EXHIBIT 10.4
SECOND MORTGAGE
THIS MORTGAGE is given on April 28, 1998 by Celebrity Entertainment, Inc.
whose address is ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (herein
"Mortgagor") to ▇▇▇▇ ▇. ▇▇▇▇▇▇, whose address is ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Mortgagee").
Mortgagor and Mortgagee have entered into a Joint Venture Agreement
contemporaneously herewith. Pursuant to that Agreement, Mortgagee is entitled to
a preferential distribution of $275,000 by June 5, 1998, certain stock being
issued, as well as other performances. This Mortgage is granted by Mortgagor to
secure performance of all obligations of Mortgagor to Mortgagee including, but
not limited to payment of the preferential distribution and all other
performances due to Mortgagee under the terms of the Joint Venture Agreement. To
secure these performances, Mortgagor does hereby mortgage, grant and convey to
Mortgagee the following property located in ▇▇▇▇▇▇ County, Florida:
See Exhibit "A"
Together with all improvements now or hereafter erected on the property
and all easements and appurtenances thereto, and all machinery, apparatus,
equipment and fixtures now or hereafter a part of the property, as well as all
water, sewer, utility, streets, roads, walkways or other structural elements
thereto, as well as all replacements or additions thereto. All of the foregoing
is referred to in this Mortgage as the "Property".
Mortgagor covenants that Mortgagor is lawfully seized of the estate
hereby conveyed and has the right to mortgage, grant and convey the Property and
the Property is unencumbered except for that First Mortgage in a principal
amount not to exceed $350,000 in favor of ▇▇▇▇▇ ▇▇▇▇▇▇ Real Estate Employees'
Profit Sharing Plan and Trust and Reno ▇. ▇▇▇▇▇▇▇▇ ("First Mortgage"), such
easements, governmental matters, assessments, subdivision or deed restrictions
of record. Mortgagor warrants and will defend generally the title of the
Property against all claims and demands, subject to the matters set forth above.
Mortgagor covenants and agree as follows:
1. Mortgagor shall promptly perform or cause to be performed all
obligations of Mortgagor under the Joint Venture Agreement and Mortgagor agrees
to timely make all payments due on the First Mortgage and accompanying
Promissory Note and to timely perform all obligations called for under the First
Mortgage.
2. Mortgagor will fully and completely comply with all terms and
conditions of this Mortgage.
3. Mortgagor will pay all taxes due on the Property by escrow if
required by the first mortgage, or otherwise prior to March 30th of each year.
4. Mortgagor will keep the improvements now existing or hereafter
erected on the Property insured against loss by fire, hazards, included within
the term "extended coverage" and any other hazards, including food, floods or
flooding, for which Mortgagee requires insurance. This insurance shall be
maintained in amounts and for periods Mortgagee requires, provided that such
coverage shall not exceed or duplicate the coverage required by the first
mortgagee, except that it shall be in an amount equal to the full value of the
improvements. All insurance policies and any renewals thereof shall be
acceptable to Mortgagee and shall include a standard mortgage clause and shall
name Mortgagee as a loss payee. If Mortgagor fails to maintain insurance
coverage as described in this paragraph, then Mortgagee, at Mortgagor's cost,
shall have the right to obtain full coverage or single interest coverage on the
Property.
5. Mortgagor shall maintain the Property in good condition, shall
comply with all ordinances or regulations applicable to the Property and shall
not destroy, damage or impair the Property, allow the Property to deteriorate,
or commit waste on the Property. Mortgagor shall be in default if any forfeiture
action or proceeding, whether civil or criminal, is begun that, in Mortgagee's
judgment, could result in forfeiture of the Property or otherwise materially
impair the lien created by this Mortgage.
6. If Mortgagor fails to perform the covenants and agreements contained
in this Mortgage or if there is a legal proceeding that may significantly affect
Mortgagee's rights in the Property (such as a proceeding in foreclosure,
bankruptcy probate, for condemnation or forfeiture or to enforce laws or
regulations), then Mortgages may, but is not required to, do and pay for
whatever is necessary to protect the value of the Property and Mortgagee's
rights in the Property. Mortgagee's actions may include paying any sums secured
by a lien which has priority over the Mortgage, appearing in Court, paying
reasonable attorneys' fees and entering on the Property to make repairs. Any
amounts expended or disbursed by Mortgagee under this paragraph shall become
additional debt of Mortgagor secured by this Mortgage and shall bear interest
from the date of disbursement at the maximum rate allowed by law.
7. Mortgagee or its agent may make reasonable entries upon and
inspections on the Property. Mortgagee shall give Mortgagor notice at the time
of or prior to inspection specifying reasonable cause for the inspection.
8. The proceeds for any award or claim for damages, direct or
consequential, in connection with any condemnation or other taking of any part
of the Property, or for conveyance in lieu of condemnation are hereby assigned
to Mortgagee as additional security for performance of the obligations hereunder
and to the extent any such proceeds shall come into existence, they shall be
paid to Mortgagee to be held in escrow until all performances, obligations and
liabilities secured hereby have been satisfied in full.
10. Mortgagor shall not lease the Property, or any parcel thereof, to any
person or entity other than Mortgagor, except rentals of rooms or spaces in the
ordinary course of business but shall take no advance payments for more than two
months rent. Further, Mortgagor does hereby assign to Mortgagee all rents,
profits, income, issues and revenues of the Property and each parcel thereof as
further security under this Mortgage. Mortgagor acknowledges and agrees that in
the event of default, Mortgagee shall have the immediate right to directly
collect all rents, profits, issues, income and revenues of the Property and each
parcel thereof and that Mortgagor will take no action or attempt to interfere
with this direct collection, and that in addition to this right, Mortgagee shall
have all rights under any Florida Statutes concerning assignment of rents,
including but not limited to the provisions of Fla. Stat. Section 697.07 as
amended from time to time.
11. Annually, but not later than May 1st of each year after the execution
hereof, Mortgagor shall deliver to Mortgagee, evidence that all real estate
taxes for the prior year have been paid in full, that no special assessments
have been made against the Property, that no environmental claims or assessments
have been made against the Property and the status of any lease of the
Property. In addition, Mortgagor shall simultaneously deliver financial
statements and tax returns for Mortgagor for the prior year and for all months
through the date of delivery of the financial statements. Further, if at any
time any law suit or claim of any type of nature is made against Mortgagor which
claim is an amount in excess of $5,000, or in the event that any actions
brought, including but not limited to actions brought by the Department of
Professional Regulation, or the subject of any 30-day letter or similar demand
for payment of Federal, State or local taxes, within 10 days after receipt of
such notice, claim a lawsuit or proceeding, Mortgagor shall deliver to Mortgagee
a copy of all documents pertaining to such matters. Mortgagor agrees that the
failure to comply with the provisions of this section shall not constitute
technical defaults, but rather shall be considered as material and the
equivalent of monetary defaults hereunder.
12. Extension of the time for payment or modification of the due date of
the sum secured by this Mortgage granted by Mortgagee to Mortgagor or any
successor in interest to Mortgagor shall not operate to release the liability of
Mortgagor. Any forbearance by Mortgagee in exercising any right or remedy on one
or more than one occasion shall not be a waiver or preclude the exercise of any
right or remedy.
13. If all or any part of the Property or any interest is sold or
transferred, directly or indirectly, without Mortgagee's prior written consent,
this Mortgage shall be in default and Mortgagee shall be entitled to treat all
possible obligations or liabilities that may be due under the agreements
referenced above to be due and commence foreclosure and other appropriate
actions hereunder.
14. Mortgagor shall, by not cause or permit the presence,
use, disposal, storage or release of any hazardous substances on
the Property. Mortgagor shall not do, nor allow anyone else to
do anything affecting the Property that is in violation of any
environmental law. Mortgagor has made due inquiry and investigation into the
present condition of the Property, and hereby acknowledge and represent that no
condition exists on the Property in violation of any Environmental Law,
including but not limited to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act of 1986, the Florida Resource Recovery and
Management Act and the Pollution Spill Prevention and Control
Act. Further, Mortgagor does hereby specifically represent that
the Property does not and has never contained asbestos, PCBs or
other toxic materials, nor has been the location or subject of
any underground storage tanks, radioactive elements or any other
hazardous substance. Mortgagor represent that there is no civil,
criminal or administrative suit, demand or claim, hearing, notice, demand
letter, notice of violation, investigation or proceeding pending or threatened
against the Mortgagor relating in any way to any Environmental Law, plan, order,
decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder. Mortgagor, and each of them, jointly and
severally, hereby agree to indemnify, reimburse, defend and hold harmless
Mortgagee, its officers, directors or other agents and assigns, from and against
all demands, claims, civil or criminal actions or causes of action, liens,
assessments, civil or criminal penalties or fines, losses, damages, liabilities,
obligations, costs, disbursements, expenses or fees of any kind or nature
(including without limitation, cleanup costs, attorneys', paralegals',
consultants' or experts' fees and disbursements and costs of litigation) which
at any time may be imposed, incurred or asserted, expended or awarded by or
against Mortgagee as a result of any environmental condition on the Property now
or in the future or the inaccuracy of any warranty made by Mortgagor pursuant to
this paragraph. Mortgagor agrees that any damages or liabilities incurred by
Mortgagee by virtue of any environmental problem associated with the Property or
owed pursuant to this indemnification shall be secured by this Mortgage.
15. Mortgagor shall be in default on this Mortgage if any of the following
events occur and remain uncured after five (5) days written notice from
Mortgagee to Mortgagor:
a. Mortgagor shall fail to pay any obligations, liabilities or
other amounts due under the terms of the First Mortgage or shall fail to observe
or perform any obligations or terms of the First Mortgage, or shall be in
default under the First Mortgage or any documents executed in connection
therewith.
b. Mortgagor shall default or fail to timely perform
Mortgagor's obligations to Mortgagee under the terms of the Joint
Venture Agreement dated April 28, 1998 between Mortgagor and
Mortgagee or shall attempt to grant or grants any junior lien on
the Property or attempt to sell or sells all or any part of the
Property.
c. J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall cease to be the Executive Vice
President or a higher ranking officer of Mortgagor, or shall be removed from his
day-to-day operational responsibilities for any reason.
d. Mortgagor shall default under any warranty or covenant of
Mortgagor contained in this Mortgage.
e. Any federal or state tax lien, claim of lien for labor and
materials, junior mortgage or junior lien, judgment of more than $5,000,
regulatory decision or other Court Order that affects, the licensing or
operation of Celebrity Fish Camp and RV Park, or any transfer or attempted
transfer of any portion of the business assets of Celebrity Fish Camp and RV
Park, the Property or any rights in connection therewith, or any effort is made
to lease or grant any other license or similar rights in the Property without
Mortgagee's written consent.
16. In the event of occurrence of a default as described in Paragraph 15,
or under the Agreement, then and in such event, Mortgagee shall be entitled to
immediately demand performance of all obligations due under the Joint Venture
Agreement whether or not such obligations and performances were yet due under
the terms of the Joint Venture Agreement or related documents. In the event of a
default, Mortgagee shall be entitled to exercise all rights available to a
mortgagee under Florida law separately or cumulatively, including but not
limited to the right to seek foreclosure of the Property and obtain a judgment
on the Joint Venture Agreement or do both independently or simultaneously and
Mortgagor shall not assert that the independent or simultaneous prosecution of
any and all remedies allowed under applicable law or hereunder shall constitute
an election or bar to the assertion of any such remedy.
17. After default, in the discretion of Mortgagee, Mortgagee will have the
absolute right to seek and obtain appointment of a receiver for the Property and
the business operated thereon and each or either parcel thereof. Mortgagee shall
be entitled to the appointment of a receiver as a matter of right regardless of
the value of the Property or either parcel thereof and without regard to the
solvency or payment ability of Mortgagor. Mortgagee may exercise this right in
any Court having jurisdiction, without notice and Mortgagor agrees that it shall
raise no defense or otherwise interfere with the appointment of a receiver and
that such receiver shall be vested with such duties and powers to the fullest
extent allowed by applicable law. In addition, Mortgagor agrees that any
receiver appointed shall have the right to advertise the Property for sale, rent
either or all of the Property or take such other action as will cause the
Property to generate revenues including but not limited to removal of the
existing tenants or occupants and replacement with tenants and occupants paying
or capable of paying amounts in excess of those paid by the then current tenants
or occupants.
18. If Mortgagee employs an attorney to enforce or protect its rights
hereunder or its rights in the Property, then and in such event, Mortgagor
agrees to pay and fully and completely indemnify Mortgagee for all costs and
expenses incurred by Mortgagee in connection therewith including reasonable
attorneys' fees and legal assistants fees for services rendered prior to
litigation and during all trial, appellate, bankruptcy court or other
proceedings.
19. Mortgagor agrees that time is of the essence in connection with the
performance owed Mortgages hereunder.
20. The Mortgagor, knowingly and voluntarily, WAIVES THE RIGHT TO TRIAL
BY JURY IN ANY ACTION OR PROCEEDING FOR THE PURSUIT, ASSERTION OR RESOLUTION OF
ANY CLAIM OR DEFENSE THAT HAS BEEN ASSERTED OR MAY EVER BE ASSERTED OR
ASSERTABLE BY MORTGAGOR UNDER THE AGREEMENT, ADDENDUM, COVENANT, GUARANTEE OR
OTHER PURCHASE DOCUMENTS AND MORTGAGE OR UNDER ANY LAW OR THEORY
GOVERNING THE RELATIONSHIP OF THE PARTIES. THIS WAIVER OF JURY TRIAL SHALL
EXTEND TO ALL MATTERS BETWEEN THE PARTIES AND SHALL BE UNCONDITIONAL AND
ABSOLUTE. IN THE EVENT THAT ANY COLLATERAL MATTER IS JUDICIALLY DETERMINED TO BE
OUTSIDE THE SCOPE OF THIS WAIVER OF JURY TRIAL OR IF THIS WAIVER OF JURY TRIAL
IS DETERMINED TO BE UNENFORCEABLE IN ANY DEGREE, THEN THIS WAIVER OF JURY TRIAL
SHALL BE AUTOMATICALLY MODIFIED TO ENCOMPASS SUCH MATTERS SO THAT NO MATTER
INVOLVING MORTGAGOR AND MORTGAGEE SHALL BE SUSCEPTIBLE TO TRIAL BY JURY.
IN WITNESS WHEREOF, Celebrity Entertainment, Inc. accepts and agrees to
the terms of this Mortgage and sets its hands and seals to this Mortgage on this
28th day of April, 1998.
Signed, sealed and
delivered in the presence of:
Celebrity Entertainment, Inc.
/s/ /s/
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Executive Vice President
"Mortgagor"
STATE OF FLORIDA
COUNTY OF PALM BEACH
BEFORE ME the undersigned authority, personally appeared J.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Executive Vice President of Celebrity
Entertainment, Inc. who is authorized to conduct the business of
the corporation and who is personally known to me or who has
produced a valid Drivers License as identification, and who
executed the foregoing for the purposes stated therein and who
did take an oath on this 28th day of April, 1998.
/s/
NOTARY PUBLIC, State of Florida at
Large
My Commission expires:12/28/01