsewhere in this Shore Mortgage shall relieve Grantor of
its duty to pay the Secured Obligations, which shall be absolute,
regardless of the occurrence of damage to or destruction of or
condemnation of all or any portion of the Mortgaged Property.
9. PAYMENT OF TAXES, ETC. Except as otherwise provided in Paragraph 16
hereof, Grantor shall pay, prior to the date upon which any fine, penalty,
interest or cost may be added thereto or imposed by law for the nonpayment
thereof, all taxes, assessments, water rates, sewer rents and other charges,
including vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Real Property or the Improvements, of any kind or
nature whatsoever, ordinary or extraordinary, now or hereafter levied, assessed
or imposed upon or which constitute a lien upon or against the Real Property or
the Improvements or any portion thereof (collectively, the "TAXES"). Grantor
shall deliver to Mortgagee promptly after request therefor by Mortgagee,
receipted bills or canceled checks evidencing the payment of prior taxes to the
date upon which any fine, penalty, interest or cost may be added thereto or
imposed by law for the nonpayment thereof. In the case of any assessment payable
in installments, each installment thereof shall be paid prior to or on the date
on which such installment becomes due and payable without imposition of any
fine, penalty, interest or cost. Grantor shall not be entitled to any credit on
the Notes or any other sums which may become payable under the terms thereof or
hereof, or otherwise, by reason of the payment of Taxes.
10. ESCROW FUND. (a) Grantor shall, following an Event of Default which
has not been waived in writing by the Holders in accordance with the Indenture,
pay to Mortgagee on the first day of each calendar month one-twelfth of an
amount (hereinafter referred to as the "ESCROW FUND") which would be sufficient
to pay the Taxes, all insurance premiums and all of Grantor's monetary
obligations under the Lease payable, or estimated by Mortgagee to be payable,
during the ensuing twelve (12) months, which shall be invested as provided in
Section 10(b) hereof, with income earned thereon becoming a part of the Escrow
Fund, PROVIDED that Mortgagee shall bear no liability for any loss occasioned by
investment of the Escrow Fund as herein provided, by any delays in investing or
reinvesting the Escrow Fund or by any failure to achieve the maximum possible
yield from the Escrow Fund. Mortgagee will apply the Escrow Fund to the payment
of Taxes and insurance premiums which are required to be paid by Grantor
pursuant to the provisions of this Shore Mortgage. If the amount of the Escrow
Fund shall exceed such amounts payable by Grantor pursuant to the provisions of
this Shore Mortgage, Mortgagee shall at its election, (a) return any excess to
Grantor, (b) credit such excess against future payments to be made to the Escrow
Fund or (c) reimburse Mortgagee for any amount owed to it under this Shore
Mortgage or under any of the Transaction Documents. If the Escrow Fund is not
sufficient to pay such amounts as the same become payable, Grantor shall on
demand pay, to Mortgagee an amount which shall be sufficient to make up the
deficiency. Any amounts in the Escrow Fund shall be kept separate and segregated
from the general funds of Mortgagee. If this Shore mortgage is sold or assigned
by Mortgagee in whole, Mortgagee shall deduct any amount owing
14
to it under this Shore Mortgage or any Transaction Document and transfer to the
assignee the balance, if any, then held by Mortgagee under this Paragraph and,
upon such assignment and transfer, Mortgagee shall have no further obligation to
Grantor with respect to such amount. If at any time Grantor tenders to Mortgagee
full payment of the entire Secured Obligations, including any applicable premium
or penalty, and the lien of the Indenture or this Shore Mortgage shall have been
discharged, Mortgagee shall refund to Grantor any balance remaining in the
Escrow Fund.
(b) In the event that the Escrow Fund is created, Mortgagee
shall create an account denominated "Louisiana Casino Cruises, Inc. --
Shore Mortgage Escrow Fund" (or some similar name) in which to hold all
amounts in the Escrow Fund. All amounts from time to time in the Escrow
Fund shall be invested in the First American Fund (or, if the First
American Fund should become unavailable for any reason, a comparable
cash management fund). Mortgagee is specifically authorized to
implement its automated cash investment system to assure that funds in
the Escrow Fund are invested and to charge its normal cash management
fees, which may be deducted from income earned on investments.
11. SPACE LEASES, RENTS AND CASH COLLATERAL. (a) As additional and
collateral security for payment of the Secured Obligations, and as cumulative of
any and all rights and remedies herein provided, Grantor hereby bargains, sells,
transfers, assigns and sets over to Mortgagee for the benefit of the Holders,
any and all Space Leases and Rents and any and all cash collateral to be derived
from the Mortgaged Property, or the use and occupation thereof, or under any
contract or bond relating to the construction or reconstruction of the Mortgaged
Property, including all Rents, royalties, revenues rights, deposits (including
security deposits) and benefits accruing to Grantor under all Space Leases, and
the right to receive the same and apply them against the Secured Obligations or
against Grantor's other obligations hereunder or the Company's obligations under
the Transaction Documents, together with all Space Leases, contracts, bonds,
leases and other documents evidencing the same now or hereafter in effect and
all right of Grantor thereunder. Nothing contained in the preceding sentence
shall be construed to bind Mortgagee to the performance of any of the provisions
of any such Space Lease, contract, bond, lease or other documents or otherwise
impose any obligation upon Mortgagee, except that Mortgagee shall be accountable
for any money actually received pursuant to such assignment to the extent of its
disposition thereof in a manner inconsistent with this Shore Mortgage or the
Transaction Documents. Grantor shall deliver to Mortgagee upon Mortgagee's
request an executed counterpart of each such Space Lease, contract, bond or
other documents. The assignment of said Space Leases, Rents, income profits,
proceeds and cash collateral, and any of the aforesaid rights with respect
thereto and to the contracts, bonds, leases and other documents evidencing the
same, is intended to be and is an absolute present assignment from Grantor to
Mortgagee and not merely the passing of a security interest.
(b) So long as there shall exist no Event of Default hereunder
which has not been waived in writing by the Holders in accordance with
the Indenture, Grantor shall
15
have the right and license to exercise all rights, options and
privileges extended to the lessor under the terms of the Space Leases,
including, without limitation, the right to collect all Rents. Grantor
agrees to hold the same in trust and to use the same, FIRST, in payment
of the Secured Obligations, SECOND, the Taxes and insurance premiums
payable hereunder and all other charges on or against the Mortgaged
Property and, THIRD, to the expenses of Grantor's business in or on the
Mortgaged Property.
(c) In the event of any such Event of Default which has not
been so waived, the right and license set forth in subparagraph (c) of
this Paragraph shall be automatically revoked, and, thereafter,
Mortgagee shall have the right and authority to exercise any of the
rights or remedies referred to or set forth herein. In addition, upon
such an Event of Default, Grantor shall promptly pay to Mortgagee (i)
all rent prepayments and security or other deposits paid to Grantor
pursuant to any Space Leases and (ii) all charges for services or
facilities or for escalations which were paid pursuant to any Space
Leases to the extent allocable to any period from and after such Event
of Default and any such sums received by Mortgagee shall be applied by
Mortgagee in accordance with Section 6.10 of the Indenture.
(d) If Grantor is not required to surrender possession of the
Mortgaged Property hereunder in the event of any such Event of Default
which has not been so waived, Grantor will pay monthly in advance to
Mortgagee, or to any receiver appointed to collect same, the income,
profits or proceeds received by Grantor under any of the Space Leases.
(e) Grantor will upon Mortgagee's request execute, acknowledge
and deliver to Mortgagee, in form approved by Mortgagee, one or more
general or specific assignments of the lessor's interest under any
Space Lease (which are consistent with the foregoing provisions).
Grantor will, on demand, pay to Mortgagee, or reimburse Mortgagee for
the payment of, any reasonable costs or expenses incurred in connection
with the preparation or recording of any such assignment.
(f) Grantor will (i) perform or cause to be performed the
lessor's material obligations under any Space Lease, (ii) enforce the
performance by the lessee under its respective Space Lease of all of
said lessee's material obligations thereunder and (iii) give Mortgagee
prompt notice and a copy of any notice of default, event of default,
termination or cancellation sent or received by Grantor.
(g) Except to the extent expressly permitted herein or under
the other Transaction Documents, Grantor will not, without Mortgagee's
consent, (i) assign, mortgage, pledge or otherwise transfer, dispose of
or encumber, whether by operation of law or otherwise, any Space Lease
or the Rents or other income thereunder or therefrom, (ii) accept or
permit the acceptance of a prepayment of any Rents for more than one
16
month in advance of the due dates therefor, (iii) amend, modify or
otherwise alter any Space Lease or (iv) cancel, terminate or accept a
surrender of any Space Lease.
(h) Grantor will from time to time, promptly upon Mortgagee's
request, prepare and deliver to Mortgagee such information concerning
the Space Leases as Mortgagee shall request.
12. MAINTENANCE OF THE PROPERTY; ALTERATIONS. Notwithstanding Section
4.15 of the Indenture, Grantor will cause the Mortgaged Property to be
maintained and kept in good condition, repair and working order (ordinary wear
and tear excepted) and supplied with all necessary Equipment and will cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of Grantor may be necessary so that
the business carried on in connection therewith may be conducted at all times,
except, in every case, as and to the extent that Grantor may be prevented by
fire, strikes, lockouts, acts of God, inability to obtain labor or materials,
governmental restrictions, enemy action, civil commotion or unavoidable casualty
or similar causes beyond the control of Grantor. Grantor further agrees to
permit Mortgagee (and its agents, employees and contractors) to enter upon and
inspect the Mortgaged Property at any time during normal business hours upon
reasonable notice and, at Mortgagee's option, after the giving of a notice of
default hereunder and the expiration of any applicable grace period, to make
such repairs, replacements, renewals or additions, or to otherwise protect and
maintain the same in good, safe, insurable condition, but nothing contained in
this Paragraph shall be deemed to impose any duty upon Mortgagee or affect in
any manner the obligations of Grantor hereunder or of the Company under the
Transaction Documents.
13. DAMAGE TO AND DESTRUCTION OF THE MORTGAGED PROPERTY. (a) In the
event that, at any time during the term of the Notes, the Real Property, the
Improvements or the Equipment shall be damaged or destroyed, in whole or in
part, by fire or other casualty covered by insurance, Grantor shall give prompt
written notice thereof to Mortgagee. At such time as such damage, destruction or
casualty shall occur, the Insurance Proceeds payable in connection therewith
shall be payable to Mortgagee in accordance with Paragraph 8 hereof and shall be
deposited in the Collateral Account and shall be released, applied and/or
distributed in accordance with Sections 4.10 and 11.4 of the Indenture.
(b) Upon the occurrence of an Event of Default which has not
been waived in writing by the Holders in accordance with Section 6.4 of
the Indenture, Mortgagee shall have the right to apply such Insurance
Proceeds in accordance with Section 6.10 of the Indenture.
14. CONDEMNATION. (a) In the event that the Mortgaged Property, or any
part thereof, shall be taken in condemnation proceedings or by exercise of the
right of eminent domain, or by conveyance in lieu of condemnation, or as a
result of the exercise by any governmental authority of any right or option to
purchase (hereinafter collectively called "PROCEEDINGS"), Mortgagee shall have
the right to participate in any such Proceedings at Grantor's expense, including
reasonable
17
attorneys' fees and disbursements, and any Eminent Domain Awards that may be
made or any proceeds thereof shall be deposited with Mortgagee and held in trust
by Mortgagee and distributed in the manner herein set forth. The parties agree
to execute any and all further documents that may be required in order to
facilitate collection of any Eminent Domain Award and the making of any such
deposit.
(b) If, at any time during the term of the Notes, there occurs
a Proceeding, any Eminent Domain Awards payable in connection therewith
shall be deposited in the Collateral Account and shall be released,
applied and/or distributed in accordance with Sections 4.10 and 11.4 of
the Indenture.
(c) Upon the occurrence of an Event of Default which has not
been waived in writing by the Holders in accordance with Section 6.4 of
the Indenture, Mortgagee shall have the right to apply such Eminent
Domain Awards in accordance with Section 6.10 of the Indenture.
15. COMPLIANCE WITH AGREEMENTS, LAWS, ETC. Subject to Section 16,
Grantor agrees to perform and comply in all material respects with all
covenants, agreements and restrictions affecting the Mortgaged Property and with
all laws, ordinances, acts, rules, regulations and orders of any legislative,
executive, administrative or judicial body, commission or officer (whether
federal, state or local) exercising any power of regulation or supervision over
Grantor or any part of the Mortgaged Property, whether now or hereafter enacted
and in force, whether the same be directed to the erection, repair, manner of
use or structural alteration of the Improvements or otherwise. Grantor further
agrees (i) to comply with the terms of all insurance policies covering or
applicable to the Mortgaged Property, all requirements of the issuer of any such
policy, and all orders, rules, regulations and other requirements of or
standards recommended by the National and Regional Fire Protection Associations
(or any other body exercising similar functions) applicable to or affecting the
Mortgaged Property or any use or condition of the Mortgaged Property, and (ii)
to procure, maintain and comply with all permits, licenses, approvals or other
authorizations required for any use of the Mortgaged Property then being made,
and for the proper erection, installation, operation and maintenance of the
Improvements and the Equipment or any portion of any of the foregoing, subject
to the right to contest the applicability or validity of any license, permit,
approval or authorization in accordance with the provisions of Paragraph 16
hereof. With respect to the compliance obligations of Grantor in this Paragraph
15 other than Grantor's obligation to comply with all environmental or hazardous
materials laws, ordinances, rules, regulations or orders, Grantor shall have no
compliance obligation under this Paragraph 15 where failure to comply would not
have a material adverse effect on (a) the use made by Grantor of, the value or
condition of, or the business conducted on the Mortgaged Property or (b) the
rights or interests of Mortgagee or any Holder.
16. CONTEST OF TAXES, ASSESSMENTS AND LIENS. Notwithstanding anything
to the contrary contained in this Shore Mortgage, Grantor shall have the right
to contest, at its own expense, by appropriate legal proceedings conducted in
good faith and with due diligence, the
18
amount or validity of any Taxes or encumbrance referred to herein (other than
this Shore Mortgage or any other document or instrument securing all or any
portion of the Secured Obligations), or any of the laws, ordinances, acts,
rules, regulations orders, licenses and authorizations referred to herein;
PROVIDED that (a) Grantor gives Mortgagee timely notice of its intention to
contest the same, (b) the commencement of such proceedings shall suspend the
collection or enforcement of the matter under contest, or, if the commencement
of such proceedings does not suspend such collection or enforcement, Grantor
shall have made payment of any item sought to be collected with or without
protest, (c) there shall be no impairment of the lien of this Shore Mortgage or
undue interference with the normal conduct of Grantor's riverboat gaming
operation at the Mortgaged Property, (d) neither the Mortgaged Property, nor any
part thereof or interest therein, would be in any immediate danger of being
sold, forfeited or lost, (e) neither Mortgagee nor any Holder would be
potentially subjected to criminal, or in imminent danger of civil, liability for
failure to comply therewith pending the outcome of such proceedings, (f) in the
case of Taxes, assessments, charges or other impositions, Grantor shall have
either (i) paid the amount in dispute prior to instituting such contest, in
which event the notice requirement of subparagraph (a) of this Paragraph shall
be satisfied by giving notice prior to initiating such contest rather than prior
to making payment, or (ii) furnished such security, if any, as may be required
by Mortgagee during the pendency of such proceedings, and (g) if such contest be
finally resolved against Grantor, Grantor shall promptly pay the amount required
to be paid, together with all interest and penalties accrued thereon, or comply
with the applicable requirement. Grantor shall indemnify and save Mortgagee and
each Holder harmless from and against any liability, loss, damage, cost or
expense of any kind that may be imposed upon Mortgagee or such Holder in
connection with any such contest and any determination resulting therefrom.
17. CURE OF DEFAULTS BY MORTGAGEE. If Grantor shall default in the
payment of any Taxes or other assessments, charges or impositions as herein
required; shall fail or refuse to keep the Improvements and Equipment in good
repair; shall fail or refuse to insure the Mortgaged Property as herein
required; shall fail to pay and satisfy liens or encumbrances against the
Mortgaged Property as herein required in respect of which security shall not
have been given as herein permitted; shall fail to pay any other sum or make any
other deposit elsewhere in this Shore Mortgage required to be paid or deposited;
or shall otherwise fail to make any payment or perform any act required to be
made or performed hereunder within any applicable grace or cure period, if any,
then Mortgagee, without further demand upon Grantor, and without waiving or
releasing any obligation or default, may (provided, that one or more Holders
shall have deposited with Mortgagee sufficient funds in order to pay the same),
but shall not be obligated to: pay such Taxes or other assessments, charges or
impositions; redeem the Mortgaged Property from any tax sale or forfeiture;
purchase any tax title obtained, or which shall be obtained thereon, without
inquiring into the validity or invalidity of any such Taxes, tax deed, or
assessments; make reasonable repairs to the Mortgaged Property; procure such
insurance and pay such insurance premium charges; pay or settle any and all
suits or claims for such liens; satisfy any such encumbrances or any other
claims that may be made against the Mortgaged Property or any part thereof; pay
any other sum or make any other deposit herein required to be paid or made by
19
Grantor or perform any such act for the account and at the expense of Grantor,
and enter upon the Mortgaged Property for any such purpose and take all such
action thereon as Mortgagee or any of its duly appointed agents, may deem
necessary or appropriate therefor; and all monies paid for any of the purposes
authorized in this Paragraph or for similar purposes set forth elsewhere in this
Shore Mortgage and all expenses paid or incurred in connection therewith,
including reasonable attorneys' fees and disbursements and any other monies
disbursed or advanced by Mortgagee under any Transaction Document to protect the
lien of this Shore Mortgage, shall be due and payable upon demand, with interest
("ADDITIONAL INTEREST"), from and including the date of disbursement or advance
to and including the date of payment, at a per annum rate equal to the rate
borne by the Notes (the "ADDITIONAL INTEREST RATE"). Any sum payable pursuant to
this Shore mortgage as Additional Interest (A) shall be deemed a part of the
Secured Obligations, (B) shall be a lien on the Mortgaged Property equal in
priority to the original indebtedness secured by this Shore Mortgage, and (C)
may be included in any decree foreclosing this Shore Mortgage to be paid out of
the proceeds of the sale of the Mortgaged Property if not otherwise paid by
Grantor. The maximum amount of all Secured Obligations secured by this Shore
Mortgage is SEVENTY-FIVE MILLION DOLLARS ($75,000,000.00).
18. INDEMNITY. Grantor hereby agrees to indemnify, defend and hold
Mortgagee (and its directors, officers, agents and employees) and each Holder
harmless from and against any and all loss, liability, damage, claim, judgment
or expense (including reasonable attorneys' fees and expenses, bond expenses,
printing and automated document preparation and retention expenses and other
ordinary litigation expenses) incurred by it (or such director, officer, agent
or employee) in connection with the acceptance or administration of Mortgagee's
duties under this Shore Mortgage, any action or proceeding to foreclose this
Shore Mortgage or in or to which Mortgagee or any Holder may be made a party due
to the existence of this Shore Mortgage or the other Transaction Documents or to
which action or proceeding Mortgagee or any Holder may become a party for the
purpose of protecting the lien of this Shore Mortgage. All sums paid by
Mortgagee or any Holder to prosecute or defend the rights herein set forth shall
be deemed a part of the Secured Obligations and shall be paid by Grantor to
Mortgagee or such Holder within ten (10) days after written demand, and if not
paid within that period, shall accrue interest from and including the date of
disbursement or advance by Mortgagee or such Holder to and including the date of
payment by Grantor at the Additional Interest Rate.
19. EVENT OF DEFAULT. The term "EVENT OF DEFAULT," wherever used in
this Shore Mortgage, shall mean any one or more of the events of default listed
in Section 6.1 of the Indenture, subject to such cure rights as may be expressly
set forth in the Indenture. If any Event of Default shall occur then, in any
such event, Mortgagee may, in accordance with Article VI of the Indenture and by
written notice to Grantor, declare the entire unpaid balance of the Secured
Obligations or any portion thereof to be forthwith due and payable, and
thereupon such entire balance or portion thereof shall become so due and payable
without presentment, protest or further demand or notice of any kind, all of
which are hereby expressly waived, and Grantor will forthwith pay to Mortgagee
the entire Secured Obligations or portion thereof, as applicable, and, to the
extent permitted by law, the premiums and penalties, if any, provided in this
Shore
20
Mortgage and each other Transaction Document, as applicable, and such payment
shall be applied in accordance with Section 6.10 of the Indenture.
20. ADDITIONAL REMEDIES. If any one or more Events of Default which has
not been waived in writing by the Holders in accordance with the Indenture shall
occur, then, and in any such event, Mortgagee shall have the following rights,
in addition to the right of acceleration provided in this Shore Mortgage or
otherwise provided in any Transaction Document, by law or in equity, all of
which rights and remedies shall be, to the fullest extent permitted by law,
cumulative:
(a) POSSESSION. Mortgagee and its agents may enter upon the
Mortgaged Property, and exclude Grantor and its agents and servants
wholly therefrom, without liability for trespass, damages or otherwise,
and take possession of all books, records and accounts relating thereto
and all other Mortgaged Property, and Grantor agrees to surrender
possession of the Mortgaged Property and of such books, records and
accounts to Mortgagee or its agents on demand after the happening of
any Event of Default; and having and holding the same, may use,
operate, manage, preserve, control and otherwise deal therewith and
conduct the business thereof, either personally or by its
superintendents, managers, agents, servants, attorneys or receivers,
without interference from Grantor; and upon each such entry and from
time to time thereafter may, at the expense of Grantor and the
Mortgaged Property, without interference by Grantor and as Mortgagee
may deem advisable, (i) insure or reinsure the Mortgaged Property, (ii)
make all necessary or proper repairs, renewals, replacements,
alterations, additions, betterments and improvements thereto and
thereon and (iii) in every such case in connection with the foregoing,
have the right to exercise all rights and powers of Grantor with
respect to the Mortgaged Property, either in Grantor's name or
otherwise;
(b) FORECLOSURE. Mortgagee may, at its option, foreclose this
Shore Mortgage for any portion of the Secured Obligations which is then
due and payable, whether by acceleration or otherwise;
(c) SUITS. Mortgagee may, either with or without first taking
possession, proceed by suit or suits in equity or at law, or by any
other appropriate remedy or proceeding, to protect and enforce its
rights hereunder whether for the specific performance of any covenant
or agreement contained herein or in any other Transaction Document or
for an injunction against the violation of any of the terms hereof or
thereof or in aid of the exercise of any right, power or remedy granted
to Mortgagee herein or therein, or to enforce the payment of all or any
part of the Secured Obligations, or to foreclose the lien and security
interest of this Shore Mortgage against the Mortgaged Property or any
part thereof, and to have all of the Mortgaged Property or any part
thereof sold in one or more sales (as an entirety or in parcels) under
the judgment or decree of a court of competent jurisdiction or
otherwise. All rights of action under this Shore
21
Mortgage may be enforced by Mortgagee without the possession of the
Notes and without the production thereof at any trial or other
proceeding relative thereto;
(d) RECEIVER. Mortgagee, in any action to foreclose the lien
of this Shore Mortgage, to the extent permitted by law, shall be
entitled as a matter of right, and without notice, to the appointment
of a receiver of the Mortgaged Property or any part thereof, pending
such proceedings, with such powers as the court, making such
appointment, shall confer, and Grantor hereby consents to the
appointment of such receiver and will not oppose any such appointment;
or
(e) SECURITY INTEREST. In addition to the rights and remedies
of Mortgagee hereinabove set forth and not in lieu thereof, upon the
occurrence of an Event of Default, Mortgagee shall have all of the
rights and remedies of a holder of a security interest under the Code
with respect to the Security Interest Property (provided that Mortgagee
shall give Grantor fifteen (15) days' notice of any public or private
sale of all or any portion of the Security Interest Property) and under
any other applicable law, and all rights provided or referred to herein
and in each other Transaction Document, all of which rights and
remedies shall, to the fullest extent permitted by law, be cumulative.
21. CONFESSION OF JUDGMENT. For purposes of executory process under the
laws of the State of Louisiana, or in the event Mortgagee elects, at its option,
to enter suit via ordinaria on the Secured Obligations, Mortgagor (i) hereby
waives citation, other legal process, and legal delays, (ii) hereby acknowledges
the Secured Obligations and confesses judgment in favor of Mortgagee for the
full amount of the Secured Obligations, including, without limitation,
principal, interest, expenses, attorneys' fees, and all other fees provided for
hereunder, and (iii) consents that judgment be rendered and signed whether
during term of court or in vacation for the full amount of the Secured
Obligations.
22. AUTHORIZATION TO EXECUTE DEEDS, APPOINTMENT OF KEEPER, ETC. (a)
Upon the occurrence of an Event of Default which has not been waived in writing
by the Holders in accordance with the Indenture, Grantor irrevocably appoints
Mortgagee as its true and lawful attorney-in-fact, which appointment is coupled
with an interest and is unconditional and irrevocable, in Grantor's name and
stead and on its behalf, for the purpose of effectuating any sale, assignment,
transfer or delivery of the Mortgaged Property or any part thereof or any
interest therein for the enforcement of this Shore Mortgage as Mortgagee may
reasonably consider necessary or appropriate, with full power of substitution,
Grantor hereby ratifying and confirming all that such attorney shall lawfully do
by virtue hereof. If so requested by Mortgagee or any other purchaser, Grantor
shall ratify and confirm any such sale, assignment, transfer or delivery by
executing and delivering to Mortgagee, or such other purchaser, all proper
deeds, bills of sale, assignments, releases and other instruments as may be
designated in any such request. Mortgagee shall use reasonable efforts to
deliver to Grantor, promptly after the execution or filing thereof, copies of
any document executed by Mortgagee on behalf of Grantor pursuant to this
Paragraph or Paragraph 28 hereof; PROVIDED that the failure of Mortgagee to so
22
deliver any such document to Grantor shall not affect the validity or
enforceability of such document.
(b) In the event the Mortgaged Property, or any part thereof,
is seized as an incident to an action for the recognition or
enforcement of this Shore Mortgage by executory process, ordinary
process, sequestration, writ of fieri facias or otherwise, Grantor and
Mortgagee agree that the court issuing any such order shall, if
petitioned for by Mortgagee, direct the applicable sheriff to appoint
as a keeper of the Mortgaged Property, the Mortgagee or any agent
designated by Mortgagee or any person named by the Mortgagee at the
time such seizure is effected. This designation is pursuant to
Louisiana Revised Statutes 9:5136 through 5140.2, inclusive, as the
same may be amended, and Mortgagee shall be entitled to all the rights
and benefits afforded thereunder. It is hereby agreed that the keeper
shall be entitled to receive as compensation, in excess of its
reasonable costs and expenses incurred in the administration or
preservation of the Mortgaged Property, an amount equal to $500 per
day. The designation of keeper made herein shall not be deemed to
require Mortgagee to provoke the appointment of such a keeper.
23. PROCEEDS OF FORECLOSURE SALE. In any foreclosure of this Shore
Mortgage there shall be allowed and included in the decree of sale to be paid,
in the following order, out of the proceeds of such sale:
First: All reasonable fees and costs owed to or incurred by
Mortgagee and its agents and consultants hereunder or under the Transaction
Documents;
Second: All court costs, allowances authorized or permitted by
statute or a court, fees of receivers, attorneys' fees and disbursements,
reasonable appraisers' fees, expenditures for documentary and expert evidence,
stenographers' charges, publication costs and reasonable costs (which may be
estimated as to items to be expended after the entry of the decree) of procuring
all abstracts of title, title searches and examinations, title policies and
similar data with respect to title which Mortgagee may deem reasonably necessary
and any other expenses of the foreclosure proceeding. All such expenses shall
become additional indebtedness secured hereby and immediately due and payable,
with interest computed at the Additional Interest Rate, from and including the
date of payment to and including the date of repayment to Mortgagee;
Third: Any lien prior to the lien and security interest of
this Shore Mortgage which Mortgagee may consider necessary or desirable to
discharge;
Fourth: All other items advanced or paid by Mortgagee pursuant
to this Shore Mortgage from any other Transaction Document, with interest (to
the extent permitted by law), from and including the date of any such advance to
and including the date of payment computed at the Additional Interest Rate; and
23
Fifth: In accordance with Section 6.10 of the Indenture.
24. PURCHASE OF THE PROPERTY BY MORTGAGEE. Mortgagee may for its own
account be a purchaser of the Mortgaged Property or any part thereof or any
interest therein at any sale thereof, whether pursuant to foreclosure or
otherwise, and may apply the amount of the Secured Obligations outstanding
toward the purchase price thereof.
25. WAIVER OF RIGHT TO BRING COUNTERCLAIM IN FORECLOSURE ACTION. In any
action to foreclose the lien or liens of this Shore Mortgage, including a
partial foreclosure, no defense, counterclaim or setoff shall be available to
Grantor other than one which denies the existence or sufficiency of the facts
upon which the action is grounded or which raises an issue concerning the
priority of liens or the statute of limitations or other bar to an action based
on the passage of time. If any defense, counterclaim or setoff, other than one
permitted by the preceding sentence, is timely raised in such foreclosure
action, such defense, counterclaim or setoff shall be dismissed; PROVIDED,
HOWEVER, that, if such defense, counterclaim or setoff is based on a claim that
could be tried in an action for money damages, such claim may be brought in a
separate action which shall not thereafter be consolidated with such foreclosure
action. Nothing contained herein, however, shall limit Grantor's right to bring
a separate action, at law or in equity, to adjudicate the issues that are the
basis for any purported defense, claim or setoff. The bringing of such separate
action for money damages shall not be deemed to afford any grounds for staying
the foreclosure action.
26. UNIFORM COMMERCIAL CODE. This Shore Mortgage constitutes a security
agreement under the Code and a fixture filing for the purposes of Article 9 of
the Code and a security interest shall attach to the Security Interest Property
for the benefit of Mortgagee as additional security for the Secured Obligations.
Pursuant to Section 32 hereof, Grantor is obligated to make certain filings and
re-filings. Grantor also hereby authorizes Mortgagee to file financing and
continuation statements with respect to the Security Interest Property without
the signature of Grantor and, upon request, Grantor shall promptly execute
financing and continuation statements in form satisfactory to Mortgagee to
further evidence and secure Mortgagee's interest in the Security Interest
Property. Mortgagee shall deliver to Grantor a copy of each such filing promptly
after making the same. Upon the occurrence of any Event of Default, Mortgagee
shall have all of the rights and remedies of a secured party under the Code,
with respect to the Security Interest Property, or other applicable law, and all
rights and remedies provided for herein and in each other Transaction Document,
all of which rights and remedies are cumulative to those provided elsewhere in
this Shore Mortgage or otherwise available to Mortgagee. Following the
occurrence of any Event of Default, Mortgagee, pursuant to Section 9-501(4) of
the Code, shall have the option of proceeding as to both real and personal
property in accordance with its rights and remedies in respect of the real
property, in which event the default provisions of the Code shall not apply. The
parties agree that, in the event Mortgagee elects to proceed with respect to the
Equipment separately from the Real Property, Grantor will assemble the Equipment
(other than those items of Equipment which are affixed to the Improvements and
not removable without material damage to such items or the Improvements) and
make the Equipment available to Mortgagee at a place or places reasonably
convenient to Mortgagee. Any
24
notice of sale, disposition or other intended action by Mortgagee, sent to
Grantor at the address of Grantor specified for notices herein at least fifteen
(15) days prior to such action, shall constitute reasonable notice to Grantor.
All replacements, renewals and additions to the Equipment shall become and be
immediately subject to the security interest herein of Mortgagee and be covered
by this Shore Mortgage as part of the Mortgaged Property. Grantor shall, from
time to time, on request of Mortgagee, deliver to Mortgagee an inventory of the
Equipment in reasonable detail. Grantor warrants and represents that all
Equipment now is, and that all replacements thereof, substitutions therefor and
additions thereto, will be, owned by Grantor free and clear of liens,
encumbrances or security interests of others prior to or on a parity with the
interest herein of Mortgagee other than security interests or leases given to
providers of Equipment to finance the purchase of the same and Permitted
Encumbrances and Permitted Liens. Neither the provisions of this Paragraph nor
the filing of any separate security agreement or financing statement with
respect to Mortgagee's security interest in the Security Interest Property shall
be construed as in any way derogating or impairing the intention of Grantor and
Mortgagee hereto that the Security Interest Property shall, at all times and for
all purposes and in all proceedings, both legal and equitable, be regarded as a
part of the Mortgaged Property.
27. Intentionally Omitted.
28. TERMS SUBJECT TO APPLICABLE LAW; SEVERABILITY. All rights, powers
and remedies provided herein are intended to be limited to the extent necessary
so that they will not render this Shore Mortgage invalid, unenforceable or not
entitled to be recorded, registered or filed under any applicable law. If any
term of this Shore Mortgage shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the other terms
hereof shall in no way be affected thereby.
29. MODIFICATIONS BY MORTGAGEE. Grantor agrees that, without affecting
the liability of Grantor or any other person or entity (except any person or
entity expressly released in writing) liable for payment of the Secured
Obligations or for performance of any obligation contained herein or affecting
the lien and security interest of this Shore Mortgage upon the Mortgaged
Property or any part thereof, Mortgagee may, at any time and from time to time,
without notice to or the consent of any person or entity, release any person or
entity liable for payment of any debt or for performance of any obligation,
extend the time or agree to alter the terms of payment of any such indebtedness
or performance of any such obligation, modify or waive any obligation,
subordinate, modify or otherwise deal with the lien and security interest
hereof, accept additional security of any kind, consent to the making of any map
or plat of the Mortgaged Property, the creating of any easements thereon on or
any covenants restricting use or occupancy thereof, or exercise or refrain from
exercising or waive any right Mortgagee may have.
30. CHANGE IN LAWS REGARDING TAXATION. In the event of the passage
after the date of this Shore Mortgage of any Federal law or law of the state in
which the Real Property is located deducting from the value of real property for
the purposes of taxation any lien or encumbrance thereon or changing in any way
the laws for the taxation of mortgages or debts secured by
25
mortgages for state or local purposes or the manner of the collection of any
such taxes, and imposing a tax, either directly or indirectly, on this Shore
Mortgage or all or any part of the Secured Obligations, or upon Mortgagee or any
Holder or any by reason of or as holder of any of the foregoing (excepting
therefrom any income tax on interest payments made to Mortgagee or any Holder
with respect to the Secured Obligations), Grantor shall, if permitted by law,
pay any tax imposed as a result of any such law within the statutory period or
within thirty (30) days after demand by Mortgagee, whichever is less.
31. DOCUMENTARY STAMPS. If at any time the United States of America,
any state thereof or any governmental subdivision of any such state shall
require revenue or other stamps to be affixed to this Shore Mortgage, Grantor
will pay for the same, with interest and penalties thereon, if any.
32. CUMULATIVE REMEDIES OF MORTGAGEE; NO WAIVER. No legal, equitable or
contractual right, power or remedy of Mortgagee or any Holder hereunder or under
any other Transaction Document shall be exclusive of any other but, rather, each
right, power or remedy shall be separate, cumulative and concurrent and shall be
in addition to every right, power or remedy now or hereafter existing at law or
in equity. No delay in the exercise of, or omission to exercise, any right,
power or remedy accruing on any default shall impair any such right, power or
remedy or be construed to be a waiver of any such default or acquiescence
therein, nor shall it affect any subsequent default of the same or a different
nature. Every such right, power or remedy may be exercised concurrently or
independently, and when and as often as may be deemed expedient, by Mortgagee or
any Holder, as applicable. Mortgagee may resort for the payment of the Secured
Obligations to the Mortgaged Property and to any other security held by
Mortgagee in such order and manner as Mortgagee, in its discretion, may elect.
Mortgagee or any Holder may take action to recover the Secured Obligations or
any portion thereof or to enforce any covenant herein or in any other
Transaction Document without prejudice to the right of Mortgagee thereafter to
foreclose this Shore Mortgage. No act of Mortgagee or any Holder shall be
construed as an election to proceed under any one provision herein to the
exclusion of any other provision.
33. FILING OF SHORE MORTGAGE, ETC. Grantor, forthwith upon the
execution and delivery of this Shore Mortgage and thereafter, from time to time,
as required, will cause this Shore Mortgage and any security instrument or
Transaction Document creating a lien or evidencing the lien hereof upon the
Mortgaged Property and each instrument of further assurance, and each supplement
to any of the foregoing and each modification to any of the foregoing, to be
filed, registered or recorded in such manner and in such places as may be
required by any present or future law in order to publish notice of and fully to
protect the lien hereof upon, and the interest of Mortgagee in, the Mortgaged
Property. Grantor will pay all filing, registration or recording fees and all
reasonable expenses incident to the preparation, execution and acknowledgment of
this Shore Mortgage, any mortgage supplemental hereto, any security instrument
with respect to the Mortgaged Property and any instrument of further assurance,
and all federal, state, county and municipal taxes, duties, imposts, assessments
and charges arising out of or in connection with the
26
execution and delivery of this Shore Mortgage, any mortgage supplemental hereto,
any security instrument with respect to the Mortgaged Property or any instrument
of further assurance and shall furnish to Mortgagee evidence satisfactory to it
that all recordings and re-recordings, registrations and re-registrations,
filings and re-filings have been effectively made. Grantor shall hold harmless
and indemnify Mortgagee and each Holder and its successors and assigns against
any liability incurred by reason of the imposition of any tax on the making and
recording of this Shore Mortgage.
34. MARSHALING. Grantor waives and releases any right to have the
Mortgaged Property marshaled.
35. WAIVER OF NOTICE. Grantor shall not be entitled to any notices of
any nature whatsoever from Mortgagee except with respect to matters for which
this Shore Mortgage specifically and expressly provides for the giving of
notices by Mortgagee to Grantor, and Grantor hereby expressly waives the right
to receive any notice from Mortgagee with respect to any matter for which this
Shore Mortgage does not specifically and expressly provide for the giving of
notice by Mortgagee to Grantor.
36. RECOVERY OF SUMS REQUIRED TO BE PAID. Mortgagee shall have the
right, from time to time, to take action to recover any sum or sums which
constitute a part of the Secured Obligations as the same become due, without
regard to whether or not the balance of the Secured Obligations shall be due and
without prejudice to the right of Mortgagee thereafter to bring an action of
foreclosure, or any other action, for a default or defaults by Grantor existing
at the time such earlier action was commenced.
37. FURTHER ASSURANCES. Grantor covenants that it will, at Grantor's
sole cost and expense and at the request of Mortgagee, (i) promptly correct any
defect or error which may be discovered in the Transaction Documents, (ii)
promptly do, execute, acknowledge and deliver, and record and re-record, file
and re-file and register and re-register, any and all such acts and instruments
as Mortgagee may require from time to time in order to carry out more
effectively the purposes of this Mortgage and the other Transaction Documents
and to effectuate, complete or perfect, or to continue and preserve, the liens
and security interests created by this Mortgage and the other Transaction
Documents as first and prior liens and security interests, subject only to the
Permitted Encumbrances and Permitted Liens and such other matters as may be
expressly permitted under the Transaction Documents, upon all of the Mortgaged
Property, whether now owned or hereafter acquired by Grantor, (iii) promptly
furnish Mortgagee with evidence satisfactory to Mortgagee of every such
recording, filing or registration and (iv) promptly execute and deliver to
Mortgagee such other documents and instruments and take such other actions as
Mortgagee may from time to time require in order to evidence, preserve, protect
and effectuate Mortgagee's rights hereunder.
38. NOTICES. All notices and other communications provided for
hereunder shall be in writing (including telecopier, telegraphic, telex or cable
communication) and mailed, telecopied,
27
telegraphed, telexed, cabled or delivered, if to Mortgagee at its address at ▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Administration; if to Grantor at its address at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; or, as to each party, at such other address as shall be
designated by such party in a written notice to the other parties. All such
notices and communications shall be effective when received (with respect to
notices given by Grantor to Mortgagee) and when given (with respect to notices
given by Mortgagee to Grantor).
39. LIABILITY. If Grantor consists of more than one person or entity,
the obligations and liabilities of each such person or entity hereunder shall be
joint and several and solidary.
40. HEADINGS, ETC. The headings and captions of the paragraphs of this
Shore Mortgage are for convenience of reference only and are not to be construed
as defining or limiting, in any way, the scope or intent of the provisions
hereof.
41. SUCCESSORS AND ASSIGNS. The provisions of this Shore Mortgage shall
be binding upon Grantor, its successors and assigns, and all persons and
entities claiming under or through Grantor or any such successor or assign, and,
subject to the terms of the Transaction Documents, shall inure to the benefit of
Mortgagee and each Holder and their respective successors and assigns.
42. DISCHARGE OF LIEN. Subject to Article VIII of the Indenture, upon
the observance and performance of each and every covenant and condition set
forth herein and in the Transaction Documents and payment in full of the Secured
Obligations or Legal Defeasance or Covenant Defeasance, Mortgagee shall promptly
deliver to Grantor a confirmatory certification evidencing the same and a
satisfaction or other instruments, in recordable form, as may be reasonably
necessary to evidence such discharge and to satisfy the same of record.
43. SURVIVAL OF ASSIGNMENT. Notwithstanding anything to the contrary
contained in this Shore Mortgage, the assignment, pledge and mortgaging of the
Space Leases, Construction Documents, Rents, Eminent Domain Awards and the
Insurance Proceeds, and any cash collateral derived from the Mortgaged Property
and the right to apply any of the foregoing in accordance with the terms of this
Shore Mortgage, shall survive any foreclosure of the lien of this Shore
Mortgage.
44. MISCELLANEOUS. Unless the context clearly indicates a contrary
intent or unless otherwise specifically provided herein, words used in this
Shore Mortgage shall be used interchangeably in singular or plural form and the
word "Grantor" shall mean each Grantor and any subsequent owners of the
Mortgaged Property or any part thereof or interest therein, the word "Mortgagee"
shall mean Mortgagee or any successor thereto, and the word "Mortgagee" shall
include an individual, corporation, partnership, trust, unincorporated
association, government, governmental authority or other entity. References to
"this paragraph" shall mean the paragraph commencing with an Arabic numeral in
which the affected phrase or sentence is contained. Whenever the context may
require, any pronouns used herein shall include the corresponding
28
masculine, feminine or neuter forms and the singular form of nouns and pronouns
shall include the plural and vice versa. The terms "herein," "hereof" or
"hereunder" or similar terms used in this Shore Mortgage refer to this entire
Shore Mortgage and not to the particular provision in which the term is used.
This Shore Mortgage may be executed in any number of duplicate originals and
each such duplicate original shall be deemed to constitute but one and the same
instrument. The terms of this Shore Mortgage supersede the terms of any and all
prior instruments consolidated herein.
45. GOVERNING LAW; INTERPRETATION. This Shore Mortgage is to be
construed in accordance with and governed by the internal laws of the state in
which the Real Property is located, without regard to principles of conflicts of
law. It is acknowledged and agreed that, in the preparation of this Shore
Mortgage and each other Transaction Document, indistinguishable contributions
were made by representatives of both Grantor and Mortgagee and that Grantor and
Mortgagee each waives any and all rights, both in law or in equity, to have the
provisions of this Shore Mortgage or any part thereof or the provisions of any
other Transaction Document interpreted in favor of one over the other based on a
claim that representatives of one or the other were the principal draftsmen of
any such document.
46. TRUE COPY. Grantor acknowledges having received a true copy of this
Shore Mortgage without charge.
47. EXPENSES OF ENFORCEMENT. All costs and expenses paid by Mortgagee
in the performance and the enforcement of any right or remedy afforded Mortgagee
pursuant to this Shore Mortgage or any other Transaction Document (including
reasonable attorneys' fees, expenses and disbursements) shall be paid by Grantor
upon demand by Mortgagee, shall bear interest, to the extent permitted by law,
at the Additional Interest Rate from the date of demand until the date of
payment and shall be deemed a part of the Secured Obligations and secured by
this Shore Mortgage.
48. WAIVER. (a) Grantor hereby covenants and agrees that it will not at
any time: (i) insist upon or plead, or in any manner whatever claim or take any
advantage of, any stay, exemption or extension law or any so-called "moratorium
law" now or at any time hereafter in force; or (ii) claim, take or insist upon
any benefit or advantage of or from any law now or hereafter in force providing
for the valuation or appraisal of the Mortgaged Property, or any part thereof,
prior to any sale or sales thereof to be made pursuant to any provisions herein
contained, or to decree, judgment or order of any court of competent
jurisdiction. Grantor hereby expressly waives any and all rights of redemption
from sale under any order or decree of foreclosure of this Shore Mortgage, on
its own behalf and on behalf of each and every person, it being the intent
hereof that any and all such rights of redemption of the Grantor and of all
other persons are and shall be deemed to be hereby waived to the full extent
permitted by the law of the state in which the Real Property is located.
29
(b) Grantor hereby expressly waives in favor of Mortgagee any
and all homestead exemptions and other exemptions of seizure or
otherwise to which Grantor is or may be entitled under the constitution
and statutes of the State of Louisiana insofar as the Mortgaged
Property is concerned. Grantor hereby expressly further waives: (i) the
benefit of appraisement as provided for in Louisiana Code of Civil
Procedure Articles 2332, 2336, 2723 and 2724, and all other laws
conferring such benefits; (ii) the demand and three (3) days delay
accorded by Louisiana Code of Civil Procedure Articles 2639 and 2721;
(iii) the notice of seizure required by Louisiana Code of Civil
Procedure Articles 2293 and 2721; (iv) the three (3) days delay
provided by Louisiana Code of Civil Procedure Articles 2331 and 2722;
(v) the benefit of the other provisions of Louisiana Code of Civil
Procedure Articles 2331, 2722 and 2723; and (vi) the benefit of the
provisions of any other articles of the Louisiana Code of Civil
Procedure not specifically mentioned above.
49. CONSTRUCTION MORTGAGE. This Shore Mortgage secures in part an
obligation incurred for the construction of Improvements on the Real Property
and constitutes a "construction mortgage" within the meaning of Section 9-313 of
the Code.
50. THE MORTGAGEE'S DUTIES. The rights, authority to approve, or to
consent to, disapprove, withhold consent, exercise judgment or discretion and
such other powers (collectively the "POWERS") conferred on Mortgagee hereunder
are solely to protect its interest in the Mortgaged Property, and Mortgagee
shall be under no obligation to exercise any such Powers. Except for accounting
for moneys actually received by it hereunder, and the safe custody of any
collateral in its possession (subject to the standards of care governing the
Mortgagee hereunder), Mortgagee shall not have any duty as to any matters
relating to any Mortgaged Property or as to ascertaining or taking action with
respect to any Mortgaged Property whether or not Mortgagee or any Holder has or
is deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve rights against any parties or any other rights
pertaining to any Mortgaged Property. Nothing herein shall affect any obligation
of Mortgagee or any Holder to the Holders under the Indenture or under
applicable law.
51. SHORE MORTGAGE ABSOLUTE. The obligations of Grantor under this
Shore Mortgage are independent of the obligations of Grantor under the other
Transaction Documents, and a separate action or actions may be brought and
prosecuted against Grantor to enforce this Shore Mortgage, irrespective of
whether any action is brought against Grantor under such other Transaction
Documents. All rights of Mortgagee and the mortgage, assignment and security
interest hereunder, and all obligations of Grantor hereunder, shall be absolute
and unconditional, irrespective of:
(a) any lack of validity or enforceability of any other
Transaction Document or any other agreement or instrument relating
thereto;
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(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the obligations of Grantor under
the other Transaction Documents or any other amendment or waiver of or
any consent to any departure from the other Transaction Documents,
including, without limitation, any increase in such obligations
resulting from the extension of additional credit to Grantor or
otherwise;
(c) any taking, exchange, release or non-perfection of any
other collateral, or any taking, release or amendment or waiver of or
consent to departure from any guaranty, for all or any other of the
obligations of Grantor under the other Transaction Documents;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the obligations of Grantor under the other
Transaction Documents, or any manner of sale or other disposition of
any collateral for all or any of such obligations or any other assets
of Grantor;
(e) any change, restructuring or termination of the corporate
restructure or existence of Grantor; or
(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, Grantor or a third party
grantor of a security interest or mortgage.
52. AUTHENTIC EVIDENCE. Any and all declarations of facts made by
authentic act before a notary public in the presence of two witnesses by a
person declaring that such facts lie within his knowledge, shall constitute
authentic evidence of such facts for the purpose of executory process.
53. INTERACTION WITH INDENTURE. All terms, covenants, conditions,
provisions and requirements of the Indenture are incorporated by reference in
this Shore Mortgage. Notwithstanding any other provision of this Shore Mortgage,
the terms and provisions of this Shore Mortgage shall be subject and subordinate
to the terms of the Indenture. To the extent that the Indenture provides Grantor
with a particular cure or notice period, or establishes any limitations or
conditions on Mortgagee's actions with regard to a particular set of facts,
Grantor shall be entitled to the same cure periods and notice periods, and
Mortgagee shall be subject to the same limitations and conditions, under this
Shore Mortgage, as under the Indenture, in place of the cure periods, notice
periods, limitations and conditions provided for under this Shore Mortgage;
provided, however, that such cure periods, notice periods, limitations and
conditions shall not be cumulative as between the Indenture and this Shore
Mortgage. In the event of any conflict or inconsistency between the provisions
of this Shore Mortgage and those of the Indenture, including, without
limitation, any conflicts or inconsistencies in any definitions herein or
therein, the provisions or definitions of the Indenture shall govern.
54. EXCLUDED ASSETS. Notwithstanding anything to the contrary contained
herein, if a portion of the Collateral, Mortgaged Property or Security Interest
Property becomes an Excluded
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Asset after the Issue Date, the Mortgagee shall, simultaneous with the granting
of the applicable Permitted Lien, without the payment of any partial release
for, or any other prepayment with respect to, the Notes, release the Lien in
favor of the Mortgagee in such Excluded Asset in accordance with the provisions
of Section 11.4 of the Indenture. Once any Excluded Asset is released, such
Excluded Asset shall be expressly excluded from and shall no longer be deemed
Collateral, Mortgaged Property or Security Interest Property under this Shore
Mortgage and shall not be subject to any of the representations, covenants or
obligations under this Shore Mortgage.
THUS DONE AND PASSED on the day and in the month and year hereinabove
first written, in the presence of the undersigned witnesses who hereunto sign
their names with Grantor and me, Notary, after due reading of the whole.
WITNESSES:
__________________________________ LOUISIANA CASINO CRUISES, INC.
By: ____________________________
___________________________________ Name:
Title:
____________________________________
NOTARY PUBLIC
My commission expires: ____________
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